<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 24, 1996
REGISTRATION NO. 33-99294
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
----------------
JOHN DEERE RECEIVABLES, INC.
AND
DEERE RECEIVABLES CORPORATION
(EXACT NAME OF REGISTRANTS AS SPECIFIED IN THEIR CHARTERS)
----------------
NEVADA 36-3837230
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
SUITE 600
FIRST INTERSTATE BANK BUILDING
1 EAST FIRST STREET
RENO, NEVADA 89501
(702) 786-5914
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
FRANK S. COTTRELL, ESQ.
CORPORATE SECRETARY
SUITE 600
FIRST INTERSTATE BANK BUILDING
1 EAST FIRST STREET
RENO, NEVADA 89501
(702) 786-5914
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
JONATHAN JEWETT RENWICK D. MARTIN
SHEARMAN & STERLING BROWN & WOOD
599 LEXINGTON AVENUE ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10022 NEW YORK, NEW YORK 10048
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED(1) REGISTERED PER UNIT(2) PRICE(2) FEE
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset Backed Securities.......... $2,000,000,000 100% $2,000,000,000 $689,655.17(3)
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</TABLE>
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(1) The Asset Backed Securities may be issued either by a trust established by
John Deere Receivables, Inc. or by Deere Receivables Corporation.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) $400,000 previously paid; $289,656 paid herewith.
----------------
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.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
INCLUDED IN THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS RELATING ALSO
TO REGISTRATION STATEMENT NO. 33-66922 PREVIOUSLY FILED BY THE REGISTRANT ON
FORM S-3 AND DECLARED EFFECTIVE ON SEPTEMBER 1, 1993. THIS REGISTRATION
STATEMENT, WHICH IS A NEW REGISTRATION STATEMENT, ALSO CONSTITUTES POST-
EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 33-66922, AND SUCH
POST-EFFECTIVE AMENDMENT NO. 1 SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY
WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT AND IN ACCORDANCE WITH
SECTION 8(C) OF THE SECURITIES ACT OF 1933.
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- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 24, 1996
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED ,
JOHN DEERE OWNER TRUST 199X-A
$ CLASS A-1 ASSET BACKED NOTES
$ CLASS A-2 ASSET BACKED NOTES
$ [FLOATING RATE] ASSET BACKED CERTIFICATES
JOHN DEERE RECEIVABLES, INC., SELLER
JOHN DEERE CAPITAL CORPORATION, SERVICER
-----------
The John Deere Owner Trust 199X-A (the "Trust" or the "Issuer") will be
formed pursuant to a Trust Agreement, to be dated as of , 199 , between
John Deere Receivables, Inc. (the "Seller") and , as
Owner Trustee, and will issue $ aggregate principal amount of Class
A-1 Asset Backed Notes (the "A-1 Notes") and $ aggregate principal
amount of Class A-2 Asset Backed Notes (the "A-2 Notes" and, together with the
A-1 Notes, the "Notes"). The Notes will be issued pursuant to an Indenture, to
be dated as of , 199 , (the "Indenture"), between the Trust and
, as Indenture Trustee. The Trust will also issue $
aggregate principal amount of [Floating Rate] Asset Backed Certificates (the
"Certificates" and, together with the Notes, the "Securities"). The assets of
the Trust include a pool of agricultural and industrial equipment retail
installment sale and loan contracts (the "Receivables") purchased by the Trust
from the Seller on or prior to the date of the issuance of the Notes and the
Certificates. The Seller will purchase the Receivables from John Deere Capital
Corporation concurrently with their sale to the Issuer. The Notes will be
secured by the assets of the Trust pursuant to the Indenture.
Interest on both the A-1 Notes and the A-2 Notes will be payable [monthly] on
or about the 15th day of each [month] (each a "Payment Date"), commencing on
, 199 . Principal of the Notes will be payable on each Payment Date to
the extent described herein; provided, however, that no principal payments in
respect of the A-2 Notes will be made until the A-1 Notes have been paid in
full.
(Continued on following page)
-----------
THE NOTES REPRESENT OBLIGATIONS OF, AND THE CERTIFICATES REPRESENT BENEFICIAL
INTERESTS IN, THE TRUST ONLY AND DO NOT REPRESENT INTERESTS IN OR
OBLIGATIONS OF JOHN DEERE RECEIVABLES, INC., JOHN DEERE CAPITAL
CORPORATION, DEERE & COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THE NOTES NOR THE CERTIFICATES OR THE RECEIVABLES ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HASTHE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO THE
OFFERING PRICE(1) DISCOUNT(2) ISSUER(1)(3)
<S> <C> <C> <C>
Per A-1 Note................... % % %
Per A-2 Note................... % % %
Per Certificate................ % % %
Total.......................... $ $ $
</TABLE>
- -----
(1) Plus accrued interest, if any, from the Closing Date.
(2) The Seller has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting".
(3) Before deducting estimated expenses of $ payable by the Issuer.
-----------
The Notes are offered by the Note Underwriters, and the Certificates are
offered by the Certificate Underwriters (collectively, the "Underwriters"),
subject to prior sale, when, as and if issued to and accepted by them. It is
expected that delivery of the Notes will be made only in book-entry form
through the Same Day Funds Settlement System of The Depository Trust Company on
or about , 199 . It is expected that the Certificates will be ready for
delivery in New York, New York on or about , 199 .
-----------
The date of this Prospectus Supplement is , 199 .
<PAGE>
(continued from preceding page)
The final scheduled payment date for the A-1 Notes will be , 199 , and
the final scheduled payment date for the A-2 Notes will be , .
However, the actual payment in full of the A-1 Notes and the A-2 Notes is
expected to occur sooner.
[The interest rate for the A-1 Notes will be set for each Payment Date to
LIBOR (as defined herein) minus % per annum. The interest rate for the
A-2 Notes will be set for each Payment Date to LIBOR (as defined herein) minus
% per annum, except as otherwise described herein.]
The A-2 Notes may be subject to redemption in whole, but not in part, on any
Payment Date if the Servicer exercises its option to purchase the Receivables
when the aggregate principal amount of the Receivables is reduced to 10% or
less of the initial Pool Balance of the Receivables assigned to the Trust.
The Certificates represent fractional undivided interests in the Trust.
Principal, to the extent described herein, and interest, to the extent of the
Pass-Through Rate which is generally equal to [LIBOR minus %] per annum
except as otherwise described herein, will be distributed on each Payment
Date, commencing on , . The final scheduled payment date for the
Certificates will be , . However, the actual payment in full of the
Certificates is expected to occur sooner.
The Issuer will be a newly formed limited-purpose Delaware business trust
and will generally be prohibited from incurring any indebtedness other than
the Notes. The Issuer's assets will include the Receivables, the Collection
Account, the Note Distribution Account, the Certificate Distribution Account
and the Reserve Account.
PROSPECTIVE INVESTORS SHOULD CONSIDER THE FACTORS SET FORTH UNDER "RISK
FACTORS" STARTING ON PAGE S-12 HEREIN AND IN THE ACCOMPANYING PROSPECTUS.
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION ABOUT THE
OFFERING OF THE NOTES AND THE CERTIFICATES. ADDITIONAL INFORMATION IS
CONTAINED IN THE PROSPECTUS AND PROSPECTIVE INVESTORS ARE URGED TO READ BOTH
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF THE NOTES OR
THE CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER HAS RECEIVED BOTH
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. TO THE EXTENT ANY STATEMENTS IN
THIS PROSPECTUS SUPPLEMENT CONFLICT WITH STATEMENTS IN THE PROSPECTUS, THE
STATEMENTS IN THIS PROSPECTUS SUPPLEMENT SHALL CONTROL.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE NOTES AND
THE CERTIFICATES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
REPORTS TO SECURITYHOLDERS
Unless and until Definitive Notes are issued, periodic and annual unaudited
reports containing information concerning the Receivables will be prepared by
the Servicer and sent on behalf of the Trust only to Cede & Co. ("Cede"), as
nominee of The Depository Trust Company ("DTC") and registered holder of the
Notes. Periodic and annual unaudited reports containing information concerning
the Receivables will be prepared by the Servicer and sent on behalf of the
Trust to the registered holders of the Certificates. See "Certain Information
Regarding the Securities--Book-Entry Registration" and""--Reports to
Securityholders" in the accompanying Prospectus (the "Prospectus"). Such
reports will not constitute financial statements prepared in accordance with
generally accepted accounting principles. The Trust will file with the
Securities and Exchange Commission (the "Commission") such periodic reports as
are required under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations thereunder and as are otherwise
agreed to by the Commission. Copies of such periodic reports may be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
S-2
<PAGE>
SUMMARY OF TERMS
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere herein and in the Prospectus. Certain
capitalized terms used herein are defined elsewhere in this Prospectus
Supplement on the pages indicated in the "Index of Terms" or, to the extent not
defined herein, have the meanings assigned to such terms in the Prospectus.
Issuer ................... John Deere Owner Trust 199X-A (the "Trust" or the
"Issuer").
Seller.................... John Deere Receivables, Inc. (the "Seller").
Servicer.................. John Deere Capital Corporation (the "Servicer" or
"JDCC"). The Servicer will designate Deere Credit
Services, Inc. ("Deere Credit Services"), an indi-
rect wholly-owned subsidiary of Deere & Company, as
its agent to service the Receivables (in such ca-
pacity, the "Sub-Servicer") at the Servicer's ex-
pense.
Indenture Trustee.........
Bank, as indenture trustee under the
Indenture (the "Indenture Trustee").
Owner Trustee.............
Bank Delaware, as trustee under the Trust
Agreement (the "Owner Trustee").
The Notes................. Class A-1 Asset Backed Notes (the "A-1 Notes") in
the aggregate principal amount of $ and
Class A-2 Asset Backed Notes (the "A-2 Notes" and,
together with the A-1 Notes, the "Notes") in the
aggregate principal amount of $ .
The Notes will be available for purchase in denomi-
nations of $1,000 and integral multiples thereof in
book-entry form only. The Noteholders will not be
entitled to receive a Definitive A-1 Note or a De-
finitive A-2 Note, as the case may be, except in
the event that Definitive A-1 Notes and Definitive
A-2 Notes are issued in the limited circumstances
described in the Prospectus. See "Certain Informa-
tion Regarding the Securities--Definitive Notes" in
the Prospectus. The Notes will be issued pursuant
to an Indenture to be dated as of , 199X
(the "Indenture"), between the Issuer and the In-
denture Trustee.
The Certificates.......... [Floating Rate] Asset Backed Certificates (the
"Certificates") in the aggregate principal amount
of $ will be offered. The Seller will
purchase the remaining $ principal amount
of the Certificates. The Certificates will be
available for purchase in denominations of $100,000
and integral multiples of $1,000 in excess thereof.
The Certificates will be issued in fully regis-
tered, certificated form ("Definitive Certifi-
cates") to Certificateholders or their nominees.
The Certificates will be issued pursuant to a Trust
Agreement to be dated as of , 199X (the
"Trust Agreement") between the Seller and the Owner
Trustee, acting thereunder not in its individual
capacity but solely as trustee of the Trust. Pur-
chasers of Certificates and their assignees must
represent that they are United States persons.
S-3
<PAGE>
The Trust................. The Trust will be a trust established under the
laws of the State of Delaware. The activities of
the Trust are limited by the terms of the Trust
Agreement to purchasing, owning and managing the
Receivables, issuing and making payments on the
Notes and the Certificates and other activities re-
lated thereto. The Trust Property includes (i) the
Receivables, (ii) all monies (including accrued in-
terest) due thereunder or paid thereon on or after
the Cut-off Date, (iii) such amounts as from time
to time may be held in one or more accounts estab-
lished and maintained by the Servicer pursuant to
the Sale and Servicing Agreement or the Trust
Agreement, as described below, (iv) the security
interests in the Financed Equipment, (v) the rights
to proceeds from claims on physical damage, credit
life and disability insurance policies, if any,
covering Financed Equipment or Obligors, as the
case may be, (vi) any proceeds of repossessed Fi-
nanced Equipment, (vii) the rights of the Seller
under the Purchase Agreement and (viii) interest
earned on short-term investments made by the Trust.
Receivables...............
The Receivables will consist of agricultural and
industrial equipment retail installment sale and
loan contracts secured by new and used agricultural
equipment and industrial equipment, including
rights to receive certain payments made with re-
spect to such Receivables, and security interests
in the equipment financed thereby (the "Financed
Equipment"), and the proceeds thereof. On or prior
to , 199X (the "Closing Date"), the Seller
will purchase Receivables having an aggregate prin-
cipal balance of approximately $ as of
, 199X (the "Cut-off Date"), from JDCC pur-
suant to a Purchase Agreement to be dated as of
, 199X (the "Purchase Agreement"), between
JDCC and the Seller, and the Seller will sell such
Receivables to the Trust pursuant to a Sale and
Servicing Agreement to be dated as of ,
199X (the "Sale and Servicing Agreement") among the
Seller, the Servicer and the Trust.
The Receivables arose from financing provided in
connection with retail sales by dealers (the "Deal-
ers") of new and used agricultural equipment and
industrial equipment to retail purchasers (the "Ob-
ligors") and are either originated, or acquired
from such Dealers, by Deere & Company, a Delaware
corporation ("Deere"), and its wholly-owned subsid-
iaries (collectively called "John Deere"). The Re-
ceivables will be purchased by JDCC pursuant to
agreements with certain John Deere companies. The
Receivables have been selected from the contracts
owned by JDCC based on the criteria specified in
the Purchase Agreement and described herein.
Each Receivable provides for fixed payments (except
as described below) on a periodic basis. [Each
variable rate Receivable pays interest at a vari-
able rate (the "Receivable Rate"), reset monthly,
at a specified amount (the "Base Rate Additive")
below
S-4
<PAGE>
or above the Base Rate described below, subject to
the highest rate permitted by applicable state or
federal law (whichever is less), and is prepayable
without premium or penalty at any time. The "Base
Rate" as of any date is the annual percentage rate
announced publicly from time to time by Citibank,
N.A., in New York, New York, as the base rate it
uses for determining the rate of interest it
charges on loans, as in effect at the close of
business on the 15th day of the immediately preced-
ing calendar month.] [Each fixed rate Receivable
pays interest at the rate specified in the related
contract.] The fixed payments provided for under
each Receivable are sufficient to amortize fully
the amount financed and pay finance charges at the
original Receivable Rate over an original term
which is determined as if such rate were in effect
without change throughout such term. Changes in the
Receivable Rate do not change the amount of each
scheduled payment but will reduce or increase the
amount of the final installment payment on a Re-
ceivable and may reduce or increase the total num-
ber of payments on such Receivable. See "The Re-
ceivables Pool".
As of the Cut-off Date, the weighted average annual
Base Rate Additive in respect of the Receivables
was approximately %. As of the Closing Date,
the Base Rate in respect of the Receivables was
% per annum. As of the Cut-off Date, the
weighted average annual percentage rate (the "APR")
of the fixed rate Receivables was approximately
%. The weighted average interest rate in respect
of the Receivables (the "Pool Rate") as of the Cut-
off Date was approximately %. The weighted av-
erage remaining term of the Receivables was approx-
imately months. No Receivable will have a
scheduled maturity later than , 200X.
The "Pool Balance" at any time represents the ag-
gregate principal balance of the Receivables at the
end of the preceding Collection Period after giving
effect to (i) all payments received from Obligors
during such Collection Period, (ii) Purchase
Amounts to be remitted by the Servicer or the
Seller (as the case may be) for such preceding Col-
lection Period and (iii) all losses realized on Re-
ceivables liquidated during such preceding Collec-
tion Period.
Terms of the Notes:
A. Interest Payments..... Interest on the outstanding principal amount of the
Notes will accrue from and including the most re-
cent Payment Date (or from and including the Clos-
ing Date in the case of the first Payment Date) to
but excluding the following Payment Date and will
be payable [monthly on the th day of each month]
or, if any such date is not a Business Day, on the
next succeeding Business Day (each a "Payment
Date") commencing , 199X, to the holders of
record of the A-1 Notes (the "A-1 Noteholders") and
the holders of record of the A-2 Notes (the "A-2
Noteholders"; together with the A-1 Noteholders,
the "Noteholders"), in each case as of the th day
of the calendar month in which such
S-5
<PAGE>
Payment Date occurs (the "Note Record Date"). [In-
terest in respect of the Notes shall be calculated
on the basis of a year of 360 days, in each case
for the actual number of days occurring in the pe-
riod for which such interest is payable.]
On each Payment Date, the per annum interest rate
for the A-1 Notes (the "A-1 Note Interest Rate")
will be a rate equal to the London interbank of-
fered rate for one-month United States dollar de-
posits ("LIBOR") as of the second LIBOR Business
Day prior to the immediately preceding Payment Date
(or, in the case of the initial Payment Date, the
second LIBOR Business Day prior to the Closing
Date) minus % per annum. See "Description of
the Notes--The A-1 Notes" herein.
On each Payment Date, the per annum interest rate
for the A-2 Notes (the "A-2 Note Interest Rate")
will be the lesser of (i) LIBOR as of the second
LIBOR Business Day prior to the immediately preced-
ing Payment Date (or, in the case of the initial
Payment Date, the second LIBOR Business Day prior
to the Closing Date) plus % per annum and
(ii) %; provided, however, that if the applica-
ble Pool Rate borne by the Receivables during the
related Collection Period less the servicing fee
rate (the difference between the Pool Rate and the
servicing fee rate being the "Net Pool Rate") is
less than or equal to the A-2 Note Interest Rate
(thus calculated for such Payment Date) plus %
per annum, then the A-2 Note Interest Rate for such
Payment Date will equal such Net Pool Rate less
% per annum. See "Description of the Notes--The
A-2 Notes" herein.
B. Principal Payments....
Principal of the Notes will be payable on each Pay-
ment Date in an amount calculated as a percentage
of the Principal Distribution Amount for such Pay-
ment Date to the extent of funds available therefor
as described herein. The Principal Distribution
Amount for a Payment Date will be based upon de-
creases in the Note Value of the Receivables and/or
collections on and losses in respect of the princi-
pal of the Receivables during the related Collec-
tion Period. "Collection Period" means with respect
to the first Payment Date, the period from the Cut-
off Date through the fiscal month ending on
, 199X and with respect to each subsequent Pay-
ment Date, the Collection Period means [the fiscal
month, as specified on Schedule C to the Sale and
Servicing Agreement,] immediately following the
previous Collection Period. See "Description of the
Transfer and Servicing Agreements--Distributions"
herein.
On each Payment Date, principal of the A-1 Notes
will be payable in an amount equal to 100% of the
Principal Distribution Amount and, on and after
[the later of (i)] the Payment Date on which the A-
1 Notes have been paid in full, [and (ii) the
, 199X Payment Date], principal of the A-2
Notes will be payable in an
S-6
<PAGE>
amount equal to the A-2 Noteholders' Percentage of
the Principal Distribution Amount for such Payment
Date, less any portion thereof applied on such Pay-
ment Date to reduce the outstanding principal
amount of the A-1 Notes to zero. See "Description
of the Transfer and Servicing Agreements--Distribu-
tions" herein.
The Sub-Servicer will calculate the A-2 Notehold-
ers' Percentage in the manner described under "De-
scription of the Transfer and Servicing Agree-
ments--Distributions" herein.
The outstanding principal amount, if any, of the A-
1 Notes will be payable in full on , 199X
(the "A-1 Final Scheduled Payment Date") and the
outstanding principal amount, if any, of the A-2
Notes will be payable in full on , (the
"A-2 Final Scheduled Payment Date").
C. Optional Redemption... The A-2 Notes may be redeemed in whole, but not in
part, on any Payment Date after the A-1 Notes have
been paid in full if the Servicer exercises its op-
tion to purchase the Receivables when the aggregate
principal amount of the Receivables is 10% or less
of the initial Pool Balance, at a redemption price
(the "A-2 Redemption Price") equal to the unpaid
amount of the A-2 Notes, plus accrued and unpaid
interest thereon.
Terms of the Certificates:
A. Pass-Through Rate.....
The Certificates will bear interest at a rate (the
"Pass-Through Rate") equal to the sum of [LIBOR mi-
nus %] per annum; provided, however, that on
and after the , 199X Payment Date, if the ag-
gregate amount of Realized Losses during the period
from the Cut-off Date through the end of the fiscal
month ending in , 199X is (x) % or less
(but greater than %) of the Pool Balance as of
the Cut-off Date, the Pass-Through Rate (as deter-
mined in the clause preceding this proviso) for any
Payment Date shall be increased by % per annum
or (y) % or less of the Pool Balance as of the
Cut-off Date, the Pass-Through Rate (as determined
in the clause preceding this proviso) for any Pay-
ment Date shall be increased by % per annum;
provided further that, notwithstanding the preced-
ing proviso, if the Net Pool Rate borne by the Re-
ceivables during the related Collection Period is
less than the Pass-Through Rate thus calculated for
such Payment Date, then the Pass-Through Rate pay-
able on the Certificates will equal such Net Pool
Rate.
B. Interest.............. On each Payment Date, the Owner Trustee shall dis-
tribute pro rata to the holders of record of the
Certificates (the "Certifi-
cateholders" and together with the Noteholders, the
"Securityholders") as of the last day of the imme-
diately preceding calendar month (the "Certificate
Record Date") interest at the Pass-Through Rate on
the Certificate Balance as of the preceding Payment
Date (after giving effect to distributions made on
S-7
<PAGE>
such Payment Date) generally to the extent of funds
available therefor following payment of the Servic-
ing Fee, the Administration Fee and distributions
in respect of the Notes. Interest for a Payment
Date will accrue from and including the most recent
Payment Date (or, in the case of the first Payment
Date, from and including the Closing Date) to but
excluding such current Payment Date and will be
calculated on the basis of a year of 360 days, in
each case for the actual number of days occurring
in the period for which such interest is payable.
In addition, Certificateholders will receive on
each Payment Date, if on such Payment Date the
amount on deposit in the Reserve Account, after
giving effect to all withdrawals and deposits re-
quired to be made on such Payment Date, exceeds the
Specified Reserve Account Balance, an amount equal
to the lesser of (1) such excess and (2) one-
twelfth of the product of (a) the excess, if any,
of (i) the amount of the positive spread, if any,
between the Base Rate in effect on the day that LI-
BOR for such Payment Date is established and LIBOR
for such Payment Date over (ii) % times (b) the
Certificate Balance on the preceding Payment Date.
C. Principal............ Principal of the Certificates will be payable on
each Payment Date on and after the [later of (i)
the] Payment Date following the Payment Date on
which the A-1 Notes have been paid in full, [and
(ii) the , 199X Payment Date], in an amount
generally equal to the Certificateholders' Princi-
pal Distributable Amount for the Collection Period
preceding such Payment Date, to the extent of funds
available therefor following payment of the Servic-
ing Fee, the Administration Fee and distributions
of interest and principal in respect of the Notes
and interest in respect of the Certificates. The
Certificateholders' Principal Distributable Amount
generally will be based on the Certificateholders'
Percentage of the Principal Distribution Amount,
which for any Payment Date will be based upon de-
creases in the Note Value of the Receivables and/or
collections on and losses in respect of the princi-
pal of the Receivables during the related Collec-
tion Period. See "Description of the Transfer and
Servicing Agreements--Distributions" herein.
The outstanding amount, if any, of the Certificates
will be payable in full on , .
D. Optional Purchase.... If the Servicer exercises its option to purchase
the Receivables when the aggregate principal amount
of the Receivables is 10% or less of the Pool Bal-
ance as of the Cut-off Date, the Certificateholders
will receive an amount in respect of the Certifi-
cates equal to the Certificate Balance together
with accrued interest at the Pass-Through Rate and
the Certificates will be retired. See "Description
of the Certificates--Optional Purchase" herein.
Reserve Account........... The Reserve Account will be created with an initial
deposit by the Seller of cash or Eligible Invest-
ments having a value of approxi-
S-8
<PAGE>
mately $ (the "Reserve Account Initial
Deposit"). The Reserve Account Initial Deposit will
be augmented on each Payment Date by the deposit
into the Reserve Account of amounts remaining after
payment of the Servicing Fee, the Administration
Fee and the deposit into the Note Distribution Ac-
count and the Certificate Distribution Account of
amounts to be distributed to the Noteholders and
Certificateholders. The amounts in the Reserve Ac-
count on each Payment Date prior to the , 199X
Payment Date in excess of the Specified Reserve Ac-
count will be released to the Seller. On each Pay-
ment Date commencing with the , 199X Payment
Date, if the amount in the Reserve Account on such
Payment Date exceeds the Specified Reserve Account
Balance, all or a portion of such excess will gen-
erally be released to the Note Distribution Account
to be distributed to the A-2 Noteholders as princi-
pal on the A-2 Notes.
The "Specified Reserve Account Balance" with re-
spect to any Payment Date will be equal to the
greater of (i) % of the Pool Balance as of the
close of business on the last day of the related
Collection Period and (ii) $ ; provided,
however, that (a) if either Realized Losses or de-
linquencies exceed certain levels, the Specified
Reserve Account Balance may be higher and (b) in no
event will the Specified Reserve Account Balance
exceed the sum of the outstanding principal amount
of the Notes and the Certificate Balance. See "De-
scription of the Transfer and Servicing Agree-
ments--Reserve Account" herein.
Collection Account........ Except under certain conditions described herein,
the Sub-Servicer will be required to remit collec-
tions received with respect to the Receivables
within two business days of receipt thereof to one
or more accounts in the name of the Indenture
Trustee (the "Collection Account"). Pursuant to the
Sale and Servicing Agreement, the Servicer will
have the revocable power to instruct the Indenture
Trustee to withdraw funds on deposit in the Collec-
tion Account and to apply, except as otherwise de-
scribed herein, such funds on each Payment Date to
the following (in the priority indicated): (i) the
Servicing Fee for the prior Collection Period and
any overdue Servicing Fees to the Servicer, (ii)
the Administration Fee for the prior Collection Pe-
riod and any overdue Administration Fees to the Ad-
ministrator, (iii) the Noteholders' Interest Dis-
tributable Amount, the A-1 Noteholders' Principal
Distributable Amount and the A-2 Noteholders' Prin-
cipal Distributable Amount into the Note Distribu-
tion Account, (iv) the Certificateholders' Interest
Distributable Amount into the Certificate Distribu-
tion Account, (v) the Certificateholders' Principal
Distributable Amount into the Certificate Distribu-
tion Account and (vi) the remaining balance, if
any, to the Reserve Account for distribution in ac-
cordance with the Sale and Servicing Agreement. See
"Description of the Transfer and Servicing Agree-
ments--Distributions" and "--Reserve Account" here-
in.
S-9
<PAGE>
Transfer and Servicing
Agreements...............
Under the Purchase Agreement, the Seller will pur-
chase the Receivables from JDCC and under the Sale
and Servicing Agreement, the Seller will sell the
Receivables to the Trust. In addition, the Servicer
will agree with the Trust to be responsible for
servicing, managing, maintaining custody of and
making collections on the Receivables. The rights
and benefits of the Seller under the Purchase
Agreement and of the Trust under the Sale and Ser-
vicing Agreement will be assigned to the Indenture
Trustee as collateral for the Notes. The obliga-
tions of the Seller and the Servicer under those
Agreements include those specified below.
The Seller will be obligated to repurchase any Re-
ceivable if the interest of the Trust therein is
materially adversely affected by a breach of any
representation or warranty made by the Seller or
JDCC with respect to the Receivable, if the breach
has not been cured following the discovery by or
notice to the Seller of the breach. JDCC will, in
most cases, be obligated to repurchase the Receiv-
able from the Seller pursuant to the Purchase
Agreement contemporaneously with the Seller's re-
purchase from the Trust. The obligation of the
Seller to repurchase any Receivable with respect to
which JDCC has breached a representation or war-
ranty is subject to JDCC's repurchase of such Re-
ceivable.
Consistent with its normal procedures, the Sub-
Servicer may, in its discretion, arrange with the
Obligor on a Receivable to extend or modify the
payment schedule. Some of such arrangements may re-
sult in the Servicer purchasing the Receivable for
the Purchase Amount.
The Servicer shall receive a fee for each Collec-
tion Period (the "Servicing Fee") equal to % per
annum (the "Servicing Fee Rate") of the Pool Bal-
ance as of the first day of such Collection Period,
plus certain late fees and other administrative
fees or similar charges.
Tax Status................ In the opinion of Shearman & Sterling, special fed-
eral tax counsel for the Trust, the Notes will be
characterized as debt for federal income tax pur-
poses and the Trust will not be characterized as an
association (or a publicly traded partnership) tax-
able as a corporation. The Certificateholders (in-
cluding the Seller) will agree to treat the Trust
as a partnership in which they are partners for
purposes of federal and state income tax, franchise
tax and any other income tax, with the assets of
the partnership being the assets held by the Trust,
the partners of the partnership being the
Certificateholders and the Notes being debt of the
partnership. Alternative characterizations of the
Trust and the Securities are possible, as more
fully described herein. See "Certain Federal Income
Tax Considerations" and "Certain State Tax Consid-
erations" herein for information regarding the ap-
plication of federal and Iowa tax laws to the Secu-
rities and the Trust.
S-10
<PAGE>
ERISA Considerations...... Subject to the considerations discussed under
"ERISA Considerations" herein and in the Prospec-
tus, the Notes are eligible for purchase by em-
ployee benefit plans.
The Certificates may not be acquired by any (i) em-
ployee benefit plan subject to the Employee Retire-
ment Income Security Act of 1974, as amended
("ERISA"), (ii) individual retirement account or
(iii) entity whose underlying assets are treated as
plan assets. See "ERISA Considerations" herein and
in the Prospectus.
Legal Investment.......... The A-1 Notes will be eligible securities for pur-
chase by money market funds under paragraph (a)(5)
of Rule 2a-7 under the Investment Company Act of
1940, as amended.
Rating of the Securities.. It is a condition to the issuance of the Notes that
the A-1 Notes be rated in the highest short-term
rating category, the A-2 Notes be rated in the
highest long-term rating category and the Certifi-
cates be rated at least "A" or its equivalent, in
each case by at least two nationally recognized
rating agencies. There can be no assurance that
such ratings will not be lowered or withdrawn by a
rating agency if, in the opinion of such rating
agency, circumstances so warrant. See "Special Con-
siderations--Ratings of the Securities" herein.
S-11
<PAGE>
RISK FACTORS
Limited Liquidity. There is currently no secondary market for the
Securities. The Note Underwriters and the Certificate Underwriters currently
intend to make a market in the Securities, but they are under no obligation to
do so. There can be no assurance that a secondary market will develop or, if a
secondary market does develop, that it will provide the Securityholders with
liquidity of investment or that it will continue for the life of the
Securities.
Seasonality of Cash Flow. Payment frequency of the Receivables may be
monthly, quarterly, semiannually, annually or on an irregular basis. The large
majority of the Receivables (representing approximately % of the aggregate
unpaid principal balance of the Receivables as of the Cut-off Date) are
agricultural equipment retail installment sale and loan contracts and tend to
have payment dates which correspond to periods in which farmers have stronger
cash flows. As a result, the amounts of cash distributed to Securityholders
will tend to share in this seasonality, with higher amounts of principal paid
on the Payment Dates occurring in , and of each year and
relatively lower amounts paid on other Payment Dates.
Subordination; Limited Assets. Distributions of interest and principal on
the Certificates will be subordinated in priority of payment to interest and
principal due on the Notes. The Certificateholders will not receive any
distributions with respect to a Payment Date until the full amount of interest
on and principal of the Notes on such Payment Date has been deposited in the
Note Distribution Account. The Trust does not have, nor is it permitted or
expected to have, any significant assets or sources of funds other than the
Receivables and the Trust Accounts. The Securities represent solely
obligations of, or interests in, the Trust and the Securities will not be
insured or guaranteed by Deere, JDCC, the Seller, the Servicer, the Sub-
Servicer, the Owner Trustee or any other person or entity. Consequently,
holders of the Securities must rely for repayment upon payments on the
Receivables and, if and to the extent available, amounts on deposit in the
Reserve Account. Amounts to be deposited in the Reserve Account are limited in
amount, and the amount required to be on deposit in the Reserve Account will
be reduced as the Pool Balance is reduced. In addition, funds in the Reserve
Account will be available on each Payment Date to cover shortfalls in
distributions of interest and principal on the Notes prior to the application
thereof to cover shortfalls on the Certificates. If the Reserve Account is
exhausted, the Trust will depend solely on current payments on the Receivables
to make payments on the Securities. Although the Trust will covenant to sell
the Receivables if directed to do so by the Indenture Trustee in accordance
with the Indenture following an acceleration of the Notes upon an Event of
Default, there is no assurance that the market value of the Receivables will
at any time be equal to or greater than the aggregate principal amount of
outstanding Notes. Therefore, upon an Event of Default with respect to the
Notes there can be no assurance that sufficient funds will be available to
repay Noteholders in full. In addition, the amount of principal required to be
distributed to Noteholders under the Indenture is generally limited to amounts
available therefor in the Note Distribution Account. Therefore, the failure to
pay principal on the Notes may not result in the occurrence of an Event of
Default until the A-1 Final Scheduled Payment Date or the A-2 Final Scheduled
Payment Date.
Servicer Default. In the event a Servicer Default occurs, the Indenture
Trustee or the Noteholders, as described under "Description of the Transfer
and Servicing Agreements--Rights upon Servicer Default" in the Prospectus, may
remove the Servicer without the consent of the Owner Trustee or any of the
Certificateholders. The Owner Trustee or the Certificateholders will not have
the ability to remove the Servicer if a Servicer Default occurs. In addition,
the Noteholders have the ability, with certain specified exceptions, to waive
defaults by the Servicer, including defaults that could materially adversely
affect the Certificateholders. See "Description of the Transfer and Servicing
Agreements--Waiver of Past Defaults" in the Prospectus.
Ratings of the Securities. It is a condition to the issuance of the Notes
and the Certificates that the A-1 Notes be rated in the highest short-term
rating category, the A-2 Notes be rated in the highest long-term rating
category and the Certificates be rated at least "A" or its equivalent, in each
case by at
S-12
<PAGE>
least two nationally recognized rating agencies (the "Rating Agencies"). A
rating is not a recommendation to purchase, hold or sell Securities, inasmuch
as such rating does not comment as to market price or suitability for a
particular investor. The rating of the Securities addresses the likelihood of
the timely payment of interest on and the ultimate repayment of principal of
the Securities pursuant to their terms. There is no assurance that a rating
will remain for any given period of time or that a rating will not be lowered
or withdrawn entirely by a Rating Agency if in its judgment circumstances in
the future so warrant. In the event that a rating is subsequently lowered or
withdrawn, no person or entity will be obligated to provide any additional
credit enhancement. The rating of the Notes is based primarily on the credit
quality of the Receivables, the subordination provided by the Certificates and
the availability of funds in the Reserve Account. The rating of the
Certificates is based primarily on the credit quality of the Receivables and
the availability of funds in the Reserve Account.
Trust's Relationship to the Seller and John Deere Capital Corporation;
Financial Condition of Deere & Company. None of the Seller, JDCC or Deere is
generally obligated to make payments in respect of the Notes, the Certificates
or the Receivables. If JDCC were to cease acting as Servicer or if Deere
Credit Services were to cease acting as Sub-Servicer, delays in processing
payments on the Receivables and information in respect thereof could occur and
result in delays in payments to the Securityholders. In connection with the
sale of Receivables by JDCC to the Seller, JDCC makes representations and
warranties with respect to the characteristics of such Receivables. In certain
circumstances, JDCC and the Seller are required to repurchase Receivables with
respect to which such representations and warranties have been breached. See
"Description of the Transfer and Servicing Agreements--Sale and Assignment of
Receivables" herein.
For additional information regarding Deere and JDCC, see "The Seller, Deere
and the Servicer" in the Prospectus. Deere and JDCC are subject to the
information requirements of the Exchange Act and in accordance therewith file
reports and other information with the Commission. Copies of such periodic
reports may be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
[Relationship Between Base Rate and LIBOR. Allocations of payments on the
Receivables to principal and interest depend upon the applicable Base Rate.
Interest on the Notes and the Certificates accrues at a rate based upon LIBOR.
These two rates can and will vary with respect to each other. Historically,
they have increased or decreased roughly in tandem and, during the last ten
years, LIBOR always has remained below the Base Rate. However, no assurance
can be given that these historical trends will continue.]
[The Receivables bear interest at the Base Rate plus a Base Rate Additive
ranging from - % to %. Each of the A-1 Note Interest Rate, the A-2 Note
Interest Rate and the Pass-Through Rate is based upon LIBOR. If, in respect of
any Payment Date, there does not exist a positive spread between the Net Pool
Rate for the Collection Period preceding such Payment Date and (i) the sum of
(A) the A-2 Note Interest Rate plus (B) % per annum or (ii) the Pass-
Through Rate for such Payment Date (in each case, calculated before giving
effect to this sentence), then, the rate of interest payable on the A-2 Notes
on such Payment Date shall equal the Net Pool Rate less % per annum and
the Pass-Through Rate for such Payment Date shall equal the Net Pool Rate.]
[Changes in the Base Rate. Changes in the Base Rate may affect the final
maturity date of the Receivables and, thereby, affect the weighted average
life of the Securities. For a discussion of the effect of a change in the Base
Rate on final maturity, see "The Receivables Pool--Maturity and Prepayment
Considerations" herein.]
S-13
<PAGE>
THE TRUST
GENERAL
The Issuer, John Deere Owner Trust 199x-A, will be a business trust formed
under the laws of the State of Delaware pursuant to the Trust Agreement for
the transactions described in this Prospectus Supplement. After its formation,
the Trust will not engage in any activity other than (i) acquiring, holding
and managing the Receivables and the other assets of the Trust and proceeds
therefrom, (ii) issuing and making payments on the Notes, (iii) issuing and
making payments on the Certificates and (iv) engaging in other activities that
are necessary, suitable or convenient to accomplish the foregoing or are
incidental thereto or connected therewith.
The Trust will initially be capitalized with equity of $ ,
excluding amounts in the Reserve Account. Certificates with an original
principal balance of $ (which represents approximately % of the
total original principal balance of the Certificates) will be sold to the
Seller and the remaining Certificates will be sold to third party investors
that are expected to be unaffiliated with the Seller, the Servicer or the
Trust. The proceeds from the initial sale of the Certificates together with
the proceeds from the initial sale of the Notes will be used by the Trust to
purchase the Receivables from the Seller pursuant to the Sale and Servicing
Agreement. The Servicer will initially service the Receivables pursuant to the
Sale and Servicing Agreement, and will be compensated for acting as the
Servicer. See "Description of the Transfer and Servicing Agreements--Servicing
Compensation" herein. To facilitate servicing and to minimize administrative
burden and expense, the Servicer will be appointed custodian for the
Receivables by the Owner Trustee, but will not stamp the Receivables to
reflect the sale and assignment of the Receivables to the Trust, nor amend the
financing statements filed to perfect the security interest in the Financed
Equipment or the certificates of title, if applicable, of the Financed
Equipment. In the absence of amendments to the certificates of title, the
Trust may not have perfected security interests in the Financed Equipment
securing the Receivables originated in some states. See "Certain Legal Aspects
of the Receivables" in the Prospectus.
If the protection provided to the investment of the Securityholders in the
Trust by the availability of funds in the Reserve Account is insufficient, the
Trust must rely solely on payments from or on behalf of the Obligors on the
Receivables and the proceeds from the repossession and sale of Financed
Equipment which secures defaulted Receivables. In such event, certain factors,
such as the Trust's not having first priority perfected security interests in
some of the Financed Equipment, may affect the Trust's ability to realize on
the collateral securing the Receivables, and thus may reduce the proceeds to
be distributed to Securityholders with respect to the Securities. See
"Description of the Transfer and Servicing Agreements--Distributions" and "--
Reserve Account" herein and "Certain Legal Aspects of the Receivables" in the
Prospectus.
The Trust's principal offices are in , Delaware, in care of
, as Owner Trustee, at the address listed below under
"--The Owner Trustee" herein.
CAPITALIZATION OF THE TRUST
The following table illustrates the capitalization of the Trust as of the
Cut-off Date, as if the issuance and sale of the Notes and the Certificates
offered hereby had taken place on such date:
<TABLE>
<S> <C>
Class A-1 Floating Rate Asset Backed Notes.................. $
Class A-2 Floating Rate Asset Backed Notes..................
[Floating Rate] Asset Backed Certificates...................
------------
Total..................................................... $
============
</TABLE>
S-14
<PAGE>
THE OWNER TRUSTEE
will be the Owner Trustee under the Trust Agreement.
is a banking corporation and its principal offices are located
at . The Owner Trustee's
liability in connection with the issuance and sale of the Notes and the
Certificates is limited solely to the express obligations of the Owner Trustee
set forth in the Trust Agreement and the Sale and Servicing Agreement. [An
affiliate of the] [The] Owner Trustee is one of a number of banks with which
Deere and JDCC maintain ordinary banking relationships and from which Deere
and JDCC have obtained credit facilities and lines of credit. [An affiliate of
the Owner Trustee also serves as trustee under indentures under which Deere or
JDCC is the obligor.]
THE RECEIVABLES POOL
The Receivables were purchased by the Servicer from the Sales Companies
which either originated the Receivables in the ordinary course of business in
connection with retail sales by the Dealers or, in limited instances, acquired
the Receivables from the Dealers in the ordinary course of business. The large
majority of the aggregate principal balance of the Receivables represents
financing of new and used equipment manufactured or distributed by John Deere.
The Servicer purchases contracts in accordance with its credit standards which
are based upon the buyer's ability to repay the obligation, credit history and
the downpayment on the Financed Equipment. The "Sales Companies" include
Deere, John Deere Industrial Equipment Company and John Deere Company, which
was merged into Deere on January 31, 1992.
The Receivables were selected from JDCC's portfolio by several criteria,
including, as of the Cut-off Date, the following: except as described under
"Certain Legal Aspects of the Receivables", each Receivable was originated in
the United States, has an Obligor which is a United States person, is secured
by a perfected first priority security interest in the related Financed
Equipment, has a scheduled maturity of not later than , provides
for scheduled payments which fully amortize the amount financed (assuming that
the Receivable Rate calculated at the time of origination remains in effect
without change throughout the term of such Receivable), has an outstanding
principal balance of at least $ and is not more than days past due. As
of the Cut-off Date, no Obligor on any Receivable was noted in the related
records of the Servicer or the Sub-Servicer as being the subject of a
bankruptcy proceeding. No selection procedures believed by JDCC or the Seller
to be adverse to Securityholders were used in selecting the Receivables.
[Payment schedules on the Receivables are structured so that customers can
make payments in conjunction with their expected cash flow (which, as to
agricultural equipment customers, is highly seasonal and crop-related). Each
Receivable provides for fixed payments (except as provided below as to final
payments) on a monthly, quarterly, semiannual, annual or other basis. Most
Receivables relating to agricultural equipment pay on an annual basis and most
other Receivables pay on a monthly basis. The fixed payments provided for
under each Receivable are sufficient to amortize fully the amount financed and
pay finance charges over the original term if the Receivable Rate at the time
of origination were in effect without change throughout such term. Any
reduction in the total dollar amount of payments actually required on a
Receivable over its original term resulting from changes in the actual
Receivable Rate will reduce the installment payments in the inverse order of
their final scheduled payment date. Any increases in the total dollar amount
of payments resulting from changes in the actual Receivable Rate (a) if the
increase is equal to or less than one-half of the amount of the originally
scheduled final installment payment, will increase the final payment by such
amount or (b) if greater, may result in additional installment payments after
the originally scheduled final installment payment, in the same amounts and
payment intervals as originally scheduled, to the extent necessary to result
in payment in full.]
S-15
<PAGE>
The composition of the [variable rate] [and fixed rate] Receivables, the
distribution of the [variable rate] Receivables by Base Rate Additive, [and
the fixed rate receivables by APR], equipment type, payment frequency, current
principal balance and the geographic distribution of the Receivables, all as
of the Cut-off Date, are set forth in the following tables.
COMPOSITION OF THE [VARIABLE RATE] RECEIVABLES
<TABLE>
<CAPTION>
WEIGHTED AVERAGE AGGREGATE WEIGHTED AVERAGE WEIGHTED AVERAGE AVERAGE PRINCIPAL
BASE RATE PRINCIPAL NUMBER OF ORIGINAL TERM REMAINING TERM BALANCE
ADDITIVE (RANGE) BALANCE RECEIVABLES (RANGE) (RANGE) (RANGE)
---------------- --------- ----------- ---------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
% $ months months (1) $
(- % to %) ( to months) ( to months) ($ to $ )
</TABLE>
- --------
(1) Based on scheduled payments and assuming no prepayments of the Receivables
and that the Base Rate of % in effect on the Cut-off Date remains in
effect without change until each Receivable is fully paid.
[COMPOSITION OF THE FIXED RATE RECEIVABLES
<TABLE>
<CAPTION>
WEIGHTED AVERAGE AGGREGATE WEIGHTED AVERAGE WEIGHTED AVERAGE
APR OF PRINCIPAL NUMBER OF REMAINING TERM ORIGINAL TERM AVERAGE PRINCIPAL
RECEIVABLES BALANCE RECEIVABLES (RANGE) (RANGE) BALANCE (RANGE)
- ---------------- --------- ----------- ---------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
$ months months $
( to %) ( to months) ( to months) ($ to $ )]
</TABLE>
- --------
DISTRIBUTION OF THE [VARIABLE RATE] RECEIVABLES BY BASE RATE ADDITIVE
<TABLE>
<CAPTION>
PERCENT
OF
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
BASE RATE ADDITIVE RANGE RECEIVABLES BALANCE BALANCE
- ------------------------ ----------- ------------ ---------
<S> <C> <C> <C>
0.00% or below............................... $ %
0.01%-0.99% .................................
1.00%-1.99% .................................
2.00%-2.99% .................................
3.00%-3.99% .................................
4.00% and above..............................
------ ------------ -----
Total...................................... $ 100.0%
====== ============ =====
</TABLE>
[DISTRIBUTION OF THE FIXED RATE RECEIVABLES BY APR
<TABLE>
<CAPTION>
PERCENT
OF
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
APR RANGE RECEIVABLES BALANCE BALANCE
- --------- ----------- --------- ---------
<S> <C> <C> <C>
0.00% to 4.00%................................ $ %
4.01% to 5.00%................................
5.01% to 6.00%................................
6.01% to 7.00%................................
7.01% to 8.00%................................
8.01% to 9.00%................................
9.01% to 10.00%................................
10.01% to 11.00%................................
11.01% to 12.00%................................
12.01% to 13.00%................................
13.01% to 14.00%................................
14.01% to 15.00%................................
15.01% and above................................
------- -------- -----
Total......................................... $ 100.0%]
======= ======== =====
</TABLE>
S-16
<PAGE>
DISTRIBUTION OF THE RECEIVABLES BY EQUIPMENT TYPE
<TABLE>
<CAPTION>
PERCENT
OF
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
TYPE RECEIVABLES BALANCE BALANCE
- ---- ----------- ------------ ---------
<S> <C> <C> <C>
Agricultural
New........................................ $ %
Used.......................................
Industrial
New........................................
Used.......................................
------ ------------ -----
Total.................................... $ %
====== ============ =====
</TABLE>
DISTRIBUTION OF THE RECEIVABLES BY PAYMENT FREQUENCY
<TABLE>
<CAPTION>
PERCENT
OF
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
FREQUENCY RECEIVABLES BALANCE BALANCE
- --------- ----------- ------------ ---------
<S> <C> <C> <C>
Annual (1)................................... $ %
Semiannual...................................
Quarterly....................................
Monthly......................................
Other (2)....................................
------ ------------ -----
Total...................................... $ %
====== ============ =====
</TABLE>
- --------
(1) Based on aggregate principal balance, approximately %, % and %
of the annual Receivables have scheduled payments within the Collection
Period relating to the Payment Dates in [January, February and April,]
respectively.
(2) The other Receivables represent loans with scheduled payments which occur
at various intervals (at least once) during the calendar year other than
intervals described by the other categories and/or which have various
scheduled payment amounts.
DISTRIBUTION OF THE RECEIVABLES BY CURRENT PRINCIPAL BALANCE
<TABLE>
<CAPTION>
PERCENT
OF
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
CURRENT PRINCIPAL BALANCE RANGE RECEIVABLES BALANCE BALANCE
- ------------------------------- ----------- ------------ ---------
<S> <C> <C> <C>
$ 500- 10,000............................. $ %
10,001- 20,000.............................
20,001- 30,000.............................
30,001- 40,000.............................
40,001- 50,000.............................
50,001- 75,000.............................
75,001-100,000.............................
100,001-200,000.............................
200,001 and above...........................
------ ------------ -----
Total ..................................... $ %
====== ============ =====
</TABLE>
S-17
<PAGE>
GEOGRAPHIC DISTRIBUTION OF THE RECEIVABLES
<TABLE>
<CAPTION>
PERCENT
OF
AGGREGATE
PRINCIPAL
STATE(1) BALANCE
- -------- ---------
<S> <C>
Alabama................. %
Alaska..................
Arizona.................
Arkansas................
California..............
Colorado................
Connecticut.............
Delaware................
Florida.................
Georgia.................
Idaho...................
Illinois................
Indiana.................
Iowa....................
Kansas..................
Kentucky................
Louisiana...............
Maine...................
Maryland................
Massachusetts...........
Michigan................
Minnesota...............
Mississippi.............
Missouri ...............
Montana.................
</TABLE>
<TABLE>
<CAPTION>
PERCENT
OF
AGGREGATE
PRINCIPAL
STATE(1) BALANCE
- -------- ---------
<S> <C>
Nebraska................ %
Nevada..................
New Hampshire...........
New Jersey..............
New Mexico..............
New York................
North Carolina..........
North Dakota............
Ohio....................
Oklahoma................
Oregon..................
Pennsylvania............
Rhode Island............
South Carolina..........
South Dakota............
Tennessee...............
Texas...................
Utah....................
Vermont.................
Virginia................
Washington..............
West Virginia...........
Wisconsin...............
Wyoming.................
-----
100.0%
=====
</TABLE>
- --------
(1) Based on billing addresses of Obligors.
S-18
<PAGE>
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Set forth below is certain information concerning JDCC's experience in the
United States pertaining to delinquencies and repossessions on JDCC's retail
agricultural and industrial equipment receivables (including variable rate
receivables, fixed rate receivables and variable rate receivables which are
subject to an interest rate cap arrangement). Delinquencies, repossessions and
net losses on agricultural and industrial equipment receivables are affected
by economic conditions generally. In addition, delinquencies, repossessions
and net losses on agricultural equipment receivables may be affected by
commodity market prices, weather conditions such as flood, drought and early
frost and the level of farmers' income, while delinquencies, repossessions and
net losses on industrial equipment receivables may be affected by the level of
housing starts and non-residential construction. Delinquencies, repossessions
and net losses on both agricultural and industrial equipment receivables have
remained relatively stable over the prior five fiscal years. Generally, when
an account becomes 120 days delinquent, accrual of finance income is
suspended, the collateral is repossessed or the account is designated for
litigation. There can be no assurance that the delinquency, repossession and
net loss experience on the Receivables will be comparable to that set forth
below.
DELINQUENCY EXPERIENCE(1)
<TABLE>
<CAPTION>
AT OCTOBER 31,
--------------------------------------------------------------------------------------------------
1991 1992 1993 1994 1995
------------------ ------------------ ------------------ ------------------ ------------------
NUMBER NUMBER NUMBER NUMBER NUMBER
OF FACE OF FACE OF FACE OF FACE OF FACE
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
--------- -------- --------- -------- --------- -------- --------- -------- --------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross Portfolio.. 219,526 $3,796.0 228,618 $3,818.7 224,150 $3,867.9 222,739 $4,297.4 233,131 $4,862.3
Period of
Delinquency
30-59 days...... 3,805 $ 60.1 3,674 $ 60.2 3,480 $ 51.1 2,945 $ 51.4 3,575 $ 69.5
60 days or more. 5,580 $ 102.4 3,057 $ 47.7 2,959 $ 43.4 2,335 $ 35.3 3,005 $ 57.3
------- -------- ------- -------- ------- -------- ------- -------- ------- --------
Total
Delinquencies... 9,385 $ 162.5 6,731 $ 107.9 6,439 $ 94.5 5,280 $ 86.7 6.580 $ 126.8
Total Delinquen-
cies as a Per-
cent of the
Gross Portfolio. 4.28% 4.28% 2.94% 2.83% 2.87% 2.44% 2.37% 2.02% 2.95% 2.61%
</TABLE>
<TABLE>
<CAPTION>
DELINQUENCY EXPERIENCE (1)
---------------------------------------
AT APRIL 30, AT APRIL 30,
1995(2) 1996(2)
------------------ -------------------
NUMBER OF FACE NUMBER OF FACE
CONTRACTS AMOUNT CONTRACTS AMOUNT
--------- -------- --------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Gross Portfolio....................... 210,539 $4,334.5 212,019 $ 4,746.8
Period of Delinquency
30-59 days........................... 4,429 $ 90.0 5,508 $ 141.1
60 days or more...................... 3,252 $ 53.2 4,675 $ 93.3
------- -------- ------- ---------
Total Delinquencies................... 7,681 $ 143.2 10,183 $ 234.4
Total Delinquencies as a Percent of
the Gross Portfolio.................. 3.65% 3.30% 4.80% 4.94%
</TABLE>
- -------
(1) Face amounts and percentages are based on the gross amount of all unpaid
installments scheduled to be paid on each contract, including unearned
finance and other charges. The information in the table includes
previously sold contracts that continue to be serviced by Deere Credit
Services.
S-19
<PAGE>
CREDIT LOSS/REPOSSESSION EXPERIENCE(1)
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED OCTOBER 31, ENDED APRIL 30,
------------------------------------------------ ------------------
1991 1992 1993 1994 1995 1995(5) 1996(5)
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Gross Portfolio
Managed During the
Period(2).............. $3,591.1 $3,807.3 $3,843.3 $4,082.7 $4,579.9 $4,316.0 $4,804.6
Repossessions as a
Percent of Average
Gross Portfolio
Managed(2)............. 1.84% 1.52% 1.21% .88% .67% .38% .35%
Net Losses as a Percent
of Liquidations(3)(4).. .73% .76% .23% .22% .22% .23% .41%
Net Losses as a Percent
of Average Gross
Portfolio
Managed(2)(4).......... .47% .50% .14% .13% .13% .09% .17%
</TABLE>
- --------
(1) Except as indicated, all amounts and percentages are based on the gross
amount of all unpaid installments scheduled to be paid on each contract,
including unearned finance and other charges.
(2) Average Gross Portfolio Managed includes agricultural and industrial
equipment retail notes owned by JDCC, other financial institutions and
securitization trusts. All such retail notes are serviced by Deere Credit
Services.
(3) Liquidations represent a reduction in the outstanding balances of the
contracts as a result of cash payments and charge-offs.
(4) Net Losses are equal to the aggregate net balances of all contracts which
are determined to be uncollectible less any recoveries (before giving
effect to any recoveries relating to Dealer reserves). Dealer reserves in
respect of the Receivables are not available to the Trust.
(5) Rates have been annualized.
MATURITY AND PREPAYMENT CONSIDERATIONS
All the Receivables are prepayable at any time. Each prepayment will shorten
the weighted average life of the Receivables and the weighted average life of
the Securities. (For this purpose, the term "prepayments" includes voluntary
prepayments, liquidations due to default, as well as receipts of proceeds from
insurance policies. Weighted average life means the average amount of time in
which each dollar of principal is repaid.) The rate of prepayments on the
Receivables may be influenced by a variety of economic, financial, climatic
and other factors. In particular, the large majority of the Receivables are
agricultural equipment retail installment sale and loan contracts, and,
therefore, the amount of prepayments on such Receivables has historically
tended to increase during periods in which farmers have strong cash flows. In
addition, under certain circumstances, JDCC is obligated to repurchase
Receivables pursuant to the Purchase Agreement, the Seller is obligated to
repurchase Receivables pursuant to the Sale and Servicing Agreement and the
Servicer is obligated pursuant to the Sale and Servicing Agreement to purchase
Receivables. See "Description of the Transfer and Servicing Agreements--Sale
and Assignment of Receivables" herein and "Description of the Transfer and
Servicing Agreements--Servicing Procedures" in the Prospectus. Any
reinvestment risks resulting from a faster or slower incidence of prepayment
of Receivables will be borne entirely by the Noteholders and the
Certificateholders. See also "Description of the Transfer and Servicing
Agreements--Termination" in the Prospectus regarding the Servicer's option to
purchase the Receivables when the aggregate principal amount of the
Receivables is 10% or less of the initial Pool Balance, at a purchase price
equal to the aggregate principal balance of the Receivables, plus accrued
interest at the Pool Rate, and "Description of the Transfer and Servicing
Agreements--Insolvency Event" in the Prospectus regarding the sale of the
Receivables if an Insolvency Event with respect to the Seller occurs.
[Changes in the prevailing levels of interest rates will also affect the
weighted average remaining term of the [variable rate] Receivables and the
weighted average life of the Securities. Changes in the
S-20
<PAGE>
[variable rate] Receivable Rates will result in changes in the amounts of
final installment payments or may result in additional or fewer installment
payments on certain contracts and will shorten or lengthen, as the case may
be, such weighted average remaining term. In general, such weighted average
remaining term will tend to lengthen as interest rates rise, thereby
lengthening the weighted average life of the Securities. None of JDCC, the
Seller or the Trust makes any representation as to the levels of or changes in
interest rates. In addition, the rate of payment of principal of the A-2 Notes
will be affected by the amount, if any, of cash in the Reserve Account in
excess of the Specified Reserve Account Balance that is applied as accelerated
principal payments.]
THE SELLER AND THE SERVICER
JOHN DEERE RECEIVABLES, INC.
At the option of the Seller, JDCC will be required to make one or more
capital contributions to the Seller in an aggregate amount not to exceed $
million. Funds so contributed by JDCC may be used by the Seller to meet its
general obligations, including certain obligations in respect of the Trust. In
addition, such funds may be used by the Seller to meet certain of its
obligations in respect of four other trusts holding receivables purchased
previously from the Seller.
JOHN DEERE CAPITAL CORPORATION
At October 31, 199x, JDCC and its subsidiaries (collectively called the
"Company") had full- and part-time employees and serviced approximately
accounts, representing gross receivables of approximately $
billion.
DESCRIPTION OF THE NOTES
GENERAL
The Notes will be issued pursuant to the terms of the Indenture. A copy of
the Indenture will be filed with the Commission following the issuance of the
Securities. The following summary describes certain terms of the Notes and the
Indenture. The summary does not purport to be complete and is qualified in its
entirety by reference to the provisions of the Notes and the Indenture. The
following summary supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of the Notes of
any given series and the related Indenture set forth in the Prospectus, to
which description reference is hereby made. , a
, will be the Indenture Trustee under the Indenture.
THE A-1 NOTES
Payments of Interest. The A-1 Notes will bear interest at the A-1 Note
Interest Rate, payable to the A-1 Noteholders [monthly] on each Payment Date
commencing , 199x. "Payment Date" shall mean the [ th day of each
month] or, if any such date is not a Business Day, the next succeeding
Business Day. Interest will accrue from and including the Closing Date or from
and including the most recent Payment Date to but excluding such Payment Date
and will be calculated on the basis of a year of 360 days, in each case for
the actual number of days occurring in the period for which such interest is
payable. Interest accrued as of any Payment Date but not paid on such Payment
Date will be due on the next Payment Date together with interest on such
amount at the rate per annum specified in the definition of "Noteholders'
Interest Carryover Shortfall". Interest payments on the A-1 Notes will
generally be derived from the Total Distribution Amount remaining after the
payment of the Servicing Fee and the Administration Fee, and amounts from the
Reserve Account. See "Description of the Transfer and Servicing Agreements--
Distributions" and "--Reserve Account" herein. If the amount of
S-21
<PAGE>
interest on the principal balance of the A-1 Notes and the A-2 Notes payable
on any Payment Date exceeds the excess of (A) the sum of (i) collections on
the Receivables for the related Collection Period plus (ii) the amount of cash
on deposit in the Reserve Account over (B) the amount of the Servicing Fees
and Administration Fees payable on such Payment Date, the A-1 Noteholders and
the A-2 Noteholders will receive their ratable share (based upon the total
amount of interest due to the A-1 Noteholders and the A-2 Noteholders, as the
case may be) of the amount available to be distributed in respect of interest
on the A-1 Notes and the A-2 Notes.
"LIBOR" with respect to any Payment Date shall be established by the
Indenture Trustee and shall be the rate for deposits in U.S. dollars for [one
month] which appears on Telerate Page 3750 (as defined below) as of 11:00
A.M., London time, on the second LIBOR Business Day prior to the immediately
preceding Payment Date (or, in the case of the initial Payment Date, the
second LIBOR Business Day prior to the Closing Date). "Telerate Page 3750"
means the display page currently so designated on the Dow Jones Telerate
Service (or such other page as may replace that page on that service for the
purpose of displaying comparable rates or prices). If such rate does not
appear on Telerate Page 3750, the rate with respect to such Payment Date will
be determined on the basis of the rates at which deposits in U.S. dollars are
offered at approximately 11:00 a.m., London time, on the second LIBOR Business
Day prior to the immediately preceding Payment Date to prime banks in the
London interbank market for a period equal to [one month] (commencing on such
Payment Date) by four major banks in the London interbank market selected by
the Indenture Trustee (after consultation with the Seller) ("the Reference
Banks"). The Indenture Trustee will request the principal London office of
each of the Reference Banks to provide a quotation of its rate. If at least
two such quotations are provided, the rate for such Payment Date will be the
arithmetic mean of the quotations. If fewer than two quotations are provided
as requested, the rate for such date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Indenture Trustee
(after consultation with the Seller), at approximately 11:00 a.m., New York
City time, on such immediately preceding Payment Date for loans in U.S.
dollars to leading European banks for a period equal to [one month]; provided,
however, that if such banks are not quoting as described above, LIBOR will be
the LIBOR applicable to the immediately preceding Payment Date. "LIBOR
Business Day", for purposes of the Indenture, is a day that is both a Business
Day and a day on which banking institutions in the City of London, England,
are not required or authorized by law to be closed. A "Business Day" is a day
other than a Saturday, a Sunday or a day on which banking institutions or
trust companies in New York City are authorized or obligated by law,
regulation or executive order to remain closed.
Payments of Principal. Principal payments will be made to the A-1
Noteholders on each Payment Date in an amount generally equal to the Principal
Distribution Amount until the principal balance of the A-1 Notes is reduced to
zero. Principal payments on the A-1 Notes will generally be derived from the
Total Distribution Amount remaining after the payment of the Servicing Fee,
the Administration Fee and the Noteholders' Interest Distributable Amount, and
from funds, if any, in the Reserve Account remaining after the payment of the
Noteholders' Interest Distributable Amount. See "Description of the Transfer
and Servicing Agreements-- Distributions" and "--Reserve Account" herein. The
outstanding principal amount, if any, of the A-1 Notes will be payable in full
on the A-1 Final Scheduled Payment Date.
THE A-2 NOTES
Payments of Interest. The A-2 Notes will bear interest at the A-2 Note
Interest Rate, payable to the A-2 Noteholders monthly on each Payment Date
commencing , 199x. Interest will accrue from and including the Closing
Date or from and including the most recent Payment Date to but excluding such
Payment Date and will be calculated on the basis of a year of 360 days, in
each case for the actual number of days in the period for which such interest
is payable. Interest accrued as of any
S-22
<PAGE>
Payment Date but not paid on such Payment Date will be due on the next Payment
Date together with interest on such amount at the rate per annum specified in
the definition of "Noteholders' Interest Carryover Shortfall". Interest
payments on the A-2 Notes will generally be derived from the Total
Distribution Amount remaining after the payment of the Servicing Fee and the
Administration Fee and from funds, if any, in the Reserve Account. See
"Description of the Transfer and Servicing Agreements--Distributions" and "--
Reserve Account" herein. If the amount of interest on the principal balance of
the A-1 Notes and the A-2 Notes payable on any Payment Date exceeds the excess
of (A) the sum of (i) collections on the Receivables plus (ii) the amount of
cash on deposit in the Reserve Account over (B) the amount of the Servicing
Fees and Administration Fees payable on such Payment Date, the A-1 Noteholders
and the A-2 Noteholders will receive their ratable share (based upon the total
amount of interest due to the A-1 Noteholders and the A-2 Noteholders, as the
case may be) of the amount available to be distributed in respect of interest
on the A-1 Notes and the A-2 Notes.
Payments of Principal. Principal payments will be made to the A-2
Noteholders on and after [the later to occur of (x) the Payment Date on which
the A-1 Notes have been paid in full, and (y) the , 199x Payment Date] in
an amount generally equal to the A-2 Noteholders' Percentage of the difference
between the Principal Distribution Amount and the portion thereof, if any, of
the Principal Distribution Amount paid in respect of the A-1 Notes on such
Payment Date. Principal payments on the A-2 Notes will generally be derived
from the Total Distribution Amount remaining after the payment of the
Servicing Fee, the Administration Fee and the Noteholders' Interest
Distributable Amount, from funds, if any, in the Reserve Account remaining
after the payment of the Noteholders' Interest Distributable Amount. In
addition, on and after the , 199x Payment Date, certain amounts available
to be released from the Reserve Account will be distributed to the A-2
Noteholders as a payment of principal. See "Description of the Transfer and
Servicing Agreements--Distributions" and "--Reserve Account" herein. The
outstanding principal amount, if any, of the A-2 Notes will be payable in full
on the A-2 Final Scheduled Payment Date.
Optional Redemption. The A-2 Notes will be redeemed in whole, but not in
part, on any Payment Date after the date on which the A-1 Notes have been paid
in full on which the Servicer exercises its option to purchase the Receivables
when the aggregate principal amount of the Receivables is 10% or less of the
initial Pool Balance. The A-2 Redemption Price is equal to the unpaid
principal amount of the A-2 Notes, plus accrued and unpaid interest at the A-2
Note Interest Rate thereon. The Class A-1 Notes are not redeemable prior to
maturity.
S-23
<PAGE>
DESCRIPTION OF THE CERTIFICATES
GENERAL
The Certificates will be issued pursuant to the terms of the Trust
Agreement. A copy of the Trust Agreement will be filed with the Commission
following the issuance of the Securities. The following summary describes
certain terms of the Certificates and the Trust Agreement. The summary does
not purport to be complete and is qualified in its entirety by reference to
the provisions of the Certificates and the Trust Agreement. The following
summary supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Certificates of any
given trust and the related Trust Agreement set forth in the Prospectus, to
which description reference is hereby made.
Distributions of principal of, and interest on, the Certificates will be
made by the Owner Trustee in accordance with the procedures set forth in the
Trust Agreement directly to holders of Certificates in whose names the
Certificates were registered at the close of business on the Certificate
Record Date. Such distributions will be made by check mailed to the address of
such holder as it appears on the register maintained by the Owner Trustee or
by wire transfer. The final payment on any Certificate, however, will be made
only upon presentation and surrender of such Certificate at the office or
agency specified in the notice of final distribution to Certificateholders.
Certificates will be transferable and exchangeable at the offices of the
Owner Trustee or a certificate registrar named in a notice delivered to
holders of Certificates. No service charge will be imposed for any
registration of transfer or exchange, but the Owner Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge
imposed in connection therewith.
Purchasers (including nominees of beneficial owners) of Certificates and
their assignees must represent that the beneficial owners are individuals or
entities that are U.S. persons (generally, citizens or residents of the U.S.
and corporations or partnerships organized under U.S. law), and each must
provide a certification of non-foreign status under penalties of perjury.
THE CERTIFICATES
Distributions of Interest Income. On each Payment Date, Certificateholders
will be entitled to distributions in an amount equal to the amount of interest
that would accrue at the Pass-Through Rate on the Certificate Balance as of
the preceding Payment Date (after giving effect to distributions made on such
preceding Payment Date). In addition, Certificateholders will receive on each
Payment Date, if on such Payment Date the amount on deposit in the Reserve
Account, after giving effect to all withdrawals for payments on the Notes and
the Certificates and all deposits required to be made on such Payment Date,
exceeds the Specified Reserve Account Balance, an amount equal to the lesser
of (1) such excess and (2) one-twelfth of the product of (a) % of the
excess, if any, of (i) the amount of the positive spread, if any, between the
Base Rate in effect on the date that LIBOR for such Payment Date is
established and LIBOR for such Payment Date over (ii) % times (b) the
Certificate Balance on the preceding Payment Date. Interest will be calculated
on the basis of a year of 360 days, in each case for the actual number of days
occurring in the period for which interest is payable. Such amounts will be
distributable [every month] on each Payment Date commencing , 199x.
Interest for each Payment Date will accrue from and including the Closing Date
or from and including the most recent Payment Date to but excluding the
current Payment Date. Interest distributions due for any Payment Date but not
distributed on such Payment Date will be due on the next Payment Date
increased by an amount equal to interest on such amount at the Pass-Through
Rate. Interest distributions with respect to the Certificates will be funded
from the portion of the Total Distribution Amount and the funds in the Reserve
Account remaining after the distribution of the Servicing Fee, the
Administration Fee and the Noteholders' Distributable Amount. See "Description
of the Transfer and Servicing Agreements--Distributions" and "--Reserve
Account" herein.
S-24
<PAGE>
Distributions of Principal Payments. Certificateholders will be entitled to
distributions on each Payment Date in an amount generally equal to the
Certificateholders' Percentage of (or, following the payment in full of the
Notes, all of) the Principal Distribution Amount. Distributions with respect
to principal payments will be funded from the portion of the Total
Distribution Amount remaining after the distribution of the Servicing Fee, the
Administration Fee, the Noteholders' Distributable Amount and the
Certificateholders' Interest Distributable Amount, and from funds, if any, in
the Reserve Account remaining after the payment of the Noteholders'
Distributable Amount and the Certificateholders' Interest Distributable
Amount. See "Description of the Transfer and Servicing Agreements--
Distributions" and "--Reserve Account" herein. On each Payment Date prior to
[the later to occur of (i)] the Payment Date after the Payment Date on which
the principal balance of the A-1 Notes is reduced to zero [and (ii) the ,
199x Payment Date], the Certificateholders' Percentage will be zero.
Thereafter, the Certificateholders' Percentage will be %. However, if the
amount on deposit in the Reserve Account is less than the lower of % of the
initial Pool Balance and the sum of the aggregate outstanding principal amount
of the Notes and the Certificate Balance on any Payment Date, then, with
respect to each Payment Date thereafter, the Certificateholders will not
receive any distributions of principal until the Notes have been paid in full.
Optional Purchase. If the Servicer exercises its option to purchase the
Receivables when the aggregate principal amount of the Receivables is 10% or
less of the initial Pool Balance, the Certificateholders will receive an
amount in respect of the Certificates equal to the Certificate Balance
together with accrued interest at the Pass-Through Rate and the Certificates
will be retired.
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS
The following summary describes certain terms of the Sale and Servicing
Agreement pursuant to which the Trust is purchasing and the Servicer is
undertaking to service, or cause the Sub-Servicer to service, the Receivables,
the Purchase Agreement pursuant to which the Seller is purchasing the
Receivables, the Administration Agreement pursuant to which JDCC will
undertake certain administrative duties with respect to the Trust and the
Trust Agreement pursuant to which the Trust will be created and the
Certificates will be issued (collectively, the "Transfer and Servicing
Agreements"). A copy of the Transfer and Servicing Agreements will be filed
with the Commission following the issuance of the Securities. This summary
does not purport to be complete and is subject to, and qualified in its
entirety by reference to, the provisions of the Transfer and Servicing
Agreements. The following summary supplements, and to the extent inconsistent
therewith replaces, the description set forth under the heading "Description
of the Transfer and Servicing Agreements" in the Prospectus, to which
description reference is hereby made.
SALE AND ASSIGNMENT OF RECEIVABLES
Certain information with respect to the conveyance on the Closing Date of
the Receivables from JDCC to the Seller pursuant to the Purchase Agreement and
from the Seller to the Trust pursuant to the Sale and Servicing Agreement is
set forth under "Description of the Transfer and Servicing Agreements--Sale
and Assignment of Receivables" in the Prospectus.
ACCOUNTS
In addition to the Accounts referred to in the Prospectus under "Description
of Transfer and Servicing Agreements--Accounts", the Servicer will also
establish and maintain at the office of the Indenture Trustee the Reserve
Account, in the name of the Indenture Trustee on behalf of the Noteholders and
the Certificateholders.
SERVICING COMPENSATION
The Servicer will be entitled to receive the Servicing Fee for each
Collection Period in an amount equal to % per annum of the Pool Balance as
of the first day of such Collection Period. The Servicing
S-25
<PAGE>
Fee (together with any portion of the Servicing Fee that remains unpaid from
prior Payment Dates) will be paid solely to the extent of the Interest
Distribution Amount. However, the Servicing Fee will be paid prior to the
distribution of any portion of the Interest Distribution Amount to the
Noteholders or the Certificateholders and prior to payment of the
Administration Fee. See "Description of the Transfer and Servicing
Agreements--Servicing Compensation" in the Prospectus.
DISTRIBUTIONS
Deposits to Collection Account. By the third business day prior to a Payment
Date (each a "Determination Date"), the Sub-Servicer will provide the
Indenture Trustee with certain information with respect to the related
Collection Period, including the amount of aggregate collections on the
Receivables and the aggregate Purchase Amount of Receivables to be repurchased
by the Seller or to be purchased by the Servicer.
On or before each Payment Date, the Servicer will cause the Total
Distribution Amount to be deposited into the Collection Account. The "Total
Distribution Amount" for a Payment Date shall be the aggregate collections
(including any Liquidation Proceeds) in respect of the Receivables during the
related Collection Period plus Investment Earnings during such Collection
Period. The Total Distribution Amount on any Payment Date shall exclude all
payments and proceeds (including Liquidation Proceeds) of (i) any Receivables
the Purchase Amount of which has been included in the Total Distribution
Amount in a prior Collection Period and (ii) any Liquidated Receivable after
the reassignment of such Liquidated Receivable by the Trust to the Seller.
"Liquidated Receivables" means defaulted Receivables in respect of which the
Financed Equipment has been sold or otherwise disposed of and "Liquidation
Proceeds" means all proceeds of the Liquidated Receivables, net of expenses
incurred by the Servicer in connection with such liquidation and any amounts
required by law to be remitted to the Obligor on such Liquidated Receivables.
The "Interest Distribution Amount" for a Payment Date shall be the excess,
if any, of the Total Distribution Amount over the Principal Distribution
Amount for such Payment Date.
The "Principal Distribution Amount" for a Payment Date shall mean either (i)
in all cases when clause (ii) does not apply, the Note Value Decline for the
fiscal month ending immediately prior to such Payment Date or (ii) if the Base
Rate at the beginning of the fiscal month ending immediately prior to such
Payment Date is not equal to the Base Rate at the beginning of the next fiscal
month, the Alternate Principal Distribution Amount for such fiscal month. For
purposes of this definition, fiscal month shall mean a fiscal month specified
on Schedule C to the Sale and Servicing Agreement.
Deposits to the Distribution Accounts. On the second business day prior to
each Payment Date, the Servicer shall instruct the Indenture Trustee to make
deposits and distributions for receipt by the Servicer or Administrator or for
deposit in the applicable Trust Account or Certificate Distribution Account on
the following Payment Date.
Distributions of the Total Distribution Amount shall be made in the
following order of priority:
(i) to the Servicer, from the Interest Distribution Amount, the Servicing
Fee and all unpaid Servicing Fees from prior Collection Periods;
(ii) to the Administrator, from the Total Distribution Amount remaining
after the application of clause (i), the Administration Fee and all unpaid
Administration Fees from prior Collection Periods;
(iii) to the Note Distribution Account, from the Total Distribution
Amount remaining after the application of clauses (i) and (ii), the
Noteholders' Interest Distributable Amount;
(iv) to the Note Distribution Account, from the Total Distribution Amount
remaining after the application of clauses (i), (ii) and (iii), the A-1
Noteholders' Principal Distributable Amount;
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(v) on each Payment Date prior to the , 199 Payment Date, to the
Note Distribution Account, from the Total Distribution Amount remaining
after the application of clauses (i) through (iv), the A-2 Noteholders'
Principal Distributable Amount;
(vi) to the Certificate Distribution Account, from the Total Distribution
Amount remaining after the application of clauses (i) through (v), the
Certificateholders' Interest Distributable Amount;
(vii) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clauses (i) through
(vi), the Certificateholders' Principal Distributable Amount; and
(viii) to the Reserve Account, the Total Distribution Amount remaining
after the application of clauses (i) through (vii).
The "Note Value" of the Receivables represents the principal amount of Notes
and Certificates that, based on the assumptions stated below, can be supported
by the scheduled payments on the Receivables.
"Note Value" of the Receivables means, with respect to any day, the present
value of the scheduled and unpaid payments on the Receivables, discounted to
such day monthly at an annual rate equal to the Pool Rate on such day. For
purposes of calculating Note Value, in the event of a defaulted Receivable,
(a) prior to repossession of the Financed Equipment securing such defaulted
Receivable, the scheduled payments on such Receivable will be computed based
on the amounts that would have been the scheduled payments had such default
not occurred, (b) after the time at which the Financed Equipment securing such
defaulted Receivable has been repossessed, but prior to liquidation of such
defaulted Receivable, the principal balance of such defaulted Receivable shall
be added to such Note Value, but there shall be deemed to be no scheduled
payments due on such defaulted Receivable and (c) after liquidation of such
defaulted Receivable there shall be deemed to be no scheduled payments due on
such Receivable. As a result of the calculations described in the preceding
sentence, as of the end of any Collection Period, the Note Value of the
Receivables, to the extent it relates to a defaulted Receivable, will be
reduced only after liquidation of any defaulted Receivable.
"Note Value Decline", with respect to any fiscal month as specified in
Schedule C to the Sale and Servicing Agreement, means the amount (not less
than zero) equal to (i) the Note Value as of the beginning of such fiscal
month less (ii) the Note Value as of the beginning of the next fiscal month.
"Alternate Principal Distribution Amount" for a fiscal month (as specified
on Schedule C to the Sale and Servicing Agreement) means (a) the sum of (i)
the collections in respect of the Receivables (including Liquidation Proceeds)
during such fiscal month and (ii) Realized Losses in respect of Receivables
that become Liquidated Receivables in such fiscal month less (b) one-twelfth
of the product of (x) the Note Value at the beginning of the preceding fiscal
month and (y) the Pool Rate at the beginning of such preceding fiscal month.
"Realized Losses" means the excess of the principal balance of the
Liquidated Receivables over Liquidation Proceeds to the extent allocable to
principal.
"Noteholders' Distributable Amount" means, with respect to any Payment Date,
the sum of theA-1 Noteholders' Principal Distributable Amount, the A-2
Noteholders' Principal Distributable Amount and the Noteholders' Interest
Distributable Amount.
"Noteholders' Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Noteholders' Monthly Interest Distributable
Amount for such Payment Date and the Noteholders' Interest Carryover Shortfall
for such Payment Date.
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"Noteholders' Monthly Interest Distributable Amount" means, with respect to
any Payment Date (referred to herein as the "current Payment Date"), an amount
equal to the sum of (i) the interest accrued from and including the
immediately preceding Payment Date (or, in the case of the first Payment Date,
the Closing Date) to but excluding the current Payment Date at a rate equal to
the A-1 Note Interest Rate on the outstanding principal balance of the A-1
Notes on the immediately preceding Payment Date (or, in the case of the first
Payment Date, on the Closing Date), after giving effect to all distributions
of principal to A-1 Noteholders on such Payment Date and (ii) the interest
accrued from and including the immediately preceding Payment Date (or, in the
case of the first Payment Date, the Closing Date) to but excluding the current
Payment Date at a rate equal to the A-2 Note Interest Rate on the outstanding
principal balance of the A-2 Notes on the immediately preceding Payment Date
(or, in the case of the first Payment Date, on the Closing Date), after giving
effect to all distributions of principal to the A-2 Noteholders on such
Payment Date.
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Payment Date, the excess of the Noteholders' Monthly Interest Distributable
Amount for the preceding Payment Date and any outstanding Noteholders'
Interest Carryover Shortfall on such preceding Payment Date, over the amount
in respect of interest that is deposited in the Note Distribution Account on
such preceding Payment Date, plus interest on the amount of interest due but
not paid to A-1 Noteholders on the preceding Payment Date, to the extent
permitted by law, at a rate per annum equal to the sum of the interest rate
borne by the A-1 Notes from such preceding Payment Date through the current
Payment Date [plus % per annum,] plus interest on the amount of interest
due but not paid to A-2 Noteholders on the preceding Payment Date, to the
extent permitted by law, at a rate per annum equal to the sum of the interest
rate borne by the A-2 Notes from such preceding Payment Date through the
current Payment Date [plus % per annum.]
"A-1 Noteholders' Principal Distributable Amount" means, with respect to any
Payment Date, the sum of the A-1 Noteholders' Monthly Principal Distributable
Amount for such Payment Date and the A-1 Noteholders' Principal Carryover
Shortfall as of the close of the preceding Payment Date; provided, however,
that the A-1 Noteholders' Principal Distributable Amount shall not exceed the
outstanding principal balance of the A-1 Notes. In addition, on the A-1 Final
Scheduled Payment Date, the principal required to be deposited in the Note
Distribution Account will include the amount necessary (after giving effect to
the other amounts to be deposited in the Note Distribution Account on such
Payment Date and allocable to principal) to reduce the outstanding principal
balance of the A-1 Notes to zero.
"A-2 Noteholders' Principal Distributable Amount" means, with respect to any
Payment Date, the sum of the A-2 Noteholders' Monthly Principal Distributable
Amount for such Payment Date and the A-2 Noteholders' Principal Carryover
Shortfall as of the close of the preceding Payment Date; provided, however,
that, until an amount sufficient to reduce the outstanding principal balance
of the A-1 Notes to zero has been deposited in the Note Distribution Account,
the A-2 Noteholders' Principal Distributable Amount shall be zero; provided
further that the A-2 Noteholders' Principal Distributable Amount shall not
exceed the outstanding principal balance of the A-2 Notes. In addition, on the
A-2 Final Scheduled Payment Date, the principal required to be deposited in
the Note Distribution Account will include the amount necessary (after giving
effect to the other amounts to be deposited in the Note Distribution Account
on such Payment Date and allocable to principal) to reduce the outstanding
principal balance of the A-2 Notes to zero.
"A-1 Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Payment Date until the Payment Date on which the outstanding
principal balance of the A-1 Notes has been reduced to zero, 100% of the
Principal Distribution Amount, but not in excess of the outstanding principal
balance of the A-1 Notes.
"A-2 Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Payment Date on or after the Payment Date on which an amount
sufficient to reduce the outstanding principal
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balance of the A-1 Notes to zero has been deposited in the Note Distribution
Account, the sum of (x) the A-2 Noteholders' Percentage of the difference
between the Principal Distribution Amount and the portion thereof, if any,
applied to reduce the principal balance of the A-1 Notes to zero, plus (y) the
Accelerated Principal Distribution Amount, if any; provided, however, that if
the amount on deposit in the Reserve Account is less than the lesser of % of
the initial Pool Balance and the sum of the outstanding principal amount of
the Notes and the Certificate Balance on any Payment Date, then, with respect
to each Payment Date thereafter, the A-2 Noteholders' Monthly Principal
Distributable Amount means 100% of the Principal Distribution Amount less the
portion thereof, if any, necessary on such Payment Date to be deposited in the
Note Distribution Account to reduce the outstanding principal balance of the
A-1 Notes to zero. In addition, on or after the , 199x Payment Date,
certain amounts from the Reserve Account may be paid as accelerated principal
on the A-2 Notes as described under "Reserve Account" below.
"Accelerated Principal Distribution Amount" means, with respect to any
Payment Date, the additional amount of interest that would have accrued on the
A-2 Notes from and including the preceding Payment Date to but excluding the
current Payment Date, if the A-2 Note Interest Rate were not limited to %
due to clause (ii) of the definition of "A-2 Note Interest Rate".
"A-2 Noteholders' Percentage" means (i) for each Payment Date to and
including [the later to occur of (x)] the Payment Date on which the principal
balance of the A-1 Notes is reduced to zero [and (y) the Payment
Date], 100% and (ii) thereafter, %; provided, however, that if, on or after
[the later to occur of (x)] the Payment Date on which the principal balance of
the A-1 Notes is reduced to zero [and (y) the , 199 Payment Date,] the
amount on deposit in the Reserve Account is less than the lesser of % of the
initial Pool Balance and the sum of the outstanding principal amount of the
Notes and the Certificate Balance, then, with respect to each Payment Date
thereafter, the A-2 Noteholders' Percentage shall be 100%.
"A-1 Noteholders' Principal Carryover Shortfall" means, as of the close of
any Payment Date, the excess of the A-1 Noteholders' Monthly Principal
Distributable Amount and any outstanding A-1 Noteholders' Principal Carryover
Shortfall from the preceding Payment Date over the amount in respect of
principal that is deposited in the Note Distribution Account in respect of the
A-1 Notes.
"A-2 Noteholders' Principal Carryover Shortfall" means, as of the close of
any Payment Date, the excess of the A-2 Noteholders' Monthly Principal
Distributable Amount and any outstanding A-2 Noteholders' Principal Carryover
Shortfall from the preceding Payment Date over the amount in respect of
principal that is deposited in the Note Distribution Account in respect of the
A-2 Notes.
"Certificate Balance" equals, initially, $ and, thereafter on each
Payment Date, equals the initial Certificate Balance, reduced by all amounts
previously distributed to Certificateholders as principal. The Certificate
Balance shall also be reduced on any Payment Date by the excess, if any, of
the sum of the Certificate Balance and the outstanding principal balance of
the Notes (after giving effect to amounts allocable to principal to be
deposited in the Certificate Distribution Account and the Note Distribution
Account on such Payment Date) over the sum of (x) the Note Value on the last
day of the preceding Collection Period and (y) the amount on deposit in the
Reserve Account after giving effect to any distributions therefrom on such
Payment Date. Thereafter, the Certificate Balance shall be increased to the
extent that any portion of the Total Distribution Amount is available to pay
the existing Certificateholders' Principal Carryover Shortfall, but not by
more than the aggregate reductions in the Certificate Balance.
"Certificateholders' Distributable Amount" means, with respect to any
Payment Date, the sum of the Certificateholders' Principal Distributable
Amount and the Certificateholders' Interest Distributable Amount.
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"Certificateholders' Interest Distributable Amount" means, with respect to
any Payment Date, the sum of the Certificateholders' Monthly Interest
Distributable Amount for such Payment Date and the Certificateholders'
Interest Carryover Shortfall for such Payment Date.
"Certificateholders' Monthly Interest Distributable Amount" means, with
respect to any Payment Date, the sum of (i) interest accrued from and
including the preceding Payment Date to, but excluding, such Payment Date (or,
in the case of the first Payment Date, interest accrued from and including the
Closing Date to, but excluding, such Payment Date) at the Pass-Through Rate on
the Certificate Balance on the last day of the preceding Collection Period
(or, in the case of the first Payment Date, on the Closing Date) plus (ii) if
on such Payment Date the amount on deposit in the Reserve Account, after
giving effect to all withdrawals for payment on the Notes and the Certificates
(other than pursuant to this clause (ii)) and all deposits required to be made
on such Payment Date, exceeds the Specified Reserve Account Balance, an amount
equal to the lesser of (1) such excess and (2) one-twelfth of the product of
(a) % of the excess, if any, of (x) the amount of the positive spread, if
any, between the Base Rate in effect on the date that LIBOR is established for
such Payment Date and LIBOR for such Payment Date over (y) % times (b) the
Certificate Balance on the preceding Payment Date.
"Certificateholders' Interest Carryover Shortfall" means, with respect to
any Payment Date, the excess of the Certificateholders' Monthly Interest
Distributable Amount for the preceding Payment Date and any outstanding
Certificateholders' Interest Carryover Shortfall on such preceding Payment
Date, over the amount in respect of interest that is deposited in the
Certificate Distribution Account on such preceding Payment Date, plus interest
on such excess, to the extent permitted by law, at the Pass-Through Rate from
such preceding Payment Date through the current Payment Date.
"Certificateholders' Principal Distributable Amount" means, with respect to
any Payment Date, the sum of the Certificateholders' Monthly Principal
Distributable Amount for such Payment Date and the Certificateholders'
Principal Carryover Shortfall as of the close of the preceding Payment Date;
provided, however, that the Certificateholders' Principal Distributable Amount
shall not exceed the Certificate Balance. In addition, on , the
principal required to be distributed to Certificateholders will include the
amount necessary (after giving effect to the other amounts to be deposited in
the Certificate Distribution Account on such Payment Date and allocable to
principal) to reduce the Certificate Balance to zero.
"Certificateholders' Monthly Principal Distributable Amount" means, with
respect to any Payment Date on or after [the later to occur of (i)] the
Payment Date following the Payment Date on which the principal balance of the
A-1 Notes is reduced to zero [and (ii) the Payment Date], the
Certificateholders' Percentage of the Principal Distribution Amount (less the
portion thereof, if any, applied on such Payment Date to reduce the principal
balance of the A-1 Notes to zero) and, with respect to any Payment Date on or
after the Payment Date on which the outstanding principal balance of the A-2
Notes is reduced to zero, 100% of the Principal Distribution Amount (less the
portion thereof required on the first such Payment Date to reduce the
outstanding principal balance of the A-2 Notes to zero, which shall be
deposited into the Note Distribution Account); provided, however, that if as
described in the definition of "A-2 Noteholders' Monthly Principal
Distributable Amount", 100% of the Principal Distribution Amount is required
to be deposited in the Note Distribution Account, then no portion of the
Principal Distribution Amount will be deposited in the Certificate
Distribution Account until the Notes have been paid in full.
"Certificateholders' Percentage" means 100% minus the A-2 Noteholders'
Percentage.
"Certificateholders' Principal Carryover Shortfall" means, as of the close
of any Payment Date, the sum of (i) the excess of the Certificateholders'
Monthly Principal Distributable Amount and any outstanding Certificateholders'
Principal Carryover Shortfall from the preceding Payment Date, over the amount
in respect of principal that is deposited in the Certificate Distribution
Account and (ii) the
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unreimbursed portion of the amount by which the Certificate Balance has been
reduced as described in the second sentence of the definition of "Certificate
Balance" above.
On each Payment Date, all amounts on deposit in the Note Distribution
Account (other than investment earnings, if any) will be distributed to the
Noteholders.
On each Payment Date, all amounts on deposit in the Certificate Distribution
Account (other than investment earnings, if any) will be distributed to the
Certificateholders.
RESERVE ACCOUNT
The rights of the Certificateholders to receive distributions with respect
to the Receivables generally will be subordinated to the rights of the
Noteholders in the event of defaults and delinquencies on the Receivables as
provided in the Sale and Servicing Agreement. The protection afforded to the
Noteholders through subordination will be effected both by the preferential
right of the Noteholders to receive current distributions with respect to the
Receivables and by the establishment of the Reserve Account. The Reserve
Account will be created with the initial deposit by the Seller on the Closing
Date of the Reserve Account Initial Deposit and will be augmented on each
Payment Date, by deposit therein of the Total Distribution Amount remaining
after the payment of the Servicing Fee, the Administration Fee, the deposit of
the Noteholders' Distributable Amount in the Note Distribution Account and the
deposit of the Certificateholders' Distributable Amount in the Certificate
Distribution Account as described above under "--Distributions". Amounts on
deposit in the Reserve Account will be released to the extent that the amount
on deposit in the Reserve Account exceeds the Specified Reserve Account
Balance.
"Specified Reserve Account Balance" with respect to any Payment Date, means
the greater of (a) % of the Pool Balance as of the close of business on
the last day of the related Collection Period and (b) $ ; provided,
however, that the amount in clause (a) with respect to a Payment Date
(referred to herein as the "current Payment Date") shall be equal to the
amount calculated for such clause (a) for the Payment Date immediately
preceding such current Payment Date if any of the following events occur: (i)
the aggregate of the Realized Losses realized from the Cut-off Date through
the end of the Collection Period preceding such current Payment Date exceeds
an amount equal to % of the initial Pool Balance; (ii) other than in
respect of the [first two] Payment Dates, the sum of four times the Realized
Losses realized during three fiscal months immediately preceding such current
Payment Date plus the principal amount as of the last day of the Collection
Period immediately preceding such current Payment Date of all Receivables
which have not yet been liquidated as to which the Financed Equipment securing
such Receivables has been repossessed exceeds the amount equal to % of the
Pool Balance at the beginning of such three fiscal month period; or (iii) the
aggregate amount of scheduled payments that are delinquent by more than 60
days as of the end of the Collection Period immediately preceding such current
Payment Date exceeds an amount equal to % of the Pool Balance as of the
end of such Collection Period; provided further that the Specified Reserve
Account Balance shall not exceed the outstanding principal amount of the Notes
and the Certificates immediately preceding such current Payment Date less the
Principal Distribution Amount to be deposited in the Note Distribution Account
and the Certificate Distribution Account on such current Payment Date, and
upon payment of all the interest and principal due on the Notes and the
Certificates the Specified Reserve Account Balance shall be zero.
If the amount on deposit in the Reserve Account on and after the , 199x
Payment Date (after giving effect to all deposits or withdrawals therefrom on
such Payment Date) and prior to the A-1 Final Scheduled Payment Date, is
greater than the Specified Reserve Account Balance for such Payment Date, the
Servicer shall instruct the Indenture Trustee to distribute such excess in the
Reserve Account to the Seller; provided, however, that if, after giving effect
to all payments made on the Notes and Certificates on such Payment Date, the
Note Value as of the end of the preceding Collection Period is
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less than the sum of the outstanding principal amount of the Notes and the
Certificate Balance, such remainder amount shall not be distributed to the
Seller but shall be retained in the Reserve Account available for application
in accordance with the Sale and Servicing Agreement. On or the
date of the optional redemption of the A-2 Notes or after payment of all
interest on and principal of the Notes and Certificates, the Servicer shall
instruct the Indenture Trustee to distribute the Reserve Account balance to
the Seller.
If the amount on deposit in the Reserve Account (after giving effect to all
deposits or withdrawals therefrom on such Payment Date, other than as
described in this sentence) on the A-1 Final Scheduled Payment Date and the
, 199 Payment Date is greater than the Specified Reserve Account Balance
for such Payment Date, the Servicer shall instruct the Indenture Trustee to
distribute such excess to the Seller.
If the amount on deposit in the Reserve Account (after giving effect to all
deposits or withdrawals therefrom on such Payment Date, other than as
described in this sentence) on any Payment Date on and after the , 199
Payment Date, is greater than the Specified Reserve Account Balance for such
Payment Date, and on each Payment Date subsequent to any reduction or
withdrawal by any Rating Agency of its rating of any class of Notes (and such
rating shall not have been reinstated), the Servicer shall instruct the
Indenture Trustee to deposit all or a portion of the amount of the excess in
the Note Distribution Account for distribution to the A-2 Noteholders as
accelerated payments of principal on the A-2 Notes. To the extent that any
amount of excess in the Reserve Account is not deposited in the Note
Distribution Account, such excess amount shall be distributed to the Seller.
Upon any distribution to the Seller of amounts from the Reserve Account in
accordance with the provisions of the Sale and Servicing Agreement, neither
the Noteholders nor the Certificateholders will have any rights in, or claims
to, such amounts.
In addition, if, after giving effect to all payments made on the Notes and
Certificates on the Payment Date in March of any year, the Note Value as of
the end of the preceding Collection Period is less than the sum of the
outstanding principal amount of the Notes and the Certificate Balance and such
deficiency was not caused by a default by the Indenture Trustee or the Owner
Trustee in paying funds in its possession, the Servicer shall instruct the
Indenture Trustee to withdraw from the Reserve Account on such Payment Date
the amount therein, if any, in excess of the Specified Reserve Account Balance
and deposit such excess amount, first, into the Note Distribution Account to
the extent of such outstanding principal amount of the Notes for distribution
to Noteholders as principal and then any remainder of such excess amount into
the Certificate Distribution Account to the extent of such Certificate Balance
for distribution to Certificateholders as principal.
If on any Payment Date on which any Notes are outstanding the amount in the
Reserve Account is less than % of the Pool Balance, then funds will be
withdrawn from the Reserve Account only to the extent needed to pay the
interest due on the Notes and the Certificates and no funds from the Reserve
Account will be applied on such Payment Date to principal of the Notes or the
Certificates.
Subject to the limitation described in the preceding paragraph, amounts held
from time to time in the Reserve Account will continue to be held for the
benefit of Noteholders and Certificateholders. Funds will be withdrawn from
cash in the Reserve Account to the extent that the Total Distribution Amount
(after the payment of the Servicing Fee and the Administration Fee) with
respect to any Collection Period is less than the Noteholders' Distributable
Amount and will be deposited in the Note Distribution Account. In addition,
funds will be withdrawn from the Reserve Account to the extent that the
portion of the Total Distribution Amount remaining after the payment of the
Servicing Fee and the Administration Fee and the deposit of the Noteholders'
Distributable Amount in the Note Distribution Account is less than the
Certificateholders' Distributable Amount and will be deposited in the
Certificate Distribution Account.
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The Specified Reserve Account Balance may be reduced, or the definition
otherwise modified, without the consent of the Securityholders, provided that
the Rating Agencies confirm in writing that such reduction or modification
will not result in a reduction or withdrawal of the then current rating of any
class of the Notes or of the Certificates.
If, on any Payment Date the entire Noteholders' Distributable Amount for
such Payment Date (after giving effect to any amounts withdrawn from the
Reserve Account) is not deposited in the Note Distribution Account, the
Certificateholders generally will not receive any distributions.
The subordination of the Certificates and the availability of funds in the
Reserve Account is intended to enhance the likelihood of receipt by
Noteholders of the full amount of principal and interest due them and to
decrease the likelihood that the Noteholders will experience losses. The
availability of funds in the Reserve Account is intended to enhance the
likelihood of receipt by Certificateholders of the full amount of principal
and interest due them and to decrease the likelihood that the
Certificateholders will experience losses. However, in certain circumstances,
the Reserve Account could be depleted.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
[The following is a summary of certain federal income tax considerations
relevant to the purchase, ownership and disposition of the Notes and the
Certificates. This summary does not purport to deal with all aspects of
federal income taxation that may be relevant to holders of the Notes or
holders of the Certificates in light of their specific investment
circumstances, nor to certain types of holders subject to special treatment
under the federal income tax laws (for example, banks, life insurance
companies and tax-exempt organizations). This discussion is based upon current
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the
Treasury regulations (proposed, temporary and final) promulgated thereunder,
judicial decisions and Internal Revenue Service ("IRS") rulings, all of which
are subject to change, which change may be retroactively applied in a manner
that could adversely affect a holder of one or more of the Notes or the
Certificates. The information below is directed to investors that will hold
the Notes or the Certificates, as the case may be, as capital assets
(generally, property held for investment) within the meaning of Section 1221
of the Code.
Prospective investors are advised to consult their own tax advisors with
regard to the federal income tax consequences of purchasing, holding and
disposing of the Notes and the Certificates, as well as the tax consequences
arising under the laws of any state, foreign country or other jurisdiction.
The Trust will be provided with an opinion of Shearman & Sterling, special
federal tax counsel of the Trust ("Tax Counsel") regarding certain federal
income tax matters discussed below. The Trust has not sought, nor does it
intend to seek, a ruling from the IRS that its position as reflected in the
discussion below will be accepted by the IRS. Moreover, there are no cases or
IRS rulings on similar transactions involving both debt and equity interests
issued by a trust similar to those of the Notes and the Certificates.
TAX CLASSIFICATION OF THE TRUST
Tax Counsel will advise the Trust that, based upon the terms of the Trust
Agreement and related documents and transactions as described in the
Prospectus and herein (and assuming ongoing compliance with such agreement and
documents), the Trust will not be classified as an association (or as a
publicly traded partnership) taxable as a corporation for federal income tax
purposes. This advice will be based upon conclusions by Tax Counsel that (1)
the Trust will not have certain characteristics necessary for a business trust
to be classified as an association taxable as a corporation, and (2) the
nature of the income of the Trust will exempt it from the rule that certain
publicly traded partnerships are taxable as corporations.
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Prospective investors should be aware, however, that the proper
characterization of the arrangement involving the Trust, the Certificates, the
Notes, the Seller and the Servicer is not entirely clear because there is no
authority on transactions closely comparable to that contemplated herein. If,
contrary to the opinion of Tax Counsel, the IRS successfully argued that the
Trust should be classified (and thus taxable) as a corporation, the Trust,
including the income from the Receivables (reduced by deductions, including
interest expense on the Notes if the Notes were treated as debt of the Trust
and not otherwise recharacterized), would be subject to federal income tax at
corporate rates. Such a tax could substantially reduce the amounts available
to make payments on the Notes and distributions on the Certificates (and
holders of Certificates could be liable for any such tax that is unpaid by the
Trust).
TAX CONSIDERATIONS FOR NOTEHOLDERS
Treatment of Notes as Indebtedness. Tax Counsel will advise the Trust that,
based upon the terms of the Notes and the documents and transactions relating
thereto as described in the Prospectus and herein, the Notes will be
classified as debt for federal income tax purposes. If, contrary to the
opinion of Tax Counsel, the IRS successfully asserted that one or more of the
Notes did not represent debt for federal income tax purposes, the Notes might
be treated as equity interests in the Trust. If so treated, the Trust might be
taxable as a corporation with the adverse consequences noted above (and the
taxable corporation would not be able to reduce its taxable income by
deductions for interest expense on Notes recharacterized as equity).
Alternatively, the Trust might be a publicly traded partnership that would not
be taxable as a corporation because it would meet certain qualifying income
tests. Nonetheless, treatment of the Notes as equity interests in such a
publicly traded partnership could have adverse tax consequences to certain
holders. For example, income to certain tax-exempt entities (including pension
funds) would be "unrelated business taxable income", income to foreign holders
generally would be subject to U.S. tax and U.S. tax return filing and
withholding requirements, and individual holders might be subject to certain
limitations on their ability to deduct their share of Trust expenses. The
remainder of this discussion assumes, in accordance with the opinion of Tax
Counsel, the Notes would be treated as debt for federal income tax purposes.
Interest Income on the Notes. Subject to the discussion below, stated
interest on the Notes will be taxable to a Noteholder as ordinary income when
received or accrued in accordance with such Noteholder's method of tax
accounting. Since the A-1 Notes and the A-2 Notes have scheduled maturity
dates that are more than one year from their original issue, neither class of
Notes (nor the income thereon) should be subject to the special rules for
short-term obligations under Code Sections 1281 to 1283. Under Treasury
regulations relating to the tax treatment of debt instruments issued with
original issue discount (the "OID Regulations"), a Note will be treated as
issued with original issue discount if the excess of the stated redemption
price at maturity of the Note (generally its principal amount) over the issue
price of the Note equals or exceeds a de minimis amount, that is, 1/4 of one
percent of the stated redemption price at maturity of the Note multiplied by
its weighted average maturity. Generally, the issue price of a Note is the
first price at which a substantial amount of the Notes involved in the issue
is sold to purchasers other than bond houses, brokers or similar persons or
organizations acting in the capacity of underwriters, placement agents or
wholesalers.
It is expected that, except as described below, the Notes will not be issued
with original issue discount if, as anticipated, the Notes will be sold to the
public at a first price of par or at a first price representing a de minimis
discount from par. Under the OID Regulations, a holder of a Note issued with a
de minimis amount of original issue discount must include such discount in
income, on a pro rata basis, as principal payments are made on the Note.
As a result of limitations on the monthly payment of interest on the Notes
to the extent the Trust has insufficient funds, the IRS may contend that the
Notes should be treated as having been issued with OID. Under the OID
Regulations, stated interest payable on the Notes would represent OID unless
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the interest is qualified stated interest that is unconditionally payable at
least annually--meaning that the failure of the issuer to make timely payment
of interest (other than for a reasonable grace period) must be expected to be
penalized or reasonable remedies must be available to the holders to compel
payment. The IRS has recently issued a Revenue Ruling which, while
distinguishable on its facts, indicates that "penalty interest" equal to an
additional 2% above the stated rate, as provided on the Notes, may not in
itself be sufficient to warrant treating interest as unconditionally payable
for OID purposes absent other remedies to reasonably ensure the issuer of the
debt instrument will make timely payment.
The Notes provide for stated interest at a floating rate based upon LIBOR,
but the A-2 Note Interest Rate is subject to certain restrictions on the
maximum level of the floating rate. Under the OID Regulations, stated interest
payable at a variable rate is not taxed as original issue discount or
contingent interest if the variable rate is a qualified floating rate or a
qualifying objective rate. The tax treatment of interest that is not based on
qualified floating or objective rates is not certain and the OID Regulations
do not address the tax treatment of debt instruments bearing contingent
interest, except in circumstances not relevant to this discussion. While
(because of such maximum rate restrictions) the treatment of interest on the
A-2 Notes is not entirely clear under the OID Regulations, the Trust intends
to take the position that the stated interest on the Notes represents interest
payable at a qualified floating rate or qualifying objective rate and thus
should not be taxable to holders of Notes as original issue discount or as
contingent interest.
If the Notes are treated as having original issue discount, a Noteholder
(including a cash basis holder) generally would be required to include the
discount on the Notes in income for federal income tax purposes under the
accrual method on a constant yield basis, resulting in the inclusion of
interest in income somewhat in advance of the receipt of cash attributable to
that income. Under Section 1272(a)(6) of the Code, special provisions apply to
debt instruments on which payments may be accelerated due to prepayments of
other obligations securing those debt instruments. However, no regulations
have been issued interpreting those provisions and the manner in which those
provisions would apply to the Notes is unclear. Further, recently proposed OID
Regulations for contingent interest do not address the tax treatment of debt
instruments on which payments may be accelerated due to prepayment of other
obligations.
Market Discount and Premium. A holder who purchases a Note at a market
discount (generally, at a cost less than its remaining principal amount) that
exceeds a statutorily defined de minimis amount will be subject to the "market
discount" rules of the Code. These rules provide, in part, that gain on the
sale or other disposition of a debt instrument with a term of more than one
year and partial principal payments on such a debt instrument are treated as
ordinary income to the extent of accrued market discount. The market discount
rules also provide for deferral of interest deductions with respect to debt
incurred to purchase or carry a Note that has market discount. A holder who
purchases a Note at a premium may elect to be subject to the premium
amortization rules of the Code.
Sale or Other Disposition. If a Noteholder sells a Note, such holder will
recognize gain or loss in an amount equal to the difference between the amount
realized on the sale and the holder's adjusted tax basis in the Note. The
adjusted tax basis of a Note to a particular Noteholder will equal the
holder's cost for the Note, increased by any market discount or original issue
discount previously included by such Noteholder in income with respect to the
Note and decreased by the amount of bond premium (if any) previously amortized
and by the amount of principal payments previously received by such Noteholder
with respect to such Note. Any such gain or loss will be capital gain or loss
if the Note was held as a capital asset, except for gain attributable to
accrued interest or accrued market discount not previously included in income.
Capital losses generally may be used only to offset capital gains.
Foreign Holders. If interest paid (or accrued) to a Noteholder who is a
nonresident alien, foreign corporation or other non-United States person (a
"foreign person") is not effectively connected with
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the conduct of a trade or business within the United States by the foreign
person, the interest generally will be considered "portfolio interest", and
generally will not be subject to United States federal income tax and
withholding tax provided the foreign person (i) is not actually or
constructively a "10% shareholder" of the Trust (including a holder of 10% of
the outstanding Certificates) or JDCC or a "controlled foreign corporation"
with respect to which the Trust or JDCC is a "related person" within the
meaning of the Code and (ii) provides the person otherwise required to
withhold U.S. tax an appropriate statement, signed under penalties of perjury,
certifying that the beneficial owner of the Note is a foreign person and
providing the foreign person's name and address. The statement may be made on
a Form W-8 or substantially similar substitute form and, if the information
provided in the statement changes, the foreign person must so inform the
person otherwise required to withhold U.S. tax within 30 days of such change.
The statement generally must be provided in the year a payment occurs or in
either of the two preceding years. If a Note is held through a securities
clearing organization or certain other financial institutions, the
organization or institution may provide a signed statement to the withholding
agent. However, in that case, the signed statement must be accompanied by a
Form W-8 or substitute form provided by the foreign person that owns the Note.
If interest on a Note is not portfolio interest, then it will be subject to
United States federal income and withholding tax at a rate of 30%, unless
reduced or eliminated pursuant to an applicable tax treaty.
Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a Note by a foreign person will be exempt from United
States federal income and withholding tax, provided that (i) the gain is not
effectively connected with the conduct of a trade or business in the United
States by the foreign person and (ii) in the case of an individual foreign
person, the foreign person is not present in the United States for 183 days or
more in the taxable year or certain other conditions are not met.
If the interest, gain or income on a Note held by a foreign person is
effectively connected with the conduct of a trade or business in the United
States by the foreign person (although exempt from the withholding tax
previously discussed if the holder provides an appropriate statement), the
holder generally will be subject to United States federal income tax on the
interest, gain or income at regular federal income tax rates. In addition, if
the foreign person is a foreign corporation, it may be subject to a branch
profits tax on its "effectively connected earnings and profits" within the
meaning of the Code for the taxable year, as adjusted for certain items, at a
30% rate (or a lower rate under an applicable tax treaty).
Information Reporting and Backup Withholding. The Trust will be required to
report to the IRS, and to each Noteholder of record, the amount of interest
paid on the Notes (and the amount of interest withheld for federal income
taxes, if any) for each calendar year, except as to exempt holders (generally,
holders that are corporations, tax-exempt organizations, qualified pension and
profit-sharing trusts, individual retirement accounts, or nonresident aliens
who provide certification as to their status as nonresidents). Accordingly,
each holder (other than exempt holders who are not subject to the reporting
requirements) will be required to provide, under penalties of perjury, a
certificate containing the holder's name, address, correct federal taxpayer
identification number and a statement that the holder is not subject to backup
withholding. Should a nonexempt Noteholder fail to provide the required
certification, the Trust will be required to withhold 31% of the amount of
interest otherwise payable to the holder, and remit the withheld amount to the
IRS as a credit against the holder's federal income tax liability.
TAX CONSIDERATIONS FOR CERTIFICATEHOLDERS
Partnership Treatment of the Trust. The Seller and the Servicer will express
their intent in the Trust Agreement and related documents and will agree, and
the other Certificateholders will agree by their purchase of Certificates, to
treat the Trust as a partnership for purposes of federal and state income
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tax, franchise tax and any other taxes measured in whole or in part by income,
with the assets of the partnership being the assets held by the Trust, the
partners of the partnership being the Certificateholders (including the Seller
in its capacity as recipient of distributions from the Reserve Account), and
the Notes representing indebtedness of the partnership. The Seller and the
other Certificateholders will further agree in such documents to take no
action inconsistent with the treatment of Certificates for such purposes as
partnership interests in the Trust.
In view of the lack of cases or rulings on similar transactions, a variety
of alternative characterizations are possible in addition to the position to
be taken by Certificateholders that the Certificates represent equity
interests in a partnership with the Seller. For example, because the
Certificates have certain features characteristic of debt, the Certificates
might be considered for tax purposes as debt of the Seller or of the Trust. It
is also possible that the Trust might be treated for tax purposes as holding
debt of the Seller rather than the Receivables. Any such characterization
should not result in materially adverse tax consequences to Certificateholders
with respect to income earned on the Certificates as compared to the
consequences from treatment of the Certificates as equity in a partnership, as
described below, although there could be some timing differences for income
inclusion by Certificateholders. Accordingly, the following discussion assumes
that the Certificates represent equity interests in a partnership that owns
the Receivables for federal income tax purposes.
Partnership Taxation. As a partnership, the Trust will not be subject to
federal income tax. Rather, each Certificateholder will be required to
separately take into account such holder's distributive share of income,
gains, losses, deductions and credits of the Trust and to report such items on
his personal income tax return for the taxable year with or within which ends
the Trust's taxable year. (As explained below, the Trust's taxable year ends
October 31st.) The income of the Trust will consist primarily of interest and
finance charges earned on the Receivables (including appropriate adjustments
for market discount, original issue discount, and premium) and any income or
gain upon collection or disposition of Receivables. The expenses of the Trust
will consist primarily of interest accruing on the Notes, servicing and other
fees, and losses or deductions upon collection or disposition of Receivables.
The tax items of a partnership are allocable to the partners in accordance
with the Code, Treasury regulations and the partnership agreement (here, the
Trust Agreement and related documents). The Trust Agreement will provide, in
general, that the Certificateholders will be allocated taxable income of the
Trust for each fiscal month equal to the sum of (i) interest that accrues on
the Certificates in accordance with their terms for such fiscal month,
including interest accruing at the Pass-Through Rate or Pass-Through Rates in
effect for such month and interest on amounts previously due on Certificates
but not yet distributed; (ii) a portion of any contingent additional amount
payable as part of the Certificateholder's Monthly Interest Distributable
Amount allocable to such fiscal month; and (iii) subject to the discussion
below on discount and premium, any Trust income attributable to discount (or
less any offset attributable to allowable premium) on the Receivables that
corresponds to any difference of the principal amount of the Certificates and
their initial issue price. All remaining taxable income of the Trust will be
allocated to the Seller. Based upon the economic arrangement of the parties,
this approach for allocating Trust income should be permissible, but because
of the absence of authority directly on point, no assurance can be given that
the IRS would not require a greater amount of income to be allocated to
Certificateholders. Moreover, even under the foregoing method of allocation,
holders of Certificates may be allocated income equal to the entire Pass-
Through Rate plus the other items described above even though the Trust might
not have sufficient cash to make current cash distributions of such amount.
Thus, cash basis holders will in effect be required to report income from the
Certificates on the accrual basis and Certificateholders may become liable for
taxes on Trust income even if such holders have not received cash from the
Trust to pay such taxes. In addition, under such allocation a
Certificateholder's taxable income could exceed the amount of net income
allocated to him because of limitations on deductions for expenses or losses
of the Trust allocated to such holder. Alternatively, it is possible that the
IRS would treat Certificateholders as
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receiving guaranteed payments from the Trust, in which case the payments on
Certificates would be treated as ordinary income but not as interest income.
In addition, because tax allocations and tax reporting will be done on a
uniform basis for all Certificateholders but Certificateholders may be
purchasing Certificates at different times and at different prices,
Certificateholders may be required to report on their tax returns taxable
income that is greater or less than the amount reported to them by the Trust.
Under the Trust Agreement, the Seller is authorized to adjust the
allocations described above if necessary to reflect the economic income, gain
or loss to the Certificateholders (including the Seller) or as otherwise
required by the Code. Certificateholders should also be aware that because of
the interest rate cap feature on the A-2 Notes and the interest payment
feature on the Receivables (under which some interest can be added to
principal (as opposed to being paid currently)), there could be a significant
mismatching of interest income earned and interest expense accrued by the
Trust. So long as the allocation set forth above is respected by the IRS,
however, the excess interest income earned by the Trust from such mismatching
should be allocated to the Seller.
A portion of the taxable income allocated to a Certificateholder that is a
pension, profit sharing or employee benefit plan or other tax-exempt entity
(including an individual retirement account) will be treated as income from
"debt financed property", which generally will be taxable to such a holder
under the Code as unrelated business taxable income.
An individual taxpayer's share of expenses of the Trust (including fees for
the Servicer but not interest expense) would be miscellaneous itemized
deductions. Such deductions might be disallowed to the individual in whole or
in part because of the two percent limitation on miscellaneous itemized
deductions and might result in such holder being taxed on an amount of income
that exceeds the amount of cash actually distributed to such holder over the
life of the Trust.
The Trust intends to make all tax calculations relating to Trust income and
allocations to Certificateholders on an aggregate basis. If the IRS were to
require that such calculations be made separately for each Receivable, the
Trust might be required to incur additional expense but it is not expected
that there will be any significant adverse tax effect on Certificateholders.
Discount and Premium. As a result of their interest rate and payment
features, it is likely that stated interest on some of the Receivables would
be treated as original issue discount under the OID Regulations that is
includible in income by holders as such discount accrues. Since the Trust will
elect the accrual method of tax accounting, it is not expected that such
treatment would, as a general rule, have any materially adverse tax effect on
holders of Certificates. Certificateholders should be aware, however, that
interest accruing on some Receivables for a payment period could exceed
payments due thereunder for such period, in which case the likelihood might
increase that holders of Certificates would recognize Trust income prior to
the receipt of cash from the Trust that is attributable to such income.
The purchase price paid by the Trust for the Receivables (exclusive of
amounts paid for accrued interest thereon) may be greater or less than the
remaining principal balance of the Receivables at the time of purchase. If so,
the Receivables will have been acquired at a premium or discount, as the case
may be, exclusive of Receivables treated as contributed by the Seller as a
partner to the Trust. (As indicated above, the Trust will make this
calculation of discount or premium on an aggregate basis, but might be
required to recompute it on a Receivable by Receivable basis.)
If the Trust acquires the Receivables at a premium or at a market discount,
the Trust will elect to include such discount in income as it accrues over the
life of the Receivables or (to the extent allowable) may offset such premium
against interest income or original issue discount on the Receivables. If the
aggregate initial principal amount of Certificates differs from their
aggregate issue price, market discount income or allowable premium deductions
attributable to such difference will be allocated to
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Certificateholders. Because the Receivables have indefinite maturities, the
method and timing for including market discount or offsetting premium against
income thereon is not clear under present law and the offset for premium might
be deferred until maturity; one reasonable approach, however, would be on the
basis of principal payments when made.
Constructive Termination. Under Section 708 of the Code, the Trust will be
deemed to terminate for federal income tax purposes if 50% or more of the
capital and profits interests in the Trust are sold or exchanged within a 12-
month period. If such a termination occurs, there will be a closing of the
partnership's taxable year for all partners and the Trust will be considered
to distribute its assets to the partners, who would then be treated as
recontributing those assets to the Trust, as a new partnership. The Trust will
not comply with certain technical requirements that might apply when such a
constructive termination occurs. As a result, the Trust may be subject to
certain tax penalties and may incur additional expenses if it is required to
comply with those requirements. (Furthermore, the Trust might not be able to
comply due to lack of data.) Moreover, if the tax year of the Trust is not a
calendar year, the closing of a tax year of the Trust may cause a
Certificateholder reporting on a calendar year to report more than 12 months'
taxable income of the Trust.
Disposition of Certificates. Generally, capital gain or loss will be
recognized on a sale of Certificates in an amount equal to the difference
between the amount realized and the seller's tax basis in the Certificates
sold. A Certificateholder's tax basis in a Certificate generally will equal
his cost increased by his share of Trust income (includible in his income) and
decreased by any distributions received with respect to such Certificate. In
addition, both tax basis in a Certificate and the amount realized on a sale of
such Certificate would include the holder's share of the outstanding balance
of the Notes and other liabilities of the Trust. A holder acquiring
Certificates at different prices may be required to maintain a single
aggregate adjusted tax basis in such Certificates, and, upon sale or other
disposition of some of the Certificates, allocate a pro rata portion of such
aggregate tax basis to the Certificates sold (rather than maintaining a
separate tax basis in each Certificate for purposes of computing gain or loss
on a sale of that Certificate).
Any gain on the sale of a Certificate attributable to the holder's share of
unrecognized accrued market discount, if any, on the Receivables would
generally be treated as ordinary income to the holder and might give rise to
special tax reporting requirements. The Trust does not expect to have any
other assets that would give rise to such special reporting requirements.
Thus, to avoid those special reporting requirements, the Trust will elect to
include market discount in income as it accrues if the Receivables are
acquired at a market discount.
If a Certificateholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions
described above) over the life of the Certificates that exceeds the aggregate
cash distributions with respect thereto, such excess generally will give rise
to a capital loss upon the retirement of the Certificates.
Allocations Between Transferors and Transferees. In general, the Trust's
taxable income and losses will be determined each fiscal month and the tax
items for a particular fiscal month will be apportioned among the
Certificateholders in proportion to the principal amount of Certificates owned
by them as of the close of the last day of the corresponding calendar month,
which is the Certificate Record Date for the next Payment Date. As a result of
this monthly allocation, a holder purchasing Certificates may be allocated tax
items (which will affect its tax liability and tax basis) attributable to
periods before the actual transfer.
The use of such a monthly convention may not be permitted by existing
regulations. If a monthly convention is not allowed (or only applies to
transfers of less than all of the partner's interest), taxable income or
losses of the Trust might be reallocated among the Certificateholders. The
Seller is authorized to revise the Trust's method of allocation between
transferors and transferees to conform to a method permitted by future
regulations.
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No Section 754 Election. In the event that a Certificateholder sells its
Certificates at a gain (loss), the purchasing Certificateholder will have a
higher (lower) basis in the Certificates than that of the selling
Certificateholder. The tax basis of the Trust's assets will not be adjusted to
reflect that higher (or lower) basis unless the Trust were to file an election
under Section 754 of the Code. In order to avoid the administrative
complexities that would be involved in keeping accurate accounting records, as
well as potentially onerous information reporting requirements, the Trust will
not make such election. As a result, Certificateholders might be allocated a
greater or lesser amount of Trust income than would be appropriate based on
their own purchase price for Certificates.
Administrative Matters. The Owner Trustee is required to keep or cause to be
kept complete and accurate books of the Trust. Code Section 706 requires that
a partnership adopt the taxable year of its majority interest partners, or, if
none, its principal partners, and the Seller has a taxable year that ends
October 31. Accordingly, such books will be maintained for financial reporting
and tax purposes on an accrual basis and the fiscal and taxable year of the
Trust will be the 12-month period ending October 31 (or, in the case of
October 31, 1995, the period from the Closing Date to October 31, 1995). The
Owner Trustee will file a partnership information return (IRS Form 1065) with
the IRS for each taxable year of the Trust and will report to holders and the
IRS each Certificateholder's allocable share of items of Trust income and
expense on Schedule K-1. The Trust will provide the Schedule K-1 information
to nominees that fail to provide the Trust with the information statement
described below and such nominees will be required to forward such information
to the beneficial owners of the Certificates. Generally, holders must file tax
returns that are consistent with the information return filed by the Trust or
be subject to penalties unless the holder notifies the IRS of all such
inconsistencies.
Under Code Section 6031, any person that holds Certificates as a nominee at
any time during the Trust taxable year is required to furnish the Trust with a
statement containing certain information on the nominee, the beneficial owners
and the Certificates so held. The information referred to below for any
taxable year must be furnished to the Trust on or before the last day of the
first month following the close of the Trust's taxable year (i.e., November
30). Such information includes (i) the name, address and taxpayer
identification number of the nominee and (ii) as to each beneficial owner (x)
the name, address and taxpayer identification number of such person, (y)
whether such person is a United States person, a tax-exempt entity or a
foreign government, an international organization, or any wholly-owned agency
or instrumentality of either of the foregoing, and (z) certain information on
Certificates that were held, acquired or transferred on behalf of such person
throughout the year. In addition, brokers and financial institutions that hold
Certificates through a nominee are required to furnish directly to the Trust
information as to themselves and their ownership of Certificates. A clearing
agency registered under Section 17A of the Exchange Act that holds an interest
in a partnership as a nominee is not required to furnish any such information
statement to the Trust. Nominees, brokers and financial institutions that fail
to provide the Trust with the information described above may be subject to
penalties.
The Seller, as the tax matters partner, will be responsible for representing
the Certificateholders in any dispute with the IRS. The Code provides for
administrative examination of a partnership as if the partnership were a
separate and distinct taxpayer. Generally, the statute of limitations for
partnership items does not expire before three years since the later of the
filing or the last date for filing of the partnership information return. Any
adverse determination following an audit of the return of the Trust by the
appropriate taxing authorities could result in an adjustment of the returns of
the Certificateholders, and, under certain circumstances, a Certificateholder
may be precluded from separately litigating a proposed adjustment to the items
of the Trust. An adjustment could also result in an audit of a
Certificateholder's returns and adjustments of items not related to the income
and losses of the Trust.
Foreign Persons. Ownership of Certificates by nonresident aliens and foreign
corporations and other foreign persons raises tax issues unique to such
persons, may have substantially adverse tax
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consequences to them, and will subject the Trust to U.S. tax withholding and
reporting requirements. For this reason, purchasers (including nominees of
beneficial owners) of Certificates and their assignees must represent that the
beneficial owners of Certificates are individuals or entities that are U.S.
persons (generally, citizens or residents of the U.S. and corporations or
partnerships organized under U.S. law), and each purchaser must provide a
certificate of non-foreign status signed under penalties of perjury.
Backup Withholding. Distributions made on the Certificates and proceeds from
the sale of the Certificates will be subject to a "backup" withholding tax of
31% if, in general, the Certificateholder fails to comply with certain
identification procedures, unless the holder is an exempt recipient under
applicable provisions of the Code.
CERTAIN STATE TAX CONSIDERATIONS
[The following is a discussion of certain Iowa state tax considerations.
Lane & Waterman of Davenport, Iowa has acted as special Iowa tax counsel for
the Trust regarding certain state tax matters discussed below. There are no
reported cases or rulings on similar transactions by the Iowa Department of
Revenue and Finance ("IDOR"). Thus, the opinion of counsel is based upon
present provisions of Iowa statutes and the regulations promulgated
thereunder, all of which are subject to change (which change may be
retroactive) and further interpretation by the IDOR. No ruling on any of the
issues discussed below will be sought from the IDOR.
NOTES
Assuming the Notes will be treated as debt for federal income tax purposes,
the Notes will be treated as debt for Iowa income tax purposes. Accordingly,
Noteholders not otherwise subject to taxation in Iowa should not become
subject to taxation in Iowa solely because of a holder's ownership of Notes.
However, a Noteholder already subject to Iowa's individual or corporate income
tax could be required to pay additional Iowa tax as a result of the
Noteholder's ownership or disposition of Notes.
CERTIFICATES
The activities to be undertaken by the Sub-Servicer in servicing and
collecting the receivables will take place in Iowa. The State of Iowa imposes
a state individual income tax and a corporate income tax which is imposed on
corporations and other entities doing business in the State of Iowa.
If the arrangement created by the Trust is treated as a partnership (not
taxable as a corporation) for federal income tax purposes, in the opinion of
Lane & Waterman, the same treatment should also apply for Iowa tax purposes.
In such case, the resulting constructive partnership should not be subject to
income taxation in Iowa because of its activities in Iowa and, accordingly,
non-resident Certificateholders who are not otherwise subject to Iowa tax
should not be subject to Iowa income tax on income received through the
constructive partnership. However, if any income of the Trust is subject to
Iowa tax, a Certificateholder not otherwise subject to taxation in Iowa will
not become subject to Iowa income tax on income which is not derived from Iowa
as a result of ownership of the Certificates.
If the Certificates are instead treated as ownership interests in an
association taxable as a corporation or a "publicly traded partnership"
taxable as a corporation, then the hypothetical entity should not be subject
to Iowa income tax because of its activities in Iowa (which, if applicable,
could result in reduced distributions to Certificateholders). However, if any
Iowa derived income of the Trust is subject to Iowa income tax a
Certificateholder not otherwise subject to tax in Iowa will not become subject
to Iowa income tax as a result of mere ownership of such an interest.
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As noted in the preceding discussion under "Certain Federal Income Tax
Considerations" concerning tax considerations for certificateholders of the
Trust, because the Certificates have certain features characteristic of debt,
the Certificates might be considered for federal income tax purposes as debt
of the Seller or of the Trust. If such a characterization should occur, the
Certificates will also be treated as debt for Iowa income tax purposes.
Accordingly, Certificateholders not otherwise subject to taxation in Iowa
should not become subject to taxation in Iowa solely as a result of such a
classification. However, a Certificateholder already subject to Iowa's
individual or corporate income tax could be required to pay additional Iowa
tax as a result of the Certificateholder's ownership or disposition of the
Certificates.
Because each state's income tax laws vary, it is impossible to predict the
income tax consequences to the holders of Notes and holders of Certificates in
all of the state taxing jurisdictions in which they are already subject to
tax. Noteholders and Certificateholders are urged to consult their own
advisors with respect to state income and franchise taxes.]
THE FEDERAL AND STATE INCOME TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
NOTEHOLDER'S OR A CERTIFICATEHOLDER'S PARTICULAR TAX SITUATION. PROSPECTIVE
PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES
AND THE CERTIFICATES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR
OTHER TAX LAWS.
ERISA CONSIDERATIONS
THE NOTES
The Notes may be purchased by an employee benefit plan or an individual
retirement account (a "Plan") subject to ERISA, or Section 4975 of the Code. A
fiduciary of a Plan must determine that the purchase of a Note is consistent
with its fiduciary duties under ERISA and does not result in a nonexempt
prohibited transaction as defined in Section 406 of ERISA or Section 4975 of
the Code. Employee benefit plans which are governmental plans (as defined in
Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33)
of ERISA) are not subject to the fiduciary responsibility or prohibited
transaction provisions of ERISA or the Code. For additional information
regarding treatment of the Notes under ERISA, see "ERISA Considerations" in
the Prospectus.
THE CERTIFICATES
The Certificates may not be acquired by (a) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By its acceptance of a
Certificate, each Certificateholder will be deemed to have represented and
warranted that it is not a Benefit Plan.
In this regard, purchasers that are insurance companies that expect to use
general account assets to purchase Certificates should consult with their
counsel with respect to the recent United States Supreme Court case
interpreting the fiduciary responsibility rules of ERISA, John Hancock Mutual
Life Insurance Co. v. Harris Trust and Savings Bank (decided December 12,
1993). In John Hancock, the Supreme Court ruled that assets held in an
insurance company's general account may be deemed to be "plan assets" for
ERISA purposes under certain circumstances. Prospective purchasers that are
insurance companies should determine whether the decision affects their
ability to make purchases of
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the Certificates. In particular, such an insurance company should consider the
exemptive relief granted by the Department of Labor for transactions involving
insurance company general accounts in Prohibited Transactions Exemption 95-60,
60 Fed. Reg. 35925 (July 12, 1995).
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Note Underwriting Agreement"), the Seller has agreed to cause the Trust
to sell to each of the underwriters named below (the "Note Underwriters"), and
each of the Note Underwriters has severally, and not jointly, agreed to
purchase, the principal amount of Notes set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
UNDERWRITERS A-1 NOTES A-2 NOTES
------------ ---------- ----------
<S> <C> <C>
$ $
---------- ----------
$ $
========== ==========
</TABLE>
In the Note Underwriting Agreement, the Note Underwriters have agreed,
subject to the terms and conditions therein, to purchase all the Notes offered
hereby if any of such Notes are purchased. The Seller has been advised by the
Note Underwriters that they propose initially to offer the A-1 Notes and the
A-2 Notes to the public at the respective prices set forth herein, and to
certain dealers at such prices less a concession not in excess of % per A-
1 Note and % per A-2 Note. The Note Underwriters may allow and such
dealers may reallow a concession not in excess of % per A-1 Note and %
per A-2 Note to certain other dealers. After the initial public offering, such
prices and such concessions may be changed.
The Note Underwriting Agreement provides that the Seller and JDCC will
indemnify the Note Underwriters against certain civil liabilities, including
liabilities under the Securities Act, or contribute to payments the Note
Underwriters may be required to make in respect thereof.
The Indenture Trustee (on behalf of the Trust) may, from time to time,
invest the funds in the Trust Accounts in Eligible Investments acquired from
the Note Underwriters.
Subject to the terms and conditions set forth in a certificate underwriting
agreement (the "Certificate Underwriting Agreement"), the Seller has agreed to
cause the Trust to sell to (the "Certificate
Underwriters"; and, together with the Note Underwriters, the "Underwriters"),
and the Certificate Underwriters have agreed to purchase, Certificates in an
aggregate principal amount of $ . The Seller will purchase
Certificates in an aggregate principal amount of $ from the
Certificate Underwriters and will purchase Certificates in an aggregate
principal amount of $ from the Trust.
The Seller has been advised by the Certificate Underwriters that they
propose initially to offer the Certificates to the public at the price set
forth herein, and to certain dealers at such price less a concession not in
excess of % per Certificate. The Certificate Underwriters may allow and
such dealers may reallow a concession not in excess of % per Certificate
to certain other dealers. After the initial public offering of the
Certificates, the public offering price and such concessions may be changed.
S-43
<PAGE>
The Certificate Underwriting Agreement provides that the Seller and JDCC
will indemnify the Certificate Underwriters against certain civil liabilities,
including liabilities under the Securities Act, or contribute to payments the
Certificate Underwriters may be required to make in respect thereof.
The Indenture Trustee (on behalf of the Trust) may, from time to time,
invest the funds in the Trust Accounts in Eligible Investments acquired from
the Certificate Underwriters.
The closing of the sale of the Notes is conditioned on the closing of the
sale of the Certificates. The closing of the sale of the Certificates is
conditioned on the closing of the sale of the Notes.
Upon receipt of a request by an investor who has received an electronic
Prospectus Supplement and Prospectus from an Underwriter or a request by such
investor's representative within the period during which there is an
obligation to deliver a Prospectus Supplement and Prospectus, the Seller or
the Underwriters will promptly deliver, or cause to be delivered, without
charge, a paper copy of the Prospectus Supplement and Prospectus.
LEGAL OPINIONS
In addition to the legal opinions described in the Prospectus, certain legal
matters relating to the Notes and the Certificates will be passed upon for the
Trust, the Seller and the Servicer by Shearman & Sterling, New York, New York
and by Richards, Layton & Finger, Wilmington, Delaware, and for the Note
Underwriters and the Certificate Underwriters by Brown & Wood, New York, New
York. Certain federal income tax and other matters will be passed upon for the
Trust by Shearman & Sterling, and certain Iowa state income tax and other
matters will be passed upon for the Trust by Lane & Waterman, Davenport, Iowa.
S-44
<PAGE>
INDEX OF TERMS
Set forth below is a list of the defined terms used in this Prospectus
Supplement and the pages on which the definitions of such terms may be found
herein.
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
A-1 Final Scheduled Payment Date........................................... S-7
A-2 Final Scheduled Payment Date........................................... S-7
A-1 Noteholders............................................................ S-5
A-2 Noteholders............................................................ S-5
A-2 Noteholders' Percentage................................................ S-29
A-1 Noteholders' Principal Carryover Shortfall............................. S-29
A-2 Noteholders' Principal Carryover Shortfall............................. S-29
A-1 Noteholders' Principal Distributable Amount............................ S-28
A-2 Noteholders' Principal Distributable Amount............................ S-28
A-1 Noteholders' Monthly Principal Distributable Amount.................... S-28
A-2 Noteholders' Monthly Principal Distributable Amount.................... S-28
A-1 Note Interest Rate..................................................... S-6
A-2 Note Interest Rate..................................................... S-6
A-1 Notes.................................................................. S-3
A-2 Notes.................................................................. S-3
A-2 Redemption Price....................................................... S-7
Accelerated Principal Distribution Amount.................................. S-29
Alternate Principal Distribution Amount.................................... S-27
Base Rate.................................................................. S-5
Base Rate Additive......................................................... S-4
Benefit Plan............................................................... S-42
Business Day............................................................... S-22
Cede....................................................................... S-2
Certificate Balance........................................................ S-30
Certificateholders......................................................... S-7
Certificateholders' Distributable Amount................................... S-29
Certificateholders' Percentage............................................. S-30
Certificateholders' Interest Carryover Shortfall........................... S-30
Certificateholders' Interest Distributable Amount.......................... S-30
Certificateholders' Principal Carryover Shortfall.......................... S-30
Certificateholders' Principal Distributable Amount......................... S-30
Certificateholders' Monthly Interest Distributable Amount.................. S-30
Certificateholders' Monthly Principal Distributable Amount................. S-30
Certificate Record Date.................................................... S-7
Certificates............................................................... S-3
Certificate Underwriting Agreement......................................... S-43
Certificate Underwriters................................................... S-43
Closing Date............................................................... S-4
Collection Account......................................................... S-9
Collection Period.......................................................... S-6
Commission................................................................. S-2
Company.................................................................... S-21
Cut-off Date............................................................... S-4
Dealers.................................................................... S-4
Deere...................................................................... S-4
Deere Credit Services...................................................... S-3
Definitive Certificates.................................................... S-3
Determination Date......................................................... S-26
DTC........................................................................ S-2
</TABLE>
S-45
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ERISA...................................................................... S-11
Exchange Act............................................................... S-2
Financed Equipment......................................................... S-4
Indenture.................................................................. S-1
Indenture Trustee.......................................................... S-3
Interest Distribution Amount............................................... S-26
Issuer..................................................................... S-3
JDCC....................................................................... S-3
John Deere................................................................. S-4
LIBOR...................................................................... S-6
LIBOR Business Day......................................................... S-22
Liquidated Receivables..................................................... S-26
Liquidation Proceeds....................................................... S-26
Net Pool Rate.............................................................. S-6
Noteholders................................................................ S-5
Noteholders' Distributable Amount.......................................... S-27
Noteholders' Interest Carryover Shortfall.................................. S-28
Noteholders' Interest Distributable Amount................................. S-27
Noteholders' Monthly Interest Distributable Amount......................... S-28
Note Record Date........................................................... S-6
Notes...................................................................... S-3
Note Underwriters.......................................................... S-43
Note Underwriting Agreement................................................ S-43
Note Value................................................................. S-27
Note Value Decline......................................................... S-27
Obligors................................................................... S-4
Owner Trustee.............................................................. S-3
Pass-Through Rate.......................................................... S-7
Payment Date............................................................... S-5
Plan....................................................................... S-42
Pool Balance............................................................... S-5
Pool Rate.................................................................. S-5
Principal Distribution Amount.............................................. S-26
Purchase Agreement......................................................... S-4
Rating Agencies............................................................ S-13
Realized Losses............................................................ S-27
Receivable Rate............................................................ S-4
Receivables................................................................ S-1
Reference Banks............................................................ S-22
Reserve Account Initial Deposit............................................ S-9
Sale and Servicing Agreement............................................... S-4
Sales Companies............................................................ S-15
Securityholders............................................................ S-7
Seller..................................................................... S-3
Servicer................................................................... S-3
Servicing Fee.............................................................. S-10
Servicing Fee Rate......................................................... S-10
Specified Reserve Account Balance.......................................... S-9
Sub-Servicer............................................................... S-3
Telerate Page 3750......................................................... S-22
Total Distribution Amount.................................................. S-26
Transfer and Servicing Agreements.......................................... S-25
Trust...................................................................... S-3
Trust Agreement............................................................ S-3
</TABLE>
S-46
<PAGE>
PROSPECTUS
JOHN DEERE OWNER TRUSTS
[DEERE RECEIVABLES CORPORATION]
ASSET BACKED NOTES
ASSET BACKED CERTIFICATES
------------
JOHN DEERE RECEIVABLES, INC., SELLER
JOHN DEERE CAPITAL CORPORATION, SERVICER
------------
The Asset Backed Notes (the "Notes") and the Asset Backed Certificates (the
"Certificates" and, together with the Notes, the "Securities") described
herein may be sold from time to time in one or more series, in amounts, at
prices and on terms to be determined at the time of sale and to be set forth
in a supplement relating to either the Notes or the Certificates or both, as
the case may be, to this Prospectus (each, a "Prospectus Supplement"). Each
series of Securities, which will include one or more classes of Notes and one
or more classes of Certificates, will be issued either by a trust to be formed
with respect to such series (each, a "Trust") or by Deere Receivables
Corporation ("DRC") (each an "Issuer") as described in the relevant Prospectus
Supplement. See "Certain Tax Considerations." Each Trust will be formed
pursuant to a Trust Agreement to be entered into between John Deere
Receivables, Inc., as Seller (the "Seller"), and the trustee specified in the
related Prospectus Supplement (the "Owner Trustee"). The Notes of each series
will be issued and secured pursuant to an Indenture between the related Issuer
and the indenture trustee specified in the related Prospectus Supplement (the
"Indenture Trustee") and will represent indebtedness of such Issuer. The
Certificates of each series will represent fractional undivided interests in
the related trust. The property of each Issuer will include a pool of
agricultural and industrial equipment retail installment sale and loan
contracts (the "Receivables") purchased by such Issuer from the Seller on or
prior to the date of issuance by such Trust of the related Securities, as
described herein and in the related Prospectus Supplement. If so provided in
the related Prospectus Supplement, additional Receivables may be purchased by
the relevant Issuer from the Seller during the term of the Notes.
Except as otherwise provided in the related Prospectus Supplement, each
class of Securities of any series will represent the right to receive a
specified amount of payments of principal and interest, at the rates, on the
dates and in the manner described herein and in the related Prospectus
Supplement. The right of each class of Securities to receive payments may be
senior or subordinate to the rights of one or more of the other classes of
such series. Distributions on Certificates of a series may be subordinated in
priority to payments due on the related Notes to the extent described herein
and in the related Prospectus Supplement. A series may also include one or
more classes of Notes or Certificates which differ as to the timing and
priority of payment, interest rate or amount of distributions in respect of
principal or interest or both. A series may also include one or more classes
of Notes or Certificates entitled to distributions in respect of principal
with disproportionate, nominal or no interest distributions, or to interest
distributions, with disproportionate, nominal or no distributions in respect
of principal. The rate of payment in respect of principal of the Notes and
distributions in respect of the Certificate Balance of the Certificates of any
class will depend on the priority of payment of such a class and the rate and
timing of payments (including prepayments, defaults, liquidations and
repurchases of Receivables) on the related Receivables. A rate of payment
lower or higher than that anticipated may affect the weighted average life of
each class of Securities in the manner described herein and in the related
Prospectus Supplement.
PROSPECTIVE INVESTORS SHOULD CONSIDER THE FACTORS SET FORTH UNDER "RISK
FACTORS" STARTING ON PAGE 10 HEREIN AND IN THE RELATED PROSPECTUS SUPPLEMENT.
Retain this Prospectus for future reference. This Prospectus may not be used
to consummate sales of Securities unless accompanied by a Prospectus
Supplement.
------------
THE NOTES OF A GIVEN SERIES REPRESENT OBLIGATIONS OF, AND THE CERTIFICATES OF
SUCH SERIES REPRESENT BENEFICIAL INTERESTS IN, THE RELATED ISSUER ONLY AND
DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF JOHN DEERE RECEIVABLES,
INC., JOHN DEERE CAPITAL CORPORATION, DEERE & COMPANY OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE SECURITIES NOR THE RECEIVABLES ARE
ISSUED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
The date of this Prospectus is , 199
<PAGE>
AVAILABLE INFORMATION
The Seller, as originator of each Trust and DRC, has filed with the
Securities and Exchange Commission (the "Commission") a Registration Statement
(together with all amendments and exhibits thereto, referred to herein as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Notes and Certificates offered pursuant
to this Prospectus. For further information, reference is made to the
Registration Statement which may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549; and at the Commission's regional offices at 500 West
Madison, 14th Floor, Chicago, Illinois 60661 and Seven World Trade Center,
13th Floor, New York, New York 10048. Copies of the Registration Statement may
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
UNTIL 90 DAYS AFTER THE DATE OF ANY PROSPECTUS SUPPLEMENT, ALL DEALERS EF-
FECTING TRANSACTIONS IN THE NOTES OR THE CERTIFICATES, WHETHER OR NOT PARTICI-
PATING IN THE RELATED DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS
SUPPLEMENT AND A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS
TO DELIVER A PROSPECTUS SUPPLEMENT AND A PROSPECTUS WHEN ACTING AS UNDERWRIT-
ERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
UPON RECEIPT OF A REQUEST BY AN INVESTOR WHO HAS RECEIVED AN ELECTRONIC
PROSPECTUS SUPPLEMENT AND PROSPECTUS FROM AN UNDERWRITER OR A REQUEST BY SUCH
INVESTOR'S REPRESENTATIVE WITHIN THE PERIOD DURING WHICH THERE IS AN
OBLIGATION TO DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS, THE SELLER OR
THE UNDERWRITERS WILL PROMPTLY DELIVER, OR CAUSE TO BE DELIVERED, WITHOUT
CHARGE, TO SUCH INVESTOR A PAPER COPY OF THE PROSPECTUS SUPPLEMENT AND
PROSPECTUS.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All documents subsequently filed by the Servicer on behalf of the Issuer
referred to in the accompanying Prospectus Supplement with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), after the date of this Prospectus
and prior to the termination of any offering of the Securities issued by such
Issuer shall be deemed to be incorporated by reference in this Prospectus and
to be a part of this Prospectus from the date of the filing of such documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained
herein (or in the accompanying prospectus supplement) or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference modifies or replaces such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Servicer on behalf of any Issuer will provide without charge to each
person to whom this Prospectus is delivered, on the written or oral request of
such person, a copy of any or all of the documents referred to above that have
been or may be incorporated by reference in this Prospectus (not including
exhibits to the information that is incorporated by reference unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates). Such requests should be directed to: John Deere
Capital Corporation, Suite 600, First Interstate Bank Building, 1 East First
Street, Reno, Nevada 89501, Attention: Manager (702) 786-5527.
2
<PAGE>
SUMMARY OF TERMS
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus and by reference to
the information with respect to the Securities of any series contained in the
related Prospectus Supplement to be prepared and delivered in connection with
the offering of such Securities. Certain capitalized terms used in the summary
are defined elsewhere in the Prospectus on the pages indicated in the "Index of
Terms". In the event that Securities are not issued by a Trust but are instead
issued by DRC, the terms of the Securities will be described in the relevant
prospectus supplement. See "Certain Tax Considerations."
Issuer.................... With respect to each series of Securities, the
Trust to be formed pursuant to a trust agreement
(a "Trust Agreement") between the Seller and the
Owner Trustee for such Trust (the "Trust" or the
"Issuer").
Seller.................... John Deere Receivables, Inc. (the "Seller").
Servicer.................. John Deere Capital Corporation (the "Servicer" or
"JDCC"). The Servicer will designate Deere Credit
Services, Inc. ("Deere Credit Services"), an indi-
rect wholly-owned subsidiary of Deere & Company,
as its agent to service the Receivables (in such
capacity, the "Sub-Servicer") at the Servicer's
expense.
Indenture Trustee......... With respect to each series of Securities, the
Indenture Trustee specified in the related
Prospectus Supplement.
Owner Trustee............. With respect to each series of Securities, the
Owner Trustee specified in the related Prospectus
Supplement.
The Notes................. Each series of Securities will include one or more
classes of Notes, which will be issued pursuant to
an indenture between the related Trust and the In-
denture Trustee (as amended and supplemented from
time to time, an "Indenture").
Unless otherwise specified in the related Prospec-
tus Supplement, Notes will be available for pur-
chase in denominations of $1,000 and integral mul-
tiples thereof in book-entry form only. Unless
otherwise specified in the related Prospectus Sup-
plement, holders of Notes (the "Noteholders") will
not be entitled to receive Definitive Notes except
in the event that Definitive Notes are issued in
the limited circumstances described herein or in
the related Prospectus Supplement. See "Certain
Information Regarding the Securities--Definitive
Notes".
Unless otherwise specified in the related Prospec-
tus Supplement, each class of Notes will have a
stated principal amount and will bear interest at
a specified rate or rates (with respect to each
class of Notes, the "Interest Rate"). Each class
of Notes may have a different Interest Rate, which
may be a fixed, variable or adjustable Interest
Rate, or any combination of the foregoing. The re-
lated Prospectus Supplement will specify the In-
terest Rate for each class of Notes, or the method
for determining the Interest Rate.
With respect to a series that includes two or more
classes of Notes, each class may differ as to the
timing and priority of
3
<PAGE>
payments, seniority, Interest Rate or amount of
payments of principal or interest in respect of
any such class or classes. In addition, payments
of principal or interest in respect of any such
class or classes may or may not be made upon the
occurrence of specified events or on the basis of
collections from designated portions of the Re-
ceivables. Further, a series may include one or
more classes of Notes ("Strip Notes") entitled to
(i) principal payments with disproportionate, nom-
inal or no interest payments or (ii) interest pay-
ments with disproportionate, nominal or no princi-
pal payments.
If the Servicer exercises its option to purchase
the Receivables of a Trust, or, if not, and if and
to the extent provided in the related Prospectus
Supplement, satisfactory bids for the purchase of
such Receivables are received, in the manner and
on the respective terms and conditions described
under "Description of the Transfer and Servicing
Agreements--Termination", the outstanding Notes
will be redeemed as set forth in the related Pro-
spectus Supplement.
The Certificates.......... Each series of Securities will include one or more
classes of Certificates, which will be issued pur-
suant to a Trust Agreement.
Unless otherwise specified in the related Prospec-
tus Supplement, Certificates will be available for
purchase in denominations of $100,000 and integral
multiples of $100,000 in excess thereof. Unless
otherwise specified in the related Prospectus Sup-
plement, the Certificates will be issued in fully
registered, certificated form ("Definitive Certif-
icates") to the holders of Certificates
("Certificateholders" and, together with the Note-
holders, the "Securityholders") or their nominees.
Unless otherwise specified in the related Prospec-
tus Supplement, each class of Certificates will
have a stated Certificate Balance specified in the
related Prospectus Supplement (the "Certificate
Balance") and will accrue interest on such Certif-
icate Balance at a specified rate (with respect to
each class of Certificates, the "Pass-Through
Rate"). Each class of Certificates may have a dif-
ferent Pass-Through Rate, which may be a fixed,
variable or adjustable Pass-Through Rate, or any
combination of the foregoing. The related Prospec-
tus Supplement will specify the Pass-Through Rate
for each class of Certificates or the method for
determining the Pass-Through Rate.
With respect to a series that includes two or more
classes of Certificates, each class may differ as
to timing and priority of distributions, seniori-
ty, allocations of losses, Pass-Through Rates or
amount of distributions in respect of principal or
interest. In addition, distributions in respect of
principal or interest in respect of any such class
or classes may or may not be
4
<PAGE>
made upon the occurrence of specified events or on
the basis of collections from designated portions
of the Receivables in such Trust. Further, a se-
ries may include one or more classes of Certifi-
cates ("Strip Certificates") entitled to (i) dis-
tributions in respect of principal with dispropor-
tionate, nominal or no interest distributions or
(ii) interest distributions with disproportionate,
nominal or no distributions in respect of princi-
pal.
To the extent specified in the related Prospectus
Supplement, distributions in respect of the Cer-
tificates may be subordinated in priority of pay-
ment to payments on the Notes.
If the Servicer exercises its option to purchase
the Receivables of a Trust, or, if not, and if and
to the extent provided in the related Prospectus
Supplement, satisfactory bids for the purchase of
such Receivables are received, in the manner and
on the respective terms and conditions described
under "Description of the Transfer and Servicing
Agreements--Termination", Certificateholders will
receive as a prepayment an amount in respect of
the Certificates as specified in the related Pro-
spectus Supplement.
Trust Property............ The Trust Property of each Trust will consist of
the property described below:
A. Receivables..........
Each Trust will purchase from the Seller a pool of
Receivables. The Receivables will consist of agri-
cultural and industrial equipment retail install-
ment sale and loan contracts secured by new and
used agricultural equipment and industrial equip-
ment, including rights to receive certain payments
made with respect to such Receivables, and secu-
rity interests in the equipment financed thereby
(the "Financed Equipment"), the proceeds thereof
and the proceeds of any repossessed Financed
Equipment related to such pool of Receivables. On
or prior to the Closing Date specified in the re-
lated Prospectus Supplement with respect to a
Trust, the Seller will purchase Receivables having
an aggregate principal balance specified in the
related Prospectus Supplement as of a date speci-
fied therein (the "Cut-off Date"), from JDCC pur-
suant to a Purchase Agreement (each, a "Purchase
Agreement"), between JDCC and the Seller, and the
Seller will sell such Receivables to such Trust
pursuant to a Sale and Servicing Agreement (each,
a "Sale and Servicing Agreement") among the Sell-
er, the Servicer and such Trust. If so provided in
the related Prospectus Supplement, under certain
circumstances, Receivables may be added to the re-
lated pool of Receivables in respect of the re-
lated Trust.
The Receivables arose from financing provided in
connection with retail sales by dealers (the
"Dealers") of new and used agricultural equipment
and industrial equipment to retail purchasers (the
"Obligors") and are either originated, or acquired
from such Dealers, by Deere & Company, a Delaware
corpora-
5
<PAGE>
tion ("Deere"), and its wholly-owned subsidiaries
(collectively called "John Deere"). The Receiv-
ables will be purchased by JDCC pursuant to agree-
ments with certain John Deere companies. The Re-
ceivables sold to a Trust will be selected from
the contracts owned by JDCC based on the criteria
specified in the applicable Purchase Agreement and
described herein or in the related Prospectus Sup-
plement.
B. Credit and Cash Flow
Enhancement..........
If and to the extent specified in the related Pro-
spectus Supplement, credit enhancement with re-
spect to a Trust or any class or classes of Secu-
rities may include any one or more of the follow-
ing: subordination of one or more other classes of
Securities, Reserve Accounts,
overcollateralization, letters of credit, credit
or liquidity facilities, surety bonds, guaranteed
investment contracts, swaps or other interest rate
protection agreements, repurchase obligations,
other agreements with respect to third party pay-
ments or other support, cash deposits or other ar-
rangements.
Unless otherwise specified in the related Prospec-
tus Supplement, any form of credit enhancement
will have certain limitations and exclusions from
coverage thereunder which will be described in the
related Prospectus Supplement.
C. Reserve Account...... If so specified in the related Prospectus Supple-
ment, a Reserve Account will be created for each
Trust with an initial deposit by the Seller of
cash or Eligible Investments having a value equal
to the amount specified in the related Prospectus
Supplement. The amount initially deposited in the
Reserve Account is referred to as the "Reserve Ac-
count Initial Deposit". To the extent specified in
the related Prospectus Supplement, the Reserve Ac-
count Initial Deposit will be augmented on each
Payment Date (as defined in the related Prospectus
Supplement) by the deposit in the Reserve Account
of amounts remaining after making all other dis-
tributions required on such day. Amounts in the
Reserve Account will be available to cover
shortfalls in amounts due to the holders of those
classes of Securities specified in the related
Prospectus Supplement in the manner and under the
circumstances specified therein. The related Pro-
spectus Supplement will also specify to whom and
the manner and circumstances under which amounts
on deposit in the Reserve Account (after giving
effect to all other required distributions to be
made by the applicable Trust) in excess of the
Specified Reserve Account Balance (as defined in
the related Prospectus Supplement) will be dis-
tributed. (See "Description of the Transfer and
Servicing Agreements--Reserve Account".)
D. Collection Account... With respect to each Trust, unless the related Pro-
spectus Supplement provides otherwise, the Sub-
Servicer will be required
6
<PAGE>
to remit collections received with respect to the
Receivables during the collection period specified
in the related Prospectus Supplement (each, a
"Collection Period") to an account in the name of
the applicable Indenture Trustee (each, a "Collec-
tion Account") within two Business Days of receipt
thereof as described herein and in the related
Prospectus Supplement, except under certain condi-
tions described herein and in the related Prospec-
tus Supplement. Pursuant to the applicable Sale
and Servicing Agreement, the Servicer will have
the revocable power to instruct the applicable In-
denture Trustee to withdraw funds on deposit in
the Collection Account and to apply such funds on
each Payment Date in the manner specified in the
related Prospectus Supplement.
E. Transfer and
Servicing
Agreements...........
With respect to each Trust, the Seller will pur-
chase the related Receivables described therein
from JDCC pursuant to a Purchase Agreement and the
Seller will sell such Receivables to the Trust
pursuant to a Sale and Servicing Agreement. In ad-
dition, the Servicer will agree with the Trust to
be responsible for servicing, managing, maintain-
ing custody of and making collections on such Re-
ceivables. The rights and benefits of the Seller
under such Purchase Agreement and of such Trust
under the Sale and Servicing Agreement will be as-
signed to the Indenture Trustee as collateral for
the Notes of the related series. The obligations
of the Seller and the Servicer under such Transfer
and Servicing Agreements include those specified
below and in the related Prospectus Supplement.
Unless otherwise provided in the related Prospectus
Supplement, the Seller will be obligated to repur-
chase any Receivable if the interest of the appli-
cable Trust therein is materially adversely af-
fected by a breach of any representation or war-
ranty made by the Seller or JDCC with respect to
such Receivable, if the breach has not been cured
following the discovery by or notice to the Seller
of the breach. JDCC will be obligated to repur-
chase the Receivable from the Seller pursuant to
the related Purchase Agreement contemporaneously
with the Seller's repurchase from the applicable
Trust. The obligation of the Seller to repurchase
any Receivable with respect to which JDCC has
breached a representation or warranty is subject
to JDCC's repurchase of such Receivable.
Unless otherwise provided in the related Prospectus
Supplement, consistent with its normal procedures,
the Sub-Servicer may, in its discretion, arrange
with the Obligor on a Receivable to extend or mod-
ify the payment schedule. Some of such arrange-
ments may result in the Servicer purchasing the
Receivable for the Purchase Amount.
Unless otherwise specified in the related Prospec-
tus Supplement, the Servicer shall be entitled to
receive a fee for servic-
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ing the Receivables of each Trust equal to a spec-
ified percentage of the aggregate principal bal-
ance of such Receivables, as set forth in the re-
lated Prospectus Supplement. See "Description of
the Transfer and Servicing Agreements--Servicing
Compensation" herein and in the related Prospectus
Supplement.
Additional Receivables, To the extent specified in the related Prospectus
Revolving Period, Etc. Supplement, the relevant Trust may purchase, under
certain circumstances, additional Receivables from
the Seller during the Revolving Period. The "Re-
volving Period" for such Trust will be the period
beginning on the related Cut-Off Date and ending
on the earlier of (a) the commencement of an
"Early Amortization Period" (as specified in such
Prospectus Supplement) and (b) the date specified
as the "Scheduled Revolving Period Termination
Date" in the related Prospectus Supplement. See
the related Prospectus Supplement for a discussion
of certain events that might lead to the early
termination of the Revolving Period and, in cer-
tain limited circumstances, the recommencement of
the Revolving Period. Unless otherwise provided in
the related Prospectus Supplement, no payments of
principal will be made on the Notes and no amounts
will be set aside for such purpose prior to the
Wind Down Period or the Early Amortization Period
(in each case, as more fully described in the re-
lated Prospectus Supplement). [/R]
Unless an Early Amortization Period has commenced,
the "Wind Down Period" with respect to such Trust
will begin on the day following the related Sched-
uled Revolving Period Termination Date and will
continue until the earlier of (a) the commencement
of an Early Amortization Period and (b) the date
on which all related Securities have been paid in
full with respect to such Trust. During the Wind
Down Period, certain amounts (to the extent speci-
fied in the related Prospectus Supplement) will be
set aside for payments of principal on the Notes
and for distributions with respect to the Certifi-
cate Balance, and such payments and distributions
will be made, to the extent described in the re-
lated Prospectus Supplement.
To the extent specified in the related Prospectus
Supplement with respect to a Trust, an Early Amor-
tization Period will commence upon the occurrence
of an "Early Amortization Event" (as described in
the related Prospectus Supplement) and will end on
the earliest of (a) the payment in full of the
outstanding principal balance of the Notes and the
Certificate Balance, (b) the termination of the
relevant Trust, and (c) the recommencement, if
any, of the Revolving Period.
With respect to such Trust, when an Early Amorti-
zation Period begins, the Revolving Period and any
then occurring Wind Down Period will terminate and
certain amounts (to the extent
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<PAGE>
described in the related Prospectus Supplement)
will thereafter be paid to the holders of the re-
lated Securities to the extent described in the
related Prospectus Supplement. If an Early Amorti-
zation Period commences during the Wind Down Peri-
od, amounts if any, on deposit in the Note Distri-
bution Account will be paid to the related holders
to the extent, and at the times, described in the
related Prospectus Supplement.
Certain Legal Aspects of
the Receivables;
Repurchase Obligations...
In connection with the sale of the Receivables to a
Trust, security interests in the Financed Equip-
ment securing the related Receivables will be as-
signed by JDCC to the Seller and by the Seller to
such Trust. Unless otherwise specified in the re-
lated Prospectus Supplement, the Seller will be
obligated to repurchase any Receivable sold to a
Trust (subject to JDCC's repurchase thereof) as to
which a first perfected security interest in the
name of JDCC in the Financed Equipment securing
such Receivable shall not exist as of the date
such Receivable is purchased by such Trust if (i)
such breach shall materially adversely affect the
interest of such Trust in such Receivable and (ii)
such failure or breach shall not have been cured
by the last day of the second (or, if the Seller
elects, the first) month following the discovery
by or notice to the Seller of such breach, and
JDCC will be obligated to purchase such Receivable
from the Seller contemporaneously with the Sell-
er's purchase from such Trust. To the extent the
security interest is perfected, the Trust will
have a prior claim over subsequent purchasers of
such Financed Equipment and holders of subse-
quently perfected security interests. However, as
against liens for repairs ("Mechanics' Liens") of
a piece of Financed Equipment or for taxes unpaid
by an Obligor under a Receivable, or through fraud
or negligence, a Trust could lose the priority of
its security interest or its security interest in
the relevant Financed Equipment. Neither the
Seller nor the Servicer will have any obligation
to repurchase a Receivable as to which any of the
aforementioned occurrences result in a Trust's
losing the priority of its security interest or
its security interest in such Financed Equipment
after the date the relevant Receivable was pur-
chased by such Trust.
Tax Considerations........ Unless otherwise specified in the related Prospec-
tus Supplement, the Prospectus Supplement for each
series of Notes and for each series of Certifi-
cates will summarize, subject to the limitations
stated therein, federal income tax considerations
relevant to the purchase, ownership and disposi-
tion of such Notes and Certificates. Information
will also be provided with respect to the tax laws
of the State of Iowa in the related Prospectus
Supplement.
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<PAGE>
ERISA Considerations...... Unless otherwise specified in the related Prospec-
tus Supplement, the Prospectus Supplement for each
series of Notes will summarize, subject to the
limitations discussed therein, considerations un-
der the Employee Retirement Income Security Act of
1974, as amended ("ERISA") relevant to the pur-
chase of such Notes by employee benefit plans and
the Prospectus Supplement for each series of Cer-
tificates will summarize, subject to the limita-
tions discussed therein, considerations under
ERISA relevant to the purchase of such Certifi-
cates by employee benefit plans and individual re-
tirement accounts.
10
<PAGE>
RISK FACTORS
Certain Legal Aspects. In connection with the sale of the Receivables to an
Issuer, security interests in Financed Equipment securing such Receivables
will be assigned by JDCC to the Seller and by the Seller to such Trust or
other Issuer. Unless otherwise provided in the related Prospectus Supplement,
the Seller will be obligated to repurchase any Receivable (subject to JDCC's
repurchase thereof) sold to such Issuer as to which a perfected security
interest in the name of JDCC in the Financed Equipment securing such
Receivable shall not exist as of the date such Issuer purchased such
Receivable if (i) such breach shall materially adversely affect the interest
of such Issuer in such Receivable and (ii) such failure or breach shall not
have been cured by the last day of the second (or, if the Seller elects, the
first) month following the discovery by or notice to the Seller of such
breach, and JDCC will be obligated to purchase such Receivable from the Seller
contemporaneously with the Seller's repurchase from such Issuer. To the extent
the security interest is perfected, such Issuer will have a prior claim over
subsequent purchasers of such Financed Equipment and holders of subsequently
perfected security interests. However, as against Mechanics' Liens or liens
for taxes unpaid by an Obligor under a Receivable, or through fraud or
negligence, such Issuer could lose the priority of its security interest or
its security interest in such Financed Equipment. Neither the Seller nor the
Servicer will have any obligation to repurchase a Receivable as to which any
of the aforementioned occurrences result in such Issuer's losing the priority
of its security interest or its security interest in such Financed Equipment
after the date such Issuer purchased such Receivable. Federal and state laws
impose requirements upon creditors in connection with extensions of retail
credit and collections and certain of these laws make an assignee of such a
contract liable to the obligor thereon for any violation by the lender. Unless
otherwise provided in the related Prospectus Supplement, the Seller will be
obligated to repurchase any Receivable (subject to JDCC's repurchase thereof)
which fails to comply with such requirements, and JDCC will be obligated to
repurchase such Receivable from the Seller contemporaneously with the Seller's
repurchase from such Trust or other Issuer.
The Seller has taken steps in structuring the transactions contemplated
hereby that are intended to ensure that the voluntary or involuntary
application for relief by JDCC under the United States Bankruptcy Code or
similar applicable state laws ("Insolvency Laws") will not result in
consolidation of the assets and liabilities of the Seller with those of JDCC.
These steps include the creation of the Seller as a separate, limited-purpose
subsidiary pursuant to a certificate of incorporation containing certain
limitations (including restrictions on the nature of the Seller's business and
a restriction on the Seller's ability to commence a voluntary case or
proceeding under any Insolvency Law without the prior unanimous affirmative
vote of all its directors). However, there can be no assurance that the
activities of the Seller would not result in a court concluding that the
assets and liabilities of the Seller should be consolidated with those of JDCC
in a proceeding under any Insolvency Law.
JDCC will warrant to the Seller in each Purchase Agreement that the sale of
the related Receivables by it to the Seller is a valid sale of such
Receivables to the Seller. In addition, JDCC and the Seller will treat the
transactions described herein as a sale of the Receivables to the Seller and
the Seller will take all actions that are required to perfect the Seller's
ownership interest in the Receivables. Notwithstanding the foregoing, if JDCC
were to become a debtor in a bankruptcy case and a creditor or trustee-in-
bankruptcy of such debtor or such debtor itself were to take the position that
a sale of Receivables to the Seller should be recharacterized as a pledge of
such Receivables to secure a borrowing of such debtor, then delays in payments
of collections of Receivables to the Seller could occur or (should the court
rule in favor of any such trustee, debtor or creditor) reductions in the
amount of such payments could result. If any transfer of Receivables to the
Seller is recharacterized as a pledge, a tax or government lien on the
property of JDCC arising before the transfer of a Receivable to the Seller may
have priority over the Seller's interest in such Receivable. If the
transactions contemplated herein are treated as a sale, the Receivables would
not be part of JDCC's bankruptcy estate and would not be available to JDCC's
creditors.
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<PAGE>
In addition, while JDCC is the Servicer, cash collections held by JDCC may,
subject to certain conditions, be commingled and used for the benefit of JDCC
prior to each Payment Date and, in the event of the bankruptcy of JDCC, an
Issuer may not have a perfected interest in such collections.
If an Insolvency Event with respect to the Seller occurs, the Indenture
Trustee for each Trust and each other Issuer will promptly sell, dispose of or
otherwise liquidate the related Receivables in a commercially reasonable
manner on commercially reasonable terms. The proceeds from any such sale,
disposition or liquidation of such Receivables will be treated as collections
on such Receivables and deposited in the applicable Collection Account. If the
proceeds from the liquidation of the Receivables and any amounts on deposit in
the Reserve Account, the Note Distribution Account and the Certificate
Distribution Account with respect to any Issuer and any amounts available from
any credit enhancement, if any, are not sufficient to pay the Notes and the
Certificates of the related series in full, the amount of principal returned
to such Noteholders and such Certificateholders will be reduced and such
Noteholders and such Certificateholders will incur a loss. See "Description of
the Transfer and Servicing Agreements--Insolvency Event".
The U.S. Court of Appeals for the Tenth Circuit in its decision in Octagon
Gas Systems, Inc. v. Rimmer (In re Meridian Reserve, Inc.) (decided May 27,
1993) concluded (noting that its position is in contrast to that taken by
another court) that a purchased royalty interest in a natural gas system was
an account and that under Article 9 of the Uniform Commercial Code (the
"UCC"), such an account, although sold by the debtor prior to the filing for
bankruptcy, remained property of the debtor's bankruptcy estate. Following
this decision, the Permanent Editorial Board for the UCC published an official
Commentary specifically adopting a contrary position. Such Commentaries are
not binding on any court. JDCC will warrant in the Purchase Agreement that the
sale of Receivables to the Seller is a valid sale of the Receivables.
Issuer's Relationship to the Seller and John Deere Capital Corporation,
Financial Condition of Deere & Company. None of the Seller, JDCC or Deere is
generally obligated to make any payments in respect of the Notes, the
Certificates or the Receivables of a specific Issuer, as the case may be. If
JDCC were to cease acting as Servicer or if Deere Credit Services were to
cease acting as Sub-Servicer, delays in processing payments on the Receivables
and information in respect thereof could occur and result in delays in
payments to the Securityholders.
In connection with the sale of Receivables by JDCC to the Seller, JDCC will
make representations and warranties with respect to the characteristics of
such Receivables. In certain circumstances, JDCC and the Seller will be
required to purchase Receivables with respect to which such representations
and warranties have been breached. See "Description of the Transfer and
Servicing Agreements--Sale and Assignment of Receivables".
The related Prospectus Supplement may set forth certain information
regarding the Issuer, the Seller, JDCC and Deere. In addition, the Trust
Issuer, Deere and JDCC are subject to the information requirements of the
Exchange Act and in accordance therewith file reports and other information
with the Commission. For further information regarding Deere and JDCC
reference is made to such reports and other information which are available as
described under "Available Information".
Subordination; Limited Assets. To the extent specified in the related
Prospectus Supplement, distributions of interest and principal on the
Certificates of a series will be subordinated in priority of payment to
interest and principal due on the Notes of such series. Moreover, each Issuer
will not have, nor is it permitted or expected to have, any significant assets
or sources of funds other than the Receivables and, to the extent provided in
the related Prospectus Supplement, the related Reserve Account and any other
credit enhancement. The Notes of any series will represent obligations solely
of the related Trust or Issuer, as the case may be, and the Certificates of
such series will represent interests solely in the related Trust, and neither
the Notes nor the Certificates of any such series will be
12
<PAGE>
insured or guaranteed by Deere, JDCC, the Seller, the Servicer, the Sub-
Servicer, the applicable Owner Trustee, if any, or any other person or entity.
Consequently, holders of the Securities of any series must rely for repayment
upon payments on the Receivables and, if and to the extent available, amounts
on deposit in the Reserve Account, if any, and any other credit enhancement,
all as specified in the related Prospectus Supplement.
Maturity and Prepayment Considerations. All the Receivables are prepayable
at any time. Each prepayment will shorten the weighted average remaining term
of the Receivables and the weighted average life of the related Notes and
Certificates. (For this purpose the term "prepayments" includes voluntary
prepayments and liquidations due to default, as well as receipts of proceeds
from insurance policies.) The rate of prepayments on the Receivables may be
influenced by a variety of economic, financial, climatic and other factors. In
particular, the amount of prepayments on agricultural equipment retail
installment sale and loan contracts has historically tended to increase during
periods in which farmers have strong cash flows. In addition, under certain
circumstances JDCC will be obligated to repurchase Receivables pursuant to a
Purchase Agreement, and the Seller will be obligated to repurchase Receivables
pursuant to a Sale and Servicing Agreement, as a result of breaches of
representations and warranties, and under certain circumstances, the Servicer
will be obligated to purchase Receivables pursuant to a Sale and Servicing
Agreement as a result of breaches of certain covenants. Consistent with its
normal procedures, the Sub-Servicer may, in its discretion and on a case-by-
case basis, arrange with the Obligor on a Receivable to extend or modify the
payment schedule. Some of such arrangements as described in the related
Prospectus Supplement will result in the Servicer purchasing the Receivable
for the Purchase Amount. See "Description of the Transfer and Servicing
Agreements--Sale and Assignment of Receivables" and "--Servicing Procedures".
Any reinvestment risks resulting from a faster or slower incidence of
prepayment of Receivables will be borne entirely by the Securityholders of the
related series of Securities. See also "Description of the Transfer and
Servicing Agreements--Termination" regarding the Servicer's option to purchase
the Receivables and "Description of the Transfer and Servicing Agreements--
Insolvency Event" regarding the sale of the Receivables if an Insolvency Event
with respect to the Seller occurs.
HOLDERS OF NOTES AND CERTIFICATES SHOULD CONSIDER, IN THE CASE OF SECURITIES
PURCHASED AT A DISCOUNT, THE RISK THAT A SLOWER THAN ANTICIPATED RATE OF
PRINCIPAL PAYMENTS ON THE RECEIVABLES COULD RESULT IN AN ACTUAL YIELD THAT IS
LESS THAN THE ANTICIPATED YIELD AND, IN THE CASE OF ANY SECURITIES PURCHASED
AT A PREMIUM, THE RISK THAT A FASTER THAN ANTICIPATED RATE OF PRINCIPAL
PAYMENTS ON THE RECEIVABLES COULD RESULT IN AN ACTUAL YIELD THAT IS LESS THAN
THE ANTICIPATED YIELD.
Risk of Commingling. The Servicer will deposit all payments on Receivables
(from whatever source) and all proceeds of Receivables collected during each
Collection Period into the Collection Account within two Business Days of
receipt thereof. However, in the event that JDCC satisfies certain
requirements for monthly or less frequent remittances as described herein and
in the Prospectus Supplement, then so long as JDCC is the Servicer and
provided that (i) there exists no Servicer Default and (ii) each other
condition to making monthly or less frequent deposits as may be specified by
the Rating Agencies is satisfied, the Servicer will not be required to deposit
such amounts into the Collection Account until on or before the Business Day
preceding the Payment Date. Pending deposit into the Collection Account,
collections may be invested by the Servicer at its own risk and for its own
benefit, and will not be segregated from Funds of the Servicer. If the
Servicer were unable to remit such funds, Securityholders might incur a loss.
Book-Entry Registration. Each class of the Notes of a given series will be
initially represented by one or more certificates registered in the name of
Cede & Co. ("Cede"), or any other nominee for The Depository Trust Company
("DTC") set forth in the related Prospectus Supplement, and will not be
registered in the names of the Noteholders of such series or their nominees.
Because of this, unless and until Definitive Notes for such series are issued,
such Noteholders will not be recognized by the applicable Indenture Trustee as
"Noteholders" (as that term is used in the related Indenture). Hence, until
such time, Noteholders of such series will only be able to exercise the rights
of Noteholders
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<PAGE>
indirectly through DTC, Cedel Bank, societe anonyme ("Cedel"), or The
Euroclear System (the "Euroclear Operator" and "Euroclear") and their
participating organizations. See "Certain Information Regarding the
Securities--Book-Entry Registration" and "Definitive Notes". Unless otherwise
provided in the relevant prospectus supplement, the Certificates will be
issued in fully registered, certificated form to the holders of Certificates
or their nominees.
THE TRUSTS
With respect to each series of Securities, other than those issued by DRC,
the Seller will establish a separate Trust pursuant to the related Trust
Agreement for the transactions described herein and in the related Prospectus
Supplement. After its formation, each Trust will not engage in any activity
other than (i) acquiring, holding and managing the Receivables purchased
pursuant to the related Sale and Servicing Agreement and the other assets of
such Trust and proceeds therefrom, (ii) issuing the Notes of the related
series, (iii) making payments on such Notes, (iv) issuing and making payments
on the Certificates representing beneficial equity interests in such Trust and
(v) engaging in other activities that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected therewith.
Upon the issuance of the Notes and the Certificates of a given series, the
related Trust will use the proceeds from such issuance to purchase Receivables
from the Seller pursuant to the related Sale and Servicing Agreement. The
Servicer will initially service the Receivables pursuant to the applicable
Sale and Servicing Agreement, and will be compensated for acting as the
Servicer. See "Description of the Transfer and Servicing Agreements--Servicing
Compensation". To facilitate servicing and to minimize administrative burden
and expense, the Servicer will be appointed custodian for the related
Receivables by each Owner Trustee, but will not stamp such Receivables to
reflect the sale and assignment of such Receivables to the related Trust, nor
amend the financing statements filed to perfect the security interest in the
Financed Equipment or the related certificates of title, if applicable, of the
Financed Equipment. In the absence of amendments to the certificates of title,
a Trust may not have perfected security interests in such Financed Equipment
securing such Receivables originated in some states. See "Certain Legal
Aspects of the Receivables".
If the protection provided to the investment of the Noteholders of a given
series by the subordination of the Certificates of such series and by the
availability of the funds in the Reserve Account, if any, or any other credit
enhancement for such series or the protection provided to Certificateholders
of such series by such Reserve Account or other credit enhancement is
insufficient, the related Trust must rely solely on the payments from the
Obligors on the related Receivables, and the proceeds from the repossession
and sale of Financed Equipment which secure defaulted Receivables. In such
event, certain factors, such as the Trust's not having first perfected
security interests in some of the Financed Equipment, may affect such Trust's
ability to realize on the collateral securing such Receivables, and thus may
reduce the proceeds to be distributed to the holders of the Securities of such
series. See "Description of the Transfer and Servicing Agreements--
Distributions" and "Description of the Transfer and Servicing Agreements--
Reserve Account" and "Certain Legal Aspects of the Receivables".
The principal offices of each Trust and the related Owner Trustee will be
specified in the related Prospectus Supplement.
THE OWNER TRUSTEE
The Owner Trustee for each Trust will be specified in the related Prospectus
Supplement. An Owner Trustee's liability in connection with the issuance and
sale of the related Securities is limited solely to the express obligations of
such Owner Trustee set forth in the related Trust Agreement and the related
Sale and Servicing Agreement.
THE TRUST PROPERTY
The property of each Trust will include (i) a pool of Receivables, (ii) all
monies (including accrued interest) due thereunder on or after the applicable
Cut-off Date, (iii) such amounts as from time to time
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<PAGE>
may be held in one or more accounts established and maintained by the Servicer
pursuant to the related Sale and Servicing Agreement, as described below and
in the related Prospectus Supplement, (iv) the security interests in the
Financed Equipment relating to such pool of Receivables, (v) the right to
proceeds from claims on physical damage, credit life and disability insurance
policies, if any, covering such Financed Equipment or the related Obligors, as
the case may be, (vi) the proceeds of any repossessed Financed Equipment
related to such pool of Receivables, (vii) the rights of the Seller under the
related Purchase Agreement and (viii) interest earned on short-term
investments made by such Trust. The Receivables will be either originated by
the Dealers and purchased by the Sales Companies pursuant to agreements with
the Dealers ("Dealer Agreements") or originated by the Sales Companies in
connection with retail sales by the Dealers, in each case for subsequent sale
to JDCC. The "Sales Companies" include Deere, John Deere Industrial Equipment
Company and John Deere Company, which was merged into Deere on January 31,
1992. Each pool of Receivables will continue to be serviced by the Servicer
and evidence direct or indirect financing made available by JDCC to the
Obligors. On or before the applicable Closing Date in respect of a Trust, JDCC
will sell the Receivables to the Seller for sale to such Trust. Unless
otherwise specified in the related Prospectus Supplement, the related Reserve
Account, if any, shall be maintained with the applicable Indenture Trustee for
the benefit of the Noteholders and the Certificateholders of the related
series.
If so specified in the Related Prospectus Supplement, the Seller will have
the right (subject to certain limitations) to designate from time to time
additional Receivables to be included in the related pool of Receivables.
THE RECEIVABLES POOL
Each pool of Receivables will consist of Receivables purchased by the
Servicer from the Sales Companies which either originated such Receivables in
the ordinary course of business in connection with retail sales by the Dealers
or, in limited instances, acquired such Receivables from the Dealers in the
ordinary course of business. The Servicer purchases contracts in accordance
with its credit standards which are based upon the buyer's ability to repay
the obligation, credit history and the down payment on the Financed Equipment.
The Receivables will be selected from JDCC's portfolio by several criteria,
including, as of the applicable Cut-off Date in respect of a pool of
Receivables, the following (unless otherwise provided in the related
Prospectus Supplement): except as described under "Certain Legal Aspects of
the Receivables", each Receivable was originated in the United States, has an
Obligor which is a United States person, is secured by a perfected first
priority security interest in the related Financed Equipment, provides for
scheduled payments which fully amortize the amount financed (assuming, in the
case of variable rate receivables, that the variable rate calculated at the
time of origination remains in effect without change throughout the term of
such Receivable), has an outstanding principal balance of at least $500, is
not more than 90 days past due as of the applicable Cut-off Date and satisfies
any other criteria set forth in the related Prospectus Supplement. As of the
applicable Cut-off Date, no Obligor on any Receivable will be noted in the
related records of the Servicer or the Sub-Servicer as being the subject of a
bankruptcy proceeding. No selection procedures believed by JDCC or the Seller
to be adverse to the Securityholders of any series will be used in selecting
the related Receivables.
Information with respect to each pool of Receivables will be set forth in
the related Prospectus Supplement, including, to the extent appropriate, the
composition of such Receivables and the distribution of such Receivables by
equipment type, payment frequency and current principal balance as of the
applicable Cut-off Date.
DELINQUENCIES, REPOSSESSIONS, AND NET LOSSES
Certain information concerning JDCC's experience in the United States
pertaining to delinquencies and repossessions on JDCC's retail agricultural
and industrial equipment receivables will be set forth in each Prospectus
Supplement. Delinquencies, repossessions and net losses on agricultural and
industrial equipment receivables are affected by economic conditions
generally. In addition, delinquencies, repossessions and net losses on
agricultural equipment receivables may be
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<PAGE>
affected by commodity market prices, weather conditions such as flood, drought
and early frost, and the level of farmers' income, while delinquencies,
repossessions and net losses on industrial equipment receivables may be
affected by the level of housing starts and non-residential construction.
Generally, when an account becomes 120 days delinquent, accrual of finance
income is suspended, the collateral is repossessed or the account is
designated for litigation. There can be no assurance that the delinquency,
repossession and net loss experience on the Receivables will be comparable to
prior experience or to such information.
MATURITY AND PREPAYMENT CONSIDERATIONS
All the Receivables will be prepayable at any time. Each prepayment will
shorten the weighted average life of the Receivables and the weighted average
life of the related Securities. (For this purpose the term "prepayments"
includes voluntary prepayments, liquidations due to default, as well as
receipts of proceeds from insurance policies.) The rate of prepayments on the
Receivables may be influenced by a variety of economic, financial, climatic
and other factors. In addition, under certain circumstances, JDCC will be
obligated to repurchase Receivables pursuant to the applicable Purchase
Agreement, and the Seller will be obligated to repurchase Receivables pursuant
to the applicable Sale and Servicing Agreement, as a result of breaches of
representations and warranties. See "Description of the Transfer and Servicing
Agreements--Sale and Assignment of Receivables" and "--Servicing Procedures".
Any reinvestment risks resulting from a faster or slower incidence of
prepayment of Receivables will be borne entirely by the related
Securityholders. See also "Description of the Transfer and Servicing
Agreements--Termination" regarding the Servicer's option to purchase the
Receivables from a particular Trust, and "Description of the Transfer and
Servicing Agreements--Sale of Receivables" regarding the sale of the
Receivables if an Insolvency Event with respect to the Seller occurs.
The related Prospectus Supplement will set forth certain additional
information with respect to the maturity and prepayment considerations
applicable to a particular pool of Receivables and the related series of
Securities.
POOL FACTORS AND TRADING INFORMATION
The "Note Pool Factor" for each class of Notes will be a seven-digit decimal
which the Servicer will compute prior to each distribution with respect to
such class of Notes indicating the remaining outstanding principal balance of
such class of Notes as of the applicable Payment Date, as a fraction of the
initial outstanding principal balance of such class of Notes. The "Certificate
Pool Factor" for each class of Certificates will be a seven-digit decimal
which the Servicer will compute prior to each distribution with respect to
such class of Certificates indicating the remaining Certificate Balance of
such class of Certificates as of the applicable Payment Date, as a fraction of
the initial Certificate Balance of such class. Each Note Pool Factor and
Certificate Pool Factor will be initially 1.0000000, and thereafter will
decline to reflect reductions in the outstanding principal balance of the
applicable class of Notes or the Certificate Balance of the applicable class
of Certificates, as the case may be. A Noteholder's portion of the aggregate
outstanding principal balance of the related class of Notes is the product of
(i) the original denomination of such Noteholder's Note and (ii) the
applicable Note Pool Factor. A Certificateholder's portion of the aggregate
outstanding Certificate Balance for the related class of Certificates is the
product of (i) the original denomination of the Certificateholder's
Certificate and (ii) the applicable Certificate Pool Factor.
Unless otherwise provided in the related Prospectus Supplement with respect
to each Trust, pursuant to the applicable Indenture, the related Noteholders
of record will receive reports on or about each Payment Date concerning the
payments received on the Receivables, the Pool Balance (as such term is
defined in the related Prospectus Supplement, the "Pool Balance"), each Note
Pool Factor and
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various other items of information. Unless otherwise provided in the related
Prospectus Supplement with respect to each Trust, the related
Certificateholders of record will receive reports on or about each Payment
Date concerning the payments received on the Receivables, the related Pool
Balance, each Certificate Pool Factor and various other items of information.
In addition, Securityholders of record during any calendar year will be
furnished information for tax reporting purposes not later than the latest
date permitted by law. See "Certain Information Regarding the Securities--
Reports to Securityholders".
USE OF PROCEEDS
Unless otherwise provided in the related Prospectus Supplement, the proceeds
from the sale of the Securities of a given series will be applied by the
related Trust to the purchase of the Receivables.
THE SELLER, DEERE AND THE SERVICER
[JOHN DEERE RECEIVABLES, INC.
The Seller is a wholly-owned subsidiary of JDCC. The Seller was incorporated
in the State of Nevada on July 15, 1992. The Seller is organized for the
limited purpose of purchasing wholesale and retail receivables from JDCC and
transferring such receivables to third parties and any activities incidental
to and necessary or convenient for the accomplishment of such purposes. The
principal executive offices of the Seller are located at First Interstate Bank
Bldg., 1 East First Street, Reno, Nevada 89501, and its telephone number is
(702) 786-5914.
The Seller has taken steps in structuring the transactions contemplated
hereby that are intended to ensure that the voluntary or involuntary
application for relief by JDCC under any Insolvency Law will not result in
consolidation of the assets and liabilities of the Seller with those of JDCC.
These steps include the creation of the Seller as a separate, limited-purpose
subsidiary pursuant to a certificate of incorporation containing certain
limitations (including restrictions on the nature of the Seller's business and
a restriction on the Seller's ability to commence a voluntary case or
proceeding under any Insolvency Law without the prior unanimous affirmative
vote of all of its directors). However, there can be no assurance that the
activities of the Seller would not result in a court's concluding that the
assets and liabilities of the Seller should be consolidated with those of JDCC
in a proceeding under any Insolvency Law. See "Special Considerations--Certain
Legal Aspects".
In addition, with respect to each Trust, the Owner Trustee, the Indenture
Trustee, all Noteholders and all Certificateholders will covenant that they
will not at any time institute against the Seller any bankruptcy,
reorganization or other proceeding under any federal or state bankruptcy or
similar law.
JDCC will warrant to the Seller in each Purchase Agreement that the sale of
the Receivables by it to the Seller is a valid sale of the Receivables to the
Seller. In addition, JDCC and the Seller will treat the transactions described
herein and in the related Prospectus Supplement as a sale of the Receivables
to the Seller and the Seller will take all actions that are required to
perfect the Seller's ownership interest in the Receivables. Notwithstanding
the foregoing, if JDCC were to become a debtor in a bankruptcy case and a
creditor or trustee-in-bankruptcy of such debtor or such debtor itself were to
take the position that the sale of Receivables to the Seller should be
recharacterized as a pledge of such Receivables to secure a borrowing of such
debtor, then delays in payments of collections of Receivables to the Seller
could occur or (should the court rule in favor of any such trustee, debtor or
creditor) reductions in the amount of such payments could result. If the
transfer of Receivables to the Seller is recharacterized as a pledge, a tax or
government lien on the property of JDCC arising before the transfer of
Receivables to the Seller may have priority over the Seller's interest in such
Receivables. If the transactions contemplated herein are treated as a sale,
the Receivables would not be part of JDCC's bankruptcy estate and would not be
available to JDCC's creditors.]
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[DEERE RECEIVABLES CORPORATION
Deere Receivables Corporation ("DRC") is a wholly-owned subsidiary of JDCC.
DRC was incorporated in the State of Nevada on March 5, 1996. DRC is organized
for the limited purpose of purchasing wholesale and retail receivables from
JDCC and transferring such receivables to third parties or holding such
receivables and selling securities to the public and any activities incidental
to, or necessary or convenient for, the accomplishment of such purposes. DRC
is intended to comply with certain requirements for the securitization of debt
obligations pursuant to certain proposed provisions of the Internal Revenue
Code of 1986, as amended. At the time of filing, the necessary legislation was
pending but had not yet been adopted. If an election is made for DRC to issue
a particular series of Securities, the tax consequences to holders will be
discussed in the applicable Prospectus Supplement. The principal executive
offices of DRC are located at 1 East First Street, Suite 600, Reno, Nevada
89501.]
DEERE & COMPANY
John Deere's operations are categorized into six business segments:
John Deere's worldwide agricultural equipment segment manufactures and
distributes a full range of equipment used in commercial farming--including
tractors; tillage, soil preparation, planting and harvesting machinery;
sprayers; crop handling equipment and precision farming devices.
John Deere's worldwide industrial equipment segment manufactures and
distributes a broad range of machines used in construction, earthmoving and
forestry--including backhoe loaders; crawler dozers and loaders; four-wheel
drive loaders; scrapers; motor graders; excavators; and log skidders. This
segment also includes the manufacture and distribution of engines and
drivetrain components for the original equipment manufacturers (OEM)
market.
John Deere's worldwide lawn and grounds care equipment segment
manufactures and distributes equipment for commercial and residential
uses--including small tractors for lawn, garden and utility purposes;
riding and walk-behind mowers; golf course equipment; utility transport
vehicles; snowblowers; hand-held products such as chain saws, string
trimmers and leaf blowers and other outdoor power products.
The products produced by the equipment segments are marketed primarily
through independent retail dealer networks and other retail outlets.
The credit segment includes the operations of the John Deere Capital
Corporation, (described below), John Deere Credit Company and John Deere
Finance Limited, which primarily purchases and finances retail notes from
John Deere's equipment sales branches in Canada, as well as recreational
vehicle and marine product notes from independent dealers. John Deere
Finance Limited, through its subsidiary, Canadian Equipment Finance
Corporation (CEFC), also purchases and finances non-Deere construction and
transportation equipment notes from independent dealers.
The insurance segment issues policies in the United States and Canada
primarily for: general and specialized lines of property and casualty
insurance to the general public; group accident and health insurance for
employees of participating John Deere dealers and disability insurance for
employees of John Deere.
The health care segment provides health management programs and related
administrative services in the United States to corporate customers as well
as employees of John Deere.
JOHN DEERE CAPITAL CORPORATION
[The principal business of JDCC and its subsidiaries (collectively called
the "Company") is providing and administering financing for retail purchases
of new and used John Deere agricultural, industrial and lawn and grounds care
equipment. The Company purchases retail installment sales and
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loan contracts ("Retail Notes") from John Deere. These Retail Notes are
acquired by John Deere through John Deere retail dealers in the United States.
The Company also purchases, finances and services retail notes unrelated to
John Deere, representing primarily recreational vehicle and recreational
marine product notes acquired from independent dealers of those products and
from marine mortgage service companies (recreational product retail notes).
The Company also leases John Deere equipment to retail customers, finances and
services unsecured revolving charge accounts acquired from and offered through
merchants in the agricultural, lawn and grounds care and marine retail
markets, and provides wholesale financing for wholesale inventories of
recreational vehicles, manufactured housing units, yachts and John Deere
engines owned by dealers of those products.
A substantial part of the retail sales and leases of John Deere products is
financed by financial institutions outside of the John Deere organization.
John Deere Credit Company, a wholly-owned finance holding subsidiary of
Deere, is the parent of JDCC.
JDCC's executive offices are located at Suite 600, First Interstate Bank
Building, 1 East First Street, Reno, Nevada 89501. Its telephone number is
(702)786-5527.
The Seller, Deere and the Servicer are each subject to the information
requirements of the Exchange Act and in accordance therewith file reports and
other information with the Commission. For further information, see "Available
Information".
DESCRIPTION OF THE NOTES
GENERAL
In the event that Securities are not issued by a Trust but are instead
issued by DRC, the terms of the Securities will be described in the relevant
Prospectus Supplement. See "Certain Tax Considerations." With respect to each
Trust, one or more classes of Notes will be issued pursuant to the terms of an
indenture substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The following summary does
not purport to be complete and is qualified in its entirety by reference to
the provisions of the applicable Notes and the related Indenture.
Unless otherwise specified in the related Prospectus Supplement, each class
of Notes will initially be represented by one or more Notes, in each case
registered in the name of the nominee of DTC (together with any successor
depository selected by the Trust, the "Depository") except as set forth below.
Unless otherwise specified in the related Prospectus Supplement, the Notes
will be available for purchase in denominations of $1,000 and integral
multiples thereof in book-entry form only. The Seller has been informed by DTC
that DTC's nominee will be Cede, unless another nominee is specified in the
related Prospectus Supplement. Accordingly, Cede is expected to be the holder
of record of the Notes of each class. Unless and until Definitive Notes are
issued under the limited circumstances described herein or in the related
Prospectus Supplement, no Noteholder will be entitled to receive a physical
certificate representing a Note. All references herein and in the related
Prospectus Supplement to actions by Noteholders shall refer to actions taken
by DTC upon instructions from its participating organizations (the
"Participants") and all references herein and in the related Prospectus
Supplement to distributions, notices, reports and statements to Noteholders
shall refer to distributions, notices, reports and statements to DTC or Cede,
as the registered holder of the Notes, as the case may be, for distribution to
Noteholders in accordance with DTC's procedures with respect thereto. See "--
Book-Entry Registration" and "--Definitive Notes" below.
PRINCIPAL AND INTEREST ON THE NOTES
The timing and priority of payment, seniority, Interest Rate and amount of
or method of determining payments of principal and interest on each class of
Notes of a given series will be described in the
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related Prospectus Supplement. The right of holders of any class of Notes to
receive payments of principal and interest may be senior or subordinate to the
rights of holders of any other class or classes of Notes of such series, as
described in the related Prospectus Supplement. Unless otherwise provided in
the related Prospectus Supplement, payments of interest on the Notes of such
series will be made prior to payments of principal thereon. To the extent
provided in the related Prospectus Supplement, a series may include one or
more classes of Strip Notes entitled to (i) principal payments with
disproportionate, nominal or no interest payments or (ii) interest payments
with disproportionate, nominal or no principal payments. Each class of Notes
may have a different Interest Rate, which may be a fixed, variable or
adjustable Interest Rate (and which may be zero for certain classes of Strip
Notes), or any combination of the foregoing. The related Prospectus Supplement
will specify the Interest Rate for each class of Notes of a given series or
the method for determining such Interest Rate. See also "Certain Information
Regarding the Securities--Fixed Rate Securities" and "--Floating Rate
Securities". One or more classes of Notes of a series may be redeemable in
whole or in part under the circumstances specified in the related Prospectus
Supplement, including as a result of the Servicer's exercising its option to
purchase the related Receivables.
To the extent specified in any Prospectus Supplement, one or more classes of
Notes of a given series may have fixed principal payment schedules, as set
forth in such Prospectus Supplement; Noteholders of such Notes would be
entitled to receive as payments of principal on any given Payment Date the
applicable amounts set forth on such schedule with respect to such Notes, in
the manner and to the extent set forth in the related Prospectus Supplement.
Unless otherwise specified in the related Prospectus Supplement, payments to
Noteholders of all classes within a series in respect of interest will have
the same priority. Under certain circumstances, the amount available for such
payments could be less than the amount of interest payable on the Notes on any
of the dates specified for payments in the related Prospectus Supplement
(each, a "Payment Date"), in which case each class of Noteholders will receive
its ratable share (based upon the aggregate amount of interest due to such
class of Noteholders) of the aggregate amount available to be distributed in
respect of interest on the Notes of such series. See "Description of the
Transfer and Servicing Agreements--Distributions" and "--Credit and Cash Flow
Enhancement".
In the case of a series of Notes which includes two or more classes of
Notes, the sequential order and priority of payment in respect of principal
and interest, and any schedule or formula or other provisions applicable to
the determination thereof, of each such class will be set forth in the related
Prospectus Supplement. Payments in respect of principal and interest of any
class of Notes will be made on a pro rata basis among all the Noteholders of
such class.
REVOLVING PERIOD AND RELATED MATTERS
To the extent specified in the related Prospectus Supplement, during the
Revolving Period (if any) with respect to the applicable Trust, no payments of
principal will be made on the Notes and no distributions of Certificate
Balance will be made with respect to the Certificates and no amounts will be
set aside for such purpose. During the Wind Down Period (if any) for such
Trust and any Early Amortization Period, certain amounts (to the extent
specified in the related Prospectus Supplement) will be set aside for payments
or principal on the Notes and distributions with respect to the Certificate
Balance, and such payments and distributions will be made, to the extent
described in the related Prospectus Supplement. If an Early Amortization
Period commences during the Wind Down Period, amounts, if any, on deposit in
the Note Distribution Account will be paid to the related holders to the
extent, and at the times, described in the related Prospectus Supplement.
THE INDENTURE
Modification of Indenture. With respect to each Trust, with the consent of
the holders of a majority of the outstanding Notes of the related series, the
applicable Indenture Trustee and the Trust may
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execute a supplemental indenture to add provisions to, or change in any manner
or eliminate any provisions of, the related Indenture with respect to the
Notes, or to modify (except as provided below) in any manner the rights of the
related Noteholders.
Unless otherwise specified in the related Prospectus Supplement with respect
to a series of Notes, without the consent of the holder of each such
outstanding Note affected thereby, however, no supplemental indenture shall
(i) change the due date of any installment of principal of, or interest on any
such Note or reduce the principal amount thereof, the interest rate specified
thereon or the redemption price with respect thereto or change any place of
payment where or the coin or currency in which any such Note or any interest
thereon is payable, (ii) impair the right to institute suit for the
enforcement of certain provisions of the related Indenture regarding payment,
(iii) reduce the percentage of the aggregate amount of the outstanding Notes
of such series the consent of the holders of which is required for any such
supplemental indenture or the consent of the holders of which is required for
any waiver of compliance with certain provisions of the related Indenture or
of certain defaults thereunder and their consequences as provided for in such
Indenture, (iv) modify or alter the provisions of the related Indenture
regarding the voting of Notes held by the related Trust, the Seller, an
affiliate of either of them or any obligor on such Notes, (v) reduce the
percentage of the aggregate outstanding amount of such Notes the consent of
the holders of which is required to direct the related Trust to sell or
liquidate the Receivables if the proceeds of such sale would be insufficient
to pay the principal amount and accrued but unpaid interest on the outstanding
Notes of such series, (vi) decrease the percentage of the aggregate principal
amount of such Notes required to amend the sections of the related Indenture
which specify the applicable percentage of aggregate principal amount of the
Notes of such series necessary to amend such Indenture or certain other
related agreements or (vii) permit the creation of any lien ranking prior to
or on a parity with the lien of the related Indenture with respect to any of
the collateral for such Notes or, except as otherwise permitted or
contemplated in such Indenture, terminate the lien of such Indenture on any
such collateral or deprive the holder of any such Note of the security
afforded by the lien of such Indenture.
Unless otherwise provided in the related Prospectus Supplement, a Trust and
the applicable Indenture Trustee may also enter into supplemental indentures,
without obtaining the consent of Noteholders of the related series, for the
purpose of, among other things, adding any provisions to or changing in any
manner or eliminating any of the provisions of the related Indenture or of
modifying in any manner the rights of such Noteholders; provided, however,
that such action will not, in the opinion of counsel satisfactory to such
Indenture Trustee, materially and adversely affect the interest of any such
Noteholder.
Events of Default; Rights upon Event of Default. With respect to the Notes
of a given series, unless otherwise specified in the related Prospectus
Supplement, an "Event of Default" with respect to such Notes is defined in the
related Indenture as being: (i) a default for five days or more in the payment
of any interest due on any such Note; (ii) a default in the payment of the
principal of or any installment of the principal of any such Note when the
same becomes due and payable; (iii) a default in the observance or performance
of any covenant or agreement of the applicable Trust made in the related
Indenture and the continuation of any such default for a period of 30 days
after notice thereof is given to such Trust by the applicable Indenture
Trustee or to such Trust and applicable Indenture Trustee by the holders of at
least 25% in principal amount of the Notes of such series then outstanding;
(iv) any representation or warranty made by such Trust in such Indenture or in
any certificate delivered pursuant thereto or in connection therewith having
been incorrect in a material respect as of the time made, and such breach not
having been cured within 30 days after notice thereof is given to such Trust
by such Indenture Trustee or to such Trust and such Indenture Trustee by the
holders of at least 25% in principal amount of such Notes of such series then
outstanding or (v) certain events of bankruptcy, insolvency, receivership or
liquidation of such Trust. However, the amount of principal required to be
distributed to the Noteholders of such series under the related Indenture is
generally limited to amounts available therefor in the applicable Note
Distribution Account. Therefore, unless
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otherwise specified in the related Prospectus Supplement, the failure to pay
principal on a class of Notes generally will not result in the occurrence of
an Event of Default until the final scheduled payment date for such class of
Notes.
If an Event of Default should occur and be continuing with respect to the
Notes of any series, the related Indenture Trustee or holders of a majority in
principal amount of such Notes then outstanding may declare the principal of
such Notes to be immediately due and payable. Such declaration may, under
certain circumstances, be rescinded by the holders of a majority in principal
amount of such Notes then outstanding.
If the Notes of any series have been declared to be due and payable
following an Event of Default with respect thereto, the related Indenture
Trustee may, in its discretion, either sell the related Receivables or elect
to have the related Trust maintain possession of such Receivables and continue
to apply distributions on such Receivables as if there had been no declaration
of acceleration. In addition, such Indenture Trustee is prohibited from
selling the Receivables following an Event of Default, other than a default in
the payment of any principal or a default for five days or more in the payment
of any interest on any Note of such series, unless (i) the holders of all such
outstanding Notes consent to such sale, (ii) the proceeds of such sale are
sufficient to pay in full the principal of and the accrued interest on such
outstanding Notes at the date of such sale, or (iii) such Indenture Trustee
determines that the proceeds of the Receivables would not be sufficient on an
ongoing basis to make all payments on such Notes as such payments would have
become due if such obligations had not been declared due and payable, and such
Indenture Trustee obtains the consent of the holders of 66 2/3% of the
aggregate outstanding amount of such Notes.
Subject to the provisions of the applicable Indenture relating to the duties
of the related Indenture Trustee, in case an Event of Default shall occur and
be continuing with respect to a series of Notes, such Indenture Trustee shall
be under no obligation to exercise any of the rights or powers under such
Indenture at the request or direction of any of the holders of such Notes, if
such Indenture Trustee reasonably believes it will not be adequately
indemnified against the costs, expenses and liabilities which might be
incurred by it in complying with such request. Subject to such provisions for
indemnification and certain limitations contained in the related Indenture,
the holders of a majority in principal amount of the outstanding Notes of a
given series shall have the right to direct the time, method and place of
conducting any proceeding or any remedy available to the applicable Indenture
Trustee, and the holders of a majority in principal amount of such Notes then
outstanding may, in certain cases, waive any default with respect thereto,
except a default in the payment of principal or interest or a default in
respect of a covenant or provision of such Indenture that cannot be modified
without the waiver or consent of all of the holders of such outstanding Notes.
Unless otherwise specified in the related Prospectus Supplement, no holder
of a Note of any series will have the right to institute any proceeding with
respect to the related Indenture, unless (i) such holder previously has given
to the applicable Indenture Trustee written notice of a continuing Event of
Default, (ii) the holders of not less than 25% in principal amount of all such
outstanding Notes have made written request of such Indenture Trustee to
institute such proceeding in its own name as Indenture Trustee, (iii) such
holder or holders have offered such Indenture Trustee reasonable indemnity,
(iv) such Indenture Trustee has for 60 days failed to institute such
proceeding and (v) no direction inconsistent with such written request has
been given to such Indenture Trustee during such 60-day period by the holders
of a majority in principal amount of such outstanding Notes.
In addition, each Indenture Trustee and the related Noteholders will
covenant that they will not at any time institute against the applicable Trust
any bankruptcy, reorganization or other proceeding under any federal or state
bankruptcy or similar law.
With respect to any Trust, neither the related Indenture Trustee nor the
related Owner Trustee in its individual capacity, nor any holder of a
Certificate representing an ownership interest in such Trust,
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nor any of their respective owners, beneficiaries, agents, officers,
directors, employees, successors or assigns shall, in the absence of an
express agreement to the contrary, be personally liable for the payment of the
principal of or interest on the related Notes or for the agreements of such
Trust contained in the applicable Indenture.
Certain Covenants. Each Indenture will provide that the related Trust may
not consolidate with or merge into any other entity, unless (i) the entity
formed by or surviving such consolidation or merger is organized under the
laws of the United States, any state or the District of Columbia, (ii) such
entity expressly assumes such Trust's obligation to make due and punctual
payments upon the Notes of the related series and the performance or
observance of every agreement and covenant of such Trust under such Indenture,
(iii) no Event of Default shall have occurred and be continuing immediately
after such merger or consolidation, (iv) such Trust has been advised that the
rating of the Notes or the Certificates of such series then in effect would
not be reduced or withdrawn by the Rating Agencies as a result of such merger
or consolidation and (v) such Trust has received an opinion of counsel to the
effect that such consolidation or merger would have no material adverse tax
consequence to such Trust or to any Noteholder or Certificateholder.
Each Trust will not, among other things, (i) except as expressly permitted
by the applicable Indenture, the related Transfer and Servicing Agreements or
certain related documents with respect to such Trust (collectively, the
"Related Documents"), sell, transfer, exchange or otherwise dispose of any of
the assets of such Trust, (ii) claim any credit on or make any deduction from
the principal and interest payable in respect of the Notes of the related
series (other than amounts withheld under the Internal Revenue Code or
applicable state law) or assert any claim against any present or former holder
of such Notes because of the payment of taxes levied or assessed upon such
Trust, (iii) dissolve or liquidate in whole or in part or (iv) (x) permit the
validity or effectiveness of the related Indenture to be impaired or permit
any person to be released from any covenants or obligations with respect to
such Notes under such Indenture except as may be expressly permitted thereby
or (y) permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance to be created on or extend to or otherwise arise upon or
burden the assets of such Trust or any part thereof, or any interest therein
or the proceeds thereof except as may be created by the terms of such
Indenture.
No Trust may engage in any activity other than as specified herein or in the
related Prospectus Supplement.
No Trust will incur, assume or guarantee any indebtedness other than
indebtedness incurred pursuant to the related Notes and the related Indenture
or otherwise in accordance with the Related Documents.
List of Noteholders. With respect to a Trust, three or more holders of the
Notes of any series (each of whom has owned a Note of such series for at least
six months) may, by written request to the applicable Indenture Trustee,
obtain access to the list of all Noteholders of such series maintained by the
applicable Indenture Trustee for the purpose of communicating with other
Noteholders of such series with respect to their rights under the related
Indenture or such Notes. Such Indenture Trustee may elect not to afford the
requesting Noteholders access to the list of such Noteholders if it agrees to
mail the desired communication or proxy, on behalf and at the expense of the
requesting Noteholders, to all Noteholders of such series of record.
Annual Compliance Statement. Each Trust will be required to file annually
with the applicable Indenture Trustee a written statement as to the
fulfillment of its obligations under the related Indenture.
Indenture Trustee's Annual Report. If required by law, the Indenture Trustee
for each Trust will be required to mail each year to all related Noteholders a
brief report relating to its eligibility and qualification to continue as the
Indenture Trustee under the related Indenture, any amounts advanced
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by it under the related Indenture, the amount, interest rate and maturity date
of certain indebtedness owing by such Trust to such Indenture Trustee in its
individual capacity, the property and funds physically held by such Indenture
Trustee as such and any action taken by it that materially affects the related
Notes and that has not been previously reported.
Satisfaction and Discharge of Indenture. An Indenture will be discharged
with respect to the collateral securing the related Notes upon the delivery to
the applicable Indenture Trustee for cancellation of all such Notes or, with
certain limitations, upon deposit with such Indenture Trustee of funds
sufficient for the payment in full of all of such Notes.
The Indenture Trustee. The Indenture Trustee for a series of Notes will be
specified in the related Prospectus Supplement. The Indenture Trustee for any
series may resign at any time, in which event the Trust will be obligated to
appoint a successor trustee for such series. The Trust may also remove any
such Indenture Trustee if such Indenture Trustee ceases to be eligible to
continue as such under the related Indenture or if such Indenture Trustee
becomes insolvent. In such circumstances, the Trust will be obligated to
appoint a successor indenture trustee for the applicable series of Notes. Any
resignation or removal of the Indenture Trustee and appointment of a successor
indenture trustee for any series of Notes does not become effective until
acceptance of the appointment by the successor indenture trustee for such
series.
DESCRIPTION OF THE CERTIFICATES
GENERAL
With respect to each Trust, one or more classes of Certificates of a given
series will be issued pursuant to the terms of a Trust Agreement. The
following summary does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the
applicable Certificates and the related Trust Agreement.
Unless otherwise specified in the related Prospectus Supplement, each class
of Certificates will initially be issued in fully registered certificated
form. The Certificates will be available for purchase in denominations of
$100,000 and integral multiples of $100,000 in excess thereof.
DISTRIBUTIONS OF PRINCIPAL AND INTEREST
The timing and priority of distributions, seniority, allocations of losses,
Pass-Through Rate and amount of or method of determining distributions with
respect to principal and interest of each class of Certificates of a given
series will be described in the related Prospectus Supplement. Distributions
of interest on such Certificates will be made on the Payment Dates specified
in the related Prospectus Supplement and will be made prior to distributions
with respect to principal of such Certificates. To the extent provided in the
related Prospectus Supplement, a series may include one or more classes of
Strip Certificates entitled to (i) distributions in respect of principal with
disproportionate, nominal or no interest distributions or (ii) interest
distributions with disproportionate, nominal or no distributions in respect of
principal. Each class of Certificates may have a different Pass-Through Rate,
which may be a fixed, variable or adjustable Pass-Through Rate (and which may
be zero for certain classes of Strip Certificates), or any combination of the
foregoing. The related Prospectus Supplement will specify the Pass-Through
Rate for each class of Certificates of a given series or the method for
determining such Pass-Through Rate. See also "Certain Information Regarding
the Securities--Fixed Rate Securities" and "--Floating Rate Securities".
Unless otherwise provided in the related Prospectus Supplement, distributions
in respect of the Certificates of a given series may be subordinate to
payments in respect of the Notes of such series as more fully described in the
related Prospectus Supplement. Distributions in respect of interest on and
principal of any class of Certificates will be made on a pro rata basis among
all the Certificateholders of such class.
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In the case of a series of Certificates which includes two or more classes
of Certificates, the timing, sequential order, priority of payment or amount
of distributions in respect of interest and principal, and any schedule or
formula or other provisions applicable to the determination thereof, of each
such class shall be as set forth in the related Prospectus Supplement.
List of Certificateholders. Three or more Certificateholders of a Class of
Certificates or one or more holders of Certificates evidencing not less than
25% of the Certificate Balance of a Class of Certificates may, by written
request to the applicable Owner Trustee, obtain access to the list of all
Certificateholders of such Class for the purpose of communicating with such
other Certificateholders with respect to their rights under the related Trust
Agreement or under such Certificates.
Reports to Certificateholders. On each Payment Date, the applicable Owner
Trustee will provide to Certificateholders of record of the related series as
of the related Record Date the statement described under "Certain Information
Regarding the Securities--Reports to Securityholders".
CERTAIN INFORMATION REGARDING THE SECURITIES
FIXED RATE SECURITIES
Each class of Securities (other than certain classes of Strip Notes or Strip
Certificates) may bear interest at a fixed rate per annum ("Fixed Rate
Securities") or at a variable or adjustable rate per annum ("Floating Rate
Securities"), as more fully described below and in the applicable Prospectus
Supplement. Each class of Fixed Rate Securities will bear interest at the
applicable per annum Interest Rate or Pass-Through Rate, as the case may be,
specified in the applicable Prospectus Supplement. Unless otherwise set forth
in the applicable Prospectus Supplement, interest on each class of Fixed Rate
Securities will be computed on the basis of a 360-day year of twelve 30-day
months. See "Description of the Notes--Principal and Interest on the Notes"
and "Description of the Certificates--Distributions of Principal and
Interest".
FLOATING RATE SECURITIES
Each class of Floating Rate Securities will initially bear interest for each
applicable Payment Date at a rate per annum determined by reference to an
interest rate basis (the "Base Rate"), plus or minus the Spread, if any, or
multiplied by the Spread Multiplier, if any, in each case as specified in the
related Prospectus Supplement. The "Spread" is the number of basis points (one
basis point equals one one-hundredth of a percentage point) that may be
specified in the applicable Prospectus Supplement as being applicable to such
class, and the "Spread Multiplier" is the percentage that may be specified in
the applicable Prospectus Supplement as being applicable to such class.
The applicable Prospectus Supplement will designate a Base Rate for a given
Floating Rate Security based on LIBOR, commercial paper rates, federal funds
rates, U.S. Government treasury securities rates, negotiable certificates of
deposit rates or another rate as set forth in such Prospectus Supplement.
As specified in the applicable Prospectus Supplement, Floating Rate
Securities of a given class may also have either or both of the following (in
each case expressed as a rate per annum): (i) a maximum limitation, or
ceiling, on the rate at which interest may accrue during any interest period
and (ii) a minimum limitation, or floor, on the rate at which interest may
accrue during any interest period. In addition to any maximum interest rate
that may be applicable to any class of Floating Rate Securities, the interest
rate applicable to any class of Floating Rate Securities will in no event be
higher than the maximum rate permitted by applicable law, as the same may be
modified by United States law of general application.
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INDEXED SECURITIES
To the extent so specified in any Prospectus Supplement, any class of
Securities of a given series may consist of Securities ("Indexed Securities")
in which the principal amount payable at the final scheduled Payment Date, for
such class (the "Indexed Principal Amount") is determined by reference to a
measure (the "Index") which will be related to (i) the difference in the rate
of exchange between United States dollars and a currency or composite currency
(the "Indexed Currency") specified in the applicable Prospectus Supplement
(such Indexed Securities, "Currency Indexed Securities"); (ii) the difference
in the price of a specified commodity (the "Indexed Commodity") on specified
dates (such Indexed Securities, "Commodity Indexed Securities"); (iii) the
difference in the level of a specified stock index (the "Stock Index"), which
may be based on U.S. or foreign stocks, on specified dates (such Indexed
Securities, "Stock Indexed Securities"); or (iv) such other objective price or
economic measures as are described in the applicable Prospectus Supplement.
The manner of determining the Indexed Principal Amount of an Indexed Security
and historical and other information concerning the Indexed Currency, the
Indexed Commodity, the Stock Index or other price or economic measures used in
such determination will be set forth in the applicable Prospectus Supplement,
together with information concerning tax consequences to the holders of such
Indexed Securities.
If the determination of the Indexed Principal Amount of an Indexed Security
is based on an Index calculated or announced by a third party and such third
party either suspends the calculation or announcement of such Index or changes
the basis upon which such Index is calculated (other than changes consistent
with policies in effect at the time such Indexed Security was issued and
permitted changes described in the applicable Prospectus Supplement), then
such Index shall be calculated for purposes of such Indexed Security by an
independent calculation agent named in the applicable Prospectus Supplement on
the same basis, and subject to the same conditions and controls, as applied to
the original third party. If for any reason such Index cannot be calculated on
the same basis and subject to the same conditions and controls as would have
been applied to the original third party, then the Indexed Principal Amount of
such Indexed Security shall be calculated in the manner set forth in the
applicable Prospectus Supplement. Any determination of such independent
calculation agent shall, in the absence of manifest error, be binding on all
parties.
Unless otherwise specified in the applicable Prospectus Supplement, interest
on an Indexed Security will be payable based on the amount designated in the
applicable Prospectus Supplement as the "Face Amount" of such Indexed
Security. The applicable Prospectus Supplement will describe whether the
principal amount of the related Indexed Security, if any, that would be
payable upon redemption or repayment prior to the applicable final scheduled
Payment Date will be the Face Amount of such Indexed Security, the Indexed
Principal Amount of such Indexed Security at the time of redemption or
repayment or another amount described in such Prospectus Supplement.
BOOK-ENTRY REGISTRATION
Unless otherwise specified in the related Prospectus Supplement, Noteholders
of a given series may hold their Notes through DTC (in the United States) or
Cedel or Euroclear (in Europe) if they are participants of such systems, or
indirectly through organizations that are participants in such systems.
Cede, as nominee for DTC, will hold the global Notes in respect of a given
series. Cedel and Euroclear will hold omnibus positions on behalf of the Cedel
Participants and the Euroclear Participants, respectively, through customers'
securities accounts in Cedel's and Euroclear's names on the books of their
respective depositaries (collectively, the "Depositaries") which in turn will
hold such positions in customers' securities accounts in the Depositaries'
names on the books of DTC.
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 UCC and a "clearing agency" registered
pursuant to Section 17A of the Exchange Act. DTC was
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created to hold securities for its Participants and to facilitate the
clearance and settlement of securities transactions between Participants
through electronic book-entries, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers,
banks, trust companies and clearing corporations. Indirect access to the DTC
system also is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants").
Transfers between DTC Participants will occur in accordance with DTC rules.
Transfers between Cedel Participants and Euroclear Participants will occur in
the ordinary way in accordance with their applicable rules and operating
procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
Participants or Euroclear Participants, on the other, will be effected in DTC
in accordance with DTC rules on behalf of the relevant European international
clearing system by its Depositary; however, such cross-market transactions
will require delivery of instructions to the relevant European international
clearing system by the counterparty in such system in accordance with its
rules and procedures and within its established deadlines (European time). The
relevant European international clearing system will, if the transaction meets
its settlement requirements, deliver instructions to its Depositary to take
action to effect final settlement on its behalf by delivering or receiving
securities in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Cedel Participants
and Euroclear Participants may not deliver instructions directly to the
Depositaries.
Because of time-zone differences, credits of securities in Cedel or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in
such securities settled during such processing will be reported to the
relevant Cedel Participant or Euroclear Participant on such business day. Cash
received in Cedel or Euroclear as a result of sales of securities by or
through a Cedel Participant or a Euroclear Participant to a DTC Participant
will be received with value on the DTC settlement date but will be available
in the relevant Cedel or Euroclear cash account only as of the business day
following settlement in DTC.
The Noteholders of a given series that are not Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of,
or other interests in, Notes of such series may do so only through
Participants and Indirect Participants. In addition, Noteholders of a given
series will receive all distributions of principal and interest from the
applicable Indenture Trustee through the Participants who in turn will receive
them from DTC. Under a book-entry format, Noteholders of a given series may
experience some delay in their receipt of payments, since such payments will
be forwarded by the applicable Indenture Trustee to Cede, as nominee for DTC.
DTC will forward such payments to its Participants, which thereafter will
forward them to Indirect Participants or such Noteholders. It is anticipated
that the only "Noteholder" in respect of any series will be Cede, as nominee
of DTC. Noteholders of a given series will not be recognized by the applicable
Indenture Trustee as Noteholders of such series, as such term is used in the
related Indenture, and such Noteholders will be permitted to exercise the
rights of Noteholders of such series only indirectly through DTC and its
Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
Notes of a given series among Participants on whose behalf it acts with
respect to such Notes and to receive and transmit distributions of principal
of, and interest on, such Notes. Participants and Indirect Participants with
which the Noteholders of a given series have accounts with respect to such
Notes similarly are required to make book-entry transfers and receive and
transmit such payments on behalf of their respective Noteholders of such
series. Accordingly, although such Noteholders will not possess Notes, the
Rules provide a mechanism by which Participants will receive payments and will
be able to transfer their interests.
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Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a Noteholder
of a given series to pledge Notes of such series 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 lack of a physical certificate for such
Notes.
DTC will advise the Administrator in respect of each Trust that it will take
any action permitted to be taken by a Noteholder of the related series under
the related Indenture only at the direction of one or more Participants to
whose accounts with DTC the Notes of such series are credited. DTC may take
conflicting actions with respect to other undivided interests to the extent
that such actions are taken on behalf of Participants whose holdings include
such undivided interests.
Cedel is incorporated under the laws of Luxembourg as a bank. Cedel holds
securities for its participating organizations ("Cedel Participants") and
facilitates the clearance and settlement of securities transactions between
Cedel Participants through electronic book-entry changes in accounts of Cedel
Participants, thereby eliminating the need for physical movement of
certificates. Transactions may be settled in Cedel in any of 28 currencies,
including United States dollars. Cedel provides to its Cedel Participants,
among other things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and
borrowing. Cedel interfaces with domestic markets in several countries. As a
professional depository, Cedel is subject to regulation by the Luxembourg
Monetary Institute. Cedel Participants are recognized financial institutions
around the world, including underwriters, securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
Indirect access to Cedel is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Cedel Participant, either directly or indirectly.
Euroclear was created in 1968 to hold securities for participants of the
Euroclear System ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Transactions may now be settled in any of 28 currencies,
including United States dollars. The Euroclear System includes various other
services, including securities lending and borrowing and interfaces with
domestic markets in several countries generally similar to the arrangements
for cross-market transfers with DTC described above. Euroclear is operated by
Morgan Guaranty Trust Company of New York, Brussels, Belgium office, under
contract with Euroclear Clearance System, S.C., a Belgian cooperative
corporation (the "Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Cooperative. The
Cooperative establishes policy for the Euroclear System on behalf of Euroclear
Participants. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries
and may include the Underwriters. Indirect access to the Euroclear System is
also available to other firms that clear through or maintain a custodial
relationship with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions
govern transfers of securities and cash within the Euroclear System,
withdrawal of securities and cash from the Euroclear System, and receipts of
payments with respect to securities in the Euroclear System. All securities in
the Euroclear System are held on a fungible basis without
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attribution of specific certificates to specific securities clearance
accounts. The Euroclear Operator acts under the Terms and Conditions only on
behalf of Euroclear Participants and has no record of or relationship with
persons holding through Euroclear Participants.
Except as required by law, neither the Administrator in respect of a Trust
nor the applicable Indenture Trustee will have any liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of the related Notes held by Cede, as nominee for DTC, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
DEFINITIVE NOTES
Unless otherwise specified in the related Prospectus Supplement, the Notes
will be issued in fully registered, certificated form ("Definitive Notes") to
the Noteholders of a given series or their nominees, rather than to DTC or its
nominee, only if (i) the Administrator in respect of the related Trust advises
the applicable 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 such Administrator is unable to locate a qualified successor,
(ii) such Administrator, at its option, elects to terminate the book-entry
system through DTC or (iii) after the occurrence of an Event of Default under
the related Indenture or a Servicer Default under the related Sale and
Servicing Agreement, Noteholders representing at least a majority of the
outstanding principal amount of such Notes advise the applicable Indenture
Trustee through DTC in writing that the continuation of a book-entry system
through DTC (or a successor thereto) is no longer in such Noteholders' best
interest.
Upon the occurrence of any event described in the immediately preceding
paragraph, the applicable Indenture Trustee will be required to notify all
such Noteholders through Participants of the availability of Definitive Notes.
Upon surrender by DTC of the definitive certificates representing such Notes
and receipt of instructions for re-registration, the applicable Indenture
Trustee will reissue such Notes as Definitive Notes to such Noteholders.
Distributions of principal of, and interest on, such Notes will thereafter
be made by the applicable Indenture Trustee in accordance with the procedures
set forth in the related Indenture directly to holders of Definitive Notes in
whose names the Definitive Notes were registered at the close of business on
the applicable Record Date specified for such Notes in the related Prospectus
Supplement. Such distributions will be made by check mailed to the address of
such holder as it appears on the register maintained by the applicable
Indenture Trustee. The final payment on any such Note, however, will be made
only upon presentation and surrender of such Note at the office or agency
specified in the notice of final distribution to the applicable Noteholders.
Definitive Notes in respect of a given series of Notes will be transferable
and exchangeable at the offices of the applicable Indenture Trustee or of a
certificate registrar named in a notice delivered to holders of such
Definitive Notes. No service charge will be imposed for any registration of
transfer or exchange, but the applicable Indenture Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge imposed in
connection therewith.
REPORTS TO SECURITYHOLDERS
With respect to each series of Securities, on or prior to each Payment Date
for such series, either the Servicer or the Sub-Servicer will provide to the
related Indenture Trustee a statement (which such Indenture Trustee shall
forward to the Noteholders of record) and to the related Owner Trustee a
statement (which such Owner Trustee shall forward to the related
Certificateholders), in each case setting forth the following information as
to such Notes and Certificates with respect to such Payment Date or the
related Collection Period:
(i) the amount of the distribution allocable to principal of each class
of such Notes and to the Certificate Balance of each class of such
Certificates;
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(ii) the amount of the distribution allocable to interest and the
Interest Rate or Pass-Through Rate on or with respect to each class of
Securities of such series in each case applicable to distributions made on
such Payment Date;
(iii) the Pool Balance, and the Note Value, if applicable, as of the
close of business on the last day of the related Collection Period;
(iv) the aggregate outstanding principal balance and the Note Pool Factor
for each class of such Notes, and the Certificate Balance and the
Certificate Pool Factor for each class of such Certificates, each after
giving effect to all payments reported under (i) above on such date;
(v) the amount of the Servicing Fee paid to the Servicer with respect to
the related Collection Periods;
(vi) the amount of the Administration Fee paid with respect to the
related Collection Period;
(vii) the amount of the aggregate Purchase Amounts for Receivables that
have been repurchased, if any, for such Collection Period;
(viii) the amount of the aggregate Realized Losses, if any, for such
Collection Period; and
(ix) the balance of the Reserve Account, if any, on such Payment Date,
after giving effect to changes therein on such Payment Date, and the
Specified Reserve Account Balance for such Payment Date.
Each amount set forth pursuant to subclauses (i), (ii), (v) and (vii) with
respect to the Notes or the Certificates of any Series will be expressed as a
dollar amount per $1,000 of the initial principal balance of such Notes or the
initial Certificate Balance of such Certificates, as applicable.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year, the applicable Indenture Trustee will provide to
the Noteholders a statement containing the amounts described in (i) and (ii)
(other than information relating to the Note Interest Rate and the Pass-
Through Rate) above for that calendar year and any other information required
by applicable tax laws, for the purpose of the Noteholders' preparation of
federal income tax returns. Within the prescribed period of time for tax
reporting purposes after the end of each Trust tax year, the Owner Trustee
will provide to the Certificateholders a statement containing the amounts
described in (i), (ii) (other than information relating to the Note Interest
Rate and the Pass-Through Rate), (v) and (vii) above for that tax year and any
other information required by applicable tax laws for the purposes of the
Certificateholders' preparation of federal income tax returns.
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS
The following summary describes certain terms of each Sale and Servicing
Agreement pursuant to which a Trust will purchase Receivables from the Seller
and the Servicer will undertake to service, or cause the Sub-Servicer to
service, such Receivables, each Purchase Agreement pursuant to which the
Seller will purchase Receivables from JDCC, each Administration Agreement
pursuant to which JDCC will undertake certain administrative duties with
respect to a Trust and each Trust Agreement pursuant to which a Trust will be
created and the Certificates in respect of such Trust will be issued
(collectively, the "Transfer and Servicing Agreements"). Forms of the Transfer
and Servicing Agreements have been filed as exhibits to the Registration
Statement of which this Prospectus forms a part. The summary does not purport
to be complete. It is qualified in its entirety by reference to the provisions
of the Transfer and Servicing Agreements.
SALE AND ASSIGNMENT OF RECEIVABLES
On the Closing Date specified with respect to any given Trust in the related
Prospectus Supplement (the "Closing Date"), JDCC will sell and assign to the
Seller, without recourse, its entire interest in the related Receivables,
including its security interests in the related Financed Equipment,
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pursuant to a Purchase Agreement. On such Closing Date, the Seller will sell
and assign to the applicable Owner Trustee, without recourse, its entire
interest in such Receivables, including its security interests in the related
Financed Equipment, pursuant to a Sale and Servicing Agreement. Each
Receivable will be identified in a schedule appearing as an exhibit to such
Sale and Servicing Agreement. The applicable Owner Trustee, on behalf of such
Trust, will, concurrently with such sale and assignment, execute, authenticate
and deliver the related Notes and the Certificates. Unless otherwise provided
in the related Prospectus Supplement, the proceeds received from the sale of
the Notes and the Certificates of a given series will be applied to the
purchase of the related Receivables from the Seller.
To the extent specified in the related Prospectus Supplement, JDCC will have
the right under the Purchase Agreement (subject to certain limitations) to
sell additional Receivables to the Seller. Unless otherwise specified in the
related Prospectus Supplement, the addition of any such Receivables to the
related pool of Receivables will be subject to the following conditions, among
others: (a) each such additional Receivable must satisfy the eligibility
criteria set forth in the related Prospectus Supplement; (b) JDCC must
represent and warrant that the inclusion of such additional Receivables in the
related pool of Receivables will not cause an Early Amortization Event (as
defined in the related Prospectus Supplement) to occur; [and (c) unless
otherwise set forth in the related Prospectus Supplement, each Rating Agency
must have provided written confirmation that such addition will not result in
a reduction or withdrawal of the rating of any outstanding related
Securities]. On the applicable purchase date (as specified in the related
Prospectus Supplement) for any additional Receivable, all such additional
Receivables will be sold by JDCC to the Seller and will be transferred by the
Seller to the related Trust.
In each Purchase Agreement, JDCC will represent and warrant to the Seller,
among other things, that (i) the information provided with respect to the
related Receivables is correct in all material respects; (ii) the Obligor on
each related Receivable is required to maintain physical damage insurance
covering the Financed Equipment in accordance with JDCC's normal requirements;
(iii) at the applicable Closing Date (or, if so specified in the related
Prospectus Supplement, the applicable purchase date), the related Receivables
are free and clear of all security interests, liens, charges and encumbrances
and no offsets, defenses, or counterclaims have been asserted or threatened;
(iv) at the applicable Closing Date (or, if so specified in the related
Prospectus Supplement, the applicable purchase date), each of the related
Receivables is secured by a first perfected security interest in the Financed
Equipment in favor of JDCC; and (v) each Receivable, at the time it was
originated, complied and, at the applicable Closing Date (or, if so specified
in the related Prospectus Supplement, the applicable purchase date), complies
in all material respects with applicable federal and state laws. Unless
otherwise provided in the related Prospectus Supplement, as of the last day of
the second (or, if the Seller elects, the first) month following the discovery
by or notice to the Seller of a breach of any such representation or warranty
that materially and adversely affects the interests of a Trust in a
Receivable, unless the breach is cured, the Seller will repurchase such
Receivable from such Trust, and JDCC will repurchase the Receivable from the
Seller, at a price equal to the unpaid principal balance owed by the Obligor
plus interest thereon at the respective Receivable Rate to the last day of the
month of repurchase (the "Purchase Amount"). The obligation of the Seller to
repurchase any Receivable with respect to which any such representation or
warranty has been breached is subject to JDCC's repurchase of such Receivable.
Unless otherwise specified in the related Prospectus Supplement, the
repurchase obligation will constitute the sole remedy available to the
Noteholders, the Indenture Trustee, the Certificateholders or the Owner
Trustee in respect of such Trust for any such uncured breach.
To assure uniform quality in servicing the Receivables and to reduce
administrative costs, the Seller will, pursuant to each Sale and Servicing
Agreement, appoint the Servicer as custodian of the Receivables. JDCC's
accounting records and computer systems will reflect the sale and assignment
of the related Receivables to the Seller and the sale and assignment by the
Seller to the applicable Trust, and UCC financing statements reflecting such
sales and assignments will be filed.
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ACCOUNTS
With respect to each Trust, the Servicer will establish and maintain with
the applicable Indenture Trustee one or more accounts, in the name of such
Indenture Trustee on behalf of the related Noteholders and the
Certificateholders, into which all payments made on or with respect to the
related Receivables will be deposited (the "Collection Account"). The Servicer
will also establish and maintain with such Indenture Trustee an account, in
the name of such Indenture Trustee on behalf of such Noteholders, in which
amounts released from the Collection Account and the Reserve Account or other
credit enhancement, if any, for distribution to such Noteholders will be
deposited and from which all distributions to such Noteholders will be made
(the "Note Distribution Account").
Any other accounts to be established with respect to a Trust, including any
Reserve Account, will be described in the related Prospectus Supplement.
For any series of Securities, funds in the Collection Account, the Note
Distribution Account, any Reserve Account and other accounts identified as
such in the related Prospectus Supplement (collectively, the "Trust Accounts")
shall be invested as provided in the related Sale and Servicing Agreement in
Eligible Investments. "Eligible Investments" are generally limited to
investments acceptable to the Rating Agencies as being consistent with the
rating of such Securities. Subject to certain conditions, Eligible Investments
may include securities issued by the Seller or its affiliates or trusts
originated by the Seller or its affiliates. Except as described below or in
the related Prospectus Supplement, Eligible Investments are limited to
obligations or securities that mature not later than the business day
immediately preceding the next distribution. However, subject to certain
conditions, funds in the Reserve Account may be invested in securities that
will not mature prior to the date of the next distribution and will not be
sold to meet any shortfalls. Thus, the amount of cash in any Reserve Account
at any time may be less than the balance of such Reserve Account. If the
amount required to be withdrawn from any Reserve Account to cover shortfalls
in collections on the related Receivables exceeds the amount of cash in such
Reserve Account a temporary shortfall in the amounts distributed to the
related Noteholders or Certificateholders could result, which could, in turn,
increase the average life of the Notes or the Certificates of such series.
Except as otherwise specified in the related Prospectus Supplement, investment
earnings on funds deposited in the applicable Trust Accounts, net of losses
and investment expenses (collectively, "Investment Earnings"), shall be
deposited in the applicable Collection Account on each Payment Date and shall
be treated as collections of interest on the related Receivables.
The Trust Accounts and the Certificate Distribution Account will be
maintained as Eligible Deposit Accounts. "Eligible Deposit Account" means
either (a) a segregated account with an Eligible Institution or (b) a
segregated trust account with the corporate trust department of a depository
institution organized under the laws of the United States of America or any
one of the states thereof or the District of Columbia (or any domestic branch
of a foreign bank), having corporate trust powers and acting as trustee for
funds deposited in such account, so long as any of the securities of such
depository institution has a credit rating from each Rating Agency in one of
its generic rating categories which signifies investment grade. "Eligible
Institution" means, with respect to a Trust, (a) the corporate trust
department of the related Indenture Trustee or the related Owner Trustee, as
applicable, 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), which (i) (A) has either
(w) a long-term unsecured debt rating acceptable to the Rating Agencies or (x)
a short-term unsecured debt rating or certificate of deposit rating acceptable
to the Rating Agencies or (B) the parent corporation of which has either (y) a
long-term unsecured debt rating acceptable to the Rating Agencies or (z) a
short-term unsecured debt rating or certificate of deposit rating acceptable
to the Rating Agencies and (ii) whose deposits are insured by the FDIC.
With respect to each Trust, the Servicer will also establish and maintain
with the applicable Owner Trustee an account, in the name of such Owner
Trustee, on behalf of the related Certificateholders, in
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which amounts released from the related Collection Account and the related
Reserve Account for distribution to such Certificateholders will be deposited
and from which all distributions to such Certificateholders will be made (the
"Certificate Distribution Account").
SERVICING PROCEDURES
The Servicer will make, or cause the Sub-Servicer to make, reasonable
efforts to collect all payments due with respect to the Receivables held by
any Trust and, in a manner consistent with the related Sale and Servicing
Agreement, will continue, or cause the Sub-Servicer to continue, such
collection procedures as the Sub-Servicer follows with respect to the
particular type of Receivable in the particular pool it services for itself
and others. Consistent with its normal procedures, the Sub-Servicer may, in
its discretion and on a case-by-case basis, arrange with the Obligor on a
Receivable to extend or modify the payment schedule. Some of such arrangements
(including, without limitation, any extension of the payment schedule beyond
the final scheduled maturity date for a Receivable (as described in the
related Prospectus Supplement)) will result in the Servicer purchasing such
Receivable for the Purchase Amount. The Servicer may sell the Financed
Equipment securing the respective Receivable at a public or private sale, or
take any other action permitted by applicable law. See "Certain Legal Aspects
of the Receivables".
PAYMENTS ON RECEIVABLES
With respect to each Trust, the Sub-Servicer will deposit all payments on
the related Receivables (from whatever source) and all proceeds of such
Receivables collected during each collection period specified in the related
Prospectus Supplement (each, a "Collection Period") into the related
Collection Account; provided, however, that when a Receivable becomes a
Liquidated Receivable (as defined below) such Receivable will be reassigned to
the Seller and any proceeds after such date (deficiency proceeds) would not be
proceeds of Receivables in the Trust. "Liquidated Receivables" means defaulted
Receivables in respect of which the Financed Equipment has been sold or
otherwise disposed of. Except under certain conditions described in the
related Prospectus Supplement, the Sub-Servicer will be required to deposit
such amounts into the related Collection Account within two business days of
receipt thereof. If certain rating agency conditions are satisfied, the
deposit of collections for a fiscal month will be made within two business
days prior to the 29th day (the 28th day in the case of February) of the
calendar month following such fiscal month (or, if such fiscal month ends in
the early part of a calendar month, the 29th day (the 28th day in the case of
February) of such calendar month). Pending deposit into the related Collection
Account, collections may be invested by the Servicer at its own risk and for
its own benefit, and will not be segregated from funds of the Servicer.
SERVICING COMPENSATION
Unless otherwise specified in the Prospectus Supplement with respect to any
Trust, the Servicer will be entitled to receive the Servicing Fee for each
Collection Period in an amount equal to a specified percentage per annum (as
set forth in the related Prospectus Supplement, the "Servicing Fee Rate") of
the Pool Balance as of the first day of such Collection Period. The Servicing
Fee (together with any portion of the Servicing Fee that remains unpaid from
prior Payment Dates) will be paid solely to the extent of the Interest
Distribution Amount (as defined in the related Prospectus Supplement) and,
unless otherwise disclosed in the related Prospectus Supplement, will be paid
prior to the distribution of any portion of the Interest Distribution Amount
to the related Noteholders or the Certificateholders and prior to payment of
the Administration Fee.
The Servicer will also collect and retain any late fees, the penalty portion
of interest paid on past due amounts and other administrative fees or similar
charges allowed by applicable law with respect to the Receivables, and will be
entitled to reimbursement from each Trust for certain liabilities. Payments by
or on behalf of Obligors will be allocated to scheduled payments and late fees
and other charges in accordance with the Sub-Servicer's normal practices and
procedures.
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The Servicing Fee will compensate the Servicer for performing, or causing
the Sub-Servicer to perform, the functions of a third party servicer of
similar types of receivables as an agent for their beneficial owner, including
collecting and posting all payments, responding to inquiries of Obligors on
the Receivables, investigating delinquencies, sending payment coupons to
Obligors, reporting tax information to Obligors, paying costs of collection
and disposition of defaults, and policing the collateral. The Servicing Fee
also will compensate the Servicer for administering, or causing the Sub-
Servicer to administer, the Receivables, accounting, or causing the Sub-
Servicer to account, for collections and furnishing or causing the Sub-
Servicer to furnish, statements to the applicable Owner Trustee and the
applicable Indenture Trustee with respect to distributions. The Servicing Fee
also will reimburse the Servicer for certain taxes, accounting fees, outside
auditor fees, data processing costs and other costs incurred in connection
with administering the Receivables.
DISTRIBUTIONS
With respect to each series of Securities, beginning on the Payment Date
specified in the related Prospectus Supplement, distributions of principal and
interest (or, where applicable, of principal or interest only) on each class
of such Securities entitled thereto will be made by the applicable Indenture
Trustee to the Noteholders and by the applicable Owner Trustee to the
Certificateholders of such series. The timing, calculation, allocation, order,
source, priorities of and requirements for each class of Noteholders and all
distributions to each class of Certificateholders of such series will be set
forth in the related Prospectus Supplement.
With respect to each Trust, on each Payment Date collections on the related
Receivables will be transferred from the Collection Account to the Note
Distribution Account and the Certificate Distribution Account for distribution
to Noteholders and Certificateholders to the extent provided in the related
Prospectus Supplement. Credit enhancement, such as a Reserve Account, will be
available to cover any shortfalls in the amount available for distribution on
such date to the extent specified in the related Prospectus Supplement. As
more fully described in the related Prospectus Supplement, and unless
otherwise specified therein, distributions in respect of principal of a class
of Securities of a given series will be subordinate to distributions in
respect of interest on such class, and distributions in respect of the
Certificates of such series may be subordinate to payments in respect of the
Notes of such series.
If the related Prospectus Supplement specifies that there is to be a
Revolving Period for a Trust, during such Revolving Period (unless otherwise
provided in the related Prospectus Supplement), no amount will be required to
be set aside to make principal payments on the Notes and distributions of
Certificate Balance on the Certificates. Accordingly, certain amounts (as
specified in the related Prospectus Supplement) will be available for
reinvestment in additional Receivables to be purchased from the Seller and
will be paid to the Seller to the extent so reinvested.
If the related Prospectus Supplement specifies that there is to be an Early
Amortization Period and/or a Wind Down Period for a Trust, during such Early
Amortization Period or such Wind Down Period, certain amounts (as specified in
the related Prospectus Supplement) will be retained by the Trust and not paid
to the Seller to the extent required to be set aside for the purpose of making
payments of principal on the related Notes and distributions with respect to
the Certificate Balance on the related Certificates, all as more fully set
forth in the related Prospectus Supplement. For each Collection Period during
an Early Amortization Period or the Wind Down Period for a Trust, certain
amounts (as specified in the related Prospectus Supplement) will be applied to
make the required deposits into the Note Distribution Account and the
Certificate Distribution Account. The relative priorities of such deposits and
the amounts required to be so deposited for any Distribution Date will be set
forth in the related Prospectus Supplement. During the Wind Down Period for a
Trust, the amount to be applied to payments on the Securities will be limited
as set forth in the related Prospectus Supplement. In general, during an Early
Amortization Period for a Trust, all collections and other available amounts
will be available to make payments on the related Securities.
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Payments will be made on the Securities during the Wind Down Period and any
Early Amortization Period to the extent, if any, described in the related
Prospectus Supplement.
CREDIT AND CASH FLOW ENHANCEMENT
The amounts and types of credit enhancement arrangements, if any, and the
provider thereof, if applicable, with respect to each class of Securities of a
given series will be set forth in the related Prospectus Supplement. If and to
the extent provided in the related Prospectus Supplement, credit enhancement
may be in the form of subordination of one or more classes of Securities,
Reserve Accounts, over-collateralization, letters of credit, credit or
liquidity facilities, surety bonds, guaranteed investment contracts, swaps or
other interest rate protection agreements, cash deposits or such other
arrangements as may be described in the related Prospectus Supplement or any
combination of two or more of the foregoing. If specified in the applicable
Prospectus Supplement, credit enhancement for a class of Securities may cover
one or more other classes of Securities of the same series, and credit
enhancement for a series of Securities may cover one or more other series of
Securities.
The presence of a Reserve Account and other forms of credit enhancement for
the benefit of any class or series of Securities is intended to enhance the
likelihood of receipt by the Securityholders of such class or series of the
full amount of principal and interest due thereon and to decrease the
likelihood that such Securityholders will experience losses. Unless otherwise
specified in the related Prospectus Supplement, the credit enhancement for a
class or series of Securities will not provide protection against all risks of
loss and will not guarantee repayment of the entire principal balance and
interest thereon. If losses occur which exceed the amount covered by any
credit enhancement or which are not covered by any credit enhancement,
Securityholders of any class or series will bear their allocable share of
deficiencies, as described in the related Prospectus Supplement. In addition,
if a form of credit enhancement covers more than one series of Securities,
Securityholders of any such series will be subject to the risk that such
credit enhancement will be exhausted by the claims of Securityholders of other
series.
RESERVE ACCOUNT
If so provided in the related Prospectus Supplement, pursuant to the related
Sale and Servicing Agreement, the Seller will establish for a series or class
of Securities one or more accounts, as specified in the related Prospectus
Supplement (the "Reserve Account"), which will be maintained with the
applicable Indenture Trustee. Unless otherwise provided in the related
Prospectus Supplement, the Reserve Account will be funded by an initial
deposit by the Seller on the related Closing Date in the amount set forth in
the related Prospectus Supplement. As further described in the related
Prospectus Supplement, the amount on deposit in the Reserve Account may be
increased on each Payment Date thereafter up to the Specified Reserve Account
Balance (as defined in the related Prospectus Supplement) by the deposit
therein of the amount of collections on the related Receivables remaining on
each such Payment Date after the payment of all other required payments and
distributions on such date. The related Prospectus Supplement will describe
the circumstances and manner under which distributions may be made out of the
Reserve Account, either to holders of the Securities covered thereby or to the
Seller.
NET DEPOSITS
As an administrative convenience, unless the applicable Prospectus
Supplement provides otherwise, the Servicer is required to remit collections
within two Business Days of their receipt, and the Sub-Servicer will make the
deposit of collections and Purchase Amounts for any Trust for or with respect
to the related Collection Period net of distributions to be made to the
Servicer or the Sub-Servicer with respect to such Collection Period. The Sub-
Servicer, however, will account to the Indenture Trustee, the Owner Trustee,
the Noteholders and the Certificateholders with respect to each Trust as if
all deposits, distributions and transfers were made individually.
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EARLY AMORTIZATION EVENTS
The related Prospectus Supplement may set forth various "Early Amortization
Events" with respect to a Trust. Upon the occurrence of any such specified
event, an Early Amortization Event with respect to such Trust will be deemed
to have occurred without any notice or other action on the part of any other
party. The Early Amortization Period will commence as of the day on which the
Early Amortization Event is deemed to occur. During an Early Amortization
Period for such Trust, certain amounts (as specified in the related Prospectus
Supplement) will be allocated to principal payments on the related Notes and
distributions of the Certificate Balance on the related Certificates and will
be paid as set forth in the related Prospectus Supplement. If an Early
Amortization Event commences during the Wind Down Period, amounts, if any, on
deposit in the Note Distribution Account and the Certificate Distribution
Account will be paid to the holders of the Securities on the first Payment
Date for such Early Amortization Period as described in the related Prospectus
Supplement.
So long as the related Scheduled Revolving Period Termination Date has not
occurred, the Revolving Period may recommence following the occurrence of an
Early Amortization Event under certain circumstances as described in the
related Prospectus Supplement.
STATEMENTS TO INDENTURE TRUSTEES AND TRUST
Prior to each Payment Date with respect to each series of Securities, the
Servicer will, or will cause the Sub-Servicer to, provide to the applicable
Indenture Trustee and the applicable Owner Trustee as of the close of business
on the last day of the preceding related Collection Period a statement setting
forth substantially the same information as is required to be provided in the
periodic reports provided to Securityholders of such series described under
"Certain Information Regarding the Securities--Reports to Securityholders".
EVIDENCE AS TO COMPLIANCE
Each Sale and Servicing Agreement will provide that a firm of independent
public accountants will furnish to the related Trust and the applicable
Indenture Trustee, annually, a statement as to compliance by the Servicer and
the Sub-Servicer during the preceding 12 months ended October 31 (or, in the
case of the first such certificate, the period from the applicable Closing
Date) with certain standards relating to the servicing of the Receivables.
Each Sale and Servicing Agreement will also provide for delivery to the
related Trust and the applicable Indenture Trustee of a certificate signed by
an officer of the Servicer stating that the Servicer either has fulfilled, or
has caused the Sub-Servicer to fulfill, its obligations under such Sale and
Servicing Agreement in all material respects throughout the preceding 12
months ended October 31 (or, in the case of the first such certificate, the
period from the applicable Closing Date to the following October 31) or, if
there has been a default in the fulfillment of any such obligation in any
material respect, describing each such default. The Servicer also will agree
to give each Indenture Trustee and each Owner Trustee notice of certain
Servicer Defaults under the related Sale and Servicing Agreement.
Copies of such statements and certificates may be obtained by
Securityholders by a request in writing addressed to the applicable Indenture
Trustee or the applicable Owner Trustee.
CERTAIN MATTERS REGARDING THE SERVICER
Each Sale and Servicing Agreement will provide that JDCC may not resign from
its obligations and duties as Servicer thereunder, except upon determination
that JDCC's performance of such duties is no longer permissible under
applicable law. No such resignation will become effective until the related
Indenture Trustee or a successor servicer has assumed JDCC's servicing
obligations and duties under such Sale and Servicing Agreement.
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Each Sale and Servicing Agreement will further provide that neither the
Servicer nor the Sub-Servicer nor any of their respective directors, officers,
employees, or agents shall be under any liability to the related Trust, the
related Noteholders or the related Certificateholders for taking any action or
for refraining from taking any action pursuant to such Sale and Servicing
Agreement, or for errors in judgment; provided, however, that neither the
Servicer nor the Sub-Servicer nor any such person will be protected against
any liability that would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of duties or by reason
of reckless disregard of obligations and duties thereunder. In addition, such
Sale and Servicing Agreement will provide that neither the Servicer nor the
Sub-Servicer is under any obligation to appear in, prosecute, or defend any
legal action that is not incidental to its servicing responsibilities under
such Sale and Servicing Agreement and that, in its opinion, may cause it to
incur any expense or liability.
Under the circumstances specified in each Sale and Servicing Agreement, any
entity into which the Servicer may be merged or consolidated, or any entity
resulting from any merger or consolidation to which the Servicer is a party,
or any entity succeeding to the business of the Servicer or, with respect to
its obligations as Servicer, any corporation 50% or more of the voting stock
of which is owned, directly or indirectly, by Deere, which corporation or
other entity in each of the foregoing cases assumes the obligations of the
Servicer, will be the successor of the Servicer under such Sale and Servicing
Agreement.
SERVICER DEFAULT
Except as otherwise provided in the related Prospectus Supplement, "Servicer
Default" under each Sale and Servicing Agreement will consist of (i) any
failure by the Servicer to deliver, or to cause the Sub-Servicer to deliver,
to the applicable Indenture Trustee for deposit in any of the related Trust
Accounts or the related Certificate Distribution Account any required payment
or to direct such Indenture Trustee to make any required distributions
therefrom, which failure continues unremedied for three Business Days after
written notice from such Indenture Trustee or the applicable Owner Trustee is
received by the Servicer or after discovery by the Servicer; (ii) any failure
by the Servicer, the Sub-Servicer or the Seller, as the case may be, duly to
observe or perform in any material respect any other covenant or agreement in
such Sale and Servicing Agreement, which failure materially and adversely
affects the rights of the related Noteholders or Certificateholders and which
continues unremedied for sixty days after the giving of written notice of such
failure (1) to the Servicer or the Seller, as the case may be, by the
applicable Indenture Trustee or the applicable Owner Trustee or (2) to the
Servicer or the Seller, as the case may be, and to the applicable Indenture
Trustee and the applicable Owner Trustee by holders of the related Notes or
Certificates, as applicable, evidencing not less than 25% in principal amount
of such outstanding Notes or Certificates; and (iii) certain events of
insolvency, readjustment of debt, marshalling of assets and liabilities, or
similar proceedings with respect to the Servicer and certain actions by the
Servicer indicating its insolvency, reorganization pursuant to bankruptcy
proceedings, or inability to pay its obligations (each, an "Insolvency
Event").
RIGHTS UPON SERVICER DEFAULT
Unless otherwise provided in the related Prospectus Supplement, as long as a
Servicer Default under a Sale and Servicing Agreement remains unremedied, the
applicable Indenture Trustee or holders of Notes of the related series
evidencing not less than 25% in principal amount of such then outstanding
Notes may terminate all the rights and obligations of the Servicer under such
Sale and Servicing Agreement, whereupon a successor servicer appointed by such
Indenture Trustee or such Indenture Trustee will succeed to all the
responsibilities, duties and liabilities of the Servicer under such Sale and
Servicing Agreement and will be entitled to similar compensation arrangements.
If, however, a bankruptcy trustee or similar official has been appointed for
the Servicer, and no Servicer Default other than such appointment has
occurred, such bankruptcy trustee or official may have the power to
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prevent the applicable Indenture Trustee or such Noteholders from effecting a
transfer of servicing. In the event that the Indenture Trustee is unwilling or
unable to so act, it may appoint, or petition a court of competent
jurisdiction for the appointment of, a successor with a net worth of at least
$50,000,000 and whose regular business includes the servicing of a similar
type of receivables. Such Indenture Trustee may make such arrangements for
compensation to be paid, which in no event may be greater than the servicing
compensation payable to the Servicer under the related Sale and Servicing
Agreement.
WAIVER OF PAST DEFAULTS
With respect to each Trust, unless otherwise provided in the related
Prospectus Supplement, the holders of Notes evidencing at least a majority in
principal amount of the then outstanding Notes of the related series (or the
holders of Certificates of such series evidencing not less than a majority of
the outstanding Certificate Balance, in the case of any default which does not
adversely affect the applicable Indenture Trustee or such Noteholders) may, on
behalf of all such Noteholders and Certificateholders, waive any default by
the Servicer in the performance of its obligations under the related Sale and
Servicing Agreement and its consequences, except a default in making, or
causing the Sub-Servicer to make, any required deposits to or payments from
any of the Trust Accounts in accordance with such Sale and Servicing
Agreement. No such waiver shall impair the Noteholders' or the
Certificateholders' rights with respect to subsequent defaults.
AMENDMENT
Unless otherwise provided in the related Prospectus Supplement, each of the
Transfer and Servicing Agreements may be amended by the parties thereto,
without the consent of the related Noteholders or the Certificateholders, for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of such Transfer and Servicing Agreements or
of modifying in any manner the rights of such Noteholders or
Certificateholders; provided that such action will not, in the opinion of
counsel satisfactory to the applicable Indenture Trustee, materially and
adversely affect the interests of any such Noteholder or Certificateholder.
Unless otherwise specified in the related Prospectus Supplement, the Transfer
and Servicing Agreements may also be amended by the Seller, the Servicer, the
applicable Trust and the applicable Indenture Trustee with the consent of the
holders of Notes evidencing at least a majority in principal amount of then
outstanding Notes of the related series and the holders of Certificates of
such series evidencing at least a majority of the Certificate Balance for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of such Transfer and Servicing Agreements or of
modifying in any manner the rights of such Noteholders or 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 related Receivables or distributions that are required to be
made for the benefit of such Noteholders or the Certificateholders or (ii)
reduce the aforesaid percentage of the Notes and Certificates of such series
which are required to consent to any such amendment, without the consent of
the holders of all the outstanding Notes and Certificates of such series.
INSOLVENCY EVENT
If an Insolvency Event occurs with respect to the Seller, the Receivables
held by each Trust will be liquidated and each Trust will be terminated 90
days after the date of such Insolvency Event unless, before the end of such
90-day period, the Owner Trustee of such Trust shall have received written
instructions from (i) each of the related Certificateholders (other than the
Seller) and (ii) each of the related Noteholders, to the effect that such
party disapproves of the liquidation of such Receivables and termination of
such Trust. Promptly after the occurrence of any Insolvency Event with respect
to the Seller, notice thereof is required to be given to such Noteholders and
Certificateholders; provided,
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however, that any failure to give such required notice will not prevent or
delay termination of such Trust. Upon termination of any Trust, the applicable
Owner Trustee shall direct the applicable Indenture Trustee promptly to sell
the assets of such Trust (other than the related Trust Accounts and the
related Certificate Distribution Account) in a commercially reasonable manner
and on commercially reasonable terms. The proceeds from any such sale,
disposition or liquidation of such Receivables will be treated as collections
on such Receivables and deposited in the related Collection Account. If the
proceeds from the liquidation of such Receivables and any amounts on deposit
in the Reserve Account and the related Note Distribution Account are not
sufficient to pay the Notes and the Certificates of the related series in
full, the amount of principal returned to Noteholders and Certificateholders
will be reduced and some or all of such Noteholders and Certificateholders
will incur a loss.
Each Trust Agreement will provide that the applicable Owner Trustee does not
have the power to commence a voluntary proceeding in bankruptcy with respect
to the related Trust without the unanimous prior approval of all
Certificateholders (including the Seller, if applicable) of such Trust and the
delivery to such Owner Trustee by each such Certificateholder of a certificate
certifying that such Certificateholder reasonably believes that such Trust is
insolvent.
PAYMENT OF NOTES
Upon the payment in full of all outstanding Notes of a given series and the
satisfaction and discharge of the related Indenture, the applicable Owner
Trustee will succeed to all the rights of the applicable Indenture Trustee,
and the Certificateholders of such series will succeed to all the rights of
the Noteholders of such series, under the related Sale and Servicing
Agreement, except as otherwise provided therein.
SELLER LIABILITY
Under each Trust Agreement, the Seller will agree to be liable directly to
an injured party for the entire amount of any losses, claims, damages or
liabilities (other than those incurred by a Noteholder or a Certificateholder
in the capacity of an investor with respect to such Trust) arising out of or
based on the arrangement created by that Trust Agreement as though such
arrangement created a partnership under the Delaware Revised Uniform Limited
Partnership Act in which the Seller was a general partner.
TERMINATION
With respect to each Trust, the obligations of the Servicer, the Sub-
Servicer, the Seller, the applicable Owner Trustee and the applicable
Indenture Trustee pursuant to the related Transfer and Servicing Agreements
will terminate upon the earlier to occur of (i) the maturity or other
liquidation of the last related Receivable and the disposition of any amounts
received upon liquidation of any such remaining Receivables and (ii) the
payment to Noteholders and Certificateholders of the related series of all
amounts required to be paid to them pursuant to such Transfer and Servicing
Agreements. Unless otherwise provided in the related Prospectus Supplement, in
order to avoid excessive administrative expense, the Servicer will be
permitted in respect of the applicable Trust, unless otherwise specified in
the related Prospectus Supplement, at its option to purchase from such Trust,
as of the end of any Collection Period immediately preceding a Payment Date,
if the aggregate principal amount of the related Receivables is less than a
specified percentage of the initial Pool Balance in respect of such Trust, all
such remaining Receivables at a price equal to the aggregate of the Purchase
Amounts thereof as of the end of such Collection Period. The related Notes and
the Certificates will be redeemed following such purchase.
If and to the extent provided in the related Prospectus Supplement with
respect to a Trust, the applicable Indenture Trustee will, within ten days
following a Payment Date as of which the Pool
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Balance is equal to or less than the percentage of the initial Pool Balance
specified in the related Prospectus Supplement, solicit bids for the purchase
of the Receivables remaining in such Trust, in the manner and subject to the
terms and conditions set forth in such Prospectus Supplement. If such
Indenture Trustee receives satisfactory bids as described in such Prospectus
Supplement, then the Receivables remaining in such Trust will be sold to the
highest bidder.
As more fully described in the related Prospectus Supplement, any
outstanding Notes of the related series will be redeemed concurrently with
either of the events specified above and the subsequent distribution to the
related Certificateholders of all amounts required to be distributed to them
pursuant to the applicable Trust Agreement may effect the prepayment of the
Certificates of such series.
ADMINISTRATION AGREEMENT
JDCC, in its capacity as administrator (the "Administrator"), will enter
into an agreement (the "Administration Agreement") with each Trust and the
applicable Indenture Trustee pursuant to which the Administrator will agree,
to the extent provided in such Administration Agreement, to provide the
notices and to perform other administrative obligations required by the
related Indenture. Unless otherwise specified in the related Prospectus
Supplement, as compensation for the performance of the Administrator's
obligations under the related Administration Agreement and as reimbursement
for its expenses related thereto, the Administrator will be entitled to a
monthly administration fee in an amount equal to $100 per month, or such other
amount as may be set forth in the related Prospectus Supplement (the
"Administration Fee").
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
SECURITY INTEREST IN EQUIPMENT
The retail installment sale contracts and the loan contracts constitute
personal property security agreements and include grants of security interests
in the equipment under the applicable UCC. Perfection of security interests in
the equipment is generally governed by the laws of the state in which such
equipment (or the obligor, if the equipment constitutes mobile goods under the
UCC) is located. The UCC generally governs the perfection of such interests.
However, under the laws of certain states and under certain circumstances,
perfection of security interests in agricultural or industrial equipment is
generally governed by certificate of title registration laws of the state in
which such equipment is located.
All of such contracts acquired by JDCC name the applicable Sales Company as
obligee or assignee and as the secured party. The Sales Companies are
instructed to take all actions necessary under the laws of the state in which
the financed equipment is located to perfect their security interests in the
financed equipment, including the filing of financing statements in the
appropriate offices and, where applicable, having a notation of its lien
recorded on such equipment's certificate of title. Obligors are not notified
of the sale from the Sales Companies to JDCC. Furthermore, because either the
Servicer or the Sub-Servicer continues to service the contracts, the Obligors
are not notified of the sale from JDCC to the Seller and, in the ordinary
course, no action is taken to record the transfer of the security interest
from JDCC to the Seller by amendment of the financing statements or, if
applicable, the certificates of title for the financed equipment or otherwise.
To perfect its interests in the contracts, JDCC takes possession of the
contracts.
With respect to each Trust, pursuant to the related Purchase Agreement, JDCC
will sell and assign its interests in the equipment securing the related
Receivables to the Seller, and pursuant to the related Sale and Servicing
Agreement, the Seller will assign its interests in the equipment securing such
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Receivables to such Trust. However, because of the administrative burden and
expense, none of the Seller, the Servicer, the Sub-Servicer or the applicable
Owner Trustee will amend any financing statement or, if applicable, any
certificate of title to identify such Trust as the new secured party on the
financing statement or, if applicable, the certificate of title relating to
the equipment. Also, the Servicer will continue to hold any certificates of
title relating to the equipment in its possession as custodian for such Trust
pursuant to the related Sale and Servicing Agreement. See "Description of the
Transfer and Servicing Agreements--Sale and Assignment of Receivables". There
are certain limited circumstances under the UCC and applicable Federal law in
which prior or subsequent transferees of Receivables held by a Trust could
have an interest in such Receivables with priority over such Trust's interest.
A purchaser of the Receivables who gives new value and takes possession of the
instruments which evidence the Receivables (i.e., the chattel paper) in the
ordinary course of his or her business may, under certain circumstances, have
priority over the interest of such Trust in the Receivables. In addition,
while JDCC is the Servicer, cash collections on the Receivables will, under
certain circumstances, be commingled with the funds of JDCC and, in the event
of the bankruptcy of JDCC, the Trust may not have a perfected interest in such
collections.
In most states, an assignment such as that under each Purchase Agreement and
each Sale and Servicing Agreement is an effective conveyance of a security
interest without amendment of any lien perfected by a financing statement
relating to the equipment or, if applicable, noted on an equipment's
certificate of title, and the assignee succeeds thereby to the assignor's
rights as secured party. By not identifying a Trust as the secured party on
the financing statement or certificate of title, the security interest of such
Trust in the equipment could be defeated through fraud or negligence. In the
absence of error, fraud or forgery by the equipment owner or the Servicer or
the Sub-Servicer or administrative error by state or local agencies, the
proper initial filing of the financing statement relating to the equipment or,
if applicable, the notation of the relevant Sales Company's lien on the
certificates will be sufficient to protect such Trust against the rights of
subsequent purchasers of the equipment or subsequent lenders who take a
security interest in the equipment securing a Receivable. If there is any
equipment as to which the original secured party failed to obtain and assign
to JDCC a perfected security interest, the security interest of JDCC would be
subordinated to, among others, subsequent purchasers of the equipment and
holders of perfected security interests. Such a failure, however, would
constitute a breach of the warranties of the Servicer under the related
Purchase Agreement and would create an obligation of the Servicer to
repurchase the related Receivables unless the breach is cured. The Seller will
assign its rights pursuant to the related Purchase Agreement to the related
Trust. See "Description of the Transfer and Servicing Agreements--Sale and
Assignment of Receivables".
Under the laws of most states, the perfected security interest in personal
property would continue for four months after such property is moved to a
state other than the state in which a financing statement was filed initially
to perfect the security interest in such property, or, if applicable, in which
such property is initially registered. In the ordinary course of servicing
receivables, the Sub-Servicer takes steps to effect re-perfection upon receipt
of information from an obligor as to the relocation of any movable property.
In states where equipment is subject to certificate of title and
registration laws, to re-register the equipment the secured party which has
its lien noted on the equipment's certificate of title must either surrender
the certificate of title, or, in states where the secured party does not
physically hold the certificate of title, agree in writing to allow the re-
registration. The secured party would therefore have the opportunity to re-
perfect its security interest in the equipment being relocated or re-
registered.
Under each Sale and Servicing Agreement, the Servicer is obligated to take,
or to cause the Sub-Servicer to take, appropriate steps, at its own expense,
to maintain perfection of security interests in the equipment and is obligated
to repurchase the related Receivable if it fails to do so.
41
<PAGE>
Under the laws of most states, liens for repairs performed on the equipment
and liens for unpaid taxes take priority over even a perfected security
interest in such goods. Under each Sale and Servicing Agreement, the Servicer
will represent to the related Trust that, as of the date the related
Receivables are sold to such Trust, each security interest in Financed
Equipment is prior to all other present liens upon and security interests in
such Financed Equipment. However, liens for repairs or taxes could arise at
any time during the term of a Receivable. No notice will be given to the Owner
Trustee, the Indenture Trustee, Noteholders or Certificateholders in respect
of a given Trust in the event such a lien arises.
REPOSSESSION
In the event of default by obligors, the holder of the retail installment
sale or loan contract has all the remedies of a secured party under the UCC,
except where specifically limited (such as in Louisiana) by other state laws.
Among the UCC remedies, the secured party generally has the right to perform
self-help repossession unless such act would constitute a breach of the peace.
Self-help is the method employed by the Sub-Servicer in most cases and is
accomplished simply by retaking possession of the financed equipment. In the
event of default by the obligor, some jurisdictions require that the obligor
be notified of the default and be given a time period within which he may cure
the default prior to repossession. Generally, the right of reinstatement may
be exercised on a limited number of occasions in any one-year period. In cases
where the obligor objects or raises a defense to repossession, or if otherwise
required by applicable state law, a court order must be obtained from the
appropriate state court, and the equipment must then be repossessed in
accordance with that order.
NOTICE OF SALE; REDEMPTION RIGHTS
The UCC and other state laws generally require the secured party to provide
the obligor with reasonable notice of the date, time and place of any public
sale and/or the date after which any private sale of the collateral may be
held. The obligor generally has the right to redeem the collateral prior to
actual sale by paying the secured party the unpaid principal balance of the
obligation plus reasonable expenses for repossessing, holding and preparing
the collateral for disposition and arranging for its sale, plus, in some
jurisdictions, reasonable attorneys' fees, or, in some states, by payment of
delinquent installments or the unpaid balance.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS
The proceeds of resale of the equipment generally will be applied first to
the expenses of resale and repossession and then to the satisfaction of the
indebtedness. While some states impose prohibitions or limitations on
deficiency judgments if the net proceeds from resale do not cover the full
amount of the indebtedness, a deficiency judgment can be sought in those
states that do not prohibit or limit such judgments. However, the deficiency
judgment would be a personal judgment against the obligor for the shortfall,
and a defaulting obligor can be expected to have very little capital or
sources of income available following repossession. Therefore, in many cases,
it may not be useful to seek a deficiency judgment or, if one is obtained, it
may be settled at a significant discount.
Occasionally, after resale of the equipment and payment of all expenses and
all indebtedness, there is a surplus of funds. In that case, the UCC requires
the lender to remit the surplus to any holder of a lien with respect to the
equipment or if no such lien holder exists or there are remaining funds, the
UCC requires the lender to remit the surplus to the obligor.
Courts have applied general equitable principles to secured parties pursuing
repossession or litigation involving deficiency balances. These equitable
principles may have the effect of relieving an obligor from some or all of the
legal consequences of a default.
42
<PAGE>
In several cases, consumers have asserted that the self-help remedies of
secured parties under the UCC and related laws violate the due process
protections provided under the 14th Amendment to the Constitution of the
United States. Courts have generally upheld the notice provisions of the UCC
and related laws as reasonable or have found that the repossession and resale
by the creditor do not involve sufficient state action to afford
constitutional protection to consumers.
JDCC will warrant under each Purchase Agreement that each Receivable
complies with all requirements of applicable law in all material respects.
Accordingly, if an Obligor has a claim against the related Trust for violation
of any law and such claim materially and adversely affects such Trust's
interest in a Receivable, such violation would constitute a breach of the
warranties of JDCC under such Purchase Agreement and would create an
obligation of JDCC to repurchase the Receivable unless the breach is cured.
See "Description of the Transfer and Servicing Agreements--Sale and Assignment
of Receivables".
OTHER
In addition to the laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including federal bankruptcy laws and
related state laws, may interfere with or affect the ability of a lender to
realize upon collateral or enforce a deficiency judgment. For example, in a
Chapter 11, 12 or 13 proceeding under the federal bankruptcy law, a court may
prevent a lender from repossessing the equipment, and, as part of the
rehabilitation plan, reduce the amount of the secured indebtedness to the
market value of the equipment at the time of bankruptcy (as determined by the
court), leaving the party providing financing as a general unsecured creditor
for the remainder of the indebtedness. A bankruptcy court may also reduce the
monthly payments due under a contract or change the rate of interest and time
of repayment of the indebtedness.
CERTAIN TAX CONSIDERATIONS
Unless otherwise specified in the related Prospectus Supplement, the
Prospectus Supplement for each series of Notes and for each series of
Certificates will summarize, subject to the limitations stated therein,
federal income tax considerations relevant to the purchase, ownership and
disposition of such Notes and Certificates. Information will also be provided
with respect to the tax laws of the State of Iowa in the related Prospectus
Supplement because the servicing and collecting of the Receivables will take
place in Iowa.
[Legislation has been passed recently by Congress as part of the Seven Year
Balanced Budget Reconciliation Act of 1995 which creates a new type of
statutory tax entity called a financial asset securitization investment trust
(a "FASIT") that is designed to facilitate the securitization of debt
obligations. Broadly speaking, a FASIT will not be taxable under the current
legislation and instruments issued thereby will be treated as debt. If the
FASIT or similar legislation is ultimately enacted into law, a Trust for a
particular series of Securities may elect to be treated as a FASIT or similar
entity. Alternatively, under the proposed legislation, DRC could issue a
particular series of Securities and elect to be treated as a FASIT or similar
entity. If such an election is made by any Issuer, the tax consequences to
holders will be discussed in the applicable Prospectus Supplement.]
ERISA CONSIDERATIONS
Unless otherwise specified in the related Prospectus Supplement, the
Prospectus Supplement for each series of Notes will summarize, subject to the
limitations discussed therein, considerations under ERISA relevant to the
purchase of such Notes by employee benefit plans and the Prospectus Supplement
for each series of Certificates will summarize, subject to the limitations
discussed therein, considerations under ERISA relevant to the purchase of such
Certificates by employee benefit plans and individual retirement accounts.
43
<PAGE>
PLAN OF DISTRIBUTION
On the terms and conditions set forth in an underwriting agreement with
respect to the Notes of a given series relating to a Trust and an underwriting
agreement with respect to the Certificates of a given series, the Seller will
agree to cause the related Trust to sell to the underwriters named therein and
in the related Prospectus Supplement, and each of such underwriters will
severally agree to purchase, the principal amount of each class of Notes and
Certificates, as the case may be, of the related series set forth therein and
in the related Prospectus Supplement. On the terms and conditions set forth in
an underwriting agreement with respect to the Notes of a given series relating
to DRC (collectively, with the underwriting agreements referred to in the
preceding clause, the "Underwriting Agreements") DRC will agree to sell to the
underwriters named therein and in the related Prospectus Supplement, and each
of such underwriters will severally agree to purchase the principal amount of
each class of Notes of the related series set forth therein and in the related
Prospectus Supplement. In each of the Underwriting Agreements with respect to
any given series of Securities, the several underwriters will agree, subject
to the terms and conditions set forth therein, to purchase all the Notes and
Certificates, as the case may be, described therein which are offered hereby
and by the related Prospectus Supplement if any of such Notes and
Certificates, as the case may be, are purchased.
Each Prospectus Supplement will either (i) set forth the price at which each
class of Notes and Certificates, as the case may be, being offered thereby
will be offered to the public and any concessions that may be offered to
certain dealers participating in the offering of such Notes and Certificates,
as the case may be, or (ii) specify that the related Notes and Certificates,
as the case may be, are to be resold by the underwriters in negotiated
transactions at varying prices to be determined at the time of such sale.
After the initial public offering of any such Notes and Certificates, as the
case may be, such public offering prices and such concessions may be changed.
Each Underwriting Agreement will provide that the Seller, the Issuer and
JDCC, as the case may be, will indemnify the underwriters against certain
civil liabilities, including liabilities under the Securities Act, or
contribute to payments the several Underwriters may be required to make in
respect thereof.
Each Indenture Trustee (on behalf of the related Issuer) may, from time to
time, invest the funds in the related Trust Accounts in Eligible Investments
acquired from the underwriters.
Pursuant to each of the Underwriting Agreements with respect to a given
series of Securities, the closing of the sale of any class of Securities
subject to either thereof will be conditioned on the closing of the sale of
all other such classes subject to either thereof. The place and time of
delivery for the Securities in respect of which this Prospectus is delivered
will be set forth in the related Prospectus Supplement.
LEGAL OPINIONS
Certain legal matters relating to the Securities of any series will be
passed upon for the related Trust, the Seller, the Issuer and the Servicer, as
the case may be, by Shearman & Sterling, New York, New York, and by Richards,
Layton & Finger, Wilmington, Delaware, and for any underwriters by Brown &
Wood, New York, New York. Certain federal income tax and other matters will be
passed upon for the related Trust by Shearman & Sterling, and certain Iowa
state income tax and other matters will be passed upon for the related Trust
by Lane & Waterman, Davenport, Iowa.
44
<PAGE>
INDEX OF TERMS
Set forth below is a list of the defined terms used in this Prospectus and
the pages on which the definitions of such terms may be found herein.
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Administration Agreement................................................... 40
Administration Fee......................................................... 40
Administrator.............................................................. 40
Base Rate.................................................................. 25
Cede....................................................................... 13
Cedel...................................................................... 14
Cedel Participants......................................................... 28
Certificate Balance........................................................ 4
Certificate Distribution Account........................................... 33
Certificate Pool Factor.................................................... 16
Certificateholders......................................................... 4
Closing Date............................................................... 30
Collection Account......................................................... 7
Collection Period.......................................................... 7
Commission................................................................. 2
Commodity Indexed Securities............................................... 26
Company.................................................................... 18
Cooperative................................................................ 28
Currency Indexed Securities................................................ 26
Cut-off Date............................................................... 5
DTC........................................................................ 13
Dealer Agreements.......................................................... 15
Dealers.................................................................... 5
Deere...................................................................... 6
Deere Credit Services...................................................... 3
Definitive Certificates.................................................... 4
Definitive Notes........................................................... 29
Depositaries............................................................... 26
Depository................................................................. 19
ERISA...................................................................... 10
Early Amortization Event................................................... 8
Early Amortization Period.................................................. 8
Eligible Deposit Account................................................... 32
Eligible Institution....................................................... 32
Eligible Investments....................................................... 32
Euroclear.................................................................. 14
Euroclear Operator......................................................... 14
Euroclear Participants..................................................... 28
Exchange Act............................................................... 2
Financed Equipment......................................................... 5
Fixed Rate Securities...................................................... 25
Floating Rate Securities................................................... 25
Indenture.................................................................. 3
Indenture Trustee.......................................................... 3
Index...................................................................... 26
Indexed Commodity.......................................................... 26
Indexed Currency........................................................... 26
Indexed Principal Amount................................................... 26
Indexed Securities......................................................... 26
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Indirect Participants...................................................... 27
Insolvency Event........................................................... 37
Insolvency Laws............................................................ 11
Interest Rate.............................................................. 3
Investment Earnings........................................................ 32
Issuer..................................................................... 3
JDCC....................................................................... 3
John Deere................................................................. 6
Liquidated Receivables..................................................... 33
Mechanics' Lien............................................................ 9
Note Distribution Account.................................................. 32
Note Pool Factor........................................................... 16
Noteholders................................................................ 3
Obligors................................................................... 5
Owner Trustee.............................................................. 3
Participants............................................................... 19
Pass-Through Rate.......................................................... 4
Payment Date............................................................... 20
Pool Balance............................................................... 16
Purchase Agreement......................................................... 5
Purchase Amount............................................................ 31
Receivables................................................................ 1
Registration Statement..................................................... 2
Related Documents.......................................................... 23
Reserve Account............................................................ 6
Reserve Account Initial Deposit............................................ 6
Retail Notes............................................................... 18
Revolving Period........................................................... 8
Rules...................................................................... 27
Sale and Servicing Agreement............................................... 5
Sales Companies............................................................ 15
Scheduled Revolving Period Termination Date................................ 8
Securities Act............................................................. 2
Securityholders............................................................ 4
Seller..................................................................... 3
Servicer................................................................... 3
Servicer Default........................................................... 37
Servicing Fee Rate......................................................... 33
Spread..................................................................... 25
Spread Multiplier.......................................................... 25
Stock Index................................................................ 26
Stock Indexed Securities................................................... 26
Strip Certificates......................................................... 5
Strip Notes................................................................ 4
Sub-Servicer............................................................... 3
Terms and Conditions....................................................... 28
Transfer and Servicing Agreements.......................................... 30
Trust...................................................................... 3
Trust Accounts............................................................. 32
Trust Agreement............................................................ 3
UCC........................................................................ 12
Underwriting Agreements.................................................... 44
Wind Down Period........................................................... 8
</TABLE>
46
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH IN-
FORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE SELLER, THE SERVICER OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY-
ONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT
INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
----------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Reports to Securityholders................................................. S-2
Summary of Terms........................................................... S-3
Risk Factors............................................................... S-12
The Trust.................................................................. S-14
The Receivables Pool....................................................... S-15
The Seller and the Servicer................................................ S-21
Description of the Notes................................................... S-21
Description of the Certificates............................................ S-24
Description of the Transfer and Servicing Agreements....................... S-25
Certain Federal Income Tax Considerations.................................. S-33
Certain State Tax Considerations........................................... S-41
ERISA Considerations....................................................... S-42
Underwriting............................................................... S-43
Legal Opinions............................................................. S-44
Index of Terms............................................................. S-45
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Summary of Terms........................................................... 3
Risk Factors............................................................... 11
The Trusts................................................................. 14
The Trust Property......................................................... 14
The Receivables Pool....................................................... 15
Pool Factors and Trading Information....................................... 16
Use of Proceeds............................................................ 17
The Seller, Deere and the Servicer......................................... 17
Description of the Notes................................................... 19
Description of the Certificates............................................ 24
Certain Information Regarding the Securities............................... 25
Description of the Transfer and Servicing Agreements....................... 30
Certain Legal Aspects of the Receivables................................... 40
Certain Tax Considerations................................................. 43
ERISA Considerations....................................................... 43
Plan of Distribution....................................................... 44
Legal Opinions............................................................. 44
Index of Terms............................................................. 45
</TABLE>
----------------
UNTIL , (90 DAYS AFTER THE DATE OF THIS PROSPECTUS SUPPLEMENT),
ALL DEALERS EFFECTING TRANSACTIONS IN THE NOTES OR THE CERTIFICATES, WHETHER
OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PRO-
SPECTUS SUPPLEMENT AND A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS SUPPLEMENT AND A PROSPECTUS WHEN ACTING AS UN-
DERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
JOHN DEERE
OWNER
TRUST 199 -
Class A-1 Asset Backed Notes
Class A-2 Asset Backed Notes
[Floating Rate] Asset Backed Certificates
JOHN DEERE
RECEIVABLES, INC.
SELLER
JOHN DEERE
CAPITAL CORPORATION
SERVICER
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered, other than underwriting
discounts and commissions. All of the amounts shown are estimates, except the
SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee.......................................... $ 690,000
Legal fees and expenses....................................... 300,000
Accounting fees and expenses.................................. 120,000
Blue Sky fees and expenses.................................... 45,000
Rating agency fees............................................ 825,000
Owner Trustee fees and expenses............................... 60,000
Indenture Trustee fees and expenses........................... 60,000
Printing and engraving........................................ 175,000
Miscellaneous................................................. 50,000
----------
Total..................................................... $2,325,000
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware authorizes Registrant
to indemnify its directors and officers under specified circumstances. Article
Fourteenth of the restated certificate of incorporation of Registrant provides
in effect that Registrant shall provide certain indemnification of its
directors and officers.
Section 145 of the General Corporation Law of Delaware also authorizes Deere
& Company to indemnify persons who serve as directors or officers of
Registrant at the request of Deere & Company under specified circumstances.
Article Seventh of the restated certificate of incorporation of Deere &
Company provides in effect that Deere & Company shall provide certain
indemnification to such persons.
The directors and officers of John Deere Receivables, Inc. are insured,
under policies of insurance maintained by Deere & Company, within the limits
and subject to the limitations of the policies, against certain expenses in
connection with the defense of actions, suits or proceedings, to which they
are parties by reason of being or having been such directors or officers.
The forms of underwriting agreements filed as a part of Exhibit 1 to this
Registration Statement provide for indemnification of directors, officers, who
sign the Registration Statement and controlling persons of the Registrant by
the underwriters, and for indemnification of each underwriter and its
controlling persons by the Registrant, against certain liabilities. Similar
provisions are contained in agreements entered into between the Registrant and
groups of underwriters on past occasions.
ITEM 16. EXHIBITS
<TABLE>
<C> <S> <C>
1.1 --Form of Underwriting Agreement for the Notes (incorpo-
rated by reference to Exhibit 1.1 to registration state-
ment on Form S-3 no. 33-66922)
1.2 --Form of Underwriting Agreement for the Certificates (in-
corporated by reference to Exhibit 1.2 to registration
statement on Form S-3 no. 33-66922)
3.1 --Certificate of Incorporation of John Deere Receivables,
Inc. (incorporated by reference to Exhibit 3.1 to regis-
tration statement on Form S-1 no. 33-49802)
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S> <C>
3.2 --By-Laws of John Deere Receivables, Inc. (incorporated by
reference to Exhibit 3.2 to registration statement on
Form S-1 no. 33-49802)
3.3 --Form of Certificate of Trust of John Deere Owner Trust
199 - (included in Exhibit 4.3 hereto)
3.4 --Certificate of Incorporation of Deere Receivables
Corporation
3.5 --By-Laws of Deere Receivables Corporation
4.1 --Form of Indenture between the Trust and the Indenture
Trustee
4.2 --Form of Floating Rate Asset Backed Note issued by a
Trust (included in Exhibit 4.1 hereto)
4.3 --Form of Trust Agreement between John Deere Receivables,
Inc. and the Owner Trustee (incorporated by reference to
Exhibit 4.3 to registration statement on Form S-3 no. 33-
66922)
4.4 --Form of Indenture between Deere Receivables Corporation
and the Trustee
4.5 --Form of Floating Rate Asset Backed Note issued by Deere
Receivables Corporation (included in Exhibit 4.4 hereto)
5.1 --Opinion of Shearman & Sterling with respect to legality
5.2 --Opinion of Richards, Layton & Finger with respect to le-
gality
8.1 --Opinion of Shearman & Sterling with respect to tax mat-
ters
8.2 --Opinion of Lane & Waterman with respect to Iowa tax mat-
ters
23.1 --Consent of Shearman & Sterling (included in Exhibits 5.1
and 8.1 hereto)
23.2 --Consent of Richards, Layton & Finger (included in Ex-
hibit 5.2 hereto)
23.3 --Consent of Lane & Waterman (included in Exhibit 8.2
hereto)
24 --Power of Attorney (See page II-4)
25.1 --Statement of Eligibility under the Trust Indenture Act
of 1939 of the Indenture Trustee for John Deere Owner
Trust (Form T-1)
25.2 --Statement of Eligibility under the Trust Indenture Act
of 1939 of the Indenture Trustee for Deere Receivables
Corporation (Form T-1)
99.1 --Form of Sale and Servicing Agreement among John Deere
Receivables, Inc., John Deere Capital Corporation and the
Owner Trustee (incorporated by reference to Exhibit 99.1
to registration statement on Form S-3 no. 33-66922)
99.2 --Form of Purchase Agreement between John Deere Capital
Corporation and John Deere Receivables, Inc. (incorpo-
rated by reference to Exhibit 99.2 to registration state-
ment on Form S-3 no. 33-66922)
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(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;
II-2
<PAGE>
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on form S-3 or form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in this Registration Statement 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.
(c) 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 referred
to in Item 15 of this Registration Statement, 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 Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE COUNTY OF ROCK
ISLAND, STATE OF ILLINOIS, ON JUNE 21, 1996.
John Deere Receivables, Inc.
as originator of the Trust
(Registrant)
/s/ R. W. Lane
By___________________________________
R. W. Lane
President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
EACH PERSON SIGNING BELOW HEREBY APPOINTS F. S. COTTRELL, NATHAN J. JONES
AND R. W. LANE AND EACH OF THEM AS HIS OR HER ATTORNEY-IN-FACT TO EXECUTE AND
FILE SUCH AMENDMENTS TO THIS REGISTRATION STATEMENT AS SUCH ATTORNEY-IN-FACT
MAY DEEM APPROPRIATE.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ R. W. Lane June 21, 1996
- ------------------------------------
R. W. Lane Director, President and
Principal Executive Officer
and Principal Accounting
Officer
/s/ F. S. Cottrell June 21, 1996
- ------------------------------------
F. S. Cottrell Director and Secretary
/s/ D. L. Evans June 21, 1996
- ------------------------------------
D. L. Evans Director and Vice President
/s/ Paul E. Gipson June 21, 1996
- ------------------------------------
Paul E. Gipson Director and Vice President
/s/ Nathan J. Jones June 21, 1996
- ------------------------------------
Nathan J. Jones Director, Vice President and
Treasurer and Principal
Financial Officer
/s/ James S. Robertson June 21, 1996
- ------------------------------------
James S. Robertson Director and Vice President
</TABLE>
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE COUNTY OF ROCK
ISLAND, STATE OF ILLINOIS, ON JUNE 21, 1996.
Deere Receivables Corporation
(Registrant)
/s/ R. W. Lane
By______________________________
R. W. Lane
President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
EACH PERSON SIGNING BELOW HEREBY APPOINTS ROBERT W. LANE, NATHAN J. JONES
AND FRANK S. COTTRELL AND EACH OF THEM AS HIS OR HER ATTORNEY-IN-FACT TO
EXECUTE AND FILE SUCH AMENDMENTS TO THIS REGISTRATION STATEMENT AS SUCH
ATTORNEY-IN-FACT MAY DEEM APPROPRIATE.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ R. W. Lane June 21, 1996
- ------------------------------------
R. W. Lane Director, President,
Principal Executive Officer
and Principal Accounting
Officer
/s/ N. J. Jones June 21, 1996
- ------------------------------------
N. J. Jones Director, Vice President and
Treasurer, and Principal
Financial Officer
/s/ F. S. Cottrell
- ------------------------------------
F. S. Cottrell Director and Secretary June 21, 1996
</TABLE>
II-5
<PAGE>
EXHIBIT 3.4
CERTIFICATE OF INCORPORATION
OF
DEERE RECEIVABLES CORPORATION
FIRST. The name of the corporation is Deere Receivables Corporation.
SECOND. The address of its registered office in the State of Nevada is One
East First Street, in the City of Reno, County of Washoe. The name of its
registered agent at such address is The Corporation Trust Company of Nevada.
THIRD. The purpose of the corporation is limited to:
(i) to acquire, own, hold and otherwise deal with (A) accounts, accounts
receivable, other receivables, contract rights, chattel paper, instruments,
documents, notes and other indebtedness (collectively, "Receivables")
arising out of: agricultural and industrial equipment retail loan and
installment sales contracts; lawn and grounds care equipment retail
installment sale and loan contracts; recreational vehicle and recreational
marine product retail installment sale and loan contracts; wholesale
installment sale and loan contracts; revolving charge accounts of retail
customers; and credit card accounts of retail customers purchasing John
Deere equipment and other products; and (B) any interest in the equipment
and products, if any, relating to sales which gave rise to Receivables,
other security interests or liens and property subject thereto from time to
time purporting to secure payment of Receivables, and guarantees, insurance
and other agreements or arrangements of whatever character from time to
time supporting or securing payment of Receivables, whether pursuant to a
contract related to Receivables or otherwise (collectively, "Related
Security"); (ii) to borrow money and contract debts when necessary for the
transaction of its business, or for the exercise of its corporate rights,
privileges or franchises, or for any other lawful purpose of its
incorporation; to issue bonds, promissory notes, bills of exchange,
debentures, and other obligations and evidences of indebtedness, payable at
a specified time or times, or payable upon the happening of a specified
event or events, whether secured by mortgage, pledge or other security, or
unsecured, for money borrowed, or in payment for property purchased, or
acquired, or for any other lawful object; (iii) to guarantee, purchase,
hold, take, obtain, receive, subscribe for, own, use, dispose of, sell,
exchange, lease, lend, assign, mortgage, pledge, or otherwise acquire,
transfer or deal in or with bonds or obligations of, or shares, securities
or interest in or issued by, any person, government, governmental agency or
political subdivision of government, and to exercise all the rights, powers
and privileges of ownership of such an interest, including the right to
vote, if any; (iv) to purchase, hold, sell and transfer shares of its own
stock, and use therefor its property or money, except that shares of its
own stock belonging to the corporation must not be voted upon, directly or
indirectly, nor counted as outstanding, to compute any
<PAGE>
2
stockholders' quorum or vote; (v) to acquire, own, hold, and otherwise deal
with interest rate or foreign currency notional principal contracts,
letters of credit or other similar instruments; (vi) to sell and assign
Receivables and issue evidences of ownership or assignment in respect
thereof, and to secure the obligations of the corporation in connection
with such sales, assignments and ownership, with (and pledge and grant
liens on and security interests in) Receivables and Related Security
acquired from time to time by the corporation and by other assets and
properties which the corporation owns from time to time or in which it
otherwise has a right, title or interest; (vii) to invest cash balances on
an interim basis in certain short-term investments; (viii) to execute,
deliver and perform agreements evidencing, necessitated by or in connection
with any and all of the foregoing or any and all of the activities and
powers referred to in clause (x) below; and (x) to engage in activities
incidental to and necessary to accomplish the foregoing.
FOURTH. The total number of shares of stock which the corporation shall
have authority to issue is 1,000 all of which shall be voting common stock $1
par value.
FIFTH. The name and mailing address of the incorporator is as follows:
Name Mailing Address
---- ---------------
A. Paul Wilczynski Deere Administrative Center
John Deere Road
Moline, Illinois 61265
SIXTH: The corporation is to have perpetual existence.
SEVENTH: (1) The business and affairs of the corporation shall be managed
by or under the direction of the Board of Directors.
(2) Except as otherwise provided herein, the directors shall
have concurrent power with the stockholders to make, alter, amend, change, add
to or repeal the Bylaws of the corporation.
(3) The number of directors of the corporation shall be as from
time to time fixed by, or in the manner provided in, the Bylaws of the
corporation. Election of directors need not be by written ballot unless the
Bylaws so provide.
(4) To the fullest extent permitted by applicable law, including
the General Corporation Law of the State of Nevada (the "GCL"), as in effect
from time to time, the independent director's, if any, fiduciary duty in respect
of any decision on any matter referred to in the Eleventh Article shall be to
the corporation (including its creditors) rather than to the corporation's
stockholders.
<PAGE>
3
(5) In addition to the powers and authority hereinbefore or by statute
expressly conferred upon them, the directors are hereby empowered to exercise
all such powers and do all such acts and things as may be exercised or done by
the corporation, subject nevertheless, to the provisions of the GCL, this
Certificate of Incorporation and any Bylaws adopted by the stockholders;
provided, however, that no Bylaws hereafter adopted by the stockholders shall
invalidate any prior act of the directors which would have been valid if such
Bylaws had not been adopted.
(6) The corporation's funds and other assets will not be commingled
with those of any direct or ultimate parent of the corporation or any affiliate
of any such parent.
(7) The corporation will maintain separate corporate records and books
of account from those of any direct or ultimate parent of the corporation and
will account for and manage all of its liabilities separately from those of any
direct or ultimate parent of the corporation or any affiliate of any such
parent, including payment by the corporation of all payroll and other
administrative expenses and taxes from its own assets.
(8) The corporation will maintain its own separate telephone number,
invoices and letterhead.
(9) The names and business addresses of the first Board of Directors,
which shall be three in number, are as follows:
<TABLE>
<CAPTION>
NAME ADDRESS
- ---- -------
<S> <C>
F. S. Cottrell Deere Administration Center
John Deere Road
Moline, IL 61265
Nathan J. Jones Deere Administration Center
John Deere Road
Moline, IL 61265
R. W. Lane Deere Administration Center
John Deere Road
Moline, IL 61265
</TABLE>
EIGHTH: A director of the corporation shall not in the absence of fraud
be disqualified by his office from dealing or contracting with the corporation
either as a vendor, purchaser or otherwise, nor in the absence of fraud shall a
director of the corporation be
<PAGE>
4
liable to account to the corporation for any profit realized by him from or
through any transaction or contract of the corporation by reason of the fact
that he, or any firm of which he is a member, or any corporation of which he is
an officer, director or stockholder, was interested in such transaction or
contract if such transaction or contract has been authorized, approved or
ratified in the manner provided in the General Corporation Law of Nevada for
authorization, approval or ratification of transactions or contracts between the
corporation and one or more of its directors or officers, or between the
corporation and any other corporation, partnership, association, or other
organization in which one or more if its directors or officers are directors or
officers, or have a financial interest.
NINTH. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Nevada may, on the application in a summary way
of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of the GCL or on the application of trustees in dissolution or of
any receiver or receivers appointed for this corporation under the provisions of
the GCL, order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
TENTH. No director shall be personally liable to the corporation or any
of 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, fraud, or a knowing
violation of law, (iii) pursuant to Section 300 of Title 78 of the GCL or (iv)
for any transaction from which the director derived an improper personal
benefit. Any repeal or modification of this Article TENTH 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
with respect to acts or omissions occurring prior to such repeal or
modification.
ELEVENTH: Without (A) the unanimous vote of the entire Board of Directors
and (B) the affirmative vote of a majority of the stockholders of the
corporation entitled to vote thereon at a special meeting of stockholders of the
corporation, the corporation shall not take any corporate action in connection
with (i) any deletion, amendment, supplement or other modification with respect
to this Certificate of Incorporation; (ii) any amendment,
<PAGE>
5
supplement or other modification with respect to Article III Section 3, Article
III Section 10, Article IV Section 4, Article IV Section 5 and Article VII
Section 2 of the By-Laws of the corporation; (iii) the institution of any
proceeding by or against the corporation seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property, or seeking any assignment for the benefit of the corporation's
creditors, or any admission by the corporation in writing of its inability to
pay its debts generally as they become due or any corporation action in
furtherance of any of the foregoing; (iv) any increase, reduction or
reclassification of capital stock of, or any reduction in the capital of, the
corporation, or any issuance of additional shares of capital stock of the
corporation; (v) the conducting by the corporation of any business or activity
not permitted by the Third Article of this Certificate of Incorporation; (vi)
any conveyance, sale, transfer, lease or other disposition of (whether in one
transaction or in a series of transactions) all, or substantially all, of the
assets of the corporation (whether now owned or hereafter acquired) to, or the
purchase, lease or other acquisition of all or substantially all of the assets
(except for purchases, conveyances, sales, transfers, leases and other
acquisitions or dispositions of Receivables, Related Security and proceeds
thereof in the ordinary course of the corporation's business in accordance with
the Third Article of this Certificate of Incorporation); or (vii) any whole or
partial liquidation, winding up or dissolution of the corporation.
Notwithstanding any other provision of this Certificate of Incorporation or
any provision of law that otherwise so empowers the corporation, the corporation
will not take any corporate action in connection with (a) any merger of the
corporation into, or consolidation or amalgamation of the corporation with, any
other person or entity or (b) any merger of any other person or entity into the
Corporation unless all the following conditions are satisfied:
(1) the corporation formed by such consolidation, amalgamation or
merger (i) shall be a corporation organized and existing under the laws of the
United States of America, any state thereof or the District of Columbia, (ii)
shall have a certificate of incorporation containing provisions substantially
identical to the provisions of the Third Article of this Certificate of
Incorporation, and (iii) shall expressly assume the due and punctual payment and
performance of all obligations of the corporation in connection with all
indebtedness of the corporation;
(2) immediately after giving effect to such transaction, no default or
event of default shall have happened and be continuing under any agreement to
which the corporation is a party; and
(3) such action shall be authorized by (i) the affirmative vote of a
majority of the stockholders of the corporation entitled to vote thereon and
(ii) the unanimous vote of the entire Board of Directors.
<PAGE>
6
TWELFTH: The Board of Directors, by the affirmative vote of a majority of
the whole Board, and irrespective of any personal interest of its members, shall
have authority to provide reasonable compensation of all directors for services,
ordinary or extraordinary, to the corporation as directors, officers or
otherwise.
THIRTEENTH: Meetings of stockholders and directors may be held outside the
State of Nevada, if the Bylaws so provide. The books and records of the
corporation may be kept (subject to provisions contained in the statutes)
outside the State of Nevada.
FOURTEENTH: Each person who is or was a director or officer of the
corporation, and each person who serves or served at the request of the
corporation as a director or officer (or equivalent) of another enterprise,
shall be indemnified by the corporation to the fullest extent authorized by the
GCL as it may be in effect from time to time, except as to any action, suit or
proceeding brought by or on behalf of a director or officer without prior
approval of the Board of Directors.
<PAGE>
EXHIBIT 3.5
BYLAWS
------
DEERE RECEIVABLES CORPORATION
------------------------------
As Adopted March 7, 1996
ARTICLE 1 - IDENTIFICATION
--------------------------
SECTION 1. NAME. The name of the Company is Deere Receivables Corporation
(hereinafter referred to as the "Company").
SECTION 2. OFFICES. The address of the Company's registered office in
Nevada shall be in the City of Reno, County of Washoe, State of Nevada. The
Company may have such other offices both within and without the State of Nevada
as the Board of Directors may from time to time determine or business may
require.
SECTION 3. SEAL. The seal of the Company shall have inscribed thereon the
name of the Company, the words "Corporate Seal" and the words "Nevada
Corporation." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
SECTION 4. FISCAL. The fiscal year of the Company shall be fixed by
resolution of the Board of Directors.
ARTICLE II - THE SHAREHOLDERS
-----------------------------
SECTION 1. PLACE OF MEETINGS. Meetings of the stockholders for any purpose
may be held at such place within or without the State of Nevada as may be
designated by the President or the Board of Directors and stated in the notice
of meeting.
SECTION 2. ANNUAL MEETING. The annual meeting of the stockholders, at which
they shall elect directors and may transact such other business as may properly
be brought before the meeting, shall be held at 11:00 a.m., local time, on the
last Tuesday in February of each year, if such day is not a legal holiday, and
if a legal holiday, then on the first following day that is not a legal holiday.
The time and place of such meeting may be changed by the Board of Directors and
designated in the notice of the meeting.
SECTION 3. SPECIAL MEETINGS. Special meetings of the stockholders may be
called by the President or the Board of Directors.
SECTION 4. NOTICE OF MEETINGS. Notice of each meeting of stockholders,
stating the place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered at least ten days before the date of the meeting, either personally or
by mail, by or at the direction of the President or the Secretary to each
stockholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail
addressed to the stockholder at his
1
<PAGE>
address as it appears on the stock transfer books of the Company with postage
thereon prepaid. Notice of any meeting of stockholders may be waived in writing
signed by the stockholder entitled to such notice, whether before or after the
time of such meeting, and shall be equivalent to the giving of such notice.
Attendance of a stockholder at a meeting shall constitute a waiver of notice of
such meeting, except when the person attends a meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. The officer
who has charge of the stock ledger of the company shall prepare and make, at
least ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. 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 days prior to the meeting, either
at a place within the city 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 5. QUORUM. The holders of a majority of the shares entitled to
vote at any meeting of stockholders, present in person or by proxy, shall
constitute a quorum at such meeting except as otherwise provided by statute. If
a quorum shall not be present at a meeting of the stockholders, the holders of a
majority of the shares entitled to vote, present in person or by proxy, may
adjourn the meeting from time to time without notice other than announcement at
the meeting until a quorum shall be present or represented. At any such
adjourned meeting at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally called.
Whenever a quorum shall be present at any meeting all matters shall be decided
by vote of the holders of a majority of the shares present, unless otherwise
provided by statute or, in the case of election of directors, by these bylaws.
If the adjournment is for more than thirty days, or if after the adjournment a
new record date is fixed for the adjourned meeting, notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.
SECTION 6. REQUIRED VOTE. Each election of directors or others shall be
determined by a plurality vote, and, except as otherwise required by law or by
the certificate of incorporation, each other matter shall be determined by a
vote of a majority of the shares present in person or represented by proxy.
SECTION 7. VOTING AT MEETINGS. Each stockholder shall be entitled to one
vote in person or by proxy for each share of the capital stock having voting
power held by such stockholder, but no proxy shall be' voted after three years
from its date, unless the proxy provides for a longer period.
2
<PAGE>
SECTION 8. ORGANIZATION. The President of the Company or, in the event of
his absence or inability to act, a Vice President or in the absence or inability
to act of both, a director present, acting in such order of priority as shall be
designated by the President, shall preside as Chairman at each meeting of the
stockholders. The Secretary of the Company shall act as Secretary of each
meeting of the stockholders. In the event of his absence or inability to act,
the Chairman of the meeting shall appoint a person who need not be a stockholder
to act as Secretary of the meeting.
SECTION 9. ACTION WITHOUT A MEETING. Unless otherwise provided in the
certificate of incorporation, any action required or permitted to be taken at
any annual or special meeting of stockholders, may be taken without a meeting,
without prior notice and without a vote, if all the stockholders who would have
been entitled to vote upon the action if such meeting were held, shall consent
in writing to such corporate action being taken.
ARTICLE III - THE BOARD OF DIRECTORS
------------------------------------
SECTION 1. NUMBER AND QUALIFICATIONS. The business and affairs of the
Company shall be managed by a Board of SIX directors who need not be residents
of the State of Nevada or stockholders of the Company. The number of directors
may be increased or decreased from time to time by amendment of these Bylaws,
provided no decrease shall have the affect of shortening the term of any
incumbent director.
SECTION 2. ELECTION. Directors shall be elected at the annual meeting of
the stockholders, except as provided in Section 3 of this Article, and each
director elected shall hold office during the term for which he is elected and
until his successor is elected and qualified.
SECTION 3. VACANCIES. Any vacancies occurring in the Board of Directors
and newly created directorships resulting from any increase in the authorized
number of directors may be filled, subject to Article SEVENTH subpart (3) of the
certificate of incorporation, by a majority of the remaining directors though
less than a quorum of the Board of Directors, and the directors so chosen shall
hold office until the next annual election of directors and until their
successors are elected by the stockholders and are qualified.
SECTION 4. REGULAR MEETINGS. Regular meetings of the Board of Directors
may be held without notice at such time and at such place, either within or
without the State of Nevada as shall from time to time be determined by the
Board.
SECTION 5. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be held upon notice by letter, telegram, cable, or radio-gram, delivered for
transmission not later than during the third day immediately preceding the day
for such meeting, or by word of mouth, telephone, or radiophone, received not
later than the day immediately preceding the day for such meeting, upon call of
the President or other officer or upon call by the President or the Secretary
3
<PAGE>
at the request in writing of one-third of the directors then in office, at
company offices in Moline, Illinois or at any other place either within or
without the State of Nevada, approved by the Board of Directors or the
President. Notice of any special meeting of the Board of Directors may be waived
in writing signed by the person or persons entitled to such notice, whether
before or after the time of such meeting, and shall be equivalent to the giving
of such notice. Attendance of a director at such meeting shall constitute a
waiver of notice thereof, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because such
meeting is not lawfully convened. Neither the business to be transacted at, nor
the purpose of, any special meeting of the Board of Directors need be specified
in the notice, or waiver of notice, of such meeting.
SECTION 6. QUORUM. Two directors shall constitute a quorum for the
transaction of business. The act of a majority of the directors present at a
meeting at which a quorum is present shall be the act of the Board of Directors
except as otherwise provided by the statutes, the certificate of incorporation
or these Bylaws. During an emergency period following a catastrophe, a majority
of the surviving members of the Board of Directors who have not been rendered
incapable of acting as the result of physical or mental incapacity or the
difficulty of transportation to the place of the meeting shall constitute a
quorum for the purpose of filling vacancies in the Board of Directors and among
the elected officers of the Company, subject to Article SEVENTH subpart (3) of
the certificate of incorporation.
SECTION 7. ORGANIZATION. The President, or in the event of his absence or
inability to act, a Vice President or, in the event of the absence or inability
to act of both the President and Vice President, another director present,
acting in such order of priority as shall be designated by the President, shall
act as Chairman of each meeting of the Board of Directors.
SECTION 8. ACTIONS BY WRITTEN CONSENT. Any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if a written consent thereto is signed by all
members of the Board or of such committee as the case may be, and such written
consent is filed with the minutes of proceedings of the Board or such committee.
SECTION 9. PARTICIPATION WITH COMMUNICATIONS EQUIPMENT. Unless otherwise
restricted by law or by the certificate of incorporation or these Bylaws,
members of the Board of Directors, or of any committee designated by the Board
of Directors, may participate in a meeting of the Board of Directors, or of any
committee, by conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other.
4
<PAGE>
SECTION 10. COMMITTEES OF DIRECTORS. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees, each committee to consist of two or more of the directors of the
Company, which, to the extent provided in the resolution, shall have and may
exercise the powers of the Board of Directors in the management of the business
and affairs of the Company and may authorize the seal of the Company to be
affixed to all papers which may require it. Such committee shall have such name
or names as may be determined from time to time by resolution adopted by the
Board of Directors. The committees shall keep regular minutes of their
proceedings and report the same to the Board of Directors when required;
provided, however, that no such committee shall have such power or authority in
reference to approving the institution of any corporate action described in the
Eleventh Article of the Certificate of Incorporation.
ARTICLE IV - THE OFFICERS
-------------------------
SECTION 2. NUMBER AND QUALIFICATIONS. The principal officers of the
Company shall consist of a President, one or more Vice Presidents, a Secretary,
and a Treasurer; and the Company may have such other officers and assistant
officers as may be deemed necessary by the Board of Directors. Any number of
offices may be held by the same person.
SECTION 2. GENERAL DUTIES. All officers of the Company shall have such
authority and perform such duties in the management of the Company as may be
provided by or delegated in accordance with these bylaws, or as may be
determined by resolution of the Board of Directors not inconsistent with these
bylaws. All agents and employees of the Company not appointed by the Board of
Directors may be appointed by the President or by persons authorized by him to
do so, to serve for such time and to have such duties as the appointing
authority may determine from time to time.
SECTION 3. ELECTION AND TERM OF OFFICE. The officers shall be elected by
the Board of Directors. Each officer shall hold office for one year and until
his successor is elected and qualified, or until he shall have resigned or shall
have been removed in the manner provided in Section 4.
SECTION 4. REMOVAL. Any officer may be removed by the Board of Directors
whenever in its judgment the interests of the Company will be served thereby,
provided, that the independent officer required by Article SEVENTH subpart (3)
of the certificate of incorporation, shall not be removed until a similarly
qualified independent officer has been elected to take the first officer's
place. Such removal shall be without prejudice to the contract rights, if any,
of the person removed. Election of an officer shall not of itself create
contract rights.
5
<PAGE>
SECTION 5. RESIGNATIONS. Any officer may resign at any time by giving
written notice to the Board of Directors or to the President. Such resignation
shall take effect at the time specified therein and, unless specified therein,
the acceptance of such resignation shall not be necessary to make it effective,
provided, that the resignation of the independent officer required by Article
SEVENTH subpart (3) of the certificate of incorporation, shall not be accepted
until a similarly qualified independent officer has been elected to take the
first officer's place.
SECTION 6. VACANCIES. A vacancy in any office may be filled by the Board
of Directors.
SECTION 7. PRESIDENT. The President shall be the chief executive officer
of the Company and as such shall have the active executive management of the
operation of the Company, and shall see that the order and resolutions of the
Board of Directors are carried into effect. He shall have power to execute in
the name of the Company all bonds, contracts, other obligations and property
conveyances which are duly authorized, and he shall have all the powers and
perform all duties devolving upon him by law and as head of the Company. He may
call special meetings of the stockholders and of the Board of Directors. From
time to time he shall bring to the attention of the Board of Directors such
information or recommendations concerning the business and affairs of the
Company as he may deem necessary or appropriate. When present, he shall preside
at all meetings of the stockholders and of the Board of Directors.
SECTION 8. VICE PRESIDENTS. The Vice Presidents shall have such powers and
perform such duties as the Board of Directors may from time to time prescribe or
as the President may from time to time delegate to them. In the absence or
inability to act of the President, his duties shall be performed by the Vice
President designated by the President or the Board of Directors.
SECTION 9. SECRETARY. The Secretary shall act as Secretary of all meetings
of the stockholders and the Board of Directors, and of committees of the Board
of Directors. He shall prepare and keep or cause to be kept in books provided
for the purpose minutes of all meetings of the stockholders and the Board of
Directors; shall see that all notices are duly given in accordance with the
provisions of these Bylaws and as required by law; shall be custodian of the
records and of the seal of the Company and see that the seal is affixed to all
documents the execution of which on behalf of the Company under its seal is duly
authorized, and in general he shall perform all duties incident to the office of
Secretary and as required by law and such other duties as may be assigned to him
from time to time by the Board of Directors or by the President.
SECTION 10. TREASURER. The Treasurer shall have charge and custody of and
be responsible for, all moneys, notes and securities in the possession of the
Company, and deposit all funds in the name of the Company in such banks, trust
companies or other depositories as he may select; shall receive, and give
receipts for, moneys due and payable to the Company from any source whatsoever;
and in general he shall perform all the duties incident to the office of
Treasurer and as required by law and such other duties as may be assigned to him
from time to time by the Board of Directors or by the President.
6
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SECTION 11. OTHER OFFICERS. Other officers and assistant officers elected
by the Board of Directors shall have such authority and perform such duties as
may be determined by resolution of the Board of Directors.
ARTICLE V - ACTS WITH RESPECT TO SECURITIES OWED
------------------------------------------------
SECTION 1. ENDORSEMENT OF SECURITIES. Subject always to the specific
directions of the Board of Directors, any security or securities owned by the
Company (including reacquired shares of capital stock of the Company) may, for
sale or transfer, be endorsed in the name of the Company by the President or
Treasurer, and may be attested by the Secretary either with or without affixing
thereto the corporate seal.
SECTION 2. VOTING OF SHARES OWNED. Subject always to the specific
direction of the Board of Directors, any share or shares of stock issued by any
other corporation and owned or controlled by the Company may be voted at any
stockholders' meeting of such other corporation by the President of the Company,
if he be present at such meeting, or in his absence by the Treasurer of the
Company. Whenever, in the judgment of the President, it is desirable for the
Company to execute a proxy or give a stockholders' consent in respect to any
share or shares of stock issued by any other corporation and owned or controlled
by the Company, such proxy or consent shall be executed in the name of the
Company by such officer of the Company without necessity of any further
authorization of the Board of Directors. Any person or persons designated in
the manner above stated as the proxy or proxies of the Company shall have full
right, power and authority to vote the share or shares of stock issued by such
other corporation and owned or controlled by the Company.
ARTICLE VI - STOCK CERTIFICATES
-------------------------------
SECTION 1. CERTIFICATES OF STOCK. The shares of the Company may be
represented by a certificate or may be uncertificated. Certificates to evidence
ownership of stock of the Company shall be issued in such form as the Board of
Directors shall from time to time approve. Any or all of the signatures on a
certificate may be facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
SECTION 2. LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Company alleged to have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in
7
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such manner as it shall require or to give the Company a bond in such sum as it
may direct as indemnity against any claim that may be made against the Company
in connection with the certificate alleged to have been lost, stolen or
destroyed, or both.
SECTION 3. REGISTRATION OF TRANSFERS. Upon surrender to the Company or the
transfer agent of the Company of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, the Company or its transfer agent shall issue a new certificate to the
person entitled thereto, cancel the old certificate and record the transaction
upon its stock records.
SECTION 4. RECORD DATE. In order that the Company may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
SECTION 5. REGISTERED STOCKHOLDERS. The Company shall be entitled to
recognize the exclusive right of a person registered in its stock records as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such shares or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise required
by law.
ARTICLE VII - OTHER PROVISIONS
------------------------------
SECTION 1. LOANS. No loan shall be made to any director or officer of the
Company and no loan shall be made to anyone secured by shares of the Company's
capital stock.
SECTION 2. AMENDMENTS. Except as otherwise provided herein, these Bylaws
(other than those in Article III Section 3, Article III Section 10, Article IV
Section 4, Article IV Section 5, Article VII Section 2 and Article VII Section
5) may be altered or repealed by the Board of Directors, by majority vote at any
regular or special meeting at which a quorum is present. ARTICLE III Section 3,
Article III Section 10, ARTICLE IV Section 4, ARTICLE IV Section 5 and Article
VII Section 2 shall not be amended or otherwise modified except as described in
the Eleventh Article of the Certificate of Incorporation. Article VII Section 5
shall not be amended or otherwise modified except by the unanimous vote of the
entire Board of Directors of the Company.
8
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SECTION 3. DIVIDENDS. Dividends upon the capital stock of the Company,
subject to the provisions of the certificate of incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the certificate of incorporation and
requirements of law.
SECTION 4. SIGNATURES ON CHECKS AND NOTES. All checks or demands for money
and notes of the Company shall be signed by such officer or officers or such
other person or persons as the Board of Directors may from time to time
designate.
SECTION 5. BANKRUPTCY PROCEEDINGS. The Company shall not, without the consent
of at least one of its Independent Directors, institute against or join in any
institution against, any entity in which the Company holds an ownership interest
any bankruptcy, insolvency, liquidation, reorganization or arrangement
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law.
9
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
JOHN DEERE OWNER TRUST 199_-_
Class A-1 Floating Rate Asset Backed Notes
Class A-2 Floating Rate Asset Backed Notes
--------------------------
INDENTURE
Dated as of ______, 199_
--------------------------
THE BANK OF NEW YORK
Indenture Trustee
- --------------------------------------------------------------------------------
Draft: March 11, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions and Incorporation by Reference
<TABLE>
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Page
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<S> <C> <C>
SECTION 1.01. Definitions...................................... 2
SECTION 1.02. Incorporation by Reference of Trust
Indenture Act................................... 11
SECTION 1.03. Rules of Construction............................ 11
SECTION 1.04. Calculations of Interest......................... 12
ARTICLE II
The Notes
SECTION 2.01. Form............................................. 12
SECTION 2.02. Execution, Authentication and Delivery........... 12
SECTION 2.03. Temporary Notes.................................. 13
SECTION 2.04. Registration; Registration of Transfer
and Exchange.................................... 13
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes....... 14
SECTION 2.06. Persons Deemed Owner............................. 15
SECTION 2.07. Payment of Principal and Interest; Defaulted
Interest........................................ 16
SECTION 2.08. Cancellation..................................... 17
SECTION 2.09. Release of Collateral............................ 17
SECTION 2.10. Book-Entry Notes................................. 17
SECTION 2.11. Notices to Clearing Agency....................... 18
SECTION 2.12. Definitive Notes................................. 18
ARTICLE III
Covenants
SECTION 3.01. Payment of Principal and Interest................ 19
SECTION 3.02. Maintenance of Office or Agency.................. 19
SECTION 3.03. Money for Payments To Be Held in Trust........... 19
SECTION 3.04. Existence........................................ 21
SECTION 3.05. Protection of Trust Estate....................... 21
SECTION 3.06. Opinions as to Trust Estate...................... 22
SECTION 3.07. Performance of Obligations; Servicing
</TABLE>
i
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<TABLE>
<CAPTION>
<S> <C> <C>
of Receivables.................................. 22
SECTION 3.08. Negative Covenants............................... 24
SECTION 3.09. Annual Statement as to Compliance................ 25
SECTION 3.10. Issuer May Consolidate, etc.,
Only on Certain Terms........................... 25
SECTION 3.11. Successor or Transferee.......................... 27
SECTION 3.12. No Other Business................................ 27
SECTION 3.13. No Borrowing..................................... 27
SECTION 3.14. Servicer's Obligations........................... 28
SECTION 3.15. Guarantees, Loans, Advances and
Other Liabilities............................... 28
SECTION 3.16. Capital Expenditures............................. 28
SECTION 3.17. Removal of Administrator......................... 28
SECTION 3.18. Restricted Payments.............................. 28
SECTION 3.19. Notice of Events of Default...................... 28
SECTION 3.20. Further Instruments and Acts..................... 28
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture.......... 29
SECTION 4.02. Application of Trust Money....................... 30
SECTION 4.03. Repayment of Moneys Held by Paying Agent......... 30
ARTICLE V
Remedies
SECTION 5.01. Events of Default................................ 31
SECTION 5.02. Acceleration of Maturity; Rescission
and Annulment................................... 32
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee................ 33
SECTION 5.04. Remedies; Priorities............................. 35
SECTION 5.05. Optional Preservation of the Receivables......... 36
SECTION 5.06. Limitation of Suits.............................. 36
SECTION 5.07. Unconditional Rights of Noteholders To
Receive Principal and Interest.................. 37
SECTION 5.08. Restoration of Rights and Remedies............... 37
SECTION 5.09. Rights and Remedies Cumulative................... 37
SECTION 5.10. Delay or Omission Not a Waiver................... 38
SECTION 5.11. Control by Noteholders........................... 38
</TABLE>
ii
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<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 5.12. Waiver of Past Defaults.......................... 38
SECTION 5.13. Undertaking for Costs............................ 39
SECTION 5.14. Waiver of Stay or Extension Laws................. 39
SECTION 5.15. Action on Notes.................................. 39
SECTION 5.16. Performance and Enforcement of Certain
Obligations..................................... 40
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee...................... 41
SECTION 6.02. Rights of Indenture Trustee...................... 42
SECTION 6.03. Individual Rights of Indenture Trustee........... 43
SECTION 6.04. Indenture Trustee's Disclaimer................... 43
SECTION 6.05. Notice of Defaults............................... 43
SECTION 6.06. Reports by Indenture Trustee to Holders.......... 43
SECTION 6.07. Compensation and Indemnity....................... 43
SECTION 6.08. Replacement of Indenture Trustee................. 44
SECTION 6.09. Successor Indenture Trustee by Merger............ 45
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.... 45
SECTION 6.11. Eligibility; Disqualification.................... 47
SECTION 6.12. Preferential Collection of Claims
Against Issuer.................................. 47
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names
and Addresses of Noteholders.................... 47
SECTION 7.02. Preservation of Information; Communications
to Noteholders.................................. 47
SECTION 7.03. Reports by Issuer................................ 48
SECTION 7.04. Reports by Indenture Trustee..................... 48
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money.............................. 49
SECTION 8.02. Trust Accounts................................... 49
SECTION 8.03. General Provisions Regarding Accounts............ 50
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 8.04. Release of Trust Estate.......................... 51
SECTION 8.05. Opinion of Counsel............................... 51
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent
of Noteholders.................................. 51
SECTION 9.02. Supplemental Indentures with Consent
of Noteholders.................................. 53
SECTION 9.03. Execution of Supplemental Indentures............. 54
SECTION 9.04. Effect of Supplemental Indenture................. 54
SECTION 9.05. Conformity with Trust Indenture Act.............. 55
SECTION 9.06. Reference in Notes to Supplemental Indentures.... 55
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption....................................... 55
SECTION 10.02. Form of Redemption Notice........................ 56
SECTION 10.03. Notes Payable on Redemption Date................. 56
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions, etc........ 56
SECTION 11.02. Form of Documents Delivered to
Indenture Trustee............................... 58
SECTION 11.03. Acts of Noteholders.............................. 59
SECTION 11.04. Notices, etc., to Indenture Trustee,
Issuer and Rating Agencies...................... 60
SECTION 11.05. Notices to Noteholders; Waiver................... 60
SECTION 11.06. Alternate Payment and Notice Provisions.......... 61
SECTION 11.07. Conflict with Trust Indenture Act................ 61
SECTION 11.08. Effect of Headings and Table of Contents......... 61
SECTION 11.09. Successors and Assigns........................... 61
SECTION 11.10. Separability..................................... 62
SECTION 11.11. Benefits of Indenture............................ 62
SECTION 11.12. Legal Holidays................................... 62
SECTION 11.13. GOVERNING LAW.................................... 62
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 11.14. Counterparts..................................... 62
SECTION 11.15. Recording of Indenture........................... 62
SECTION 11.16. Trust Obligation................................. 62
SECTION 11.17. No Petition...................................... 63
SECTION 11.18. Inspection....................................... 63
EXHIBITS
Testimonium, Signatures and Seals Acknowledgments
Exhibit A Schedule of Receivables
Exhibit B Form of Sale and Servicing Agreement
Exhibit C Form of Depository Agreement
Exhibit D Form of Class A-1 Note
Exhibit E Form of Class A-2 Note
Exhibit F Form of Transferee Certificate
</TABLE>
v
<PAGE>
INDENTURE dated as of _______, 199__, between JOHN DEERE OWNER TRUST
199_-_, a Delaware business trust (the "Issuer"), and THE BANK OF NEW YORK, a
New York banking corporation, solely as trustee and not in its individual
capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer's Class A-1 Floating
Rate Asset Backed Notes (the "Class A-1 Notes") and Class A-2 Floating Rate
Asset Backed Notes (the "Class A-2 Notes" and together with the Class A-1 Notes,
the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Holders of the Notes, all of the Issuer's
right, title and interest in and to (a) the Receivables and all moneys due
thereon on or after the Cut-off Date; (b) the security interests in the Financed
Equipment granted by Obligors pursuant to the Receivables and any other interest
of the Issuer in the Financed Equipment; (c) any proceeds with respect to the
Receivables from claims on any physical damage, credit life or disability
insurance policies covering Financed Equipment or Obligors; (d) the Purchase
Agreement, including the right assigned to the Issuer to cause JDCC to
repurchase Receivables from the Seller under certain circumstances; (e) all
funds on deposit from time to time in the Trust Accounts, including the Reserve
Account Initial Deposit, and in all investments and proceeds thereof (including
all income thereon); (f) the Sale and Servicing Agreement (including all rights
of the Seller under the Purchase Agreement assigned to the Issuer pursuant to
the Sale and Servicing Agreement); and (g) all present and future claims,
demands, causes and choses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds of
the conversion, voluntary or involuntary, into cash or other liquid property,
all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of obligations
and receivables, instruments and other property which at any time constitute all
or part of or are included in the proceeds of any of the foregoing
(collectively, the "Collateral").
<PAGE>
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 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, and accepts the trusts under this Indenture
in accordance with the provisions of this Indenture for the use and benefit of
such Holders.
ARTICLE I
Definitions and Incorporation by Reference
------------------------------------------
SECTION 1.01. Definitions. 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" has the meaning specified in Section 11.03(a).
"Administration Agreement" means the Administration Agreement dated as
of ________,199_, among the Administrator, the Issuer and the Indenture Trustee.
"Administrator" means the administrator under the Administration
Agreement.
"Affiliate" means, with respect to any specified Person, 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" and
"controlled" have meanings correlative to the foregoing.
"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,
containing the specimen signature of each such Person, 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 Assistant Treasurer, 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 (containing the specimen signatures of such
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);
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provided, however, that for purposes of Section 3.09 and Section 1(a)(J) of the
Administration Agreement such officer of the Administrator must be any of the
chief executive officer, chief financial officer or chief accounting officer.
"Basic Documents" means the Certificate of Trust, the Trust Agreement,
the Purchase Agreement, the Sale and Servicing Agreement, the Administration
Agreement, the Depository Agreement and other documents and certificates
delivered in connection therewith.
"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 2.10.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in The City of New York are
authorized or obligated by law, regulation or executive order to remain closed.
"Certificate" has the meaning assigned to it in the Trust Agreement.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit A to the Trust Agreement.
"Class A-1 Note" means a Class A-1 Floating Rate Asset-Backed Note,
substantially in the form of Exhibit D.
"Class A-1 Note Interest Rate" means, for a Payment Date, LIBOR for
such Payment Date minus ________.
"Class A-2 Note" means a Class A-2 Floating Rate Asset Backed Note,
substantially in the form of Exhibit E.
"Class A-2 Note Interest Rate" means, for a Payment Date, LIBOR for
such Payment Date plus ____% and (ii) _____%; provided, however, that if the
weighted average Net APR for the Receivables during the Collection Period
immediately preceding such Payment Date is less than or equal to the Class A-2
Note Interest Rate (computed without giving effect to this proviso) plus _____%,
then the Class A-2 Note Interest Rate for such Payment Date shall equal such
weighted average Net APR minus ______%.
"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
3
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transfers and pledges of securities deposited with the Clearing Agency.
"Closing Date" means ________, 199__.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"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 the date of the execution of this Agreement is
located at 101 Barclay Street, New York, NY 10286, Attention: Corporate Trustee
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" has the meaning specified in Section 2.10.
"Depository Agreement" means the agreement among the Issuer, the
Indenture Trustee, the Administrator and The Depository Trust Company, as the
initial Clearing Agency, dated as of the Closing Date, substantially in the form
of Exhibit C.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"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.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, 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
4
<PAGE>
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" or "Noteholder" means the Person in whose name a Class A-1
Note or a Class A-2 Note is registered on the Note Register.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Indenture Trustee" means The Bank of New York, a New York banking
corporation, 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 (a) is in fact independent of the Issuer, any other obligor upon
the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"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, 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.
"Issuer" means John Deere Owner Trust 199_-_ until a successor replaces
it and, thereafter, means the successor and, for purposes of any provision
contained herein and required by the TIA, each other obligor on the Notes.
"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.
"JDCC" means John Deere Capital Corporation, a Delaware corporation,
and its successor.
"LIBOR" with respect to any Payment Date shall be established by the
Indenture Trustee and shall equal the rate for deposits in U.S. dollars for one
month which
5
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appears on Telerate Page 3750 (as defined below) as of 11:00 A.M., London time,
on the second LIBOR Business Day prior to the immediately preceding Payment Date
(or, in the case of the initial Payment Date, the second LIBOR Business Day
prior to the Closing Date). "Telerate Page 3750" means the display page
currently so designated on the Dow Jones Telerate Service (or such other page as
may replace that page on that service for the purpose of displaying comparable
rates or prices). If such rate does not appear on Telerate Page 3750, the rate
with respect to such Payment Date will be determined on the basis of the rates
at which deposits in U.S. dollars are offered at approximately 11:00 a.m.,
London time, on the second LIBOR Business Day prior to the immediately preceding
Payment Date to prime banks in the London interbank market for a period equal to
one month (commencing on such Payment Date) by four major banks in the London
interbank market selected by the Indenture Trustee (after consultation with the
Seller) (the "Reference Banks"). The Indenture Trustee will request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. If at least two such quotations are provided, the rate for such
Payment Date will be the arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for such date will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Indenture Trustee (after consultation with the Seller), at approximately
11:00 a.m., New York City time, on such immediately preceding Payment Date for
loans in U.S. dollars to leading European banks for a period equal to one month;
provided, however, that if such banks are not quoting as described above, LIBOR
will be the LIBOR applicable to the immediately preceding Payment Date. "LIBOR
Business Day" is a day that is both a Business Day and a day on which banking
institutions in the City of London, England are not required or authorized by
law to be closed.
"Net APR" means, with respect to a Receivable, its APR less the
Servicing Fee Rate.
"Note Interest Rate" means the per annum interest rate borne by a Note.
"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).
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.04.
"Notes" means the Class A-1 Notes and the Class A-2 Notes.
"Officers' 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
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specified, any reference in this Indenture to an Officers' Certificate shall be
to an Officers' 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 employees of
or counsel to the Issuer and who shall be acceptable to the Indenture Trustee,
and which opinion or opinions shall be addressed to the Indenture Trustee as
Indenture Trustee, and shall comply with any applicable requirements of Section
11.01.
"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 therefor,
satisfactory to the Indenture Trustee); 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 that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned by
the Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any
of the foregoing Persons 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 the Indenture Trustee 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 Seller
or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes,
or a Class of Notes, as applicable, Outstanding at the date of determination.
"Owner Trustee" means Chemical Bank Delaware not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, or any successor
Owner Trustee under the Trust Agreement.
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"Paying Agent" means the Indenture Trustee, The Bank of New York or any
Person that meets the eligibility standards for the Indenture Trustee specified
in Section 6.11 and is authorized by the Issuer to make the payments to and
distributions from the Collection Account and the Note Distribution Account,
including payment of principal of or interest on the Notes on behalf of the
Issuer.
"Payment Date" means the 15th day of each month, or, if any such date
is not a Business Day, the next succeeding Business Day, commencing May 15,
1995.
"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.
"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.
"Rating Agency" means Moody's, Standard & Poor's, Fitch and Duff &
Phelps. If no such organization or successor is any longer in existence,
"Rating Agency" shall be a nationally recognized statistical rating organization
or other comparable Person designated by the Issuer, notice of which designation
shall be given to the Indenture Trustee, the Owner Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days prior notice thereof and that each
of the Rating Agencies shall have notified the Seller, the Servicer and the
Issuer in writing that such action will not result in a reduction or withdrawal
of the then current rating of the Notes.
"Record Date" means, with respect to a Payment Date or Redemption Date,
the close of business on the fourteenth day of the calendar month in which such
Payment Date or Redemption Date occurs.
"Redemption Date" means the Payment Date specified by the Servicer or
the Issuer pursuant to Section 10.01(a) or (b), as applicable.
"Redemption Price" means (a) in the case of a redemption of the Class
A-2 Notes pursuant to Section 10.01(a), an amount equal to the principal amount
of the Class A-2 Notes redeemed plus accrued and unpaid interest thereon at the
related Note Interest Rate to
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but excluding the Redemption Date, or (b) 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 (a)
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 of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary, or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
dated as of _______, 199__ among the Issuer, the Seller and the Servicer, in the
form of Exhibit B.
"Schedule of Receivables" means the listing of the Receivables set
forth in Exhibit A (which Exhibit may be in the form of microfiche).
"State" means any one of the 50 states of the United States of America
or the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.07(e).
"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest of
this Indenture for the benefit of the Noteholders (including, without
limitation, all property and interests Granted to the Indenture Trustee),
including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force on the date hereof, unless otherwise specifically provided.
"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, the following terms have the respective meanings set forth in
the Sale and Servicing Agreement as in effect on the Closing Date for all
purposes of this Indenture, and the definitions of such terms are equally
applicable both to the singular and plural forms of such terms:
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<TABLE>
<CAPTION>
Section of Sale and
Term Servicing Agreement
- ---- -------------------
<S> <C>
APR Section 1.01
Certificate Section 1.01
Certificateholders Section 1.01
Class A-2 Final
Scheduled Payment Date Section 1.01
Collection Account Section 1.01
Collection Period Section 1.01
Contract Section 1.01
Cut-off Date Section 1.01
Dealers Section 1.01
Depositor Section 1.01
Duff & Phelps Section 1.01
Eligible Deposit Account Section 1.01
Eligible Investments Section 1.01
Financed Equipment Section 1.01
Fitch Section 1.01
Initial Pool Balance Section 1.01
Moody's Section 1.01
Note Distribution Account Section 1.01
Noteholders' Distributable
Amount Section 1.01
Obligor Section 1.01
Pool Balance Section 1.01
Purchase Agreement Section 1.01
Purchased Receivable Section 1.01
Receivable Section 1.01
Recoveries Section 1.01
Reserve Account Section 1.01
Reserve Account Initial
Deposit Section 1.01
Seller Section 1.01
Servicer Section 1.01
Servicer Default Section 1.01
Servicing Fee Rate Section 1.01
Specified Reserve
Account Balance Section 1.01
Standard & Poor's Section 1.01
Total Distribution Amount Section 1.01
Transfer Date Section 1.01
Trust Accounts Section 1.01
</TABLE>
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<PAGE>
Trust Agreement Section 1.01
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.
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 exclusive;
(iv) "including" means "including without limitation"; and
(v) words in the singular include the plural and words in the plural
include the singular.
SECTION 1.04. Calculations of Interest. All calculations of interest
in respect of the Class A-1 Notes and the Class A-2 Notes made hereunder shall
be computed on the basis of a 360 day year and the actual number of days in the
related period of accrual.
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ARTICLE II
The Notes
---------
SECTION 2.01. Form. The Class A-1 and Class A-2 Notes, in each case
together with the Indenture Trustee's certificate of authentication, shall be in
substantially the forms set forth in Exhibits D and E, respectively, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and 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.
The 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.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibits D and E 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 Issuer Order authenticate and deliver
Class A-1 Notes for original issue in an aggregate principal amount of
$________and Class A-2 Notes for original issue in an aggregate principal amount
of $________. The aggregate principal amount of Class A-1 and Class A-2 Notes
outstanding at any time may not exceed such amounts, respectively, except as
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 thereof.
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
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<PAGE>
substantially in the form provided for herein executed 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 definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
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 definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for 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 temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like 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 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 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, if the
requirements of Section 8-401(1) of the UCC are met the Issuer shall execute,
and the Indenture Trustee shall
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<PAGE>
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 principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, if the requirements of
Section 8-401(1) of the UCC are met the Issuer shall execute, and the Indenture
Trustee 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 the form of Exhibit F hereto, 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 of New York or 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 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 or 9.06 not involving any transfer.
The preceding provisions of this Section 2.04 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.
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 it 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,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and deliver, in
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<PAGE>
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note of the same Class; provided, however, 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 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) 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 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
agent of the Issuer or the Indenture Trustee 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 neither the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.
(a) The Notes shall accrue interest as provided in the forms of the Class A-1
Note and Class A-2 Note set forth in Exhibits D and E, respectively, and such
interest shall be payable on each Payment Date as specified therein. 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 Payment
Date
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<PAGE>
shall be paid to the Person in whose name such Note (or one or more Predecessor
Notes) is registered on the Record Date, by check mailed first-class, postage
prepaid to such Person's address as it appears on the Note Register on such
Record Date, except that, unless Definitive Notes have been issued pursuant to
Section 2.12, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payment will be made by wire transfer in immediately available funds to the
account designated by such nominee and except for the final installment of
principal payable with respect to such Note on a Payment Date (and except for
the Redemption Price for any Note called for redemption pursuant to Section
10.01(a)) which shall be payable as provided below. The funds represented by any
such checks returned undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on
each Payment Date as provided in the forms of the Class A-1 Note and Class A-2
Note set forth in Exhibits D and E, respectively. 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, if the Indenture Trustee or the Holders of the
Notes representing not less than a majority of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable 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. Upon notice
to the Indenture Trustee by the Issuer, 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 Payment 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 no later than five Business Days prior to such final Payment
Date 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 (plus interest on such defaulted interest at
a rate per annum equal to the sum of (i) the applicable Note Interest Rate and
(ii) 2.0%, to the extent lawful) in any lawful manner. The Issuer may pay such
defaulted interest and interest on such defaulted interest to the persons who
are Noteholders on a subsequent special record date, which date shall be at
least five Business Days prior to the payment date. The Issuer shall fix or
cause to be fixed any such special record date and payment date, and, at least
10 days before any such special record date, the Issuer shall mail to each
Noteholder a notice that states the special record date, the payment date and
the amount of defaulted interest and interest on such defaulted interest to be
paid.
SECTION 2.08. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the
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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. Release of Collateral. Subject to Section 11.01, the
Indenture Trustee shall release property from the lien of this Indenture only
upon receipt of an Issuer Request accompanied by an Officers' Certificate, an
Opinion of Counsel and Independent Certificates in accordance with TIA (S)(S)
314(c) and 314(d)(l) or an Opinion of Counsel in lieu of such Independent
Certificates to the effect that the TIA does not require any such Independent
Certificates.
SECTION 2.10. 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 The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Issuer. Such Note shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner will receive a Definitive Note (as
hereinafter defined) representing such Note Owner's interest in such Note,
except as provided in Section 2.12. Unless and until definitive, fully
registered Notes (the "Definitive Notes") have been issued to Note Owners
pursuant to Section 2.12:
(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 Note Owners;
(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;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants. Pursuant to the Depository Agreement, unless
and until Definitive Notes are issued
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<PAGE>
pursuant to Section 2.12, the initial 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 Holders of Notes evidencing a
specified percentage of the Outstanding Amount of the Notes, 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 2.11. 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 Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Holders of the Notes to the Clearing Agency, and
shall have no obligation to the Note Owners or other Holders of the Notes.
SECTION 2.12. Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Notes, and
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 or a Servicer Default, Note Owners
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the Notes advise the Clearing Agency in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Note Owners, then the Clearing Agency shall notify all
Note Owners and the Indenture Trustee of the occurrence of any such event and of
the availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten 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 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, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
ARTICLE III
Covenants
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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, the Issuer will cause to be distributed all amounts on deposit in the
Note Distribution Account on a Payment Date. 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 the Borough of Manhattan, The City of New York, 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 Bank of New
York, New York, New York 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(a) and (b), 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(c) 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.
At or before noon (New York time) on each Payment 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 under
the Notes, 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 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 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
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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 of
which it has actual knowledge (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 the Indenture Trustee or such Paying Agent, as the case may be, shall
give prompt notice of such occurrence to the Issuer and shall release such money
to the Issuer on Issuer Request; and the Holder of such Note shall thereafter,
as an unsecured general creditor, look only to the Issuer for payment thereof
(but only to the extent of the amounts so paid to the Issuer), and all liability
of the Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, 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
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repaid to 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 of America,
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 Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.05. Protection of Trust Estate. The Issuer will from time
to time prepare, execute, deliver and file all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments
of further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee, and hereby authorizes the
Indenture Trustee as its agent and attorney-in-fact, to execute any financing
statement, continuation statement or other instrument required by the Indenture
Trustee pursuant to this Section.
SECTION 3.06. Opinions as to Trust Estate. (a) On the Closing Date,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements, as
are necessary to perfect and make effective the lien and security interest of
this
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Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before February 28 in each calendar year, beginning in
1996, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until February 28 in the following calendar
year.
SECTION 3.07. Performance of Obligations; Servicing of Receivables.
(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
of such Person's material covenants or obligations under any instrument or
agreement included in the Trust Estate 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 this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officers' Certificate of
the Issuer shall be deemed to be action taken by the Issuer. 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 Basic Documents and
in the instruments and agreements included in the Trust Estate, 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 Sale 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 Basic
Document or any provision thereof without the consent of the Indenture Trustee
or the Holders of at least a majority of the Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a
Servicer Default
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under the Sale and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee and the Rating Agencies thereof, and shall specify in such
notice the action, if any, the Issuer is taking with respect to such default. If
a Servicer Default shall arise from the failure of the Servicer to perform any
of its duties or obligations under the Sale and Servicing Agreement with respect
to the Receivables, the Issuer shall take all reasonable steps available to it
to remedy such failure.
(e) As promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers pursuant to Section 8.01 of
the Sale and Servicing Agreement, the Issuer shall appoint a successor servicer
(the "Successor Servicer"), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer, subject to Section 8.02 of the Sale and
Servicing Agreement. The Indenture Trustee may resign as the Servicer by giving
written notice of such resignation to the Issuer and in such event will be
released from such duties and obligations, such release not to be effective
until the date a new servicer enters into a servicing agreement with the Issuer
as provided below. Upon delivery of any such notice to the Issuer, the Issuer
shall obtain a new servicer as the Successor Servicer under the Sale and
Servicing Agreement. Any Successor Servicer other than the Indenture Trustee
shall (i) be an established financial institution having a net worth of not less
than $50,000,000 and whose regular business includes the servicing of equipment
receivables and (ii) enter into a servicing agreement with the Issuer having
substantially the same provisions as the provisions of the Sale and Servicing
Agreement applicable to the Servicer. If within 30 days after the delivery of
the notice referred to above, the Issuer shall not have obtained such a new
servicer, the Indenture Trustee may appoint, or may petition a court of
competent jurisdiction to appoint, a Successor Servicer. In connection with any
such appointment, the Indenture Trustee may make such arrangements for the
compensation of such successor as it and such successor shall agree, subject to
the limitations set forth below and in the Sale and Servicing Agreement, and in
accordance with Section 8.02 of the Sale and Servicing Agreement, the Issuer
shall enter into an agreement with such successor for the servicing of the
Receivables (such agreement to be in form and substance satisfactory to the
Indenture Trustee). If the Indenture Trustee shall succeed to the Servicer's
duties as servicer of the Receivables as provided herein, it shall do so in its
capacity as servicer and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI hereof shall be inapplicable to the
Indenture Trustee in its duties as the successor to the Servicer and the
servicing of the Receivables. In case the Indenture Trustee shall become
successor to the Servicer under the Sale and Servicing Agreement, the Indenture
Trustee shall be entitled to appoint as Servicer any one of its affiliates,
provided that it shall be fully liable for the actions and omissions of such
affiliate in such capacity as Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee. As
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soon as a Successor Servicer is appointed, the Issuer shall notify the Indenture
Trustee of such appointment, specifying in such notice the name and address of
such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Indenture Trustee or the Holders of at least a
majority in Outstanding Amount of the Notes, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any Collateral (except to the
extent otherwise provided in the Sale and Servicing Agreement) or the Basic
Documents, or waive timely performance or observance by the Servicer or the
Seller under the Sale and Servicing Agreement or JDCC under the Purchase
Agreement; provided, however, that no such amendment shall (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that are required to be
made for the benefit of the Noteholders or (ii) reduce the aforesaid percentage
of the Notes which are required to consent to any such amendment, without the
consent of the holders of all the outstanding Notes. If any such amendment,
modification, supplement or waiver shall be so consented to by the Indenture
Trustee or such Holders, the Issuer agrees, promptly following a request by the
Indenture Trustee to do so, to execute and deliver, in its own name and at its
own expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may reasonably deem necessary or appropriate in the
circumstances.
SECTION 3.08. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture, the Purchase
Agreement, the Trust Agreement or the Sale and Servicing Agreement, sell,
transfer, exchange or otherwise dispose of any of the properties or assets
of the Issuer, including those included in the Trust Estate, 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 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 Trust Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of 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 Trust Estate or any part thereof or any
interest
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therein or the proceeds thereof (other than tax liens, mechanics'
liens and other liens that arise by operation of law, in each case on a
Financed Equipment and arising solely as a result of an action or omission
of the related Obligor) or (C) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any such tax,
mechanics' or other lien arising by operation of law) security interest in
the Trust Estate.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year ending in 1995), an
Officers' Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that
(i) a review of the activities of the Issuer during the 12-month
period ending at the end of such fiscal year (or in the case of the fiscal
year ending October 31, 1995, the period from the Closing Date to October
31, 1995) and of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in the
compliance of any such condition or covenant, specifying each such default
known to such Authorized Officer and the nature and status thereof.
SECTION 3.10. 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 of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form 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
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 (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer, any Noteholder or any
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Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless
(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer the conveyance or transfer of which is hereby
restricted shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State, (B)
expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form 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 on the part of the Issuer to be performed or observed, all
as provided herein, (C) expressly agrees 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, (D)
unless otherwise provided in such supplemental indenture, expressly agrees
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, (E) expressly agrees by means of such supplemental indenture that
such Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person) required
by the Exchange Act in connection with the Notes and (F) such conveyance or
transfer is expressly permitted by this Indenture, the Purchase Agreement,
the Sale and Servicing Agreement and the Trust Agreement;
(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 (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer, any Noteholder or any Certificateholder;
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(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(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 the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(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 to and
acceptance by the Indenture Trustee of the Officer's Certificate and Opinion of
Counsel specified in Section 3.10(b)(vi) stating that the Issuer is to be so
released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic
Documents, issuing the Notes and Certificates and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with Sections 4.09, 4.10, 4.11 and 5.06 of the Sale and
Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
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SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Removal of Administrator. So long as any Notes are
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. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, (x)
distributions to the Servicer, the Owner Trustee and the Certificateholders as
permitted by, and to the extent funds are available for such purpose under, the
Sale and Servicing Agreement and (y) payments to the Indenture Trustee pursuant
to Section 1(a) (ii) of the Administration Agreement. The Issuer will not,
directly or indirectly, make payments to or distributions from the Collection
Account except in accordance with this Indenture and the Basic Documents.
SECTION 3.19. Notice of Events of Default. The Issuer agrees to give
the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder and, within five days after obtaining knowledge of
any of the following occurrences, written notice of each default on the part of
the Servicer or the Seller of its obligations under the Sale and Servicing
Agreement and each default on the part of JDCC of its obligations under the
Purchase Agreement.
SECTION 3.20. 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.
ARTICLE IV
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
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3.03, 3.04, 3.05, 3.08, 3.10, 3.12 and 3.13, (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 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
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation
(i) have become due and payable,
(ii) will become due and payable at the Class A-2 Final Scheduled
Payment 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 of
America (which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount sufficient to
pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for cancellation as
of such day of discharge or when due on the Class A-2 Final
Scheduled Payment Date or Redemption 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 caused to be paid all other sums payable
hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an Officers'
Certificate,
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an Opinion of Counsel and (if required by the TIA) an Independent
Certificate from a firm of certified public accountants, each meeting the
applicable requirements of Section 11.01(a) and each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
SECTION 4.02. Application of Trust Money. All moneys deposited with
the Indenture Trustee pursuant to Section 4.01 hereof 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 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 Sale 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.
ARTICLE V
Remedies
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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):
(i) default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of
five days; or
(ii) default in the payment of the principal of or any installment of
the principal of any Note when the same becomes due and payable; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere
in this Section specifically dealt with), or any representation or warranty
of the Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving
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to have been incorrect in any material respect as of the time when the same
shall have been made, and such default shall continue or not be cured, or
the circumstance or condition in respect of which such representation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the Issuer and
the Indenture Trustee by the Holders of at least 25% of the Outstanding
Amount of the Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable federal
or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for the Issuer or for any substantial part
of the Trust Estate, or ordering the winding-up or liquidation of the
Issuer's affairs, and such decree or order shall remain unstayed and in
effect for a period of 90 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Estate, or the making
by the Issuer of any general assignment for the benefit of creditors, or the
failure by the Issuer generally to pay its debts as such debts become due,
or the taking of action by the Issuer in furtherance of any of the
foregoing.
The Issuer shall deliver to the Indenture Trustee, within five days
after the occurrence thereof, written notice in the form of an Officers'
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (iii), its status and what action
the Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default should occur and be continuing, then and in every such case
the Indenture Trustee or the Holders of Notes representing a majority of the
Outstanding Amount of the Notes may declare all the Notes to be immediately due
and payable, by a notice in writing to
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the Issuer (and to the Indenture Trustee if given by Noteholders), and upon any
such declaration the unpaid principal amount of the Notes, together with accrued
and unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Holders of Notes representing a majority of the Outstanding Amount of the Notes,
by written notice to the Issuer and the Indenture Trustee, may rescind and annul
such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay
(A) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note when
the same becomes due and payable, 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
a rate per annum equal to the sum of (i) the respective Note Interest Rate borne
by the Notes and (ii) 2.0% and in addition thereto such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.
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(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, 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 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) 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 Trust Estate, Proceedings under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or other
similar 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 the Noteholders
allowed in such Proceedings;
(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;
(iii) to collect and receive any moneys or other property payable or
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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, 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.
(e) 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
composition 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.
(f) 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.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all 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; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Section 5.05):
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(i) institute Proceedings in its own name and as 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 Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate 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 Trust Estate
following an Event of Default, other than an Event of Default described in
Section 5.01(i) or (ii), unless (A) the Holders of 100% of the Outstanding
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 Trust Estate 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 obtains the consent
of Holders of 66-2/3% of the Outstanding Amount of the Notes. In determining
such sufficiency or insufficiency with respect to clause (B) and (C), the
Indenture Trustee may, but need not, obtain and 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
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
interest, respectively; and
THIRD: to the Issuer for distribution to the Certificateholders.
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
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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 5.05. Optional Preservation of the Receivables. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to maintain possession
of the Trust Estate. It is the desire of the parties hereto and the Noteholders
that there be at all times sufficient funds for the payment of principal of 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 Trust
Estate. In determining whether to maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain and 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 Trust
Estate for such purpose.
SECTION 5.06. 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:
(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 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
Proceedings; 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; it being 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
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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, and shall have no
liability to any person for such action or inaction.
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, 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 5.08. 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 reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, 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 5.09. 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 5.10. 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 or 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 V 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 5.11. Control by Noteholders. The Holders of a majority of
the Outstanding Amount of the Notes 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; provided that
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(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Trust Estate 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 Trust Estate 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 Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.01, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Outstanding Amount of the
Notes may waive any past Default or Event of Default and its consequences except
a Default (a) in payment of principal of or interest on any of the Notes or (b)
in respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Note. In the case of any such waiver,
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 Default or impair any right consequent
thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.13. 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,
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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 (a)
any suit instituted by the Indenture Trustee, (b) 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 (c) 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 5.14. 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 advantage 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.
SECTION 5.15. 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 Trust Estate
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 5.04(b).
SECTION 5.16. 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 agrees to take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller and the Servicer, as applicable, of each of their obligations to
the Issuer under or in connection with the Sale and Servicing Agreement or to
JDCC under or in connection with the Purchase 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 Sale
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 Seller or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale and Servicing
Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee at the direction (which direction shall be in writing or by
telephone (confirmed in
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writing promptly thereafter)) of the Holders of 66-2/3% of the Outstanding
Amount of the Notes shall exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Seller or the Servicer under or in connection
with the Sale and Servicing Agreement, including the right or power to take any
action to compel or secure performance or observance by the Seller 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
Sale and Servicing Agreement, and any right of the Issuer to take such action
shall be suspended.
(c) Promptly following a request from the Indenture Trustee to do so
and at the Administrator's expense, the Issuer agrees to take all such lawful
action as the Indenture Trustee may request to compel or secure the performance
and observance by JDCC of each of its obligations to the Seller under or in
connection with the Purchase 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 Purchase 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 Seller thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by JDCC of each of its obligations under the Purchase
Agreement.
(d) If an Event of Default has occurred and is continuing, the
Indenture Trustee at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of 66-2/3%
of the Outstanding Amount of the Notes shall exercise all rights, remedies,
powers, privileges and claims of the Seller against JDCC under or in connection
with the Purchase Agreement to the extent granted as security for the Notes
hereunder, including the right or power to take any action to compel or secure
performance or observance by JDCC of each of its obligations to the Seller
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Purchase Agreement, and any right of the Seller to
take such action shall be suspended.
ARTICLE VI
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 use the same degree of care
and skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) 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
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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 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 on their face to the
requirements of this Indenture.
Except for its calculation of LIBOR, the Indenture Trustee shall not be required
to determine, confirm or recalculate the information contained in the Servicer's
Certificate delivered to it pursuant to the Sale and Servicing Agreement.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(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 5.11 or otherwise from Holders
under the Indenture.
(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.
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) 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 Sale and Servicing Agreement.
(g) 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 adequate indemnity satisfactory to it against such
loss, liability or expense is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the
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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 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 Officers' Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the Officers' 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 wilful 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 action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
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 must comply with Sections 6.10 and 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 the Trust Estate, this Indenture 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 the 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.
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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 mandatory redemption provisions of such Note), 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; and provided that in the case of any default of the character
specified in Section 5.01(iii), no such notice to Holders shall be given until
at least 30 days after the occurrence thereof.
SECTION 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its Federal and state income tax returns. The
Indenture Trustee shall only be required to provide to the Noteholders the
information given to it by the Servicer. The Indenture Trustee shall not be
required to determine, confirm or recompute any such information.
SECTION 6.07. Compensation and Indemnity. The Issuer shall or shall
cause the Servicer to pay to the Indenture Trustee from time to time reasonable
compensation for its services. 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 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 or shall cause the Servicer to indemnify the Indenture Trustee
against any and all loss, liability or expense (including the fees of either in-
house counsel or outside counsel, but not both) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Indenture Trustee shall notify the Issuer and the Servicer
promptly of any claim for which it may seek indemnity. Failure by the Indenture
Trustee to so notify the Issuer and the Servicer shall not relieve the Issuer or
the Servicer of its obligations hereunder. The Issuer shall or shall cause the
Servicer to defend the claim and the Indenture Trustee may have separate counsel
and the Issuer shall or shall cause the Servicer to pay the fees and expenses of
such counsel. Neither the Issuer nor 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 wilful misconduct, negligence or bad
faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.01(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
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SECTION 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
may resign at any time by so notifying the Issuer. The Holders of a majority in
Outstanding Amount of the Notes may remove the Indenture Trustee by so notifying
the Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer
shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee, which successor shall be,
if JDCC is the Servicer, reasonably acceptable to the Seller.
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 the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer 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.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section
6.07 shall continue for the benefit of the retiring Indenture Trustee.
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SECTION 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation or
banking association without any further act shall be the successor Indenture
Trustee. The Indenture Trustee shall provide the Rating Agencies prior written
notice of any such transaction, provided that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11.
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 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-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Trust may at the time be located, the Indenture Trustee shall have the
power and may execute and deliver all instruments to appoint one or more Persons
reasonably acceptable to the Issuer to act as a co-trustee or co-trustees, or
separate trustee or separate 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 Trust, or any part hereof, and, subject to the
other provisions of this Section, such powers, duties, obligations, rights and
trusts as the Indenture Trustee may consider necessary or desirable. No co-
trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised
or performed by the Indenture 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 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
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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 Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
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 VI. 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
Indenture Trustee or separately, as may be provided therein, subject to all 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.
(d) Any separate trustee or co-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 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA (S) 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and its long-term
unsecured debt shall be rated at least Baa3 by Moody's. The Indenture Trustee
shall comply with TIA (S) 310(b), including the optional provision permitted by
the second sentence of TIA (S) 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA (S) 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 (S) 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). An indenture trustee who has resigned or
been removed shall be subject to TIA (S) 311(a) to the extent indicated.
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ARTICLE VII
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 (a) not more than five days after the earlier of (i) each
Record Date and (ii) 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 Holders of Notes as of such Record Date, (b) 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 10 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; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. 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 (S) 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 (S) 312(c).
SECTION 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer
is required 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) which 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; and
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(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all Noteholders described in TIA (S) 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) as may
be required 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 October 31 of each year.
SECTION 7.04. Reports by Indenture Trustee. If required by TIA (S)
313(a), within 60 days after each February 1 beginning with February 1, 1996,
the Indenture Trustee shall mail to each Noteholder as required by TIA (S)
313(c) a brief report dated as of such date that complies with TIA (S) 313(a).
The Indenture Trustee also shall comply with TIA (S) 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
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. 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 Trust Estate, 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 V.
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 5.01 of the Sale
and Servicing Agreement.
(b) Not less than two Business Days prior to each Payment Date, the
Total
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Distribution Amount with respect to the preceding Collection Period will be
deposited in the Collection Account as provided in Section 5.02 of the Sale and
Servicing Agreement. On or before each Payment Date, the Noteholders'
Distributable Amount with respect to the preceding Collection Period will be
transferred from the Collection Account and/or the Reserve Account to the Note
Distribution Account as provided in Sections 5.04 and 5.05 of the Sale and
Servicing Agreement.
(c) On each Payment Date and Redemption Date, 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 in the following amounts and in the
following order of priority:
(i) accrued and unpaid interest on the Notes; provided that if there
are not sufficient funds in the Note Distribution Account to pay the entire
amount of accrued and unpaid interest then due on the Notes, the amount in
the Note Distribution Account shall be applied to the payment of such
interest on the Notes pro rata on the basis of the total such interest due
on the Notes;
(ii) to the Class A-1 Noteholders, on account of principal, until the
Outstanding Amount of the Class A-1 Notes is reduced to zero; and
(iii) to the Class A-2 Noteholders, on account of principal, until the
Outstanding Amount of the Class A-2 Notes is reduced to zero.
(d) The Indenture Trustee shall calculate LIBOR for each Payment Date
(other than the first Payment Date) as soon as such calculation can be made.
Upon telephone request, the Indenture Trustee shall inform, by telephone
(confirmed in writing), a representative of each of the Issuer, _______ and
_______ of LIBOR for a Payment Date.
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 Eligible
Investments and reinvested by the Indenture Trustee upon Issuer Order, subject
to the provisions of Section 5.01(b) of the Sale and Servicing Agreement. All
income or other gain from investments of monies deposited in the Trust Accounts
net of any investment expenses and any losses resulting from such investments
shall be deposited by the Indenture Trustee in the Collection Account. The
Issuer will not direct the Indenture Trustee 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.
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(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 investment directions
for any funds on deposit in the Trust Accounts to the Indenture Trustee by 12:00
noon New York 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, if
such Notes shall have been declared due and payable following an Event of
Default, amounts collected or receivable from the Trust Estate are being applied
in accordance with Section 5.05 as if there had not been such a declaration;
then the Indenture Trustee shall, to the fullest extent practicable, invest and
reinvest funds in the Trust Accounts in one or more Eligible Investments.
SECTION 8.04. Release of Trust Estate. (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 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 provided in this Article VIII
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
monies.
(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 Trust Estate that secured the
Notes from the lien of this Indenture 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 Officers' Certificate, an Opinion of Counsel and (if required
by the TIA) Independent Certificates in accordance with TIA (S)(S) 314(c) and
314(d)(1) meeting the applicable requirements of Section 11.01.
SECTION 8.05. Opinion of Counsel. The Indenture Trustee shall receive
at least seven days' 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
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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 Trust Estate. 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 IX
Supplemental Indentures
-----------------------
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto, 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 of this Indenture, or to subject to the lien of 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 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, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the
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provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee, pursuant
to the requirements of Article VI; or
(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 execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the Notes
but with prior notice to the Rating Agencies, 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 such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
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 the Rating Agencies and with the consent of the Holders of
not less than a majority of the Outstanding Amount of the Notes, 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 Price with respect thereto, change the
provision of this Indenture relating to the application of collections on,
or the proceeds of the sale of, the Trust Estate 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 V, 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
52
<PAGE>
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 proviso to the definition
of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
(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 Basic Documents cannot be modified or
waived without the consent of the Holder of each Outstanding Note affected
thereby;
(vi) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation of
any of the individual components of such calculation) or to affect the
rights of the Holders of Notes to the benefit of any provisions for the
mandatory redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Trust
Estate or, except as otherwise permitted or contemplated herein, terminate
the lien of this Indenture on any property at any time subject hereto or
deprive the Holder of any Note of the security provided by the lien of this
Indenture.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders 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 Issuer and the Indenture Trustee 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
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<PAGE>
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 IX 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. 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.
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 Indenture Trustee, the Issuer 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 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 IX 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 IX 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 X
Redemption of Notes
-------------------
SECTION 10.01. Redemption. (a) The Class A-2 Notes are subject to
redemption in whole, but not in part, at the written direction of the Servicer
pursuant to
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Section 9.01(a) of the Sale and Servicing Agreement, on any Payment Date, if the
then outstanding Pool Balance is 10% or less of the Initial Pool Balance, for a
purchase price equal to the Redemption Price; provided, however, that the Issuer
has available funds sufficient to pay the Redemption Price. The Servicer or the
Issuer shall furnish the Rating Agencies notice of such redemption. If the Class
A-2 Notes are to be redeemed pursuant to this Section 10.01(a), the Servicer or
the Issuer shall furnish notice of such election to the Indenture Trustee not
later than 25 days prior to the Redemption Date and the Issuer shall deposit
with the Indenture Trustee in the Note Distribution Account the Redemption Price
of the Class A-2 Notes to be redeemed whereupon all such Class A-2 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 Class A-2 Notes.
(b) In the event that the assets of the Trust are sold pursuant to
Section 9.02 of the Trust Agreement, all amounts on deposit in the Note
Distribution Account shall be paid to the Noteholders up to the Outstanding
Amount of the Notes and all accrued and unpaid interest thereon. 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 notice of such event to the
Indenture Trustee not later than 25 days prior to the Redemption Date whereupon
all such amounts shall be payable on the Redemption Date.
SECTION 10.02. Form of Redemption Notice. (a) 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 Price;
(iii) the place where such Notes are to be surrendered for payment of
the Redemption Price (which shall be the office or agency of the Issuer to
be maintained as provided in Section 3.02); and
(iv) CUSIP number.
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.
55
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(b) Prior notice of redemption under Section 10.01(b) is not required
to be given to Noteholders.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or
portions thereof to be redeemed shall, following notice of redemption as
required by Section 10.02 (in the case of redemption pursuant to Section
10.01(a)), on the Redemption Date become due and payable at the Redemption Price
and (unless the Issuer shall default in the payment of the Redemption Price) no
interest shall accrue on the Redemption Price for any period after the date to
which accrued interest is calculated for purposes of calculating the Redemption
Price.
ARTICLE XI
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 Officers' 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) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, 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
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(iv) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
(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 the
release of any property or securities subject to the lien of 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 Officers'
Certificate certifying or stating the opinion of each person signing such
certificate 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 Officers' 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 same
matters, if the fair value to the Issuer of the securities to be so deposited
and of all other such securities 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 securities so deposited,
if the fair value thereof to the Issuer as set forth in the related Officers'
Certificate is less than $25,000 or less than one percent of the Outstanding
Amount of the Notes.
(iii) Other than with respect to the release of any Purchased
Receivables or Defaulted Receivables, whenever any property or securities are to
be released from the lien of this Indenture, the Issuer shall also furnish to
the Indenture Trustee an Officers' 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 under this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' 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 other than Purchased Receivables and Defaulted Receivables, or
securities released from the lien of this Indenture since the commencement of
the then current calendar 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 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 Officers' Certificate is less than $25,000 or less than one percent
of the then Outstanding Amount of the Notes.
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(v) Notwithstanding Section 2.09, Section 3.10(b) or any other
provision of this Section, the Issuer may (A) collect,liquidate, sell or
otherwise dispose of Receivables as and to the extent permitted or required by
the Basic Documents and (B) make cash payments out of the Trust Accounts as and
to the extent permitted or required by the Basic 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
Persons 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 Seller, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Issuer or the Administrator, 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, statements, 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 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 rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
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
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<PAGE>
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, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:
(a) The Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee and received at its Corporate Trust
Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-
class, postage prepaid, to the Issuer addressed to: John Deere Owner Trust
1995-A, in care of Chemical Bank Delaware, 1201 Market Street, 9th Floor,
Wilmington, Delaware 19801, Attention: Corporate Trustee Administration
Department, or at any other address previously furnished in writing to the
Indenture Trustee by the Issuer. The Issuer shall promptly transmit any
notice received by it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified mail, return receipt requested to (i) in the case of
Moody's, at the following address: Moody's Investors Service, Inc., ABS
Monitoring Department, 99 Church Street, New York, New York
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10007, (ii) in the case of Standard & Poor's, at the following address: Standard
& Poor's Corporation, 26 Broadway (20th Floor), New York, New York 10004,
Attention of Asset Backed Surveillance Department, (iii) in the case of Fitch,
at the following address: Fitch Investors Service, L.P., One State Street Plaza,
New York, New York 10004, Attention: Structured Finance Surveillance and (iv) in
the case of Duff & Phelps, at the following address: Duff & Phelps Credit Rating
Co., 55 East Monroe Street (35th Floor), Chicago, Illinois 60603, Attention:
Asset Backed Monitoring Department, or as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
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 provision of this Indenture or any of the Notes to the
contrary, to the extent satisfactory to the Indenture Trustee, the Issuer may
enter into any agreement 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 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.
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SECTION 11.07. 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.
The provisions of TIA (S)(S) 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.
SECTION 11.08. 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 11.09. 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-trustees and agents of the Indenture Trustee.
SECTION 11.10. 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 11.11. 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 Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 11.12. 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.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
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SECTION 11.15. 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 11.16. Trust Obligation. 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 this 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 any
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 Articles VI, VII and VIII of the Trust
Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Seller or the Trust,
or join in any institution against the Seller or the Trust of, 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 Basic Documents.
SECTION 11.18. 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
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determine that such disclosure is consistent with its obligations hereunder.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
JOHN DEERE OWNER TRUST 199_-_,
By:
-----------------------,
not in its individual
capacity but solely as
Owner Trustee,
By:
-----------------------
Name:
Title:
THE BANK OF NEW YORK, not in its
individual capacity but solely as Indenture
Trustee,
By:
-----------------------
Name:
Title:
64
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EXHIBIT A
Schedule of Receivables
-----------------------
[To be delivered to the Issuer at Closing]
<PAGE>
EXHIBIT B
[Form of Sale and Servicing Agreement]
--------------------------------------
<PAGE>
EXHIBIT C
[Form of Depository Agreement]
------------------------------
<PAGE>
EXHIBIT D
REGISTERED $
--------------
No. R
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
--------
[Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC) - ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS 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.
JOHN DEERE OWNER TRUST 199_-_
FLOATING RATE ASSET BACKED NOTES,
CLASS A-1
John Deere Owner Trust 199_-_, 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 [ ], or registered
assigns, the principal sum of [ ] DOLLARS payable on each
Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE]
and the denominator of which is $________ by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal of the Class
A-1 Notes pursuant to Section 8.02(c) of the Indenture; provided, however, that
the entire unpaid principal amount of this Note shall be due and payable on
_______, 199__. No payments of principal of the Class A-2 Notes shall be made
until the principal of the Class A-1 Notes has been paid in its entirety. The
Issuer will pay interest on this Note at the Class A-1 Note Interest Rate on
each Payment Date until the principal of this Note is paid or made
D-1
<PAGE>
available for payment, on the principal amount of this Note outstanding on the
preceding Payment Date after giving effect to all payments of principal made on
such preceding Payment Date (or in the case of the first Payment Date, on the
initial principal amount of this Note). Interest on this Note will accrue for
each Payment Date from and including the most recent Payment Date to but
excluding such Payment Date or, if no interest has yet been paid, from ______,
199_. Interest will be computed on the basis of a 360-day year for the actual
number of days in the period for which such interest is payable. 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.
D-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: JOHN DEERE OWNER TRUST 199_-_,
By: ______________________,
not in its individual capacity
but solely as Owner Trustee
under the Trust Agreement,
By:________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee,
By:________________________________
Authorized Signatory
D-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of the Class A-1 Notes of a duly authorized issue of
Notes of the Issuer, designated as its Floating Rate Asset Backed Notes (herein
called the "Notes"), all issued under an Indenture dated as of _______, 199_
(such indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and The Bank of New York, as indenture trustee (the
"Indenture Trustee", which term includes any successor indenture trustee under
the Indenture), 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 Notes are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Notes will be payable on each Payment Date in an
amount described on the face hereof.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on _______, 199__. Notwithstanding the foregoing, the
entire unpaid principal amount of the Notes shall be due and payable on the date
on which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Holders of the Notes representing not less than a
majority of the Outstanding Amount of the Notes have declared the Notes to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments on the Notes of a Class shall be made pro rata
to the Noteholders of such Class entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, 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 the
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. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any
D-4
<PAGE>
payments made on any Payment 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 Payment 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 Payment Date by notice mailed within five days of such Payment 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 New York.
The Issuer shall pay interest on overdue installments of interest at a
rate per annum equal to the sum of (i) the Class A-1 Note Interest Rate and (ii)
2.0%, to the extent lawful.
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 a commercial bank or
trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, 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 or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, 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.
D-5
<PAGE>
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that by
accepting the benefits of the indenture that such Noteholder will not at any
time institute against the Depositor, or join in any institution against the
Depositor 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 Basic Documents.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or 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 Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. 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 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 or more Predecessor Notes) shall be conclusive and binding upon such
Holder 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.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
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
D-6
<PAGE>
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.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither _________ in its individual capacity,
The Bank of New York, in its individual capacity, any owner of a beneficial
interest in the Issuer, nor any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the payment
of principal of or interest on, or performance of, or omission to perform, any
of the covenants, obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purposes of
binding the interests of the Owner Trustee in the assets of the Issuer. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Basic Documents, in the case of an Event of Default under the
Indenture, the Holder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
D-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- -----------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
--------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: ____________ _____________________________ NOTE: The signature to this
assignment must correspond with the name of the registered
owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any
change whatsoever.
Signature Guaranteed:
-------------------------------------------------------
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Indenture
Trustee which requirements will include membership or
participation in STAMP or such other "signature
guarantee program" as may be determined by the
Indenture Trustee in addition to, or in substitution
for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
- -------------------------
D-8
<PAGE>
EXHIBIT E
REGISTERED $___________
No. R
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.____________
[Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC) - ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS 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.
JOHN DEERE OWNER TRUST 199__-__
FLOATING RATE ASSET BACKED NOTES,
CLASS A-2
John Deere Owner Trust 199__-__, 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 [ ], or
registered assigns, the principal sum of [ ] DOLLARS payable on
each Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE]
and the denominator of which is $__________ by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of principal of the
Class A-2 Notes pursuant to Section 8.02(c) of the Indenture; provided, however,
that the entire unpaid principal amount of this Note shall be due and payable on
the earlier of ________, ____ and the Redemption Date, if any, pursuant to
Section 10.01(a) of the Indenture. No payments of principal of the Class A-2
Notes shall be made until the principal of the Class A-1 Notes has been paid in
its entirety. The Issuer will pay interest on this Note
E-1
<PAGE>
at the Class A-2 Note Interest Rate on each Payment 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 Payment Date after giving effect to all
payments of principal made on such preceding Payment Date (or in the case of the
first Payment Date, on the initial principal amount of this Note). Interest on
this Note will accrue for each Payment Date from and including the most recent
Payment Date to but excluding such Payment Date or, if no interest has yet been
paid, from ______, 199__. Interest will be computed on the basis of a 360-day
year for the actual number of days in the period for which such interest is
payable. 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.
E-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: JOHN DEERE OWNER TRUST 199__-__,
By: _________________________,
not in its individual capacity but
solely as Owner Trustee under
the Trust Agreement,
By: _________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee,
By: ___________________________
Authorized Signatory
E-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of the Class A-2 Notes of a duly authorized issue of
Notes of the Issuer, designated as its Floating Rate Asset Backed Notes (herein
called the "Notes"), all issued under an Indenture dated as of _______, 199__
(such indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and The Bank of New York, as indenture trustee (the
"Indenture Trustee", which term includes any successor indenture trustee under
the Indenture), 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 Notes are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Notes will be payable on each Payment Date in an
amount described on the face hereof.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of ________, ____ and the Redemption
Date, if any, pursuant to Section 10.01(a) of the Indenture. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee or the Holders of the Notes representing
not less than a majority of the Outstanding Amount of the Notes have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02 of the Indenture. All principal payments on the Notes of a Class shall be
made pro rata to the Noteholders of such Class entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, 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 the
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. Any reduction in the
E-4
<PAGE>
principal amount of this Note (or any one or more Predecessor Notes) effected by
any payments made on any Payment 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 Payment 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 Payment Date by notice mailed within five days of such Payment 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 New York.
The Issuer shall pay interest on overdue installments of interest at a
rate per annum equal to the sum of (i) the Class A-2 Note Interest Rate and (ii)
2.0%, to the extent lawful.
As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer, on any Payment Date on or after the
date on which the Pool Balance is less than or equal to 10% of the Initial Pool
Balance.
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 a commercial bank or
trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, 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 or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, 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
E-5
<PAGE>
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 or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that by
accepting the benefits of the indenture that such Noteholder will not at any
time institute against the Depositor, or join in any institution against the
Depositor 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 Basic Documents.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or 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 Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. 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 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 or more Predecessor Notes) shall be conclusive and binding upon such
Holder 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.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
E-6
<PAGE>
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
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.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither _______________ in its individual
capacity, The Bank of New York, in its individual capacity, any owner of a
beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture, it being expressly understood that said covenants,
obligations and indemnifications have been made by the Owner Trustee for the
sole purposes of binding the interests of the Owner Trustee in the assets of the
Issuer. The Holder of this Note by the acceptance hereof agrees that except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
E-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- ---------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________________________________
- -------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: _______________ __________________________ NOTE: The signature to this
assignment must correspond with the name of the
registered owner as it appears on the face of the
within Note in every particular, without alteration,
enlargement or any change whatsoever.
Signature Guaranteed:
-------------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Indenture Trustee which requirements will
include membership or participation in STAMP or such
other "signature guarantee program" as may be
determined by the Indenture Trustee in addition to,
or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
- -------------------------
E-8
<PAGE>
EXHIBIT F
[Form of Transferee Certificate]
--------------------------------
<PAGE>
EXHIBIT 4.4
- ------------------------------------------------------------------------------
DEERE RECEIVABLES CORPORATION
Class A-1 Floating Rate Asset Backed Notes
Class A-2 Floating Rate Asset Backed Notes
--------------------------
INDENTURE
Dated as of ______, 199_
--------------------------
THE BANK OF NEW YORK
Indenture Trustee
- ------------------------------------------------------------------------------
Draft: March 11, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions and Incorporation by Reference
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1.01. Definitions............................................ 2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act...... 10
SECTION 1.03. Rules of Construction.................................. 10
SECTION 1.04. Calculations of Interest............................... 11
ARTICLE II
The Notes
SECTION 2.01. Form................................................... 11
SECTION 2.02. Execution, Authentication and Delivery................. 11
SECTION 2.03. Temporary Notes........................................ 12
SECTION 2.04. Registration; Registration of Transfer and Exchange.... 12
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes............. 14
SECTION 2.06. Persons Deemed Owner................................... 15
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.. 15
SECTION 2.08. Cancellation........................................... 16
SECTION 2.09. Release of Collateral.................................. 16
SECTION 2.10. Book-Entry Notes....................................... 16
SECTION 2.11. Notices to Clearing Agency............................. 17
SECTION 2.12. Definitive Notes....................................... 17
ARTICLE III
Covenants
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 Estate................................... 20
SECTION 3.06. Opinions as to Estate.................................. 21
SECTION 3.07. Performance of Obligations; Servicing of Receivables... 21
SECTION 3.08. Negative Covenants..................................... 24
SECTION 3.09. Annual Statement as to Compliance...................... 24
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.... 25
SECTION 3.11. Successor or Transferee................................ 26
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 3.12. No Other Business...................................... 27
SECTION 3.13. No Borrowing........................................... 27
SECTION 3.14. Servicer's Obligations................................. 27
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities...... 27
SECTION 3.16. Capital Expenditures................................... 27
SECTION 3.17.......................................................... 27
Restricted Payments................................................. 27
SECTION 3.18. Notice of Events of Default............................ 27
SECTION 3.19. Further Instruments and Acts........................... 28
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture................. 28
SECTION 4.02. Application of Trust Money.............................. 29
SECTION 4.03. Repayment of Moneys Held by Paying Agent................ 29
ARTICLE V
Remedies
SECTION 5.01. Events of Default....................................... 30
SECTION 5.02. Acceleration of Maturity; Rescission
and Annulment........................................................ 31
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee................................................. 32
ECTION 5.04. Remedies; Priorities..................................... 34
SECTION 5.05. Optional Preservation of the
Receivables........................................................... 35
SECTION 5.06. Limitation of Suits..................................... 35
SECTION 5.07 Unconditonal Rights of Noteholders To Receive Principal
and Interest......................................................... 36
SECTION 5.08. Restoration of Rights and Remedies...................... 36
SECTION 5.09. Rights and Remedies Cumulative.......................... 36
SECTION 5.10. Delay or Omission Not a Waiver.......................... 37
SECTION 5.11. Control by Noteholders.................................. 37
SECTION 5.12. Waiver of Past Defaults................................. 37
SECTION 5.13. Undertaking for Costs................................... 38
SECTION 5.14. Waiver of Stay or Extension Laws........................ 38
SECTION 5.15. Action on Notes......................................... 38
SECTION 5.16. Performance and Enforcement of Certain Obligations...... 39
</TABLE>
ii
<PAGE>
ARTICLE VI
The Indenture Trustee
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 6.01. Duties of Indenture Trustee............................ 40
SECTION 6.02. Rights of Indenture Trustee............................ 41
SECTION 6.03. Individual Rights of Indenture Trustee................. 42
SECTION 6.04. Indenture Trustee's Disclaimer......................... 42
SECTION 6.05. Notice of Defaults..................................... 42
SECTION 6.06. Reports by Indenture Trustee to Holders................ 42
SECTION 6.07. Compensation and Indemnity............................. 42
SECTION 6.08. Replacement of Indenture Trustee....................... 43
SECTION 6.09. Successor Indenture Trustee by Merger.................. 44
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.......... 44
SECTION 6.11. Eligibility; Disqualification.......................... 46
SECTION 6.12. Preferential Collection of Claims Against Issuer....... 46
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders...................................................... 46
SECTION 7.02. Preservation of Information; Communications to
Noteholders......................................................... 46
SECTION 7.03. Reports by Issuer...................................... 47
SECTION 7.04. Reports by Indenture Trustee........................... 47
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money.................................... 48
SECTION 8.02. Trust Accounts......................................... 48
SECTION 8.03. General Provisions Regarding Accounts.................. 49
SECTION 8.04. Release of Estate...................................... 49
SECTION 8.05. Opinion of Counsel..................................... 50
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders. 50
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 9.02. Supplemental Indentures with Consent of Noteholders... 52
SECTION 9.03. Execution of Supplemental Indentures.................. 53
SECTION 9.04. Effect of Supplemental Indenture...................... 53
SECTION 9.05. Conformity with Trust Indenture Act................... 54
SECTION 9.06. Reference in Notes to Supplemental Indentures......... 54
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption............................................ 54
SECTION 10.02. Form of Redemption Notice............................. 55
SECTION 10.03. Notes Payable on Redemption Date...................... 55
ARTICLE XI
Miscellaneous SECTION 11.01.
Compliance
Certificates and
Opinions, etc............. 55
SECTION 11.02. Form of Documents Delivered to
Indenture Trustee.................................... 57
SECTION 11.03. Acts of Noteholders................................... 58
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies...................................... 59
SECTION 11.05. Notices to Noteholders; Waiver........................ 59
SECTION 11.06. Alternate Payment and Notice Provisions............... 60
SECTION 11.07. Conflict with Trust Indenture Act..................... 60
SECTION 11.08. Effect of Headings and Table of Contents.............. 60
SECTION 11.09. Successors and Assigns................................ 60
SECTION 11.10. Separability.......................................... 61
SECTION 11.11. Benefits of Indenture................................. 61
SECTION 11.12. Legal Holidays........................................ 61
SECTION 11.13. GOVERNING LAW......................................... 61
SECTION 11.14. Counterparts.......................................... 61
SECTION 11.15. Recording of Indenture................................ 61
SECTION 11.16. Trust Obligation...................................... 61
SECTION 11.17. No Petition........................................... 62
SECTION 11.18. Inspection............................................ 62
</TABLE>
iv
<PAGE>
EXHIBITS
Testimonium, Signatures and Seals Acknowledgments
Exhibit A Schedule of Receivables
Exhibit B Form of Sale and Servicing Agreement
Exhibit C Form of Depository Agreement
Exhibit D Form of Class A-1 Note
Exhibit E Form of Class A-2 Note
Exhibit F Form of Transferee Certificate
v
<PAGE>
INDENTURE dated as of _______, 199__, between DEERE RECEIVABLES
CORPORATION, a Nevada corporation (the "Issuer"), and THE BANK OF NEW YORK, a
New York banking corporation, solely as trustee and not in its individual
capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer's Class A-1 Floating
Rate Asset Backed Notes (the "Class A-1 Notes") and Class A-2 Floating Rate
Asset Backed Notes (the "Class A-2 Notes" and together with the Class A-1 Notes,
the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Holders of the Notes, all of the Issuer's
right, title and interest in and to (a) the Receivables and all moneys due
thereon on or after the Cut-off Date; (b) the security interests in the Financed
Equipment granted by Obligors pursuant to the Receivables and any other interest
of the Issuer in the Financed Equipment; (c) any proceeds with respect to the
Receivables from claims on any physical damage, credit life or disability
insurance policies covering Financed Equipment or Obligors; (d) the Purchase
Agreement, including the right assigned to the Issuer to cause JDCC to
repurchase Receivables from the Seller under certain circumstances; (e) all
funds on deposit from time to time in the Trust Accounts, including the Reserve
Account Initial Deposit, and in all investments and proceeds thereof (including
all income thereon); (f) the Sale and Servicing Agreement (including all rights
of the Seller under the Purchase Agreement assigned to the Issuer pursuant to
the Sale and Servicing Agreement); and (g) all present and future claims,
demands, causes and choses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds of
the conversion, voluntary or involuntary, into cash or other liquid property,
all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of obligations
and receivables, instruments and other property which at any time constitute all
or part of or are included in the proceeds of any of the foregoing
(collectively, the "Collateral").
<PAGE>
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 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, and accepts the trusts under this Indenture
in accordance with the provisions of this Indenture for the use and benefit of
such Holders.
ARTICLE I
Definitions and Incorporation by Reference
------------------------------------------
SECTION 1.01. Definitions. 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" has the meaning specified in Section 11.03(a).
"Affiliate" means, with respect to any specified Person, 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" and
"controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer of
the Issuer who is authorized to act for the Issuer and who is identified on the
list of Authorized Officers, containing the specimen signature of each such
Person, delivered by the Issuer to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).
"Basic Documents" means the Purchase Agreement, the Sale and Servicing
Agreement, the Depository Agreement and other documents and certificates
delivered in connection therewith.
"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 2.10.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in The City of New York are
authorized or
2
<PAGE>
obligated by law, regulation or executive order to remain closed.
"Class A-1 Note" means a Class A-1 Floating Rate Asset-Backed Note,
substantially in the form of Exhibit D.
"Class A-1 Note Interest Rate" means, for a Payment Date, LIBOR for
such Payment Date minus ________.
"Class A-2 Note" means a Class A-2 Floating Rate Asset Backed Note,
substantially in the form of Exhibit E.
"Class A-2 Note Interest Rate" means, for a Payment Date, LIBOR for
such Payment Date plus ____% and (ii) _____%; provided, however, that if the
weighted average Net APR for the Receivables during the Collection Period
immediately preceding such Payment Date is less than or equal to the Class A-2
Note Interest Rate (computed without giving effect to this proviso) plus _____%,
then the Class A-2 Note Interest Rate for such Payment Date shall equal such
weighted average Net APR minus ______%.
"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.
"Closing Date" means ________, 199__.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"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 the date of the execution of this Agreement is
located at 101 Barclay Street, New York, NY 10286, Attention: Corporate Trustee
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" has the meaning specified in Section 2.10.
3
<PAGE>
"Depository Agreement" means the agreement among the Issuer, the
Indenture Trustee, and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, substantially in the form of Exhibit C.
"Estate" means all money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of this
Indenture for the benefit of the Noteholders (including, without limitation, all
property and interests Granted to the Indenture Trustee), including all proceeds
thereof.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"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.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, 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" or "Noteholder" means the Person in whose name a Class A-1
Note or a Class A-2 Note is registered on the Note Register.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Indenture Trustee" means The Bank of New York, a New York banking
corporation, 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 (a) is in fact independent of the Issuer, any other obligor upon
the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or
4
<PAGE>
any material indirect financial interest in the Issuer, any such other obligor,
the Seller or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Seller or any Affiliate
of any of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
"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, 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.
"Issuer" means Deere Receivables Corporation until a successor replaces
it and, thereafter, means the successor and, for purposes of any provision
contained herein and required by the TIA, each other obligor on the Notes.
"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.
"JDCC" means John Deere Capital Corporation, a Delaware corporation,
and its successor.
"LIBOR" with respect to any Payment Date shall be established by the
Indenture Trustee and shall equal the rate for deposits in U.S. dollars for one
month which appears on Telerate Page 3750 (as defined below) as of 11:00 A.M.,
London time, on the second LIBOR Business Day prior to the immediately preceding
Payment Date (or, in the case of the initial Payment Date, the second LIBOR
Business Day prior to the Closing Date). "Telerate Page 3750" means the display
page currently so designated on the Dow Jones Telerate Service (or such other
page as may replace that page on that service for the purpose of displaying
comparable rates or prices). If such rate does not appear on Telerate Page
3750, the rate with respect to such Payment Date will be determined on the basis
of the rates at which deposits in U.S. dollars are offered at approximately
11:00 a.m., London time, on the second LIBOR Business Day prior to the
immediately preceding Payment Date to prime banks in the London interbank market
for a period equal to one month (commencing on such Payment Date) by four major
banks in the London interbank market selected by the Indenture Trustee (after
consultation with the Seller) (the "Reference Banks"). The Indenture Trustee
will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate for such Payment Date will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate for such date
will be the arithmetic mean of the rates quoted by major banks in New York City,
selected by the Indenture Trustee (after consultation with the Seller), at
5
<PAGE>
approximately 11:00 a.m., New York City time, on such immediately preceding
Payment Date for loans in U.S. dollars to leading European banks for a period
equal to one month; provided, however, that if such banks are not quoting as
described above, LIBOR will be the LIBOR applicable to the immediately preceding
Payment Date. "LIBOR Business Day" is a day that is both a Business Day and a
day on which banking institutions in the City of London, England are not
required or authorized by law to be closed.
"Net APR" means, with respect to a Receivable, its APR less the
Servicing Fee Rate.
"Note Interest Rate" means the per annum interest rate borne by a Note.
"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).
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.04.
"Notes" means the Class A-1 Notes and the Class A-2 Notes.
"Officers' 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 Officers' Certificate shall be to an Officers' 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 employees of
or counsel to the Issuer and who shall be acceptable to the Indenture Trustee,
and which opinion or opinions shall be addressed to the Indenture Trustee as
Indenture Trustee, and shall comply with any applicable requirements of Section
11.01.
"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
6
<PAGE>
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 therefor, satisfactory to the
Indenture Trustee); 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 that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned by
the Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any
of the foregoing Persons 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 the Indenture Trustee 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 Seller
or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes,
or a Class of Notes, as applicable, Outstanding at the date of determination.
"Paying Agent" means the Indenture Trustee, The Bank of New York or any
Person that meets the eligibility standards for the Indenture Trustee specified
in Section 6.11 and is authorized by the Issuer to make the payments to and
distributions from the Collection Account and the Note Distribution Account,
including payment of principal of or interest on the Notes on behalf of the
Issuer.
"Payment Date" means the 15th day of each month, or, if any such date
is not a Business Day, the next succeeding Business Day, commencing May 15,
1995.
"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.
"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
7
<PAGE>
administrative proceeding.
"Rating Agency" means Moody's, Standard & Poor's, Fitch and Duff &
Phelps. If no such organization or successor is any longer in existence,
"Rating Agency" shall be a nationally recognized statistical rating organization
or other comparable Person designated by the Issuer, notice of which designation
shall be given to the Indenture Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days prior notice thereof and that each
of the Rating Agencies shall have notified the Seller, the Servicer and the
Issuer in writing that such action will not result in a reduction or withdrawal
of the then current rating of the Notes.
"Record Date" means, with respect to a Payment Date or Redemption Date,
the close of business on the fourteenth day of the calendar month in which such
Payment Date or Redemption Date occurs.
"Redemption Date" means the Payment Date specified by the Servicer or
the Issuer pursuant to Section 10.01(a) or (b), as applicable.
"Redemption Price" means (a) in the case of a redemption of the Class
A-2 Notes pursuant to Section 10.01(a), an amount equal to the principal amount
of the Class A-2 Notes redeemed plus accrued and unpaid interest thereon at the
related Note Interest Rate to but excluding the Redemption Date, or (b) 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 (a) 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 of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary, or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
dated as of ______, 199__ among the Issuer, the Seller and the Servicer, in the
form of Exhibit B.
"Schedule of Receivables" means the listing of the Receivables set
forth in Exhibit A (which Exhibit may be in the form of microfiche).
8
<PAGE>
"State" means any one of the 50 states of the United States of America
or the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.07(e).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force on the date hereof, unless otherwise specifically provided.
"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, the following terms have the respective meanings set forth in
the Sale and Servicing Agreement as in effect on the Closing Date for all
purposes of this Indenture, and the definitions of such terms are equally
applicable both to the singular and plural forms of such terms:
<TABLE>
<CAPTION>
Section of Sale and
Term Servicing Agreement
- ---- -------------------
<S> <C>
APR Section 1.01
Certificate Section 1.01
Certificateholders Section 1.01
Class A-2 Final
Scheduled Payment Date Section 1.01
Collection Account Section 1.01
Collection Period Section 1.01
Contract Section 1.01
Cut-off Date Section 1.01
Dealers Section 1.01
Depositor Section 1.01
Duff & Phelps Section 1.01
Eligible Deposit Account Section 1.01
Eligible Investments Section 1.01
Financed Equipment Section 1.01
Fitch Section 1.01
Initial Pool Balance Section 1.01
Moody's Section 1.01
Note Distribution Account Section 1.01
Noteholders' Distributable
Amount Section 1.01
Obligor Section 1.01
Pool Balance Section 1.01
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Purchase Agreement Section 1.01
Purchased Receivable Section 1.01
Receivable Section 1.01
Recoveries Section 1.01
Reserve Account Section 1.01
Reserve Account Initial
Deposit Section 1.01
Seller Section 1.01
Servicer Section 1.01
Servicer Default Section 1.01
Servicing Fee Rate Section 1.01
Specified Reserve
Account Balance Section 1.01
Standard & Poor's Section 1.01
Total Distribution Amount Section 1.01
Transfer Date Section 1.01
Trust Accounts Section 1.01
</TABLE>
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.
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;
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<PAGE>
(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 exclusive;
(iv) "including" means "including without limitation"; and
(v) words in the singular include the plural and words in the plural
include the singular.
SECTION 1.04. Calculations of Interest. All calculations of interest
in respect of the Class A-1 Notes and the Class A-2 Notes made hereunder shall
be computed on the basis of a 360 day year and the actual number of days in the
related period of accrual.
ARTICLE II
The Notes
---------
SECTION 2.01. Form. The Class A-1 and Class A-2 Notes, in each case
together with the Indenture Trustee's certificate of authentication, shall be in
substantially the forms set forth in Exhibits D and E, respectively, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and 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.
The 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.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibits D and E 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
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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 Issuer Order authenticate and deliver
Class A-1 Notes for original issue in an aggregate principal amount of
$________and Class A-2 Notes for original issue in an aggregate principal amount
of $________. The aggregate principal amount of Class A-1 and Class A-2 Notes
outstanding at any time may not exceed such amounts, respectively, except as
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 thereof.
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
executed 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 definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
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 definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for 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 temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like 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 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
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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 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, if the
requirements of Section 8-401(1) of the UCC are met 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 principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, if the requirements of
Section 8-401(1) of the UCC are met the Issuer shall execute, and the Indenture
Trustee 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 the form of Exhibit F hereto, 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 of New York or 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 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 or 9.06 not involving any
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transfer.
The preceding provisions of this Section 2.04 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.
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 it 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, and provided that the requirements of Section 8-405 of the UCC are
met, the Issuer shall execute and upon its 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, 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 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) 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 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,
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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
agent of the Issuer or the Indenture Trustee 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 neither the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.
(a) The Notes shall accrue interest as provided in the forms of the Class A-1
Note and Class A-2 Note set forth in Exhibits D and E, respectively, and such
interest shall be payable on each Payment Date as specified therein. 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 Payment
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 check mailed first-
class, postage prepaid to such Person's address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.12, with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a Payment
Date (and except for the Redemption Price for any Note called for redemption
pursuant to Section 10.01(a)) which shall be payable as provided below. The
funds represented by any such checks returned undelivered shall be held in
accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on
each Payment Date as provided in the forms of the Class A-1 Note and Class A-2
Note set forth in Exhibits D and E, respectively. 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, if the Indenture Trustee or the Holders of the
Notes representing not less than a majority of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable 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. Upon notice
to the Indenture Trustee by the Issuer, 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 Payment 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 no later than five Business Days prior to such final Payment
Date 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
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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 (plus interest on such defaulted interest at
a rate per annum equal to the sum of (i) the applicable Note Interest Rate and
(ii) 2.0%, to the extent lawful) in any lawful manner. The Issuer may pay such
defaulted interest and interest on such defaulted interest to the persons who
are Noteholders on a subsequent special record date, which date shall be at
least five Business Days prior to the payment date. The Issuer shall fix or
cause to be fixed any such special record date and payment date, and, at least
10 days before any such special record date, the Issuer shall mail to each
Noteholder a notice that states the special record date, the payment date and
the amount of defaulted interest and interest on such defaulted interest to be
paid.
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. Release of Collateral. Subject to Section 11.01, the
Indenture Trustee shall release property from the lien of this Indenture only
upon receipt of an Issuer Request accompanied by an Officers' Certificate, an
Opinion of Counsel and Independent Certificates in accordance with TIA (S)(S)
314(c) and 314(d)(l) or an Opinion of Counsel in lieu of such Independent
Certificates to the effect that the TIA does not require any such Independent
Certificates.
SECTION 2.10. 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 The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Issuer. Such Note shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner will receive a Definitive Note (as
hereinafter defined) representing such Note Owner's interest in such Note,
except as provided in Section 2.12. Unless and until definitive, fully
registered Notes (the "Definitive Notes") have been issued to Note Owners
pursuant to Section 2.12:
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(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 Note Owners;
(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;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants. Pursuant to the Depository Agreement, unless
and until Definitive Notes are issued pursuant to Section 2.12, the initial
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 Holders of Notes evidencing a
specified percentage of the Outstanding Amount of the Notes, 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 2.11. 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 Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Holders of the Notes to the Clearing Agency, and
shall have no obligation to the Note Owners or other Holders of the Notes.
SECTION 2.12. Definitive Notes. If (i) the Issuer advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Notes, and
the Issuer is unable to locate a qualified successor, (ii) the Issuer 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 or a Servicer Default, Note Owners representing beneficial
interests aggregating at least a majority of the Outstanding Amount of the Notes
advise the Clearing Agency in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interests of the
Note Owners, then the Clearing Agency shall notify all
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Note Owners and the Indenture Trustee of the occurrence of any such event and of
the availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten 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 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, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
ARTICLE III
Covenants
---------
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, the Issuer will cause to be distributed all amounts on deposit in the
Note Distribution Account on a Payment Date. 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 the Borough of Manhattan, The City of New York, 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 Bank of New
York, New York, New York 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(a) and (b), 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(c) 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.
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At or before noon (New York time) on each Payment 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 under
the Notes, 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 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 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 of
which it has actual knowledge (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
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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 the
Indenture Trustee or such Paying Agent, as the case may be, shall give prompt
notice of such occurrence to the Issuer and shall release such money to the
Issuer on Issuer Request; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof (but
only to the extent of the amounts so paid to the Issuer), and all liability of
the Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, 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 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 corporation under the laws of the State of
Nevada (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
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 Collateral and each other
instrument or agreement included in the Estate.
SECTION 3.05. Protection of Estate. The Issuer will from time to time
prepare, execute, deliver and file all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
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(iv) preserve and defend title to the Estate and the rights of the
Indenture Trustee and the Noteholders in such Estate against the claims of
all persons and parties.
The Issuer hereby designates the Indenture Trustee, and hereby authorizes the
Indenture Trustee as its agent and attorney-in-fact, to execute any financing
statement, continuation statement or other instrument required by the Indenture
Trustee pursuant to this Section.
SECTION 3.06. Opinions as to Estate. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements, as
are necessary to perfect and make effective the lien and security interest of
this Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before February 28 in each calendar year, beginning in
1996, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until February 28 in the following calendar
year.
SECTION 3.07. Performance of Obligations; Servicing of Receivables.
(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
of such Person's material covenants or obligations under any instrument or
agreement included in the Estate 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 this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officers' Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Servicer to assist the Issuer in performing its
duties under this Indenture.
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(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Estate, 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 Sale 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 Basic
Document or any provision thereof without the consent of the Indenture Trustee
or the Holders of at least a majority of the Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a
Servicer Default under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect to
such default. If a Servicer Default shall arise from the failure of the Servicer
to perform any of its duties or obligations under the Sale and Servicing
Agreement with respect to the Receivables, the Issuer shall take all reasonable
steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers pursuant to Section 8.01 of
the Sale and Servicing Agreement, the Issuer shall appoint a successor servicer
(the "Successor Servicer"), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer, subject to Section 8.02 of the Sale and
Servicing Agreement. The Indenture Trustee may resign as the Servicer by giving
written notice of such resignation to the Issuer and in such event will be
released from such duties and obligations, such release not to be effective
until the date a new servicer enters into a servicing agreement with the Issuer
as provided below. Upon delivery of any such notice to the Issuer, the Issuer
shall obtain a new servicer as the Successor Servicer under the Sale and
Servicing Agreement. Any Successor Servicer other than the Indenture Trustee
shall (i) be an established financial institution having a net worth of not less
than $50,000,000 and whose regular business includes the servicing of equipment
receivables and (ii) enter into a servicing agreement with the Issuer having
substantially the same provisions as the provisions of the Sale and Servicing
Agreement applicable to the Servicer. If within 30 days after the delivery of
the notice referred to above, the Issuer shall not have obtained such a new
servicer, the Indenture Trustee may appoint, or may petition a court of
competent jurisdiction to appoint, a Successor Servicer. In connection with any
such appointment, the Indenture Trustee may make such arrangements for the
compensation of such successor as it and such successor shall agree, subject to
the limitations set forth below and in the Sale and Servicing Agreement, and in
accordance with Section 8.02 of the Sale and Servicing Agreement, the Issuer
shall enter into an agreement with such successor for the servicing of the
Receivables (such agreement to be in form and substance satisfactory to the
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Indenture Trustee). If the Indenture Trustee shall succeed to the Servicer's
duties as servicer of the Receivables as provided herein, it shall do so in its
capacity as servicer and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI hereof shall be inapplicable to the
Indenture Trustee in its duties as the successor to the Servicer and the
servicing of the Receivables. In case the Indenture Trustee shall become
successor to the Servicer under the Sale and Servicing Agreement, the Indenture
Trustee shall be entitled to appoint as Servicer any one of its affiliates,
provided that it shall be fully liable for the actions and omissions of such
affiliate in such capacity as Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee. As soon as a Successor Servicer is appointed, the Issuer
shall notify the Indenture Trustee of such appointment, specifying in such
notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Indenture Trustee or the Holders of at least a
majority in Outstanding Amount of the Notes, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any Collateral (except to the
extent otherwise provided in the Sale and Servicing Agreement) or the Basic
Documents, or waive timely performance or observance by the Servicer or the
Seller under the Sale and Servicing Agreement or JDCC under the Purchase
Agreement; provided, however, that no such amendment shall (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that are required to be
made for the benefit of the Noteholders or (ii) reduce the aforesaid percentage
of the Notes which are required to consent to any such amendment, without the
consent of the holders of all the outstanding Notes. If any such amendment,
modification, supplement or waiver shall be so consented to by the Indenture
Trustee or such Holders, the Issuer agrees, promptly following a request by the
Indenture Trustee to do so, to execute and deliver, in its own name and at its
own expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may reasonably deem necessary or appropriate in the
circumstances.
SECTION 3.08. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture, the Purchase
Agreement or the Sale and Servicing Agreement, sell, transfer, exchange or
otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Estate, 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
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payments under the Code) 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 Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of 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 Estate or any part thereof or any
interest therein or the proceeds thereof (other than tax liens, mechanics'
liens and other liens that arise by operation of law, in each case on a
Financed Equipment and arising solely as a result of an action or omission
of the related Obligor) or (C) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any such tax,
mechanics' or other lien arising by operation of law) security interest in
the Estate.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year ending in 1995), an
Officers' Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that
(i) a review of the activities of the Issuer during the 12-month
period ending at the end of such fiscal year (or in the case of the fiscal
year ending October 31, 1995, the period from the Closing Date to October
31, 1995) and of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under this
Indenture throughout such year, or, if there has been a default in the
compliance of any such condition or covenant, specifying each such default
known to such Authorized Officer and the nature and status thereof.
SECTION 3.10. 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 of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form 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
on the part of the Issuer to be performed or observed, all as provided
herein;
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(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 (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer, 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; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Estate, to any Person, unless
(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer the conveyance or transfer of which is hereby
restricted shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State, (B)
expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form 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 on the part of the Issuer to be performed or observed, all
as provided herein, (C) expressly agrees 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, (D)
unless otherwise provided in such supplemental indenture, expressly agrees
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, (E) expressly agrees by means of such supplemental indenture that
such Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person) required
by the Exchange Act in connection with the Notes and (F) such conveyance or
transfer is expressly permitted by this Indenture, the Purchase Agreement
and the Sale and Servicing Agreement;
(ii) immediately after giving effect to such transaction, no Default
or Event
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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 (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer, 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; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(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 the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(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 to and
acceptance by the Indenture Trustee of the Officer's Certificate and Opinion of
Counsel specified in Section 3.10(b)(vi) stating that the Issuer is to be so
released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic
Documents, issuing the Notes and Certificates and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with Sections 4.09, 4.10, 4.11 and 5.06 of the Sale and
Servicing Agreement.
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SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Restricted Payments. The Issuer shall not, directly
or indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer or
to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value
any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; provided, however, that
the Issuer may make, or cause to be made, (x) distributions to the Servicer and
the Certificateholders as permitted by, and to the extent funds are available
for such purpose under, the Sale and Servicing Agreement and (y) payments to the
Indenture Trustee. The Issuer will not, directly or indirectly, make payments
to or distributions from the Collection Account except in accordance with this
Indenture and the Basic Documents.
SECTION 3.18. Notice of Events of Default. The Issuer agrees to give
the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder and, within five days after obtaining knowledge of
any of the following occurrences, written notice of each default on the part of
the Servicer or the Seller of its obligations under the Sale and Servicing
Agreement and each default on the part of JDCC of its obligations under the
Purchase Agreement.
SECTION 3.19. 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.
ARTICLE IV
Satisfaction and Discharge
--------------------------
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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 3.03, 3.04, 3.05, 3.08,
3.10, 3.12 and 3.13, (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 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
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation
(i) have become due and payable,
(ii) will become due and payable at the Class A-2 Final
Scheduled Payment 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 of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such
Notes not theretofore delivered to the Indenture Trustee for
cancellation as of such day of discharge or when due on the Class
A-2 Final Scheduled Payment Date or Redemption Date (if Notes
shall have been called for redemption pursuant to Section
10.01(a)), as the case may be;
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(B) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an Officers'
Certificate, an Opinion of Counsel and (if required by the TIA) an
Independent Certificate from a firm of certified public accountants, each
meeting the applicable requirements of Section 11.01(a) and each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
SECTION 4.02. Application of Trust Money. All moneys deposited with
the Indenture Trustee pursuant to Section 4.01 hereof 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 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 Sale 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.
ARTICLE V
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):
(i) default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of
five days; or
(ii) default in the payment of the principal of or any installment of
the principal of any Note when the same becomes due and payable; or
(iii) default in the observance or performance of any covenant or
agreement
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of the Issuer made in this Indenture (other than a covenant or agreement, a
default in the observance or performance of which is elsewhere in this
Section specifically dealt with), or any representation or warranty of the
Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such representation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the Issuer and
the Indenture Trustee by the Holders of at least 25% of the Outstanding
Amount of the Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Estate in an involuntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for the Issuer or for any substantial part
of the Estate, or ordering the winding-up or liquidation of the Issuer's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 90 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Estate, or the making by
the Issuer of any general assignment for the benefit of creditors, or the
failure by the Issuer generally to pay its debts as such debts become due,
or the taking of action by the Issuer in furtherance of any of the
foregoing.
The Issuer shall deliver to the Indenture Trustee, within five days
after the occurrence thereof, written notice in the form of an Officers'
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (iii), its status and what action
the Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default should occur and be continuing, then and in every such case
the Indenture Trustee or the Holders of Notes representing a majority of the
Outstanding Amount of the Notes may declare all the Notes to be immediately due
and payable, by a notice in writing to
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the Issuer (and to the Indenture Trustee if given by Noteholders), and upon any
such declaration the unpaid principal amount of the Notes, together with accrued
and unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Holders of Notes representing a majority of the Outstanding Amount of the Notes,
by written notice to the Issuer and the Indenture Trustee, may rescind and annul
such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay
(A) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note when
the same becomes due and payable, 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
a rate per annum equal to the sum of (i) the respective Note Interest Rate borne
by the Notes and (ii) 2.0% and in addition thereto such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.
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(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, 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 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) 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 Estate, Proceedings under Title 11 of the United States Code or
any other applicable federal or state bankruptcy, insolvency or other similar
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 the Noteholders
allowed in such Proceedings;
(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;
(iii) to collect and receive any moneys or other property payable or
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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, 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.
(e) 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
composition 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.
(f) 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.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all 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; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Section 5.05):
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(i) institute Proceedings in its own name and as 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 Estate;
(iii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Estate 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 Estate following an Event of Default,
other than an Event of Default described in Section 5.01(i) or (ii), unless
(A) the Holders of 100% of the Outstanding 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 Estate 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 obtains the consent of Holders of 66-2/3% of the
Outstanding Amount of the Notes. In determining such sufficiency or
insufficiency with respect to clause (B) and (C), the Indenture Trustee may,
but need not, obtain and 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 Estate for such
purpose.
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
interest, respectively; and
THIRD: to the Issuer for distribution to the Certificateholders.
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
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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 5.05. Optional Preservation of the Receivables. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to maintain possession
of the Estate. It is the desire of the parties hereto and the Noteholders that
there be at all times sufficient funds for the payment of principal of 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 Estate.
In determining whether to maintain possession of the Estate, the Indenture
Trustee may, but need not, obtain and 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 Estate for
such purpose.
SECTION 5.06. 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:
(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 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
Proceedings; 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; it being 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
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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, and shall have no
liability to any person for such action or inaction.
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, 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 5.08. 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 reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, 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 5.09. 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 5.10. 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 or 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 V 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 5.11. Control by Noteholders. The Holders of a majority of
the Outstanding Amount of the Notes 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; provided that
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(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Estate 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 Estate 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 Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.01, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Outstanding Amount of the
Notes may waive any past Default or Event of Default and its consequences except
a Default (a) in payment of principal of or interest on any of the Notes or (b)
in respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Note. In the case of any such waiver,
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 Default or impair any right consequent
thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.13. 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,
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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 (a)
any suit instituted by the Indenture Trustee, (b) 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 (c) 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 5.14. 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 advantage 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.
SECTION 5.15. 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 Estate 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 5.04(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Servicer's expense, the Issuer agrees to take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller and the Servicer, as applicable, of each of their obligations to
the Issuer under or in connection with the Sale and Servicing Agreement or to
JDCC under or in connection with the Purchase 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 Sale
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 Seller or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale and Servicing
Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee at the direction (which direction shall be in writing or by
telephone (confirmed in
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writing promptly thereafter)) of the Holders of 66-2/3% of the Outstanding
Amount of the Notes shall exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Seller or the Servicer under or in connection
with the Sale and Servicing Agreement, including the right or power to take any
action to compel or secure performance or observance by the Seller 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
Sale and Servicing Agreement, and any right of the Issuer to take such action
shall be suspended.
(c) Promptly following a request from the Indenture Trustee to do so
and at the Issuer's expense, the Issuer agrees to take all such lawful action as
the Indenture Trustee may request to compel or secure the performance and
observance by JDCC of each of its obligations to the Seller under or in
connection with the Purchase 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 Purchase 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 Seller thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by JDCC of each of its obligations under the Purchase
Agreement.
(d) If an Event of Default has occurred and is continuing, the
Indenture Trustee at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of 66-2/3%
of the Outstanding Amount of the Notes shall exercise all rights, remedies,
powers, privileges and claims of the Seller against JDCC under or in connection
with the Purchase Agreement to the extent granted as security for the Notes
hereunder, including the right or power to take any action to compel or secure
performance or observance by JDCC of each of its obligations to the Seller
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Purchase Agreement, and any right of the Seller to
take such action shall be suspended.
ARTICLE VI
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 use the same degree of care
and skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) 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
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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 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 on their face to the
requirements of this Indenture.
Except for its calculation of LIBOR, the Indenture Trustee shall not be required
to determine, confirm or recalculate the information contained in the Servicer's
Certificate delivered to it pursuant to the Sale and Servicing Agreement.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(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 5.11 or otherwise from Holders
under the Indenture.
(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.
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) 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 Sale and Servicing Agreement.
(g) 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 adequate indemnity satisfactory to it against such
loss, liability or expense is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the
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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 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 Officers' Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the Officers' 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 wilful 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 action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
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 must comply with Sections 6.10 and 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 the Estate, this Indenture 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 the 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.
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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 mandatory redemption provisions of such Note), 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; and provided that in the case of any default of the character
specified in Section 5.01(iii), no such notice to Holders shall be given until
at least 30 days after the occurrence thereof.
SECTION 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its Federal and state income tax returns. The
Indenture Trustee shall only be required to provide to the Noteholders the
information given to it by the Servicer. The Indenture Trustee shall not be
required to determine, confirm or recompute any such information.
SECTION 6.07. Compensation and Indemnity. The Issuer shall or shall
cause the Servicer to pay to the Indenture Trustee from time to time reasonable
compensation for its services. 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 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 or shall cause the Servicer to indemnify the Indenture Trustee
against any and all loss, liability or expense (including the fees of either in-
house counsel or outside counsel, but not both) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Indenture Trustee shall notify the Issuer and the Servicer
promptly of any claim for which it may seek indemnity. Failure by the Indenture
Trustee to so notify the Issuer and the Servicer shall not relieve the Issuer or
the Servicer of its obligations hereunder. The Issuer shall or shall cause the
Servicer to defend the claim and the Indenture Trustee may have separate counsel
and the Issuer shall or shall cause the Servicer to pay the fees and expenses of
such counsel. Neither the Issuer nor 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 wilful misconduct, negligence or bad
faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.01(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
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SECTION 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture
Trustee may resign at any time by so notifying the Issuer. The Holders of a
majority in Outstanding Amount of the Notes may remove the Indenture Trustee by
so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee, which successor shall be,
if JDCC is the Servicer, reasonably acceptable to the Seller.
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 the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer 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.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Servicer's obligations under Section 6.07
shall continue for the benefit of the retiring Indenture Trustee.
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SECTION 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation or
banking association without any further act shall be the successor Indenture
Trustee. The Indenture Trustee shall provide the Rating Agencies prior written
notice of any such transaction, provided that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11.
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 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-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Trust may at the time be located, the Indenture Trustee shall have the
power and may execute and deliver all instruments to appoint one or more Persons
reasonably acceptable to the Issuer to act as a co-trustee or co-trustees, or
separate trustee or separate 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 Trust, or any part hereof, and, subject to the
other provisions of this Section, such powers, duties, obligations, rights and
trusts as the Indenture Trustee may consider necessary or desirable. No co-
trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised
or performed by the Indenture 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 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
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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 Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
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 VI. 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
Indenture Trustee or separately, as may be provided therein, subject to all 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.
(d) Any separate trustee or co-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 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA (S) 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and its long-term
unsecured debt shall be rated at least Baa3 by Moody's. The Indenture Trustee
shall comply with TIA (S) 310(b), including the optional provision permitted by
the second sentence of TIA (S) 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA (S) 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 (S) 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). An indenture trustee who has resigned or
been removed shall be subject to TIA (S) 311(a) to the extent indicated.
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ARTICLE VII
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 (a) not more than five days after the earlier of (i) each
Record Date and (ii) 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 Holders of Notes as of such Record Date, (b) 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 10 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; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. 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 (S) 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 (S) 312(c).
SECTION 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer
is required 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) which 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; and
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(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all Noteholders described in TIA (S) 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) as may
be required 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 October 31 of each year.
SECTION 7.04. Reports by Indenture Trustee. If required by TIA (S)
313(a), within 60 days after each February 1 beginning with February 1, 1996,
the Indenture Trustee shall mail to each Noteholder as required by TIA (S)
313(c) a brief report dated as of such date that complies with TIA (S) 313(a).
The Indenture Trustee also shall comply with TIA (S) 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
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. 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 Estate, 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
V.
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 5.01 of the Sale
and Servicing Agreement.
(b) Not less than two Business Days prior to each Payment Date, the
Total
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Distribution Amount with respect to the preceding Collection Period will
be deposited in the Collection Account as provided in Section 5.02 of the Sale
and Servicing Agreement. On or before each Payment Date, the Noteholders'
Distributable Amount with respect to the preceding Collection Period will be
transferred from the Collection Account and/or the Reserve Account to the Note
Distribution Account as provided in Sections 5.04 and 5.05 of the Sale and
Servicing Agreement.
(c) On each Payment Date and Redemption Date, 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 in the following amounts and in the
following order of priority:
(i) accrued and unpaid interest on the Notes; provided that if there
are not sufficient funds in the Note Distribution Account to pay the entire
amount of accrued and unpaid interest then due on the Notes, the amount in
the Note Distribution Account shall be applied to the payment of such
interest on the Notes pro rata on the basis of the total such interest due
on the Notes;
(ii) to the Class A-1 Noteholders, on account of principal, until the
Outstanding Amount of the Class A-1 Notes is reduced to zero; and
(iii) to the Class A-2 Noteholders, on account of principal, until the
Outstanding Amount of the Class A-2 Notes is reduced to zero.
(d) The Indenture Trustee shall calculate LIBOR for each Payment Date
(other than the first Payment Date) as soon as such calculation can be made.
Upon telephone request, the Indenture Trustee shall inform, by telephone
(confirmed in writing), a representative of each of the Issuer, _______ and
_______ of LIBOR for a Payment Date.
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 Eligible
Investments and reinvested by the Indenture Trustee upon Issuer Order, subject
to the provisions of Section 5.01(b) of the Sale and Servicing Agreement. All
income or other gain from investments of monies deposited in the Trust Accounts
net of any investment expenses and any losses resulting from such investments
shall be deposited by the Indenture Trustee in the Collection Account. The
Issuer will not direct the Indenture Trustee 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.
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(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 investment directions
for any funds on deposit in the Trust Accounts to the Indenture Trustee by 12:00
noon New York 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, if
such Notes shall have been declared due and payable following an Event of
Default, amounts collected or receivable from the Estate are being applied in
accordance with Section 5.05 as if there had not been such a declaration; then
the Indenture Trustee shall, to the fullest extent practicable, invest and
reinvest funds in the Trust Accounts in one or more Eligible Investments.
SECTION 8.04. Release of Estate. (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 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 provided in this Article VIII
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
monies.
(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 Estate that secured the Notes
from the lien of this Indenture 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
Officers' Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA (S)(S) 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.01.
SECTION 8.05. Opinion of Counsel. The Indenture Trustee shall receive
at least seven days' 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
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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 Estate. 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 IX
Supplemental Indentures
-----------------------
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to
the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto, 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 of this Indenture, or to subject to the lien of 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 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, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the
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provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to
the requirements of Article VI; or
(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 execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the Notes
but with prior notice to the Rating Agencies, 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 such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
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 the Rating Agencies and with the consent of the
Holders of not less than a majority of the Outstanding Amount of the Notes, 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 Price with respect thereto, change the
provision of this Indenture relating to the application of collections on,
or the proceeds of the sale of, the Estate 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 V, 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
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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 proviso to the definition
of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Estate pursuant to Section 5.04;
(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 Basic Documents cannot be modified or waived
without the consent of the Holder of each Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation of
any of the individual components of such calculation) or to affect the
rights of the Holders of Notes to the benefit of any provisions for the
mandatory redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Estate or,
except as otherwise permitted or contemplated herein, terminate the lien of
this Indenture on any property at any time subject hereto or deprive the
Holder of any Note of the security provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders 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 Issuer and the Indenture Trustee 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
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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 IX 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. 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.
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 Indenture Trustee, the Issuer 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 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 IX 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 IX 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 X
Redemption of Notes
-------------------
SECTION 10.01. Redemption. (a) The Class A-2 Notes are subject to
redemption in whole, but not in part, at the written direction of the Servicer
pursuant to
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Section 9.01(a) of the Sale and Servicing Agreement, on any Payment Date, if the
then outstanding Pool Balance is 10% or less of the Initial Pool Balance, for a
purchase price equal to the Redemption Price; provided, however, that the Issuer
has available funds sufficient to pay the Redemption Price. The Servicer or the
Issuer shall furnish the Rating Agencies notice of such redemption. If the Class
A-2 Notes are to be redeemed pursuant to this Section 10.01(a), the Servicer or
the Issuer shall furnish notice of such election to the Indenture Trustee not
later than 25 days prior to the Redemption Date and the Issuer shall deposit
with the Indenture Trustee in the Note Distribution Account the Redemption Price
of the Class A-2 Notes to be redeemed whereupon all such Class A-2 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 Class A-2 Notes.
(b) In the event that the assets of the Issuer are sold, all amounts
on deposit in the Note Distribution Account shall be paid to the Noteholders up
to the Outstanding Amount of the Notes and all accrued and unpaid interest
thereon. 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
notice of such event to the Indenture Trustee not later than 25 days prior to
the Redemption Date whereupon all such amounts shall be payable on the
Redemption Date.
SECTION 10.02. Form of Redemption Notice. (a) 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 Price;
(iii) the place where such Notes are to be surrendered for payment of
the Redemption Price (which shall be the office or agency of the Issuer to
be maintained as provided in Section 3.02); and
(iv) CUSIP number.
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.
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(b) Prior notice of redemption under Section 10.01(b) is not required
to be given to Noteholders.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or
portions thereof to be redeemed shall, following notice of redemption as
required by Section 10.02 (in the case of redemption pursuant to Section
10.01(a)), on the Redemption Date become due and payable at the Redemption Price
and (unless the Issuer shall default in the payment of the Redemption Price) no
interest shall accrue on the Redemption Price for any period after the date to
which accrued interest is calculated for purposes of calculating the Redemption
Price.
ARTICLE XI
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 Officers' 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) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, 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
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(iv) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
(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 the
release of any property or securities subject to the lien of 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 Officers'
Certificate certifying or stating the opinion of each person signing such
certificate 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 Officers' 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 same
matters, if the fair value to the Issuer of the securities to be so deposited
and of all other such securities 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 securities so deposited,
if the fair value thereof to the Issuer as set forth in the related Officers'
Certificate is less than $25,000 or less than one percent of the Outstanding
Amount of the Notes.
(iii) Other than with respect to the release of any Purchased
Receivables or Defaulted Receivables, whenever any property or securities are to
be released from the lien of this Indenture, the Issuer shall also furnish to
the Indenture Trustee an Officers' 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 under this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' 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 other than Purchased Receivables and Defaulted Receivables, or
securities released from the lien of this Indenture since the commencement of
the then current calendar 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 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 Officers' Certificate is less than $25,000 or less than one percent
of the then Outstanding Amount of the Notes.
56
<PAGE>
(v) Notwithstanding Section 2.09, Section 3.10(b) or any other
provision of this Section, the Issuer may (A) collect, liquidate, sell or
otherwise dispose of Receivables as and to the extent permitted or required by
the Basic Documents and (B) make cash payments out of the Trust Accounts as and
to the extent permitted or required by the Basic 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
Persons 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 Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
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, statements, 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 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 rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
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
57
<PAGE>
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, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:
(a) The Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee and received at its Corporate Trust
Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-
class, postage prepaid, to the Issuer addressed to: Deere Receivables
Corporation, in care of First Interstate Bank Building, 1 East First
Street, Reno, Nevada 89501, Attention: _________________, or at any other
address previously furnished in writing to the Indenture Trustee by the
Issuer. The Issuer shall promptly transmit any notice received by it from
the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer or
the Indenture Trustee shall be in writing, personally delivered or mailed by
certified mail, return receipt requested to (i) in the case of Moody's, at the
following address: Moody's Investors Service, Inc., ABS Monitoring Department,
99 Church Street, New York, New York 10007, (ii) in the case of Standard &
Poor's, at the following address: Standard & Poor's Corporation,
58
<PAGE>
26 Broadway (20th Floor), New York, New York 10004, Attention of Asset Backed
Surveillance Department, (iii) in the case of Fitch, at the following address:
Fitch Investors Service, L.P., One State Street Plaza, New York, New York 10004,
Attention: Structured Finance Surveillance and (iv) in the case of Duff &
Phelps, at the following address: Duff & Phelps Credit Rating Co., 55 East
Monroe Street (35th Floor), Chicago, Illinois 60603, Attention: Asset Backed
Monitoring Department, or as to each of the foregoing, at such other address as
shall be designated by written notice to the other parties.
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 provision of this Indenture or any of the Notes to the
contrary, to the extent satisfactory to the Indenture Trustee, the Issuer may
enter into any agreement 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 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.
59
<PAGE>
SECTION 11.07. 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.
The provisions of TIA (S)(S) 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.
SECTION 11.08. 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 11.09. 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-trustees and agents of the Indenture Trustee.
SECTION 11.10. 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 11.11. 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 Estate, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 11.12. 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.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
60
<PAGE>
SECTION 11.15. 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 11.16. Trust Obligation. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Indenture 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 in its individual capacity, any
holder of a beneficial interest in the Issuer or the Indenture Trustee or of any
successor or assign of the Indenture Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee has no such obligations in its 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 any failure to pay any installment or call owing to such
entity.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Seller or the Issuer,
or join in any institution against the Seller or the Issuer of, 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 Basic Documents.
SECTION 11.18. 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.
61
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
DEERE RECEIVABLES CORPORATION
By:
--------------------------,
THE BANK OF NEW YORK, not in its
individual capacity but solely as Indenture
Trustee,
By:
--------------------------
Name:
Title:
62
<PAGE>
EXHIBIT A
Schedule of Receivables
-----------------------
[To be delivered to the Issuer at Closing]
<PAGE>
EXHIBIT B
[Form of Sale and Servicing Agreement]
--------------------------------------
<PAGE>
EXHIBIT C
[Form of Depository Agreement]
------------------------------
<PAGE>
EXHIBIT D
REGISTERED $
-------------------------
No. R
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
--------
[Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC) - ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS 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.
DEERE RECEIVABLES CORPORATION
FLOATING RATE ASSET BACKED NOTES,
CLASS A-1
Deere Receivables Corporation, a corporation organized and existing
under the laws of the State of Nevada (herein referred to as the "Issuer"), for
value received, hereby promises to pay to [ ], or registered assigns,
the principal sum of [ ] DOLLARS payable on each Payment Date in an
amount equal to the result obtained by multiplying (i) a fraction the numerator
of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE] and the denominator of
which is $________ by (ii) the aggregate amount, if any, payable from the Note
Distribution Account in respect of principal of the Class A-1 Notes pursuant to
Section 8.02(c) of the Indenture; provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on _______, 199__. No
payments of principal of the Class A-2 Notes shall be made until the principal
of the Class A-1 Notes has been paid in its entirety. The Issuer will pay
interest on this Note at the Class A-1 Note Interest Rate on each Payment Date
until the principal of this Note is paid or made
D-1
<PAGE>
available for payment, on the principal amount of this Note outstanding on the
preceding Payment Date after giving effect to all payments of principal made on
such preceding Payment Date (or in the case of the first Payment Date, on the
initial principal amount of this Note). Interest on this Note will accrue for
each Payment Date from and including the most recent Payment Date to but
excluding such Payment Date or, if no interest has yet been paid, from ______,
199_. Interest will be computed on the basis of a 360-day year for the actual
number of days in the period for which such interest is payable. 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.
D-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: DEERE RECEIVABLES CORPORATION
By:
----------------------,
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
not in its individual
capacity but solely as Trustee,
By:
--------------------------------------------
Authorized Signatory
D-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of the Class A-1 Notes of a duly authorized issue of
Notes of the Issuer, designated as its Floating Rate Asset Backed Notes (herein
called the "Notes"), all issued under an Indenture dated as of _______, 199_
(such indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and The Bank of New York, as indenture trustee (the
"Indenture Trustee", which term includes any successor indenture trustee under
the Indenture), 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 Notes are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Notes will be payable on each Payment Date in an
amount described on the face hereof.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on _______, 199__. Notwithstanding the foregoing, the
entire unpaid principal amount of the Notes shall be due and payable on the date
on which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Holders of the Notes representing not less than a
majority of the Outstanding Amount of the Notes have declared the Notes to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments on the Notes of a Class shall be made pro rata
to the Noteholders of such Class entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, 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 the
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. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any
D-4
<PAGE>
payments made on any Payment 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 Payment 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 Payment Date by notice mailed within five days of such Payment 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 New York.
The Issuer shall pay interest on overdue installments of interest at a
rate per annum equal to the sum of (i) the Class A-1 Note Interest Rate and (ii)
2.0%, to the extent lawful.
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 a commercial bank or
trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, 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 or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, 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 Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Indenture 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 Estate in its individual
capacity, any holder of a beneficial interest in the Issuer or the Indenture
Trustee or of any successor or assign of the Indenture 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.
D-5
<PAGE>
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that by
accepting the benefits of the indenture that such Noteholder will not at any
time institute against the Issuer, or join in any institution against 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
Basic Documents.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or 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 Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. 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 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 or more Predecessor Notes) shall be conclusive and binding upon such
Holder 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.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
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
D-6
<PAGE>
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.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither The Bank of New York, in its individual
capacity, any owner of a beneficial interest in the Issuer, nor any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Holder shall have no claim against any of the foregoing for any deficiency, loss
or claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the Issuer
for any and all liabilities, obligations and undertakings contained in the
Indenture or in this Note.
D-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
---------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: _______________________ ________________NOTE: The signature to this
assignment must correspond with the name of the
registered owner as it appears on the face of
the within Note in every particular, without
alteration, enlargement or any change
whatsoever.
Signature Guaranteed:
-----------------------------------------------------
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Indenture
Trustee which requirements will include membership or
participation in STAMP or such other "signature
guarantee program" as may be determined by the
Indenture Trustee in addition to, or in substitution
for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
- -------------------------
D-8
<PAGE>
EXHIBIT E
REGISTERED $
-------------------
No. R
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
----------
[Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC) - ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS 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.
DEERE RECEIVABLES CORPORATION
FLOATING RATE ASSET BACKED NOTES,
CLASS A-2
Deere Receivables corporation, a business trust organized and existing
under the laws of the State of Nevada (herein referred to as the "Issuer"), for
value received, hereby promises to pay to [ ], or registered
assigns, the principal sum of [ ] DOLLARS payable on each
Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE]
and the denominator of which is $__________ by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of principal of the
Class A-2 Notes pursuant to Section 8.02(c) of the Indenture; provided, however,
that the entire unpaid principal amount of this Note shall be due and payable on
the earlier of ________, ____ and the Redemption Date, if any, pursuant to
Section 10.01(a) of the Indenture. No payments of principal of the Class A-2
Notes shall be made until the principal of the Class A-1 Notes has been paid in
its entirety. The Issuer will pay interest on this Note
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<PAGE>
at the Class A-2 Note Interest Rate on each Payment 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 Payment Date after giving effect to all
payments of principal made on such preceding Payment Date (or in the case of the
first Payment Date, on the initial principal amount of this Note). Interest on
this Note will accrue for each Payment Date from and including the most recent
Payment Date to but excluding such Payment Date or, if no interest has yet been
paid, from ______, 199__. Interest will be computed on the basis of a 360-day
year for the actual number of days in the period for which such interest is
payable. 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.
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<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: DEERE RECEIVABLES CORPORATION
By
-------------------------,
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee,
By:
-------------------------------
Authorized Signatory
E-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of the Class A-2 Notes of a duly authorized issue of
Notes of the Issuer, designated as its Floating Rate Asset Backed Notes (herein
called the "Notes"), all issued under an Indenture dated as of _______, 199_
(such indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and The Bank of New York, as indenture trustee (the
"Indenture Trustee", which term includes any successor indenture trustee under
the Indenture), 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 Notes are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Notes will be payable on each Payment Date in an
amount described on the face hereof.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of ________, ____ and the Redemption
Date, if any, pursuant to Section 10.01(a) of the Indenture. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee or the Holders of the Notes representing
not less than a majority of the Outstanding Amount of the Notes have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02 of the Indenture. All principal payments on the Notes of a Class shall be
made pro rata to the Noteholders of such Class entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, 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 the
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. Any reduction in the
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<PAGE>
principal amount of this Note (or any one or more Predecessor Notes) effected by
any payments made on any Payment 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 Payment 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 Payment Date by notice mailed within five days of such Payment 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 New York.
The Issuer shall pay interest on overdue installments of interest at a
rate per annum equal to the sum of (i) the Class A-2 Note Interest Rate and (ii)
2.0%, to the extent lawful.
As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Servicer, on any Payment Date on or after the
date on which the Pool Balance is less than or equal to 10% of the Initial Pool
Balance.
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 a commercial bank or
trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, 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 or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, 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 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 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 in its individual capacity, any
holder of a beneficial interest in the Issuer or the Indenture Trustee or of
any successor or assign of the
E-5
<PAGE>
Indenture 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 or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees that by
accepting the benefits of the indenture that such Noteholder will not at any
time institute against the Issuer, or join in any institution against 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
Basic Documents.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or 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 Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. 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 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 or more Predecessor Notes) shall be conclusive and binding upon such
Holder 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.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
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<PAGE>
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
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.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither The Bank of New York, in its individual
capacity, any owner of a beneficial interest in the Issuer, nor any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Holder shall have no claim against any of the foregoing for any deficiency, loss
or claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the Issuer
for any and all liabilities, obligations and undertakings contained in the
Indenture or in this Note.
E-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- -------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
--------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: _______________ ____________________________ NOTE: The signature to
this assignment must correspond with the name of the
registered owner as it appears on the face of the
within Note in every particular, without alteration,
enlargement or any change whatsoever.
Signature Guaranteed:
------------------------------------------------------
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Indenture
Trustee which requirements will include membership or
participation in STAMP or such other "signature
guarantee program" as may be determined by the
Indenture Trustee in addition to, or in substitution
for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
- -----------------------
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<PAGE>
EXHIBIT F
[Form of Transferee Certificate]
--------------------------------
<PAGE>
Exhibit 5.1
June 21, 1996
John Deere Receivables, Inc.
First Interstate Bank Building
1 East First Street
Reno, Nevada 89501
John Deere Capital Corporation
First Interstate Bank Building
1 East First Street
Reno, Nevada 89501
Deere Receivables Corporation
First Interstate Bank Building
1 East First Street
Reno, Nevada 89501
Registration Statement on Form S-3
(Registration No. 33-99294)
---------------------------
Gentlemen:
We are acting as counsel to John Deere Receivables, Inc., a Nevada
corporation (the "Seller"), John Deere Capital Corporation, a Delaware
corporation (the "Servicer") and Deere Receivables Corporation, a Nevada
corporation (the "Company"), in connection with the Registration Statement (No.
33-99294) on Form S-3 (the "Registration Statement") filed by the Company and
the Seller with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended, relating to the offering from time to
time, as set forth in the prospectus contained in the Registration Statement
(the "Prospectus") and as to be set forth in one or more supplements to the
Prospectus, of one or more classes of Asset Backed Notes (the "Notes") and Asset
Backed Certificates (the "Certificates") with an aggregate issue price of up to
$2,000,000,000.
<PAGE>
2
As described in the Registration Statement, the Notes and the Certificates
will be issued from time to time in series, with each series to be issued either
by a Delaware business trust (each, a "Trust") to be formed pursuant to a Trust
Agreement (each, a "Trust Agreement") between the Seller and an Owner Trustee or
by the Company. With respect to each series issued by a Trust, the Certificates
will be issued pursuant to a Trust Agreement, and the Notes will be issued
pursuant to an Indenture (each, a "Trust Indenture") between the related Trust
and an Indenture Trustee, and, with respect to each series issued by the
Company, the Notes will be issued pursuant to an Indenture (each, a "Company
Indenture"; together with the Trust Indentures, the "Indentures") between the
Company and an Indenture Trustee. The Notes and the Certificates will be sold
from time to time pursuant to certain underwriting agreements (the "Underwriting
Agreements") between the Seller, the Company (in the case of series of Notes
issued by the Company) and the various underwriters named therein.
We have examined and relied upon the Registration Statement and, in each
case as filed with, or incorporated by reference in, the Registration Statement,
the form of Sale and Servicing Agreement among a Trust or the Company (as the
case may be), the Seller and the Servicer, the form of Trust Indenture
(including forms of Notes included as exhibits thereto), the form of Company
Indenture (including forms of Notes included as exhibits thereto), the form of
Trust Agreement (including the form of Certificates of Trust to be filed
pursuant to the Delaware Business Trust Act and the form of Certificate filed as
exhibit thereto) and the forms of Underwriting Agreements for the Notes and the
Certificates (collectively, the "Operative Documents"). Terms used herein
without definition have the meanings given to such terms in the Registration
Statement.
We are familiar with the corporate proceedings of the Seller and the
Company to date and have examined such corporate records of the Seller and the
Company and such other documents and certificates as we have deemed necessary as
a basis for the opinions hereinafter expressed.
Based on the foregoing, and having regard for such legal considerations as
we have deemed relevant, we are of the opinion that, with respect to the Notes
of any series, when (i) the final terms of such Notes have been duly established
and approved by or pursuant to authorization of the Board of Directors of the
Seller or the Company, as the case may be, (ii) the Operative Documents relating
to such series have each been duly completed, executed and delivered by the
parties thereto substantially in the form filed as an exhibit to the
Registration Statement reflecting the terms established as described above,
(iii) in the case of a series of Notes to be issued by a Trust, the Certificates
of Trust for such Trust has been duly executed by the Owner Trustee and filed
with the Secretary of State of the State of Delaware, and (iv) such Notes have
been duly authorized, executed and issued by the related Trust or the Company,
as the case may be, and authenticated by the relevant Indenture Trustee, and
delivered to and paid for by the purchasers thereof, all in accordance with the
terms and conditions of the related Operative Documents and in the manner
described in the Registration Statement, such Notes will constitute
<PAGE>
3
the valid and legally binding obligations of the Trust or the Company, as the
case may be, entitled to the benefits of the related Indenture.
The opinion set forth above is subject, as to enforcement, to (i)
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws relating
to or affecting the enforcement of creditors' rights generally, and (ii) general
equitable principles (regardless of whether enforcement is considered in a
proceeding in equity of at law).
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Opinions" in the Prospectus.
Very truly yours,
Shearman & Sterling
<PAGE>
Exhibit 5.2
(302) 651-7712
June 21, 1996
John Deere Receivables, Inc.
First Interstate Bank Building
1 East First Street
Reno, Nevada 89501
John Deere Capital Corporation
First Interstate Bank Building
1 East First Street
Reno, Nevada 89501
RE: John Deere Receivables, Inc.
Registration Statement on form S-3
(Registration No. 33-99294)
----------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to John Deere Receivables, Inc.,
a Nevada corporation (the "Company" or the "Seller"), in connection with the
above-captioned Registration Statement (such registration statement together
with the exhibits and any amendments thereto, the "Registration Statement"),
filed by the Company with the Securities and Exchange Commission in connection
with the registration by the Company of Asset Backed Notes (the "Notes") and
Asset Backed Certificates (the "Certificates") with an aggregate principal
amount of $2,000,000,000.
<PAGE>
John Deere Receivables, Inc.
John Deere Capital Corporation
June 21, 1996
Page 2
As described in the Registration Statement, the Notes and the Certificates
will be issued from time to time in series, with each series to be issued by a
Delaware business trust (each, a "Trust") to be formed by the Seller pursuant to
a Trust Agreement (each, a "Trust Agreement") between the Seller and an Owner
Trustee. With respect to each series, the Certificates will be issued pursuant
to a Trust Agreement, the Notes will be issued pursuant to an Indenture (each,
an "Indenture") between the related Trust and an Indenture Trustee and the Notes
and Certificates will be sold from time to time pursuant to certain underwriting
agreements (the "Underwriting Agreements") between the Seller and the various
underwriters named therein. At your request, this opinion is being furnished to
you.
For purposes of giving the opinions hereinafter set forth, we have examined
and relied upon the Registration Statement and, in each case as filed with the
Registration Statement, the form of Sale and Servicing Agreement among a Trust,
the Seller and the Servicer, the form of Indenture (including forms of Notes
included as exhibits thereto), the form of Trust Agreement (including the form
of Certificate of Trust to be filed pursuant to the Delaware Business Trust Act
and the form of Certificate filed as an exhibit thereto) and the forms of
Underwriting Agreements for the Notes and the Certificates (the "Operative
Documents"). Terms used herein without definition have the meanings given to
such terms in the Registration Statement.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed above, and we assume that there exists no provision in any
document not listed above that bears upon or is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we assume to be true, complete and accurate in all material
respects.
Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that, with respect to the
Certificates of any series, when (i) the final terms of such Certificates have
been duly established and approved by or pursuant to authorization of the Board
of Directors of the Seller, (ii) the Operative Documents relating to such series
have each been duly completed, executed and delivered by the parties thereto
substantially in the form filed as an exhibit to the Registration Statement
reflecting the terms established as described above, (iii) the Certificate of
Trust for the related Trust has been duly executed by the Owner Trustee and
filed with the Secretary of State of the
<PAGE>
John Deere Receivables, Inc.
John Deere Capital Corporation
June 21, 1996
Page 3
State of Delaware, and (iv) such Certificates have been duly authorized,
executed and issued by the related Trust and authenticated by the Owner Trustee,
and delivered to and paid for by the purchasers thereof, all in accordance with
the terms and conditions of the related Operative Documents and in the manner
described in the Registration Statement, such Certificates will be valid, fully
paid and nonassessable beneficial interests in the Trust (subject to the
obligation of the Depositor under Section 2.07(a) of the Trust Agreement.
The foregoing opinion is subject to the following exceptions, qualifications,
limitations and assumptions:
A. This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
B. We have not participated in the preparation for the Registration
Statement or any offering materials with respect to the Certificates and assume
no responsibility for their contents.
We hereby consent to the use of this opinion exhibit to the Registration
Statement and to the use of our name under the heading "Legal Opinions" in the
Prospectus filed as part of the Registration Statement. In giving the foregoing
consent, we do not thereby admit that we come within the category of Persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other Person
or for any other purpose.
Very truly yours,
Richards, Layton & Finger
EAM/JLJ/dts
<PAGE>
Exhibit 8.1
June 21, 1996
John Deere Receivables, Inc.
First Interstate Bank Building
1 East First Street
Reno, Nevada 89501
John Deere Capital Corporation
First Interstate Bank Building
1 East First Street
Reno, Nevada 89501
Deere Receivables Corporation
First Interstate Bank Building
1 East First Street
Reno, Nevada 89501
Registration Statement on Form S-3
(Registration No. 33-99294)
---------------------------
Gentlemen:
We are acting as counsel to John Deere Receivables, Inc., a Nevada
corporation (the "Seller"), John Deere Capital Corporation, a Delaware
corporation (the "Servicer") and Deere Receivables corporation, a Nevada
corporation (the "Company"), in connection with the Registration Statement (No.
33-99294) on Form S-3 (the "Registration Statement") filed by the Company and
the Seller with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended, relating to the offering from time to
time, as set forth in the prospectus contained in the Registration Statement
(the "Prospectus") and as to be set forth in one or more supplements to the
Prospectus (each, a "Prospectus Supplement"), of one or more classes of Asset
Backed Notes (the "Notes") and Asset Backed Certificates (the "Certificates") in
an aggregate amount of up to $2,000,000,000.
<PAGE>
2
As described in the Registration Statement, the Notes and the Certificates
will be issued from time to time in series, with each series to be issued either
by a Delaware business trust (each, a "Trust") to be formed pursuant to a Trust
Agreement (each, a "Trust Agreement") between the Seller and an Owner Trustee or
by the Company. With respect to each series issued by a Trust, the Certificates
will be issued pursuant to a Trust Agreement and the Notes will be issued
pursuant to an Indenture (each, a "Trust Indenture") between the related Trust
and an Indenture Trustee, and, with respect to each series issued by the
Company, the Notes will be issued pursuant to an Indenture (each, a "Company
Indenture") between the Company and an Indenture Trustee.
We have examined and relied upon the Registration Statement and, in each
case as filed with, or incorporated by reference in, the Registration Statement,
the form of Sale and Servicing Agreement among a Trust or the Company (as the
case may be), the Seller and the Servicer, the form of a Trust Indenture
(including forms of Notes included as exhibits thereto), the form of a Company
Indenture (including forms of Notes included as exhibits thereto), the form of
Trust Agreement (including the form of Certificate filed as an exhibit thereto)
and the form of Purchase Agreement between the Seller and the Servicer
(collectively, the "Operative Documents").
Based on the foregoing and assuming that the Operative Documents with
respect to each series are executed and delivered in substantially the form as
we have examined and that the transactions contemplated to occur under the
Operative Documents in fact occur in accordance with the terms thereof, we
hereby confirm that, if we are acting as special federal tax counsel with
respect to the issuance of a Series of Notes and Certificates, the statements
set forth in the Prospectus Supplement relating to such series of Notes and
Certificates under the caption "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" will
accurately describe, subject to the limitations stated therein, the material
federal income tax considerations relevant to the purchase, ownership and
disposition of such Notes and Certificates.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Opinions" in the Prospectus.
Very truly yours,
Shearman & Sterling
<PAGE>
EXHIBIT 8.2
LANE & WATERMAN
June 17, 1996
John Deere Receivables, Inc.
First Interstate Bank Building
One East First Street
Reno, NV 89501
John Deere Capital Corporation
First Interstate Bank Building
One East First Street
Reno, NV 89501
RE: REGISTRATION STATEMENT ON FORM S-3
TO REGISTER ASSET BACKED NOTES AND ASSET
BACKED CERTIFICATES
(REGISTRATION NO. 33-99294)
Ladies and Gentlemen:
We have acted as special Iowa tax counsel for John Deere Receivables, Inc.,
a Nevada Corporation (the "Company"), in connection with the above-captioned
Registration Statement (such registration statement together with the exhibits
and any amendments thereto, the "Registration Statement"), filed by the Company
with the Securities and Exchange Commission in connection with the registration
by the Company of the Asset Backed Notes (the "Notes") and Asset Backed
Certificates (the "Certificates") with an aggregate principal amount of
$2,000,000,000. As described in the Registration Statement, the Notes and the
Certificates will be issued from time to time in series, with each series being
issued by a Delaware business trust (each, a "Trust") to be formed by the
Company pursuant to a Trust Agreement (each a "Trust Agreement") between the
Company and a Trustee. For each series, the Notes will be issued pursuant to an
Indenture between the related Trust and an
<PAGE>
June 17, 1996
Page 2
Indenture Trustee and a Sale and Servicing Agreement among the related Trust,
the Company and John Deere Capital Corporation, as Servicer (each, a "Sale and
Servicing Agreement"), and the Certificates will be issued pursuant to a Trust
Agreement and such Sale and Servicing Agreement. Capitalized terms not otherwise
defined herein are used as defined in the form of Sale and Servicing Agreement
filed as an exhibit to the Registration Statement.
In that connection, we are generally familiar with the proceedings required
to be taken in connection with the proposed authorization, issuance and sale of
any series of Notes and Certificates and we have examined copies of such
documents, corporate records and other instruments as we have deemed necessary
or appropriate for the purposes of this opinion, including the Registration
Statement and, in each case as filed as an exhibit to the Registration
Statement, the form of Sale and Servicing Agreement, the form of Indenture
(including the forms of Notes included as exhibits thereto), the form of Trust
Agreement (including the form of Certificate included as an exhibit thereto and
including the form of Certificate of Trust to be filed with the Delaware
Secretary of State) and the form of Purchase Agreement between the Company and
John Deere Capital Corporation (collectively, the "Operative Documents").
As to any facts material to the opinions expressed herein, we have relied
solely upon the factual matters contained in the representations and statements
made in the Operative Documents and we have not independently established or
verified their accuracy. We have assumed authenticity of all documents
submitted to us and the conformity to original documents of all documents
submitted to us as certified or photostatic copies.
Based on the foregoing and assuming that the Operative Documents with
respect to each series are executed and delivered in substantially the form we
have examined and that the transactions contemplated to occur under the
Operative Documents in fact occur in accordance with the terms thereof, we
hereby confirm that, if we are acting as Iowa tax counsel with respect to an
issuance of Notes and Certificates, the statements set forth in the Prospectus
Supplement forming part of the Registration Statement under the caption "CERTAIN
STATE TAX CONSIDERATIONS" accurately reflect our opinion.
We know that we are referred to under the headings "CERTAIN STATE TAX
CONSIDERATIONS" and "LEGAL OPINIONS" in the Prospectus Supplement and the
heading "LEGAL OPINIONS" in the
<PAGE>
June 17, 1996
Page 3
Prospectus and we hereby consent to the use of our name therein and to the use
of this opinion for filing with the Registration Statement as an Exhibit
thereto.
Very truly yours,
LANE & WATERMAN
<PAGE>
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
JOHN DEERE OWNER TRUST 199_ - __
(Exact name of obligor as specified in its charter)
Delaware Not Available
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Suite 600
First Interstate Bank Building
1 East First Street
Reno, Nevada 89501
(Address of principal executive offices) (Zip code)
______________________
Asset Backed Securities
(Title of the indenture securities)
================================================================================
<PAGE>
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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-
29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 17th day of June, 1996.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
___________________________
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
-4-
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1995, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin........... $ 4,500,312
Interest-bearing balances.................................... 643,938
Securities:
Held-to-maturity securities.................................. 806,221
Available-for-sale securities................................ 2,036,768
Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank:
Federal funds sold........................................... 4,166,720
Securities purchased under agreements to resell.............. 50,413
Loans and lease financing receivables:
Loans and leases, net of unearned income...........27,068,535
LESS: Allowance for loan and lease losses.............520,024
LESS: Allocated transfer risk reserve...................1,000
Loans and leases, net of unearned income and allowance, and
reserve.................................................. 26,547,511
Assets held in trading accounts................................ 758,462
Premises and fixed assets (including capitalized leases)....... 615,330
Other real estate owned........................................ 63,769
Investments in unconsolidated subsidiaries and associated
companies.................................................... 223,174
Customers' liability to this bank on acceptances outstanding... 900,795
Intangible assets.............................................. 212,220
Other assets................................................... 1,186,274
-----------
Total assets................................................... $42,711,907
===========
LIABILITIES
Deposits:
In domestic offices.......................................... $21,248,127
Noninterest-bearing.................................9,172,079
Interest-bearing...................................12,076,048
In foreign offices, Edge and Agreement subsidiaries, and IBFs 9,535,088
Noninterest-bearing....................................64,417
Interest-bearing....................................9,470,671
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 IBFs:
Federal funds purchased...................................... 2,095,668
Securities sold under agreements to repurchase............... 69,212
Demand notes issued to the U.S. Treasury....................... 107,340
Trading liabilities............................................ 615,718
Other borrowed money:
With original maturity of one year or less................... 1,638,744
With original maturity of more than one year................. 120,863
Bank's liability on acceptances executed and outstanding....... 909,527
Subordinated notes and debentures.............................. 1,047,860
Other liabilities.............................................. 1,836,573
-----------
Total liabilities.............................................. 39,224,720
-----------
EQUITY CAPITAL
Common stock................................................... 942,284
Surplus........................................................ 525,666
Undivided profits and capital reserves......................... 1,995,316
Net unrealized holding gains (losses) on available-for-sale
securities................................................... 29,668
Cumulative foreign currency translation adjustments............ (5,747)
-----------
Total equity capital........................................... 3,487,187
-----------
Total liabilities and equity capital........................... $42,711,907
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller 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.
Robert E. Keilman
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 is true and
correct.
J. Carter Bacot }
Thomas A. Renyi } Directors
Alan R. Griffith }
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 25.2
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
DEERE RECEIVABLES CORPORATION
(Exact name of obligor as specified in its charter)
Delaware Not Available
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Suite 600
First Interstate Bank Building
1 East First Street
Reno, Nevada 89501
(Address of principal executive offices) (Zip code)
______________________
Asset Backed Securities
(Title of the indenture securities)
================================================================================
<PAGE>
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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 17th day of June, 1996.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
-----------------------
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
-4-
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1995, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin................... $ 4,500,312
Interest-bearing balances............. 643,936
Securities:
Held-to-maturity securities........... 806,221
Available-for-sale securities......... 2,036,768
Federal funds sold and securities
purchased under agreements to resell
in domestic offices of the bank:
Federal funds sold.................... 4,166,720
Securities purchased under agreements
to resell............................. 50,413
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ...................27,068,535
LESS: Allowance for loan and
lease losses ................520,024
LESS: Allocated transfer risk
reserve........................1,000
Loans and leases, net of unearned
income and allowance, and reserve... 26,547,511
Assets held in trading accounts......... 758,462
Premises and fixed assets (including
capitalized leases)................... 615,330
Other real estate owned................. 63,769
Investments in unconsolidated
subsidiaries and associated
companies............................. 223,174
Customers' liability to this bank on
acceptances outstanding............... 900,795
Intangible assets....................... 212,220
Other assets............................ 1,186,274
-----------
Total assets............................ $42,711,907
===========
LIABILITIES
Deposits:
In domestic offices................... $21,248,127
Noninterest-bearing .........9,172,079
Interest-bearing ...........12,076,048
In foreign offices, Edge and
Agreement subsidiaries, and IBFs...... 9,535,088
Noninterest-bearing ............64,417
Interest-bearing ........... 9,470,671
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased............... 2,095,668
Securities sold under agreements
to repurchase....................... 69,212
Demand notes issued to the U.S.
Treasury.............................. 107,340
Trading liabilities..................... 615,718
Other borrowed money:
With original maturity of one year
or less............................. 1,638,744
With original maturity of more than
one year............................ 120,863
Bank's liability on acceptances exe-
cuted and outstanding................. 909,527
Subordinated notes and debentures....... 1,047,860
Other liabilities....................... 1,836,573
-----------
Total liabilities....................... 39,224,720
-----------
EQUITY CAPITAL
Common stock............................ 942,284
Surplus................................. 525,666
Undivided profits and capital
reserves.............................. 1,995,316
Net unrealized holding gains
(losses) on available-for-sale
securities............................ 29,668
Cumulative foreign currency transla-
tion adjustments...................... (5,747)
-----------
Total equity capital.................... 3,487,187
-----------
Total liabilities and equity
capital .............................. $42,711,907
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller 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.
Robert E. Keilman
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 is true and
correct.
J. Carter Bacot }
Thomas A. Renyi } Directors
Alan R. Griffith }
- --------------------------------------------------------------------------------
