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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________ to ____________
Commission File Number 0-22830
OXFORD RESOURCES CORP.
(Exact name of registrant as specified in its charter)
NEW YORK 11-2344427
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(State or other jurisdiction of incorporation) (IRS Employer ID No.)
270 SOUTH SERVICE ROAD, MELVILLE, NY 11747
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(Address of principal executive offices) (zip code)
(516) 777-8000
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
CLASS A COMMON STOCK, $.01 PAR VALUE
------------------------------------
(Title of Class)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. __
Cover Page 1 of 2 Pages
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The aggregate market value of the Class A Common Stock held by
nonaffiliates of the Registrant as of August 31, 1996 was approximately
$136,561,600.
As of August 31, 1996, the Registrant had outstanding 7,115,662 shares of
Class A Common Stock, par value $.01 per share, and 7,724,000 shares of Class B
Common Stock, par value $.01 per share.
DOCUMENTS INCORPORATED BY REFERENCE
Document Form 10-K Reference
- -------- -------------------
The definitive Proxy Statement Part III
for the 1996 Annual Meeting of
Shareholders (to be filed on or
about October 1, 1996).
Cover Page 2 of 2 Pages
Sequential Page 1 of 122 Pages
Exhibit index located on sequential page number 67
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PART I
ITEM 1. BUSINESS
GENERAL
Oxford Resources Corp. ("Oxford") was incorporated under the laws of the
State of New York in 1974 as a wholly-owned subsidiary of Trexar Corp.
("Trexar"), a Delaware corporation, and has been engaged in the automobile
leasing business since 1979. On December 10, 1993, Trexar and certain of
Trexar's direct and indirect subsidiaries merged into Oxford (the "Merger").
Oxford and its consolidated subsidiaries and, prior to the Merger, Trexar and
its consolidated subsidiaries, including Oxford, are referred to in this
Report as the "Company." The Company's principal executive offices are
located at 270 South Service Road, Melville, New York 11747 and its
telephone number is (516) 777-8000.
The Company is a specialized automobile finance company engaged primarily
in the leasing of new and used automobiles (including passenger cars, minivans,
sport/utility vehicles and light trucks) to individuals, servicing such leases
during their term and remarketing the automobiles upon the expiration of the
leases. The Company also markets an indirect automobile lending program in
which it enters into or purchases (each hereinafter referred to, as the case
may be, as "originates") retail installment contracts (referred to herein as
"Contracts") in connection with the sale of vehicles by automobile dealers.
The Company has experienced consistent growth over the past five fiscal
years, during which period the Company's annual lease originations increased
from $248.1 million to $580.2 million and its lease portfolio increased from
$576.5 million to $1.3 billion. Over the same period, the Company's total
revenues increased from $152.9 million to $301.3 million and income from
continuing operations increased from $397,000 to $18.9 million.
FORWARD-LOOKING STATEMENTS
The matters discussed in this Report contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosure contained in this Report and the Company's other filings with the
Securities and Exchange Commission.
BUSINESS STRATEGY
The Company's business strategy with respect to its leasing operations is
to (i) provide personal and attentive service to the automobile dealers in its
network, substantially all of which are manufacturer-franchised, (ii) lease
automobiles primarily to high quality credit applicants in order to continue to
build a lease portfolio with low credit loss rates, (iii) finance its lease
portfolio on a non-recourse basis during the scheduled lease term and (iv)
manage its risk relating to the Company's realization of its estimate at lease
inception of the projected value of the vehicle at the scheduled end of the
lease term (the "Residual").
The Company began marketing its current indirect lending program to
selected dealers in fiscal 1994 and intends to offer the program to dealers in
all of its leasing markets. The Company generally focuses on originating
Contracts with prime quality credit obligors. The Company entered the indirect
automobile lending business to take advantage of numerous areas of synergy with
its existing leasing operations and to provide its dealers with additional
financing alternatives. The Company believes that as its indirect automobile
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lending operations continue to grow, the Company will achieve operating
efficiencies by using its dealer relationships, financing capabilities and
credit and servicing operations for both its leasing and indirect lending
products.
DEALER RELATIONSHIPS AND MARKETING
The Company originates substantially all of its leases through its network
of approximately 1,200 automobile dealers located in 19 states. The Company
currently originates its Contracts through approximately 1,000 automobile
dealers located in 16 states. Many of these dealers participate in both the
Company's leasing and indirect lending programs.
The Company is dependant upon its existing dealer relationships for
substantially all of its lease and Contract originations. The dealer
relationships are initiated and maintained through the Company's sales
representatives, each of whom has extensive experience in the automobile finance
industry. Each sales representative is generally responsible for servicing
dealers within a specific geographic area.
Generally, the Company's sales representatives meet with their assigned
active dealers on an on-going basis. Each sales representative works closely
with the dealers in preparing credit applications for approval and explaining
the Company's credit criteria and credit determinations. The Company's credit
department maintains business hours that generally coincide with those of most
dealerships and seeks to respond to completed credit applications within two
hours of submission to the Company.
The Company offers leases on many makes and models of automobiles. Honda
Accords and Civics represented 42.3% and 12.0%, respectively, and Nissan Altimas
represented 13.7% of the vehicles in the Company's lease portfolio at June 30,
1996. Among current models of new vehicles, the Accord, Civic and Altima have
many of the characteristics which the Company currently emphasizes in its
leasing operations, including, without limitation, attractive retail price,
historical mechanical reliability and used automobile remarketing potential. No
other vehicle model represented more than 10% of the number of vehicles in the
Company's lease portfolio at June 30, 1996.
In its indirect automobile lending program, the Company purchases each
Contract at its face value. For each Contract, the Company determines a minimum
interest rate (the "Buy Rate") based on the term of the Contract, the age of the
vehicle and the credit quality of the obligor. Subject to limits imposed by the
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Company, the dealer may write a Contract at an interest rate (the "Contract
Rate") higher than the Company's Buy Rate. To the extent that the Contract
Rate on the Contract exceeds the Company's Buy Rate, the Company pays the
dealer a portion of such excess interest as a dealer commission ("Dealer
Commission"). Such commission is generally paid at the end of the month in
which the Company purchases the Contract. The Company is generally permitted
to charge back such Dealer Commission in the event of a default under or
prepayment of the Contract in the first 90 days of the life of the Contract.
Beyond such time, the dealers are entitled to retain the entire Dealer
Commission.
CREDIT PRACTICES AND PORTFOLIO PERFORMANCE
The Company investigates and evaluates against its underwriting standards
the creditworthiness of all applicants for leases and Contracts. Separate
groups of credit analysts review lease and Contract applications. Each
applicant must provide information regarding, among other things, employment,
income, credit and residential history. Applicants must demonstrate residence
and employment stability, ability to pay based both on income level and certain
debt to income ratios developed by the Company and a positive credit history,
including comparable borrowing experience. Employment and, where feasible,
income are independently verified by the Company and the applicant's credit
history is analyzed by obtaining a credit report on the applicant from an
independent credit bureau. The foregoing procedures provide the general basis
for the Company's credit analysts' decisions. Certain of the leases and
Contracts entered into by the Company may not, however, meet each of the
Company's credit specifications. The credit guidelines used by the Company in
its indirect automobile lending operations are generally broader than the
guidelines used in its leasing operations. These guidelines reflect the general
characteristics of new and used automobile financing, including downpayment
requirements and a lower average amount financed for used vehicles than for new
vehicles.
VEHICLE REMARKETING AND RESIDUAL VALUES
The Company's remarketing operations have a substantial impact on its
earnings and cash flows. Under the Company's agreements with the banks and
financial institutions which finance its leases (the "Lenders"), at the end of
the scheduled term of each lease the Company is obligated to dispose of the
vehicle and to remit to the applicable Lender the remaining balance owed to such
Lender with respect to such lease, which is equal to the vehicle's Residual. To
the extent that proceeds from the disposition of a vehicle exceed its net book
value (which equals its Residual at the scheduled termination of the lease), the
Company recognizes a gain, and to the extent that such proceeds are less than
its net book value, the Company recognizes a loss. As a result, the estimation
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of Residuals at lease inception is an important aspect of the Company's
operations.
Residuals are regularly set by the Company for each model vehicle for which
it has a lease program based upon the Company's estimate of the projected value
of a vehicle at the end of the lease term, taking into account such factors as a
vehicle's make and model, its remarketing and mechanical history, new automobile
price increases for the model, the term of the lease and how the automobile is
equipped.
If the Company were to realize significant aggregate losses on the
disposition of off-lease vehicles, there would be a material adverse effect
on the Company. The Company's ability to realize disposition proceeds
approximating the net book value of its off-lease vehicles will be
substantially determined by (i) the accuracy of the Residuals and (ii) the
Company's ability to effectively remarket its off-lease vehicles. The Company
will be obligated to remarket a significantly greater number of vehicles in
each of the next several years than in the past, reflecting the growth of its
leasing operations. The foregoing is a forward-looking statement and there
can be no assurance that such increased remarketing volume will not have a
material adverse effect on the Company nor that the Company will be able to
realize disposition proceeds approximating the net book value.
Since 1983, the Company has maintained primary layer residual value
insurance with carriers rated "AAA" by Standard & Poor's Corporation ("S&P").
The Company also currently maintains excess layer residual value insurance with
a carrier rated "A" by S&P. This insurance provides the Company with protection
in the event that proceeds from the remarketing of off-lease vehicles are not
sufficient to pay the associated Residuals. Each of the policies covers the
vehicles leased during each policy year for the term of the leases. Although
the Company has never made a claim under its residual value insurance policies,
there can be no assurance that it will not make such claims in the future or
that it will be able to secure any such coverage in the future. If aggregate
claims are in excess of the applicable policy limits, they would not be fully
covered by such policies. In addition, payment under the policies is subject to
certain deductibles and other conditions. The making of significant claims
could result in the non-renewal of such policies, which could have a material
adverse effect on the Company's ability to finance its future lease originations
on substantially the same basis as in the past. Notwithstanding the non-renewal
of such policies, the Company's policies provide that all vehicles under lease
which are covered at the time of non-renewal would continue to be covered until
the vehicles are disposed of at the end of their respective scheduled lease
terms.
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SERVICING AND COLLECTIONS
The Company services substantially all of the leases and Contracts it
originates (even after the Contracts are sold). As part of its servicing
obligations, the Company generally is required to print and provide to the
lessees and Contract obligors coupon books for their payments, collect amounts
due, process all payments received inclusive of any applicable taxes and remit
to the proper parties certain of the amounts received. The Company also obtains
appropriate vehicle registrations and titles for all leased vehicles, ensures
that the appropriate liens and security interests are established, tracks
compliance with insurance requirements, negotiates and handles claims with
insurance companies, remits all sales taxes on lease payments to the appropriate
taxing authorities, and provides related services. The Company is also required
by the Lenders and purchasers of its Contracts to generate certain reports
pertaining to the leases or Contracts. In exchange for providing these
services, the Company receives servicing fees and is generally entitled to
retain all late fees and similar charges.
The Company attempts to enhance the performance of its lease and Contract
portfolios and thereby minimize the credit risks to the Lenders and the
purchasers of its Contracts, by maintaining timely, consistent and direct
customer contact. When a default does occur, collections and repossessions are
handled by the Company's collection department. Upon a payment default on a
lease or Contract and after passage of the applicable grace period, the Company,
according to established procedures, mails written notices to the defaulting
customer and attempts to contact the customer directly by phone. Once contact
is established, the collection department will work with the customer until the
default is cured. If contact is not made or the default is not satisfactorily
cured, the Company will proceed to repossess the vehicle. The Company will
repossess the vehicle upon a determination that there is a risk of not
recovering the vehicle, but generally effects repossession no later than 120
days after the default. Repossessed vehicles are offered by the Company at
public sale after the giving of notice to the lessee or obligor and sold by the
Company in a commercially reasonable manner.
FINANCING CAPABILITY
LEASE FINANCING
The Company's lease financing capabilities include its historical ability
to (i) receive financing from a number of Lenders,(ii) borrow on a non-recourse
basis during the lease term and (iii) borrow funds at favorable rates due to,
among other things, the high credit quality of its lessees.
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During the fiscal year ended June 30, 1996, the Company financed its
leases pursuant to individual agreements with 41 Lenders. Approximately
44.8% of the dollar amount of the leases originated by the Company in fiscal
1996 were financed by two Lenders. The Company believes that it should be
able to continue to finance leases on the same or similar terms as it has in
the past. The foregoing is a forward-looking statement and, although the
Company believes that it can replace its existing financing sources with
other lenders of comparable size, stability, lending capacity and reputation,
there can be no assurance that the Company will be able to do so, or that it
will be able to do so on terms comparable to those it currently has with the
Lenders.
The financial arrangements with three of the Lenders result in the
Company's receipt of advantageous interest rates from such Lenders in exchange
for the Company's transfer of certain tax advantages. The Company entered into
these arrangements as a means of gaining economic benefit from depreciation tax
deductions that it otherwise may not use. The number of leases financed through
each of the various Lenders is based, in part, on the Company's strategy for the
use of its tax deductions for the depreciation of vehicles.
SALE OF CONTRACTS
To finance the Contracts originated by the Company, the Company has
pooled and sold substantially all of the Contracts that it has originated
either in securitization transactions or on a private whole-loan basis. Since
March 1995, the Company has sold its Contracts only in securitization
transactions. The Company intends to continue to pool and sell substantially
all of the Contracts that it originates in securitization transactions. The
foregoing is a forward-looking statement and there can be no assurance that
the Company will be able to do so on terms and conditions favorable to it or
consistent with its past securitization transactions, if at all.
COMPETITION
The Company competes in the automobile financing industry with other
leasing companies and providers of other forms of automobile financing. The
consumer automobile financing business is highly competitive and the Company
competes for dealer business on the basis of both pricing and service. The
Company's competitors include captive finance companies affiliated with
automobile manufacturers (such as American Honda Finance Company, Ford Motor
Credit Corporation and General Motors Acceptance Corporation), a variety of
local, regional and national finance companies (including General Electric
Credit Corporation), commercial banks, savings and loans and other consumer
lenders such as industrial thrifts and credit unions. Many of these competitors
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have significantly greater financial, technical and marketing resources and
market share than the Company. Certain competitors (including the captive
automobile finance companies) from time to time offer aggressive leasing and
financing programs at below market pricing to promote the sale of certain
vehicle models. The Company attempts not to compete with such companies on
their heavily promoted vehicles by focusing its marketing on vehicle models
which it believes do not receive such aggressive pricing. The Company's
relationships with its dealers are not exclusive and many of the Company's
competitors have long-standing relationships with such dealers and, unlike
the Company, many of such competitors provide additional forms of financing
to such dealers, including dealer floor plan financing.
The Company competes in the automobile leasing business by (i) providing
personal and attentive service to the automobile dealers through which it
originates leases, (ii) focusing its lease effort on high quality credit
applicants which has resulted in the Company's low historical level of
delinquencies and credit losses on its lease portfolio, (iii) financing its
lease portfolio on a non-recourse basis during the scheduled term and (iv)
utilizing several strategies to manage its risk relating to the Residuals on its
off-lease vehicles.
The Company believes that there are several important elements for a
company to compete successfully in the automobile leasing business. Potential
competitors would need (i) access to sufficient capital to finance its leases,
(ii) a network of dealers providing a steady flow of lease applications, (iii)
credit analysis expertise, (iv) expertise in asset management related to vehicle
ownership, (v) specialized lease servicing systems and operations, (vi)
expertise in estimating residual values and (vii) expertise in remarketing used
automobiles. While many banks, financial institutions and other competitors
have entered the market in the past, initially generating significant lease
volume and capturing market share, the Company believes that many such
competitors have discontinued their leasing business due to lack of and
difficulty in developing one or more of such elements. Certain banks and
financial institutions are, however, in the leasing market and compete with the
Company in their respective geographic areas of concentration. While there are
certain barriers to entry, there can be no assurances that other banks,
financial institutions or other potential competitors cannot successfully
develop such a business in the future.
The Company competes in the indirect automobile lending business by
providing personal and attentive service to the dealers in this program through
its sales representatives and by utilizing securitization of its Contracts to
assist the Company in financing such business at a favorable cost of capital.
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REGULATORY MATTERS
The Company's operations are subject to extensive supervision and
regulation under federal, state and local laws, rules and regulations. In
addition, the Company is required to obtain and maintain certain licenses and
qualifications in the states in which it operates its businesses, and is subject
to laws, rules and regulations in each such state. For example, in those states
where the Company is engaged in its indirect automobile lending program, the
Company is subject to requirements limiting the interest rates which it charges
and mandating specific retail financing disclosures, as well as the requirement
in certain states for the Company to be licensed as a sales finance company.
Numerous proposals are and have been from time to time under
consideration in Congress, certain federal regulatory agencies and certain
state legislatures, which would impose greater regulation and requirements on
the Company's leasing and lending activities. The Company believes that it
would be able to comply with any such new requirements. The foregoing
statement is a forward-looking statement and such requirements could have a
material adverse effect on the Company's activities and results of
operations. The Company is unable to predict whether any such legislation or
regulations will be enacted and, if enacted, whether they would be in a form
currently or previously proposed.
The Company has vehicle storage locations in three states in order to store
and recondition its off-lease vehicles. In such states, the Company is
required to comply with state department of motor vehicle laws, rules and
regulations, and environmental protection laws and regulations, including
without limitation, requirements relating to the discharge of waste water, motor
oil and other waste products. The Company maintains various licenses in these
states to engage in certain of the activities associated with these locations.
Several states and the federal government have enacted "lemon laws" and
similar statutes containing warranty protections for consumers who purchase or
lease new or used motor vehicles. The application of these statutes may give
rise to a claim or defense by a consumer against the manufacturer of a purchased
vehicle or the dealer from or through whom such consumer purchased or leased
such vehicle. The Company may be required to cancel a lease or Contract with a
consumer who successfully asserts such a claim or defense, and while the Company
would have a claim against the manufacturer or such dealer, there can be no
assurance that the Company will be made whole in every case in which the
consumer successfully asserts such rights.
The Company is also subject to numerous federal laws, including the Truth
in Lending Act, the Consumer Leasing Act, the Equal Credit Opportunity Act and
the Fair Credit Reporting Act and the rules and regulations promulgated
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thereunder, and certain rules of the Federal Trade Commission (the "FTC").
These laws require the Company to, among other things, provide certain
disclosures to prospective lessees and installment purchasers, prohibit
misleading advertising and protect against discriminatory financing or unfair
credit practices. Among the principal disclosure items under the Consumer
Leasing Act and Regulation M promulgated thereunder are the amount of the
lessee's monthly payment, the term of the lease and the lessee's rights and
obligations at lease termination. The Truth in Lending Act and Regulation Z
promulgated thereunder require disclosure of, among other things, the terms
of repayment, the final maturity, the amount financed, the total finance
charge and the annual percentage rate charged on each Contract. The Equal
Credit Opportunity Act prohibits creditors from discriminating against loan
applicants (including individuals who purchase and finance a vehicle under
Contracts and other parties obligated thereunder) on the basis of race,
color, sex, age or marital status. Under the Equal Credit Opportunity Act,
creditors are required to make certain disclosures regarding consumer rights
and advise consumers whose credit applications are not approved of the
reasons for the rejection. The Fair Credit Reporting Act requires the
Company to provide certain information to consumers whose credit applications
are not approved on the basis of a report obtained from a consumer reporting
agency. The rules of the FTC limit the types of property a creditor may
accept as collateral to secure a consumer loan and its holder in due course
rules provide for the preservation of the consumer's claims and defenses when
a consumer obligation is assigned to a subsequent holder. With respect to
used vehicles specifically, the FTC's Rule on Sale of Used Vehicles requires
that all sellers of used vehicles prepare, complete and display a "Buyer's
Guide" which explains any applicable warranty coverage for such vehicles.
The "Credit Practices" Rule of the FTC imposes additional restrictions on
loan provisions and credit practices.
Violations of the laws, rules and regulations described above may result in
actions for damages, claims for refunds of payments made, certain fines and
penalties, injunctions against certain practices, license revocation and the
potential forfeiture of rights to repayment of loans and payment of amounts due
under leases. The Company maintains internal controls to monitor compliance
with all legal and regulatory requirements which apply to its businesses.
Further, the Company maintains internal systems and controls to monitor, respond
to and resolve informal and formal complaints raised by its lessees, Contract
obligors and purchasers of its vehicles. The procedures include timely follow-
up with the customer and investigation of the matter and timely resolution of
the customer's concerns. The Company believes that it is currently in
substantial compliance with all relevant federal, state and local governmental
laws, rules and regulations governing its business operations.
In the event of a default under a Contract by a vehicle
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purchaser, a self-help repossession remedy is available under the Uniform
Commercial Code (the "UCC"), as adopted in most of the states in which the
Company acquires and/or originates Contracts, as long as the repossession can be
accomplished without a breach of the peace. In cases where the vehicle cannot
be obtained without a breach of the peace, or if otherwise required by
applicable state law, a court order must be obtained from the appropriate state
court.
The UCC and other state laws require a secured party to provide an obligor
with reasonable notice of a sale of the vehicle after repossession. Most
jurisdictions provide the obligor under a Contract with the right to redeem a
repossessed vehicle prior to sale by paying the secured party the unpaid
principal balance of the obligation and paying reasonable repossession and
related expenses and, in some states, reasonable attorneys' fees. Certain
state's laws also provide to an obligor, for a limited number of times in any
one year, a right to reinstate the Contract by curing all past defaults plus
reasonable repossession costs and attorneys' fees. A number of states have
enacted, or have proposed to enact, similar redemption and/or reinstatement
rights with respect to leases as well.
The proceeds from the sale of a repossesed vehicle generally are applied
first to the expenses of such repossession and sale and then to the satisfaction
of the obligation. If the net proceeds do not cover the amount of the
obligation, a deficiency judgment may be sought. However, the deficiency
judgment would be a personal judgment against the obligor for the shortfall, and
a defaulting obligor normally has very little capital or sources of income
available following repossession.
In addition to the laws limiting or prohibiting deficiency judgments,
equitable limitations and numerous other statutory provisions, including federal
bankruptcy laws and related state laws, may interfere with or affect the ability
of a secured party to realize upon collateral or enforce a deficiency judgment.
For example, under the federal bankruptcy law, a court may prevent a financing
source from repossessing an automobile, or (in a Chapter 13 proceeding) may
reduce the amount of the secured indebtedness to the market value of the
automobile at the time of bankruptcy, 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.
EMPLOYEES
The Company had 436 full-time and 48 part-time employees at June 30, 1996.
All full-time employees are salaried office, supervisory and sales personnel
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(including sales representatives who also receive commissions). None of the
Company's employees are covered by a collective bargaining agreement. The
Company's relationship with its employees is good.
ITEM 2. PROPERTIES
The Company's corporate headquarters is located in Melville, New York and
occupies approximately 51,000 square feet of space leased from an affiliate of
the Company. The lease provides for fixed rent payments of $710,940 per year
through November 30, 1998 and $761,940 per year from December 1, 1998, through
the remainder of the initial term, which expires November 30, 2001. The
agreement also provides for two renewal terms at the Company's option, each for
five years at a fixed rent per year of $566,610 for the first renewal term and
$637,500 for the second renewal term. Additionally, the Company leases
approximately 21,000 square feet of office space in Melville, New York, where
certain of the Company's operational departments are located. The Company
maintains regional sales offices in California, Florida, Georgia, Illinois,
Massachusetts, New Jersey, North Carolina and Texas and also leases locations in
New York and Florida for use as vehicle storage locations. For fiscal 1996, the
annual rental payments for all of such other leased locations aggregated
approximately $577,000. During the fiscal year ended June 30, 1996, the Company
purchased a vehicle storage and reconditioning facility in New Jersey. There is
no mortgage on this facility. The Company's facilities are sufficient to meet
its present business needs.
ITEM 3. LEGAL PROCEEDINGS
The Company is subject to numerous lawsuits in the ordinary course of
business and, as the owner of leased vehicles, may be subject to vicarious
liability under certain state laws for accidents in which such vehicles are
involved. The Company maintains insurance to protect against such liability and
does not believe such lawsuits will have a material adverse effect on the
Company's business, operations or financial condition. In addition, the Company
does not believe that it is a party to any material pending litigation which, if
decided adversely to the Company, would have a significant negative impact on
the business, income, assets or operations of the Company, and the Company is
not aware of any material threatened litigation which might involve the Company.
The foregoing statements are forward-looking statements, and there can be no
assurance that any such material adverse effect or negative impact will not
occur.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of securityholders during the
three month period ended June 30, 1996.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
At June 30, 1996, the Company had approximately seventy-two (72) holders
of record of its Class A Common Stock, including nominee shareholders of
record, and twenty-three (23) holders of its Class B Common Stock. The
Company's Class A Common Stock is traded on The Nasdaq Stock Market's
National Market under the symbol OXFD. The Company's Class B Common Stock is
not registered under the Securities Exchange Act of 1934 and there is no
public trading market for the Class B Common Stock.
The following table sets forth, for the periods indicated, the range of the
high and low sale prices.
PRICE OF CLASS A
COMMON STOCK
FISCAL YEAR ENDED JUNE 30, 1996 HIGH LOW
First Quarter 26 1/4 17 1/4
Second Quarter 28 22 1/2
Third Quarter 30 19 1/2
Fourth Quarter 30 23 1/4
FISCAL YEAR ENDED JUNE 30, 1995 HIGH LOW
First Quarter 13 1/2 9 1/4
Second Quarter 13 1/2 8 1/2
Third Quarter 13 1/4 10 3/4
Fourth Quarter 17 3/4 12
The Company has not, and does not currently anticipate paying dividends on
its Class A Common Stock. Any declaration of dividends on the Class A Common
Stock is in the sole discretion of the Company's Board of Directors.
The transfer agent and registrar of the Company's Class A Common Stock is
The Bank of New York, 101 Barclay Street, New York, NY 10286.
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ITEM 6. SELECTED FINANCIAL DATA
The following information is qualified by reference to, and should be
read in conjunction with, the Consolidated Financial Statements of the
Company, including the notes thereto, and Management's Discussion and
Analysis of Financial Condition and Results of Operations appearing elsewhere
in this Report. The selected consolidated financial data of the Company for
the five fiscal years ended June 30, 1996 (except for certain information
contained under "Other Data") has been derived from the Consolidated
Financial Statements of the Company which have been audited by BDO Seidman,
LLP, independent certified public accountants, and have been prepared to
give retroactive effect to the events described in Note 1 of Notes to the
Consolidated Financial Statements with respect to the fiscal year ended June
30, 1994 and the periods prior thereto.
[CHART APPEARS ON THE FOLLOWING PAGE]
14
<PAGE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
-----------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues (1) . . . . . . . . . . . . . . . . . . . . $ 301,321 $ 243,111 $ 198,279 $ 175,534 $ 152,906
Selling, general and administrative
expenses . . . . . . . . . . . . . . . . . . . . 44,113 33,161 28,716 25,010 18,592
Depreciation and amortization . . . . . . . . . . . 131,837 116,036 95,776 85,708 80,103
Interest expense . . . . . . . . . . . . . . . . . 94,327 72,603 60,854 57,796 53,568
Income from continuing
operations before taxes
on income (1) . . . . . . . . . . . . . . . . . . 31,044 21,311 12,933 7,020 643
Taxes on income . . . . . . . . . . . . . . . . . 12,108 8,311 5,018 2,663 246
Income from continuing
operations (1) . . . . . . . . . . . . . . . . . . 18,936 13,000 7,915 4,357 397
Income from continuing
operations, per share (2) . . . . . . . . . . . . $ 1.30 $ 0.98 $ 0.66 $ 0.41 $ 0.04
Weighted average number of
common and common equivalent
shares outstanding (in thousands) . . . . . . . . 14,588 13,305 12,045 10,563 9,612
OTHER DATA:
Lease portfolio (at period end):
Net dollar amount (3) . . . . . . . . . . . . . . $ 1,337,514 $ 1,076,545 $ 830,371 $ 668,768 $ 576,534
Number . . . . . . . . . . . . . . . . . . . . . . 85,855 67,759 55,191 45,410 38,944
Retail installment contacts (at period end) (4):
Net dollar amount (5) . . . . . . . . . . . . . . $ 305,376 $ 113,490 $ 68,288 $ 47,639 $ 13,532
Number . . . . . . . . . . . . . . . . . . . . . . 24,766 11,809 7,197 4,611 1,492
Originations during period:
Leases (net dollar amount) (3) . . . . . . . . . . $ 580,214 $ 504,690 $ 375,880 $ 264,363 $ 248,116
Leases (number) . . . . . . . . . . . . . . . . . 34,163 25,250 21,194 14,817 14,132
Retail installment contracts(net
dollar amount) (4) (5) . . . . . . . . . . . . . $ 267,451 $ 80,888 $ 42,663 $ 41,700 $ 14,752
Retail installment contracts
(number) (4) . . . . . . . . . . . . . . . . . . 17,278 6,457 3,626 3,415 1,362
<CAPTION>
June 30,
----------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Vehicles under operating leases - net . . . . . . . $ 1,337,514 $ 1,076,545 $ 830,371 $ 668,768 $ 576,534
Total assets . . . . . . . . . . . . . . . . . . . . $ 1,520,663 $ 1,173,202 $ 906,262 $ 717,826 $ 612,703
Notes payable and obligations under capital
leases - non-recourse . . . . . . . . . . . . . . $ 1,387,399 $ 1,115,983 $ 872,242 $ 716,105 $ 616,602
Shareholders' equity (deficit) . . . . . . . . . . . $ 91,463 $ 33,848 $ 20,848 $ (9,716) $ (14,246)
</TABLE>
- ---------------
(1) Includes gains on extinguishment of non-recourse obligations, which are
included in "Gain on vehicle dispositions and lease terminations" in the
Consolidated Statements of Operations. See Report of Independent Certified
Public Accountants and Note 1(b)4 of Notes to Consolidated Financial
Statements.
(2) Per share data is based on the weighted average number of common and
common equivalent shares outstanding during each period.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
15
<PAGE>
(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)
(3) See Note 2 of Notes to Consolidated Financial Statements for an analysis of
the components of vehicles under operating leases-net.
(4) Includes retail installment contracts serviced by the Company including
those held for sale and those which have been sold.
(5) Net of unearned interest.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
All of the leases which the Company originates are operating leases. At
the inception of a lease, no revenue is recognized and the leased vehicle,
together with the initial direct costs of originating the lease, which are
capitalized, appear on the Company's Balance Sheet under the caption
"vehicles under operating leases-net." Each vehicle is depreciated on a
straight-line basis over the lease term down to an amount equal to the
Residual at scheduled lease termination. Lease payments are recognized
ratably as rent income over the term of the lease.
The Company finances substantially all of its leases, on a
lease-by-lease basis, for the duration of the lease term at a fixed interest
rate and enters into a note in connection with each lease with a bank or
other financial institution financing such lease (the "Lender") for the
amount financed. The Lender financing a lease assumes all credit risk for
the duration of the lease term. Because the Company's borrowing cost is
lower than the implicit rate it builds into the lease payment stream, the
Company earns a spread. The Company receives the present value of the spread
(herein, the "premium") in cash from the Lender at the time of financing by
financing each lease at a premium to the net lease asset. The amount
financed by the Lender is calculated such that during the lease term, the
lessee's monthly payments are sufficient to (i) pay all interest due at the
Company's borrowing rate on the outstanding portion of the note and (ii)
amortize the note, so that at the end of the scheduled lease term, the
remaining principal balance of the note is equal to the Residual for the
related vehicle.
In the Company's financial statements the premium (net of the associated
capitalized initial direct costs) is recognized as income over the term of the
lease in the form of the difference between (i) rent income and (ii)
depreciation of vehicles under operating leases and interest expense. The
premium, however, is not earned evenly over the lease term. In each subsequent
month during the lease term, a greater portion of the premium is recognized than
in the prior month. At any point in time, the difference between the unpaid
note balance and the net book value of the vehicle represents the premium which
was received in cash but has not yet been recognized as income. The following
16
<PAGE>
table sets forth the aggregate amount of the non-recourse notes and capital
lease obligations, the net book value of vehicles under operating leases and
the resulting unearned premium associated with the existing lease portfolio.
AT JUNE 30,
---------------------------------------
1996 1995 1994
---- ---- ----
(IN THOUSANDS)
Notes payable and capital lease
obligations - non-recourse . . $1,387,398 $1,115,982 $872,242
Receivables from Lenders and
other (1) . . . . . . . . . . . 18,416 18,684 11,108
Net book value of vehicles
under
operating leases . . . . . . . (1,327,226) (1,065,994) (821,205)
----------- ----------- --------
Unearned premium . . . . . . . $78,588 $ 68,672 $62,145
----------- ----------- --------
----------- ----------- --------
- ---------------
(1) "Receivables from Lenders and other" represents those leases which have
been submitted to the Lenders for funding in the ordinary course of
business, but for which the Company has not received the cash as of the
dates indicated and those leases which have been partially or not funded by
a Lender.
The aggregate premium to be recognized on the Company's existing lease
portfolio is determined for the remainder of the scheduled term of the existing
leases for a number of reasons. First, the rent income and the depreciation
expense in each lease and the interest rate on the note financing each lease are
all fixed for the duration of the scheduled lease term. Second, when a lease
terminates prior to its scheduled termination due to a lessee default as a
result of a repossession of, casualty to or theft of the vehicle, the Company's
lease premium is not impacted since the resulting credit loss is absorbed by the
applicable Lender due to the non-recourse nature of the note and capital lease
obligation. Third, a lease which terminates prior to its scheduled termination
as a result of the voluntary purchase of the vehicle by the lessee or the
permitted voluntary early termination of a lease in accordance with its terms
only accelerates the recognition of the unearned premium. In such case, the
Company recognizes a gain on the disposal of the vehicle equal to the
disposition proceeds less the net book value of the vehicle and such gain will
equal the unearned lease premium.
For leases which terminate prior to their scheduled termination due to a
lessee default in connection with a repossession of, casualty to or theft of the
vehicle, the Company applies the sale or insurance proceeds and any other
recoveries realized with respect to the vehicle, to extinguish the related non-
recourse obligation which financed such lease. The Company is contractually
permitted to do this on defaulted leases since its financings are non-recourse
during the lease term and the Company's only obligation is to remit the
resulting proceeds to the Lender, up to the outstanding balance of the
obligation. The Company records the difference between the disposition proceeds
and the net book value of the vehicle as a loss (or gain, on occasion) on the
defaulted lease and recognizes an offsetting gain from the early
17
<PAGE>
extinguishment of the related non-recourse obligation at a discount to its
principal balance. Such gain equals the credit loss transferred to and incurred
by the Lender on the defaulted lease and will always exceed the loss to the
Company by an amount equal to the remaining unearned premium related to the
lease (i.e., the amount by which the related non-recourse obligation exceeds the
net book value of the vehicle). The excess of the gain over the loss is
recorded in "gain on vehicle dispositions and lease terminations" in the
Company's Consolidated Statements of Income.
The following table represents the total losses and associated offsetting
gains realized by the Company on defaulted leases for each of the periods
indicated:
FISCAL YEAR ENDED
JUNE 30,
---------------------------------
1996 1995 1994
---- ---- ----
(IN THOUSANDS)
Gain on extinguishment of
non-recourse obligations . . . . . . . $1,824 $1,301 $ 1,759
Credit losses on lessee defaults
and physical losses . . . . . . . . . (1,374) (931) (1,360)
-------- -------- -------
Net gain . . . . . . . . . . . . . . . $ 450 $ 370 $ 399
-------- -------- -------
-------- -------- -------
These gains from the early extinguishment of non-recourse borrowings are
equal to the credit losses incurred by the Lenders and therefore represent the
benefit the Company realized from effectively transferring the credit risk
associated with its leasing operations to the Lenders through the use of non-
recourse borrowings. The Company incurs a cost to derive this benefit from
transferring credit risk in the form of interest expense which is higher than
that which would be incurred if the Company used recourse borrowings.
The strict application of Statement of Financial Accounting Standards No. 4
("SFAS No. 4") would require that the gains on early extinguishment of non-
recourse obligations be presented as an extraordinary item, net of related
income taxes. The Company records the gain on debt extinguishment as part of
continuing operations because (i) such terminations occur frequently in the
ordinary course of the Company's business, (ii) each leased vehicle is pledged
individually and separately to a corresponding non-recourse obligation and,
therefore, the elimination of both the asset and the corresponding liability on
early termination is linked together, and (iii) such presentation more properly
matches the cost in the form of higher interest expense, which the Company
incurs to transfer credit risk to the Lenders, with the associated benefit of
such risk transfer. Such benefit is the gain on early extinguishment of the
non-recourse obligations which represents the credit losses transferred to and
incurred by the Lenders. The Company believes that to reflect the gain on the
18
<PAGE>
debt extinguishment as an extraordinary item, as prescribed by SFAS No. 4, would
result in a mismatched and misleading presentation insofar as it would not
properly portray the direct association between these gains and the other income
statement effects of these early terminations, as presented above. Accordingly,
these gains are included, together with other gains and losses from early
terminations and scheduled terminations, in income from continuing operations.
This presentation has no effect on net income or shareholders' equity.
The Company's leases generally have terms of 24, 36, 48 or 60 months. The
following table sets forth the weighted average original term of leases
originated by the Company for the periods indicated:
FISCAL YEAR ENDED JUNE 30,
--------------------------
1996 1995 1994
---- ---- ----
(IN MONTHS)
Weighted average original
lease term. . . . . . . . . . 34.8 36.1 39.9
The decrease in the weighted average original term during the three-
year period shown is the result of an increasing proportion of 24 and 36 month
leases in the Company's lease originations.
The following table sets forth for the Company's lease portfolio, the
lease delinquencies and credit losses at December 31, 1995, 1994 and 1993.
Delinquency and credit loss performance may in the future be influenced by
numerous factors, including economic factors. The foregoing statement is a
forward-looking statement and there can be no assurance that the Company's
future delinquency or credit loss performance with respect to its existing
lease portfolio, nor such performance with respect to leases originated by
the Company in the future, will be similar to or consistent with that set
forth herein.
AT DECEMBER 31,
--------------------------------------------
1995 1994 1993
----- ----- -----
Lease delinquencies(1) . . . .73% .71% .75%
YEAR ENDED DECEMBER 31,
--------------------------------------------
1995 1994 1993
----- ------ ----
Lease credit losses(2) . . . .14% .15% .26%
_______________
(1) Represents the number of leases which are contractually past due 30 days or
more, expressed as a percent of the number of leases in the portfolio.
(2) Credit losses are borne by the Lenders under the Company's non-recourse
borrowing arrangements. Figures presented represent the total dollars of
net credit losses incurred by the Lenders (proceeds less unpaid principal
balance of notes payable and obligations under capital leases - non-
recourse) in proportion to the average aggregate unpaid principal balance
of non-recourse notes payable and obligations under capital leases
associated with such lease portfolio.
19
<PAGE>
At the end of the scheduled lease term, the Company is obligated to dispose
of the off-lease vehicle and pay to the Lender the remaining note balance which
is equal to the Residual. If a lease terminates prior to its scheduled term,
under the terms of its agreements with the Lenders, the Company has no
obligation to pay the Residual or any other predetermined amount. The Company
recognizes a gain or loss on vehicle disposition if proceeds and/or other
recoveries are more or less than the net book value of the vehicle, which equals
the vehicle's Residual at scheduled lease termination. Consequently, the
Company's ability to dispose of the off-lease vehicles is an important aspect
of its operations. The Company seeks to manage its Residual risk through a
variety of strategies, including (i) focusing on the leasing of vehicle models
which the Company believes will have a broad appeal in the used automobile
market and (ii) utilizing multiple remarketing channels including sales and re-
leases to lessees and third parties referred by lessees, sales through
unaffiliated dealers on a consignment basis, sales directly to dealers and
wholesalers and sales through regional auctions. From time to time, the Company
has acquired selected used vehicles for re-sale.
The following table sets forth, for each of the periods indicated, the
number and percentage of vehicles which reached scheduled termination or which
were purchased by the Company for re-sale, which were remarketed by the Company
in each of the Company's remarketing channels.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
1996 1995 1994
---- ---- ----
------------------------------ ---------------------------- ------------------------
Number Percent Number Percent Number Percent
------ ------- ------- ------- ------ -------
<S> <C> <C> <C> <C>
Remarketing method:
Vehicles sold or re-leased to
lessees or third parties
referred by lessees . . . . . . . 8,009 55.7% 6,070 47.3% 4,703 46.8%
Consignment/Retail (1) . . . . . . 929 6.5 1,470 11.5 2,781 27.7
Wholesale. . . . . . . . . . . . . 5,439 37.8 5,282 41.2 2,570 25.5
------- -------- ------- ------- ------ ------
Total . . . . . . . . . . . . . . 14,377 100.0% 12,822 100.0% 10,054 100.0%
------- -------- ------- ------- ------ ------
------- -------- ------- ------- ------ ------
</TABLE>
_______________
(1) Includes sales through its network of unaffiliated dealers on a consignment
basis and, for each of fiscal 1994 and 1995, retail sales through the
Company's own retail automobile sales operations which were discontinued in
December 1994.
The number and percentage of vehicles sold or re-leased to lessees and
third parties referred by lessees and sold through the Company's other
remarketing channels relative to the total number of vehicles remarketed will
vary from quarter to quarter due to factors including changes in the used
automobile market in general and in the management of the Company's overall
vehicle inventory.
The Company engages in indirect automobile lending by purchasing Contracts
from automobile dealers in 16 states, which Contracts are originated in
connection with the sale of new and used motor vehicles by such dealers. The
Company began marketing its current indirect lending program to dealers in
20
<PAGE>
fiscal 1994. Prior thereto, the Company had originated Contracts solely in
conjunction with the sale of its own off-lease vehicles.
The following table sets forth information regarding the Company's serviced
Contract portfolio:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
---------------------------------------------------------------------------------------------
1996 1995 1994
------------ ---------- ---------------
NET DOLLAR NET DOLLAR NET DOLLAR
AMOUNT(1) NUMBER AMOUNT(1) NUMBER AMOUNT(1) NUMBER
--------- ------ --------- ------ ---------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Balance serviced,
beginning of period . . . . . . $113,490 11,809 $68,288 7,197 $47,639 4,611
Originations . . . . . . . . . 267,451 17,278 80,888 6,457 42,663 3,626
Runoff . . . . . . . . . . . . (75,565) (4,321) (35,686) (1,845) (22,014) (1,040)
---------- --------- ----------- ---------- --------- --------
Balance serviced,
end of period . . . . . . . . . $305,376 24,766 $113,490 11,809 $68,288 7,197
---------- --------- ----------- ---------- --------- --------
---------- --------- ----------- ---------- --------- --------
Balance held for sale,
end of period(2) . . . . . . . $20,672 1,393 $ 7,141 591 $7,702 725
Retail installment contracts sold
in period:
Amount . . . . . . . . . . . . . $242,453 15,939 $77,319 6,352 $34,346 3,000
Weighted average
coupon(3) . . . . . . . . . . . 13.7% 14.8% 15.9%
Gain on sale as a percentage
of dollar amount of retail
installment contracts sold . . . 4.2% 4.3% 5.1%
</TABLE>
________________
(1) Includes retail installment contracts, net of unearned interest, serviced
by the Company, including those held for sale by the Company and those
which have been sold.
(2) Included in retail installment contracts serviced. See footnote (1).
(3) Weighted average coupon represents the weighted average, based on dollar
amount, of the annual percentage rates of the retail installment contracts
sold for the respective periods.
The following tables set forth certain information with respect to (i)
the delinquency of Contracts serviced by the Company, including those held
by the Company and those which have been sold for each of the categories of
delinquency and periods presented and (ii) the net credit loss experience
of such portfolio for the periods presented. Because the Company has only
limited historical experience with respect to its indirect automobile
lending program, the delinquency and net credit loss experience to date may
not be indicative of future performance. Delinquency and net credit loss
performance in the future with respect to the Company's indirect automobile
lending program may be influenced by numerous factors, including economic
factors.
21
<PAGE>
There can be no assurance that the Company's future delinquency or net
credit loss performance with respect to its existing Contract portfolio,
nor such performance with respect to Contracts originated by the Company in
the future, will be similar to or consistent with that set forth herein.
<TABLE>
<CAPTION>
AT JUNE 30,
-----------------------------------------------------------------------------------------------------
1996 1995 1994
---- ---- ----
BALANCE PERCENT(1) BALANCE PERCENT(1) BALANCE PERCENT(1)
------- ---------- ------- ---------- -------- ----------
(DOLLARS IN THOUSANDS) (2)
<S> <C> <C> <C> <C> <C> <C>
Retail installment
contracts outstanding $305,376 100.0% $113,490 100.0% $68,288 100.0%
-------- ------ -------- ------ ------- ------
-------- ------ -------- ------ ------- ------
Delinquencies:
30-59 days................ $3,477 1.14% $1,081 0.95% $1,271 1.86%
60-89 days................ 916 0.30 326 0.29 384 0.56
90 days or more........... 790 0.26 425 0.37 500 0.73
------ ---- ------ ----- ------- ------
Total delinquencies... $5,183 1.70% $1,832 1.61% $2,155 3.15%
------ ---- ------ ----- ------- ------
------ ---- ------ ----- ------- ------
</TABLE>
- ---------------
(1) Represents the balance (on a net basis) of retail installment contracts
serviced by the Company contractually past due, expressed as a percentage
of the balance (on a net basis) of the total serviced portfolio.
(2) Includes retail installment contracts serviced by the Company, including
those held for sale by the Company and those which have been sold.
Balances are presented on a net basis (i.e., do not include unearned
interest).
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
-----------------------------------------------------------------
1996 1995 1994
---- ---- -----
(dollars in thousands) (1)
<S> <C> <C> <C>
Net credit losses . . . . . . . . . . . . . . . . . . . . . . $2,005 $1,294 $1,806
As a percentage of average principal amount
of contract balances outstanding . . . . . . . . . . . . . .97% 1.46% 3.14%
</TABLE>
_______________
(1) Includes retail installment contracts serviced by the Company, including
those held for sale by the Company and those which have been sold.
Prior to fiscal 1994, the Company originated Contracts only in connection
with the sale of its off-lease vehicles. In fiscal 1994, the Company introduced
its current indirect automobile lending program to unaffiliated automobile
22
<PAGE>
dealers in connection with the sale of their new and used vehicles. Since
(i) the current program has higher credit underwriting standards than those
under the Company's prior program and (ii) the current program has accounted
for an increasing percentage of the Company's serviced Contract portfolio,
the Company's net credit loss percentages declined over the three year period
shown. There can be no assurance that this trend will continue or that it
will not be reversed in the future. In fiscal 1995 and 1996, substantially
all of the Company's Contracts were originated through the Company's indirect
automobile lending program.
In the ordinary course of its business, the Company has pooled and sold
substantially all of the Contracts that it has originated either on a private
whole-loan basis or in securitization transactions. The Company has utilized
several structures in its securitization transactions. The Company's first
securitization transaction in June 1994 utilized a grantor trust structure
whereby the Company sold a pool of Contracts to a special purpose corporate
subsidiary which in turn sold the Contracts to a grantor trust established
for purposes of the transaction. The Company received a purchase price equal
to 100% of the then outstanding principal balance of the sold Contracts. The
grantor trust sold certificates of beneficial interest, representing 100%
ownership in the grantor trust, for cash to third parties unaffiliated with
the Company, and used the proceeds from the sale of the certificates to
purchase the pool of Contracts. Since the grantor trust transaction, the
Company, through a special purpose corporate subsidiary, has sold pools of
Contracts (on a fixed pass-through rate basis) to an unaffiliated corporation
which administers a multi-seller commercial paper conduit. In this structure,
the Company sold each pool of Contracts for a price equal to 100% of the then
outstanding principal balance of the Contracts, 3% of which was deferred and
which is anticipated to be paid out of future cash flows from the pool of
sold Contracts (herein referred to as the "holdback amount"). Any holdback
amount is included on the Company's Balance Sheet as "retained subordinated
investments in contracts sold" under the caption "Net Investment in
Automobile Receivables." At the time that the Company sells a pool of its
Contracts, in addition to any holdback amount (as previously described), the
Company may provide additional credit enhancement through the establishment
of a restricted cash spread account ("cash spread account") which is included
on the Balance Sheet as "Restricted Funds on Deposit with Banks." Recourse
to the Company in these sales is limited to the extent of the excess
servicing receivable (as hereinafter defined), retained subordinated
investments in contracts sold, if any, and the cash spread account recorded
by the Company in the transactions. Additionally, the Company has limited
contractual recourse provisions relating to the breach of certain
representations and warranties relating to the eligibility of the sold
Contracts.
The Company retains the servicing rights and responsibilities for each pool
of sold Contracts and will receive as compensation normal servicing fees over
the life of the pool.
23
<PAGE>
The Company intends to continue to sell substantially all of the
Contracts which it originates, using these or similar securitization
structures. The foregoing statement is a forward-looking statement and there
can be no assurance that the Company will be able to sell its future Contract
originations, or that the terms of any such sale will be as favorable as or
similar to the terms of the Company's past sale transactions.
All of the Company's Contract sale transactions are on a fixed pass-through
rate basis to the purchasers, which pass-through rate is determined on the sale
date. The Company recognizes gains and losses on the sale of Contracts at each
sale date based on a determination of the present value of the estimated future
amounts ("excess servicing cash flows") to be realized by the Company in
connection with such sale. These estimates consider all cash flows which are
estimated to be generated by the sold Contracts over their life less (i) normal
servicing fees, which are retained by the Company in its capacity as servicer
and are recognized over the life of the transaction, (ii) payments to investors
in the transaction, (iii) payments to the Company with respect to its retained
subordinated investments in contracts sold, if any, and (iv) credit enhancement
expenses, if any. Additionally, excess servicing cash flows are reduced by both
a credit loss provision, which is estimated to be adequate to cover credit
losses over the life of the sold Contracts, and the impact of estimated
prepayments. The gain on sale recognized is net of all transaction fees and
expenses, including Dealer Commissions incurred in connection with the
origination of the sold Contracts and any unrealized gain or loss on any
related short Treasury positions closed at the time of sale
(as discussed below).
The receivable related to the gain on sale is included on the Company's
Balance Sheet as "excess servicing receivable" under the caption "Net Investment
in Automobile Receivables." The Company evaluates the carrying value of its
excess servicing receivable for each discreet sale transaction that it has
consummated at each reporting period considering the actual prepayment and
credit loss experience of the underlying sold Contracts and makes adjustments to
reduce the carrying value of such asset, if appropriate. To date, the Company
has not been required to record any such adjustments. Any adjustment of the
Company's excess servicing receivable would be charged to servicing income.
As described above, the amount of gain on sale which the Company recognizes
upon the sale of its Contracts is based, in part, on estimates of the amount and
timing of future credit losses and prepayments over the life of such sold
Contracts. The rate of credit losses will be influenced by a variety of
economic and other factors, including general economic conditions and
unemployment rates. The rate of prepayments will also be influenced by a
variety of economic and other factors, including general levels of interest
rates and the frequency with which consumers replace their automobiles.
24
<PAGE>
Consequently, the Company's estimates may be incorrect and subject to change.
There can be no assurance that the actual rate of future credit losses or
prepayments on the Company's sold Contracts will not exceed the Company's
estimations or historical experience. The Company continually assesses its
methodology and previous estimates as additional information becomes
available. The carrying value of the Company's excess servicing receivable
may be adjusted periodically to reflect differences between previous
estimates and actual credit losses and prepayment rates at each balance sheet
date using the same discount factor used in the original determination of the
receivable. If actual credit losses or prepayments on sold Contracts were to
exceed the previous estimates used in calculating the related gain on sale
and excess servicing receivable, the Company would experience a loss and a
corresponding write-down of the carrying value of the Company's excess
servicing receivable. While the Company does not expect future changes in
its methodology or future levels of actual credit losses and prepayments to
have a significantly adverse effect on the carrying value of the excess
servicing receivable, there can be no assurance that such effect will not
occur. Periodic comparison of actual experience to previous estimates may,
however, result in adjustments to the valuation of the excess servicing
receivable.
Due to the recognition of earnings from the gain on sale resulting from
the sale of its Contracts, the Company's reported earnings during a
particular period will be impacted by the amount and timing of additional
sales which the Company may consummate in such future periods. Variations to
quarterly earnings will result in relation to the amount and timing of the
completion of such Contract sale transactions and to the extent that the
Company cannot change its Buy Rates on Contract originations as quickly as
market interest rates change.
For income tax purposes, the Company treats its leases, other than those
financed by three of the Lenders, as operating leases which, through
depreciation deductions, generate tax benefits for the Company by giving rise to
net operating losses ("NOL"). These tax benefits have historically allowed the
Company to defer the cash payment of a significant portion of its income tax
liability. The leases which are financed by the remaining three Lenders are
financed on a tax transfer basis and, therefore, the entire lease premium is
recognized immediately upon financing. Other than with respect to the treatment
of the leases for income tax purposes, the Company's financial arrangements with
such three Lenders are similar in substance to those financed with the other
Lenders. For financial reporting purposes, no material distinction is drawn
between the arrangements with such three Lenders and the Company's other
Lenders.
As a result of operating losses caused primarily by the tax treatment of
its leases, the Company had $123.4 million in NOL carryforwards for tax
reporting purposes at June 30, 1996. Under Section 382 of the Internal
Revenue Code of 1986, as amended, the taxable income of the Company available
25
<PAGE>
for offset by NOL carryforwards and certain built-in tax losses will be
subject to an annual limitation (the "382 Limitation") if an "ownership
change" occurs. An ownership change would occur if the total percentage of
stock of the Company owned by one or more "5-percent shareholders" (taking
into account certain aggregation and segregation rules) increases by more
than 50 percentage points during any three year period. If such an ownership
change were to occur, the 382 Limitation would equal the value of the Company
immediately before the ownership change, subject to certain adjustments,
multiplied by the long term tax-exempt rate (as defined in Section 382),
which for September 1996 was 5.80%. To the extent the 382 Limitation
exceeded the federal taxable income of the Company for a given year, the 382
Limitation for the subsequent year would be increased by such excess. The
Company's NOL carryforwards, except to the extent of certain built-in tax
gains, would be disallowed entirely if the Company failed to satisfy the
continuity of business enterprise requirement for the two year period
following such an ownership change. Under the continuity of business
enterprise requirement, the Company must either continue its historical
business or use a significant portion of its pre-ownership change assets in a
business.
Once financed or sold, the Company's leases and Contracts, respectively,
are not affected by future interest rate fluctuations. For leases, both the
implicit rate in each lease and the Company's cost of funds (i.e., the interest
rate on the note payable financing such lease) are fixed for the duration of the
lease term. For Contracts, both the Contract Rate and the pass-through rate,
which is determined at the time of the sale, are fixed for the duration of the
contract period.
For leases and Contracts, the Company is exposed to interest rate risk
during the holding period between the time that a lease or Contract is
originated and the time that it is financed or sold. The Company typically
holds leases prior to financing for less than a month. Any changes in the
Company's borrowing rates affect only new leases submitted for financing after
the date of change. In the case of Contracts, holding periods are generally for
three months and can be for up to six months (and longer in some cases). If
market interest rates were to increase in a period in which the Company was
holding an inventory of Contracts prior to their sale, the Company would
recognize a reduction in the amount of gain subsequently realized on the sale of
such Contracts. From time to time, the Company utilizes the short sale of
Treasury notes which is intended to decrease the impact of changes in market
rates on the gains realized from the sale of its Contracts. Such strategies
will not consistently or completely offset the effects of adverse interest rate
movements, during periods when the Company holds Contracts prior to their sale.
Except to the extent of recognizing any unrealized gain or loss on open Treasury
positions as of the end of each fiscal quarter, the Company will recognize any
additional gain or loss on any position at the time the related Contracts
26
<PAGE>
are sold and such position is closed. Such gain or loss is included within
the gain on sale on such Contracts. In the event that the Company utilizes
different financing structures for its leases and Contracts in the future,
the Company may hold such leases and Contracts for a longer period prior to
finance or sale.
RESULTS OF OPERATIONS
The following table sets forth information with respect to the Company's
sources of revenue for the fiscal years ended June 30, 1996, 1995 and 1994.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
--------------------------------------------------------------------------------------------
1996 1995 1994
--------- ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Rental income . . . . . . . . . . . . $267,959 88.9% $221,435 91.1% $183,067 92.3%
Gain on sale of retail installment
contracts . . . . . . . . . . . . 10,119 3.4 3,354 1.4 1,759 0.9
Interest and other income . . . . . . 9,470 3.1 5,801 2.4 4,800 2.4
Gain on vehicle dispositions and
lease terminations . . . . . . . . 4,296 1.4 5,784 2.4 4,130 2.1
Servicing income . . . . . . . . . . 9,477 3.2 6,737 2.7 4,523 2.3
------- ------- ----- --- ----- ----
Total revenues . . . . . . . . . . . $301,321 100.0% $243,111 100.0% $198,279 100.0%
-------- ------- -------- ------ -------- ------
-------- ------- -------- ------ -------- ------
</TABLE>
FISCAL YEAR ENDED JUNE 30, 1996 COMPARED TO FISCAL YEAR ENDED JUNE 30, 1995
Revenues for the fiscal year ended June 30, 1996 increased to $301.3
million from $243.1 million for the fiscal year ended June 30, 1995 representing
an increase of 23.9%.
Rental income for the fiscal year ended June 30, 1996 increased to $268.0
27
<PAGE>
million from $221.4 million for the prior fiscal year, representing an
increase of 21.0%. The increase in rental income was attributable to the
increase in the Company's aggregate lease portfolio. At June 30, 1996, the
Company's lease portfolio had increased to $1.3 billion (85,855 leases) from
$1.1 billion (67,759 leases) at June 30, 1995, representing an increase of
24.2%. For the fiscal year ended June 30, 1996, the Company originated $580.2
million of leases (34,163 leases), an increase of 15.0% over the $504.7
million of leases (25,250 leases) originated in the prior fiscal year.
Gain on sale of retail installment contracts for the fiscal year ended June
30, 1996 increased to $10.1 million from $3.4 million for the fiscal year ended
June 30, 1995, representing an increase of 201.7%. This increase is
attributable to the increase to $242.5 million in the dollar amount of Contracts
sold in the fiscal year ended June 30, 1996 from $77.3 million in Contracts sold
in the prior fiscal year. Gain on sale of retail installment contracts may vary
from year to year due to the timing and dollar amount of such sales and the
realization of associated gain on sale income.
Interest and other income for the fiscal year ended June 30, 1996 increased
to $9.5 million from $5.8 million for the prior fiscal year, representing an
increase of 63.3%. The increase in interest and other income was primarily
attributable to the increase in interest income on Contracts held for sale to
$5.6 million for the fiscal year ended June 30, 1996 from $2.8 million for the
prior fiscal year. The increase in interest and other income was also
attributable to the increase in interest income on short term investments to
$2.6 million from $1.3 million as a result of the Company's increased balances
of cash and cash equivalents. If the Company continues to increase its
originations of Contracts in the future, interest and other income could
continue to grow due to increases in interest income on Contracts held for sale.
The foregoing statement is forward-looking and actual results may be materially
different as a result of many factors, including, without limitation, decreases
in interest rates (due to market conditions, competitive pressures or otherwise)
or lack of growth in Contract originations (due to general economic conditions,
market changes or increased competition).
Gain on vehicle dispositions and lease terminations for the fiscal year
ended June 30, 1996 decreased to $4.3 million from $5.8 million for the prior
fiscal year. The decrease was due to the increase to 85.4% from 78.2% in the
percentage of returned vehicles sold at wholesale (as opposed to
consignment/retail) during the fiscal year ended June 30, 1996 as compared to
the fiscal year ended June 30, 1995. While the total number of vehicles
remarketed (which includes off-lease, purchased and repossessed vehicles)
increased to 15,360 for the fiscal year ended June 30, 1996 from 13,685 for the
fiscal year ended June 30, 1995, direct vehicle repair and marketing costs
associated with such sales decreased to $4.9 million from $5.5 million, and are
included in selling, general and administrative expenses. The reduction in
remarketing costs per vehicle resulted from the increase in the percentage of
28
<PAGE>
returned vehicles sold at wholesale, the costs of which are lower than the costs
of selling at retail.
Servicing income for the fiscal year ended June 30, 1996 increased to $9.5
million from $6.7 million for the fiscal year ended June 30, 1995, representing
an increase of 40.7%. This increase was attributable to the increase in the
number of leases and Contracts serviced by the Company.
Total expenses for the fiscal year ended June 30, 1996 increased to $270.3
million from $221.8 million for the prior fiscal year, representing an increase
of 21.9%
Substantially all of the Company's depreciation and amortization expense is
derived from the depreciation and amortization of the Company's vehicles under
operating leases and capitalized initial direct costs, respectively.
Depreciation and amortization expense directly associated with the Company's
leased vehicles, for the fiscal year ended June 30, 1996, increased to $129.5
million from $114.2 million for the prior fiscal year, representing an increase
of 13.4%. The increase in depreciation and amortization expense was principally
attributable to the increase in the Company's aggregate lease portfolio from
June 30, 1995 to June 30, 1996.
Substantially all of the Company's interest expense is the cost of the
borrowings attributable to the aggregate lease portfolio. Interest expense
directly associated with the Company's lease borrowings, for the fiscal year
ended June 30, 1996, increased to $94.2 million from $72.5 million for the prior
fiscal year, representing an increase of 29.8%. The increase in such interest
expense was primarily due to the increased borrowings attributable to the
Company's aggregate lease portfolio. At June 30, 1996, such aggregate non-
recourse borrowings had increased to $1.4 billion from $1.1 billion at June 30,
1995, representing an increase of 24.3%.
Selling, general and administrative expenses for the fiscal year ended June
30, 1996 increased to $44.1 million from $33.2 million for the prior fiscal
year, representing an increase of 33.0%. This increase was primarily due to the
increased costs associated with the increased lease and Contract originations
for the fiscal year ended June 30, 1996 over the prior fiscal year and from
servicing such lease and Contract portfolios.
As a result of the above factors, net income for the fiscal year ended June
30, 1996 increased to $18.9 million from $13.0 million for the prior fiscal
year, representing an increase of 45.7%.
29
<PAGE>
FISCAL YEAR ENDED JUNE 30, 1995 COMPARED TO FISCAL YEAR ENDED JUNE 30, 1994
Revenues for the fiscal year ended June 30, 1995 increased to $243.1
million from $198.3 million for the fiscal year ended June 30, 1994,
representing an increase of 22.6%.
Rental income for the fiscal year ended June 30, 1995 increased to $221.4
million from $183.1 million for the prior fiscal year, representing an increase
of 21.0%. The increase in rental income was attributable to the increase in the
Company's aggregate lease portfolio. At June 30, 1995, the Company's lease
portfolio had increased to $1.1 billion (67,759 leases) from $830.4 million
(55,191 leases) at June 30, 1994, representing an increase of 29.6%. For the
fiscal year ended June 30, 1995, the Company originated $504.7 million of leases
(25,250 leases), an increase of 34.3% over the $375.9 million of leases (21,194
leases) originated in the prior fiscal year.
Gain on sale of retail installment contracts for the fiscal year ended June
30, 1995 increased to $3.4 million from $1.8 million for the fiscal year ended
June 30, 1994, representing an increase of 90.7%. This increase was attributable
to the increase to $77.3 million in the dollar amount of Contracts sold in the
fiscal year ended June 30, 1995 from $34.3 million of Contracts sold in the
prior fiscal year.
Interest and other income for the fiscal year ended June 30, 1995 increased
to $5.8 million from $4.8 million for the prior fiscal year, representing an
increase of 20.8%. This increase was primarily attributable to an increase in
interest income on Contracts held for sale to $2.8 million from $2.0 million for
the fiscal year ended June 30, 1994. The increase in interest and other income
was also attributable to the increase in interest income on investments to $1.3
million from $661,000 as a result of increased balances of cash and cash
equivalents.
Gain on vehicle dispositions and lease terminations for the fiscal year
ended June 30, 1995 increased to $5.8 million from $4.1 million for the prior
fiscal year. The increase was primarily due to the increase in the number of
vehicles sold and an increase in the associated average gain per vehicle during
the fiscal year ended June 30, 1995 as compared to the prior fiscal year. The
total number of vehicles remarketed (which includes off-lease, purchased and
repossessed vehicles) increased to 13,685 for the fiscal year ended June 30,
1995 from 10,923 for the fiscal year ended June 30, 1994 and direct vehicle
repair and marketing costs associated with such sales increased to $5.5 million
from $4.9 million, and are included in selling, general and administrative
expenses.
Servicing income for the fiscal year ended June 30, 1995 increased to $6.7
million from $4.5 million for the fiscal year ended June 30, 1994, representing
an increase of 48.9%. This increase was attributable to the increase in the
number of leases and Contracts serviced by the Company.
30
<PAGE>
Total expenses for the fiscal year ended June 30, 1995 increased to $221.8
million from $185.3 million for the prior fiscal year, representing an increase
of 19.7%.
Depreciation and amortization expense directly associated with the
Company's leased vehicles, for the fiscal year ended June 30, 1995, increased to
$114.2 million from $94.8 million for the prior fiscal year, representing an
increase of 20.5%. The increase in depreciation and amortization expense was
principally attributable to the increase in the Company's aggregate lease
portfolio from June 30, 1994 to June 30, 1995.
Interest expense directly associated with the Company's lease borrowings,
for the fiscal year ended June 30, 1995, increased to $72.5 million from $60.5
million for the same period in the prior fiscal year, representing an increase
of 19.9%. The increase in such interest expense was primarily due to the
increased borrowings attributable to the Company's aggregate lease portfolio.
Selling, general and administrative expenses for the fiscal year ended June
30, 1995 increased to $33.2 million from $28.7 million for the prior fiscal
year, representing an increase of 15.5%. This increase was primarily due to the
increased costs associated with the increased lease and Contract originations
for the fiscal year ended June 30, 1995 over the prior fiscal year from
servicing such lease and Contract portfolios.
As a result of the above factors, net income for the fiscal year ended June
30, 1995 increased to $13.0 million from $7.9 million for the prior fiscal year,
representing an increase of 63.7%.
LIQUIDITY AND CAPITAL RESOURCES
The following table sets forth the major components of the increase in cash
and cash equivalents:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
---------------------------------------------------------
1996 1995 1994
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . $ 129,343 $ 126,925 $ 82,205
NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . (406,982) (359,490) (253,757)
NET CASH PROVIDED BY FINANCING ACTIVITIES . . . . . . . . . . 307,038 243,307 175,853
----------- --------- -----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS . . . . . . . . . . . . . . . . . . . . . . . $ 29,399 $ 10,742 $ 4,301
----------- --------- -----------
----------- --------- -----------
</TABLE>
31
<PAGE>
The Company's net cash provided by operating activities in the periods
indicated above has been significantly greater than its net income. Included in
the net cash provided by operating activities is net income plus non-cash
adjustments aggregating $110.4 million, $113.9 million and $74.3 million for the
fiscal year ended june 30, 1996, 1995 and 1994, respectively. Depreciation
expense was the major component of such non-cash adjustments in each period.
The Company's most significant uses of cash include the purchase of
vehicles subject to operating leases and the principal payments on "notes
payable - non-recourse." The cash used to purchase vehicles is generated by the
Company's financing of such leases on a non-recourse basis with various Lenders.
At June 30, 1996, the Company's non-recourse borrowings associated with its
vehicles under operating leases aggregated $1.4 billion. The Company has no
binding commitments from any Lender to fund future leases nor has the Company
committed to provide lease receivables to any Lender.
Furthermore, the Company's ability to finance substantially all of its
leases at a premium to the respective vehicle costs provides a substantial
source of cash. The following table sets forth information regarding the net
excess cash derived from financing its lease originations during each period
indicated.
FISCAL YEAR ENDED JUNE 30,
----------------------------------------
1996 1995 1994
---- ----- -----
(IN THOUSANDS)
Proceeds from notes payable and
obligations under capital
leases - non-recourse(1) . . . . . . $620,430 $529,796 $407,062
Purchases of vehicles under
operating leases(2) . . . . . . . . . 569,063 485,087 364,820
--------- -------- --------
Total net cash proceeds. . . . . . . . $ 51,367 $ 44,709 $42,242
--------- -------- --------
--------- -------- --------
_______________
(1) Excludes those leases which have been partially funded by a Lender
representing proceeds of $9.8 million, $15.7 million and $3.7 million for
fiscal years ended June 30, 1996, 1995 and 1994, respectively.
(2) Excludes those leases which have been partially or not funded by a Lender
representing purchases of vehicles under operating leases of $11.2 million,
$19.6 million and $11.1 million for the fiscal years ended June 30, 1996,
1995 and 1994, respectively.
The cash used for principal payments on notes payable - non-recourse is
principally generated from the pass-through of monthly lease payments which are
pledged as collateral to the notes and from the proceeds realized from the
disposal of vehicles. The Company is obligated to dispose of those vehicles
which reach scheduled lease termination and to pay their associated Residuals to
the Lenders. The Company expects to realize proceeds from the remarketing of
such corresponding vehicles in an amount sufficient to pay such Residuals;
however, this is a forward-looking statement and there can be no assurances
32
<PAGE>
that the Company will be able to do so due to, among other factors, general
economic and market conditions.
During the fiscal year ended June 30, 1996, the Company also used cash (i)
to purchase Contracts, including the payment of Dealer Commissions, (ii) to
provide credit enhancement with respect to the sale of Contracts and (iii) to
finance its inventory of off-lease automobiles.
The Company has sold substantially all of its Contracts in
securitization transactions or on a private whole-loan basis. During the
fiscal years ended June 30, 1996, 1995 and 1994, the Company purchased $267.5
million, $80.9 million and $42.7 million, respectively, of Contracts and sold
an aggregate amount of $242.5 million, $77.3 million and $34.3 million,
respectively, of Contracts. The difference between the amount originated and
sold during each period is primarily due to the timing of Contract sale
transactions. The Company has never had any difficulty in selling its
Contracts on terms favorable to the Company, although there can be no
assurance that it will be able to continue to do so.
During the fiscal year ended June 30, 1996, the Company increased its
commercial paper conduit facility to provide the Company with up to $250.0
million of availability to securitize its Contract originations through March
31, 1997. The Company sold approximately $242.5 million of Contracts to such
facility during the fiscal year ended June 30, 1996. The Company does not
currently intend to sell additional Contracts into such facility in the
future. The Company expects to continue to sell, on a securitized basis,
substantially all of the Contracts it originates. The foregoing statement is
forward-looking and there can be no assurance that any such transactions will
be consummated. Whether or not any such transactions are consummated in the
future, and the timing and terms thereof, is dependent upon numerous factors,
including the new and used automobile sale market, the general interest rate
environment, market competition, the performance of the Company's sold
Contracts, the condition of the asset-backed securitization markets and the
Company's ability to warehouse any Contracts originated by it.
The Company requires a substantial amount of cash to purchase Contracts and
to hold them prior to sale. Historically, the Company has funded such activity
with available cash and with short term warehousing facilities. As Contract
originations continue to grow, the Company expects that it will need to obtain
interim warehouse funding. No assurance can be made that such financing will be
obtainable on favorable terms.
The Company also utilizes cash both to fund Dealer Commissions in
connection with the origination of Contracts and to fund credit enhancement
associated with the sale of such Contracts either in the form of retained
subordinated investments and/or cash spread accounts. For the fiscal years
ended June 30, 1996, 1995 and 1994, Dealer Commissions associated with the
33
<PAGE>
Company's Contract originations were $9.9 million, $2.9 million and $614,000,
respectively. With respect to Contracts sold in the fiscal years ended June
30, 1996, 1995 and 1994, initial deposits to cash spread accounts and
retained subordinated investment amounts in such Contracts sold totalled
$12.1 million, $3.5 million and $2.0 million, respectively. The indirect
automobile lending operations generate cash flow from collections on retained
subordinated investments and withdrawals from cash spread accounts (i.e.,
excess servicing cash flow). Such cash flow is available to fund Dealer
Commissions, retained subordinated investments and cash spread accounts. For
the fiscal years ended June 30, 1996, 1995 and 1994 excess servicing cash
flow and collections on retained subordinated investments received by the
Company from previously sold Contracts were, in the aggregate, $7.7 million,
$3.5 million and $246,000, respectively. Excess servicing cash flow and
collections on retained subordinated investments to be realized by the
Company in the future from Contracts previously sold are expected to enable
the Company to recover the excess servicing receivable, retained subordinated
investments and cash spread accounts associated with such sold Contracts. As
Contract originations continue to grow, the Company expects to fund Dealer
Commissions and credit enhancement from available cash, excess servicing cash
flow and collections on retained subordinated investments from Contracts
previously sold. Although the Company believes it will be able to obtain
financing and achieve liquidity (including through any required warehousing
arrangements) adequate to support its current and future indirect automobile
lending operations, this is a forward-looking statement and there can be no
assurance that it will be able to do so.
The Company has utilized the short sale of Treasury notes, from time to
time, in an attempt to reduce its exposure to interest rate risk during the
period that the Company holds Contracts prior to their sale. By entering
into such transactions, the Company attempts to obtain an inverse
relationship between the value of the Contracts held for sale and the value
of the shorted Treasury positions entered into by the Company when market
interest rates change. This includes certain risks created by the cash
versus non-cash relationship of the Treasury notes and the related sale of
the Contracts. This relationship arises because the Treasury notes are
settled with current cash payments while the gain associated with the sale of
the Contracts represents the present value of estimated future excess
servicing cash flows. In the event that losses result from these
transactions, the resulting cash payments would adversely impact the
Company's liquidity.
The Company's vehicle inventory at June 30, 1996 was $14.8 million as
compared to $15.6 million at June 30, 1995. Because the Company expects to
increase the number of vehicles sold in each of the next several years due to an
increasing number of vehicles reaching scheduled lease termination, vehicle
inventories are expected to increase. The Company expects to finance its
vehicle inventory with its revolving credit facilities and available cash;
however, this is a forward-looking statement and there can be no
assurance in this regard.
34
<PAGE>
The Company maintains a $3.0 million revolving credit facility at an
interest rate of prime plus 1.0% to finance automobile inventory. At June
30, 1996, the Company had an aggregate availability under the facility of
$3.0 million. The Company also maintains an additional $10.0 million line of
credit facility at prime rate to finance its automobile inventory. At June
30, 1996, the Company had an aggregate availability under the facility of
$10.0 million.
The Company incurred capital expenditures of $7.0 million in the fiscal
year ended June 30, 1996. The Company is continuing to review and upgrade its
current computer data processing and servicing systems and expects to continue
to invest capital to obtain new hardware and software for such systems. The
Company also expects to make certain additional capital improvements to its new
reconditioning and remarketing facility during the current fiscal year and
beyond. The Company has no other material commitments for capital expenditures.
The foregoing statements are forward-looking and there can be no assurance
that such statements will prove to be true due, in part, to the Company's
need to remain flexible in its capital expenditures so as to be able to
address needs as they arise.
The Company believes, based on its historical cash requirements and
anticipated uses of cash, that the cash derived from its operating and financing
activities will be sufficient to meet its cash requirements and implement its
business plan through the end of fiscal 1997.
On October 19, 1995, the Company consummated a public offering of
2,645,000 shares (including 1,200,000 primary shares, 345,000 primary shares
sold by the Company upon the exercise by the underwriters of the
over-allotment option granted to them and 1,100,000 secondary shares sold by
certain shareholders of the Company) of its Class A Common Stock. The
Company recorded the sale by it of an aggregate of 1,545,000 shares of Class
A Common Stock at the public offering price of $25.25 per share less
underwriting discounts, commissions and public offering expenses in the
aggregate of $2.5 million for total net proceeds of $36.5 million. The
Company used the net proceeds from the public offering for general corporate
and working capital purposes, including to enhance the Company's liquidity
and financial flexibility with regard to its lease and Contract originations
and expand and further develop its used automobile remarketing capabilities
and operations.
RECENT ACCOUNTING PRONOUNCEMENTS
In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of."
The Company will adopt SFAS No. 121 as of July 1, 1996.
In October 1995, FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation." SFAS No. 123 establishes a fair value method for accounting for
stock-based compensation plans either through recognition or disclosure.
35
<PAGE>
Effective July 1, 1996, the Company intends to adopt the employee stock-based
compensation provisions of SFAS No. 123 by disclosing the pro forma net
income and pro forma net income per share amounts, assuming the fair value
method was adopted July 1, 1995.
In June 1996, FASB issued SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities." The Company
is required to adopt SFAS No. 125 for all such transactions which occur
subsequent to December 31, 1996.
The Company does not expect the adoption of SFAS Nos. 121, 123 or 125
to have a material effect on the Company's Consolidated Financial Statements or
results of operations.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data required to be contained in
this Report appear following the signature pages of this Report, starting on
page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 is incorporated herein by reference to
the section entitled "Election of Directors" in the Company's proxy statement
for its 1996 Annual Meeting of Shareholders (the "Proxy Statement"), scheduled
to be held on November 4, 1996.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated by reference to the
section entitled "Executive Compensation" in the Company's Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by Item 12 is incorporated by reference to the
subsections entitled "Security Ownership of Certain Beneficial Owners" and
"Security Ownership of Management" in the Company's Proxy Statement.
36
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 is incorporated by reference to the
subsections entitled "Employment Arrangements and Compensation Plans" and "Other
Related Party Transactions" in the Company's Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT, SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) FINANCIAL STATEMENTS
The following consolidated financial statements of Oxford Resources Corp.
and subsidiaries are included in Part II, Item 8 of this Report and appear
following the signature pages of this Report on the following pages:
Page(s)
-------
Report of Independent Certified Public Accountants. . . . . . . . . . .F-2
Consolidated Balance Sheets - June 30,
1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . .F-3
Consolidated Statements of Income -
years ended 1996, 1995 and 1994 . . . . . . . . . . . . . . . . . . .F-4
Consolidated Statements of Shareholders'
Equity(Deficit)- years ended
June 30, 1996, 1995, and 1994 . . . . . . . . . . . . . . . . . . . .F-5
Consolidated Statements of Cash Flows-
years ended June 30, 1996, 1995 and 1994. . . . . . . . . . . . . . .F-6
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . .F-8
(2) FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statement schedules of Oxford
Resources Corp. and subsidiaries (which appears following the signature pages of
this Report at page S-3) is included in Part IV of this Report:
Schedule II - Valuation and Qualifying Accounts
Schedules other than those listed above are omitted because of the absence
of the conditions under which they are required or because the information
required is included in the consolidated financial statements or noted thereto.
(3) EXHIBITS
Please see Index of Exhibits following the signature page of this Report.
37
<PAGE>
(b) REPORTS ON FORM 8-K
The Company was not required to file a current report on Form 8-K during
the quarter ended June 30, 1996 and none were filed during that period.
38
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
OXFORD RESOURCES CORP.
(Registrant)
September 27, 1996 By:/s/ Michael C. Pascucci
------------------------
Michael C. Pascucci
Chairman of the Board &
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
September 27, 1996 By: /s/ Michael C. Pascucci
------------------------------
Michael C. Pascucci
Chairman of the Board
Chief Executive Officer &
Director (Principal Executive
Officer)
September 27, 1996 By: /s/ John A. Danzi
------------------------------
John A. Danzi
President, Chief Operating
Officer & Director
September 27, 1996 By: /s/Christopher S. Pascucci
------------------------------
Christopher S. Pascucci
Executive Vice President,
Chief Financial Officer & Director
(Principal Financial Officer)
September 27, 1996 By: /s/ Mark A. Freeman
------------------------------
Mark A. Freeman
Senior Vice President,
Secretary, Treasurer & Director
(Principal Accounting Officer)
39
<PAGE>
September 27, 1996 By: /s/ Ralph P. Pascucci
------------------------------
Ralph P. Pascucci
Senior Vice President &
Director
September 27, 1996 By: /s/ Peter I. Cavallaro
------------------------------
Peter I. Cavallaro
Senior Vice President,
General Counsel, Assistant Secretary
& Director
September 27, 1996 By: /s/ Gene M. Bernstein
------------------------------
Gene M. Bernstein
Director
September 27, 1996 By: /s/ Robert Ench
------------------------------
Robert Ench
Director
September 27, 1996 By: /s/ Stephen V. Murphy
------------------------------
Stephen V. Murphy
Director
40
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDARIES
INDEX
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 2
CONSOLIDATED FINANCIAL STATEMENTS:
Balance sheets 3
Statements of income 4
Statements of shareholders' equity (deficit) 5
Statements of cash flows 6 - 7
Notes to financial statements 8 - 26
F-1
41
<PAGE>
[LOGO]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and
Shareholders of
Oxford Resources Corp.
Melville, New York
We have audited the consolidated balance sheets of Oxford Resources Corp. and
subsidiaries as of June 30, 1996 and 1995 and the related consolidated
statements of income, shareholders' equity (deficit), and cash flows for each of
the three years in the period ended June 30, 1996. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described in Note 1(b)4 to the consolidated financial statements, because the
Company's leased vehicles are financed with individual non-recourse obligations,
under certain circumstances the early termination of a lease results in the
recognition of a gain from the early extinguishment of the related obligation.
A literal application of Statement of Financial Accounting Standards No. 4 (SFAS
No. 4) requires that such gains be presented as an extraordinary item. In the
opinion of management, with which we concur, a literal application of the
requirements of SFAS No. 4 would result in a misleading presentation insofar as
it would not properly portray the direct association between these gains and the
other income statement effects of these early terminations, the frequent and
recurring nature of these events, and therefore the economic effects of these
transactions. Accordingly, these gains, which in the years ended June 30, 1996,
1995 and 1994 amounted to $1,823,544, $1,300,944 and $1,759,718, respectively,
before reduction for income taxes of $711,000, $507,000 and $683,000,
respectively, are included in income from continuing operations within the
caption "gain on vehicle dispositions and lease terminations". This
presentation has no effect on net income or shareholders' equity.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Oxford Resources
Corp. and subsidiaries at June 30, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
June 30, 1996, in conformity with generally accepted accounting principles.
BDO Seidman, LLP
New York, New York
August 26, 1996
F-2
42
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 66,298,981 $ 36,900,005
Available for sale securities 7,684,401 50,818
Net investment in automobile receivables 60,708,681 22,946,755
Inventories and other assets 26,007,423 23,436,913
Vehicles under operating leases - net 1,337,514,432 1,076,545,431
Property and equipment, less accumulated depreciation 10,702,456 6,028,496
Restricted funds on deposit with banks (net of $33,529,951
and $30,724,151 of security deposits) 8,922,036 4,341,079
Receivables from related parties 2,824,147 2,952,357
- -----------------------------------------------------------------------------------------------------------------------------
$1,520,662,557 $1,173,201,854
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Accrued expenses and other liabilities $ 16,150,730 $ 10,197,516
Deferred income taxes 25,650,000 13,174,000
Notes payable and obligations under capital leases - non-recourse 1,387,398,523 1,115,982,573
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,429,199,253 1,139,354,089
- -----------------------------------------------------------------------------------------------------------------------------
COMMITMENTS
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value - shares authorized 10,000,000; none issued - -
Common stock:
Class A, $.01 par value - shares authorized 62,000,000; issued 7,115,662 and 5,268,000 71,157 52,680
Class B, $.01 par value - shares authorized 8,000,000; issued 7,724,000 and 8,000,000 77,240 80,000
Additional paid-in capital 61,258,667 24,478,801
Retained earnings 28,172,662 9,236,284
Unrealized appreciation on available for sale securities 1,883,578 -
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 91,463,304 33,847,765
- -----------------------------------------------------------------------------------------------------------------------------
$1,520,662,557 $1,173,201,854
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-3
43
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES:
Rental income $267,958,888 $221,435,598 $183,066,996
Gain on sale of retail installment contracts 10,119,587 3,354,139 1,759,074
Interest and other income 9,469,884 5,800,529 4,800,007
Gain on vehicle dispositions and lease terminations 4,295,703 5,784,046 4,130,019
Servicing income 9,476,667 6,736,761 4,523,416
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 301,320,729 243,111,073 198,279,512
- -----------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Selling, general and administrative 44,112,729 33,161,399 28,716,517
Depreciation and amortization 131,836,513 116,035,719 95,775,891
Interest 94,327,109 72,603,101 60,854,184
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 270,276,351 221,800,219 185,346,592
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES ON INCOME 31,044,378 21,310,854 12,932,920
TAXES ON INCOME 12,108,000 8,311,000 5,018,000
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS 18,936,378 12,999,854 7,914,920
INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES - - 28,082
- -----------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 18,936,378 $ 12,999,854 $ 7,943,002
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET INCOME PER SHARE $ 1.30 $ 0.98 $ 0.66
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES
OUTSTANDING 14,588,126 13,305,479 12,044,663
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-4
44
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Unrealized
Common Stock Appreciation
------------------------------------ on Total
Class A Class B Additional Retained Available Shareholders'
---------------- --------------- Paid-in Earnings for Sale Equity
Shares Amount Shares Amount Capital (Deficit) Securities (Deficit)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JULY 1, 1993 2,563,000 $25,630 8,000,000 $80,000 $ 608,382 $(10,429,721) $ - $(9,715,709)
Issuance of common
stock 2,705,000 27,050 - - 23,870,419 - - 23,897,469
Distribution of shares
of WLIG-TV Inc. - - - - - (1,276,851) - (1,276,851)
Net income - - - - - 7,943,002 - 7,943,002
- ------------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 1994 5,268,000 52,680 8,000,000 80,000 24,478,801 (3,763,570) - 20,847,911
Net income - - - - - 12,999,854 - 12,999,854
- ------------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 1995 5,268,000 52,680 8,000,000 80,000 24,478,801 9,236,284 - 33,847,765
Issuance of common
stock 1,545,000 15,450 - - 36,513,262 - - 36,528,712
Conversion of common
stock 276,000 2,760 (276,000) (2,760) - - - 0
Exercise of stock
options 26,662 267 - - 266,604 - - 266,871
Unrealized appreciation
on available for sale
securities - - - - - - 1,883,578 1,883,578
Net income - - - - - 18,936,378 - 18,936,378
- ------------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 1996 7,115,662 $71,157 7,724,000 $77,240 $61,258,667 $ 28,172,662 $1,883,578 $91,463,304
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-5
45
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 18,936,378 $ 12,999,854 $ 7,943,002
- ------------------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization on vehicles under operating leases 129,474,370 114,223,309 94,756,464
Depreciation and amortization on property and equipment 2,362,143 1,812,410 1,019,427
Provision for possible losses 7,423,965 4,158,062 3,056,237
Accrued interest on retail installment contracts sold (2,118,410) (1,318,700) (1,249,037)
Deferred income taxes 12,476,000 8,238,000 4,715,900
Gain on vehicle dispositions and lease terminations (4,295,703) (5,784,046) (4,130,019)
Gain on sale of retail installment contracts (10,119,587) (3,354,139) (1,759,074)
Decrease (increase) in assets:
Purchase of treasury notes (234,074,726) (45,795,739) -
Sale of treasury notes 234,760,339 45,062,073 -
Lease termination fees receivable (5,740,366) (4,427,338) (2,741,634)
Inventories and other assets (2,024,836) 1,096,637 (12,084,111)
Retail installment contracts:
Purchases (267,451,193) (80,888,175) (42,663,182)
Sales 242,452,928 77,319,340 34,346,293
Dealer commissions and expenses paid (10,132,081) (3,233,961) (910,366)
Principal collections on contracts held for sale 9,669,381 3,640,155 2,327,902
Collections from retail installment contracts sold 5,722,788 2,101,029 246,188
Deposits to spread account (5,867,526) (2,293,965) (1,155,772)
Withdrawals from spread account 1,929,357 1,355,603 -
Changes in net operating assets of discontinued operations - - 143,903
Increase in liabilities:
Accounts payable and accrued liabilities 5,960,333 2,014,980 343,055
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ADJUSTMENTS 110,407,176 113,925,535 74,262,174
- ------------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 129,343,554 126,925,389 82,205,176
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
F-6
46
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIAIRES
CONSOLDIATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of available for sale securities (5,750,005) - -
Purchase of vehicles under operating leases (580,213,560) (504,690,197) (375,880,294)
Proceeds from dispositions of vehicles under operating leases 193,802,708 151,462,091 125,084,932
Subordinated investment retained in retail installment contracts sold (7,913,727) (2,509,762) (911,618)
Capital expenditures (7,036,103) (3,914,486) (1,676,978)
(Increase) decrease in receivables from related parties 128,210 162,227 (215,145)
Investing activities of discontinued operations - - (158,638)
- ------------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (406,982,477) (359,490,127) (253,757,741)
- ------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable and obligations under capital leases -
non-recourse 630,196,721 545,449,291 410,798,324
Principal payments on notes payable and obligations under capital leases -
non-recourse (358,780,771) (301,708,835) (254,661,174)
Increase in restricted funds on deposit with banks (1,166,515) (380,219) (646,034)
Increase in notes payable and obligations under capital leases - - 1,366,225
Principal payments on notes payable and obligations under capital leases (7,119) (53,576) (4,689,715)
Proceeds from the sale of common stock and exercise of stock options 36,795,583 - 23,897,469
Distribution of cash of WLIG-TV Inc. - - (120,329)
Financing activities of discontinued operations - - (91,448)
- ------------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 307,037,899 243,306,661 175,853,318
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 29,398,976 10,741,923 4,300,753
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 36,900,005 26,158,082 21,857,329
- ------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR $66,298,981 $36,900,005 $26,158,082
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-7
47
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
The consolidated financial statements for the year ended June 30, 1994
give effect, on a retroactive basis, to the merger ("Merger") of the
previous parent company, Trexar Corp. ("Trexar") into its principal
operating subsidiary, Oxford Resources Corp. ("Oxford", and together
with its wholly-owned subsidiaries, the "Company") (Note 1(g)).
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All intercompany accounts
and transactions have been eliminated in consolidation.
Concurrently with the Merger, Trexar distributed the shares of its
wholly-owned commercial television station subsidiary, WLIG-TV Inc.
("WLIG") to its stockholders in the amount of $1,276,851. WLIG's
operations have been reflected as discontinued operations.
(b) DESCRIPTION OF BUSINESS AND REVENUE RECOGNITION
The Company's business and its policies for recognizing revenue are as
follows:
1. AUTOMOBILE LEASING.
The Company enters into or purchases leases on new and used
automobiles from automobile dealers. All of the leases which the
Company enters into or purchases are accounted for as operating
leases. At the inception of the lease, no revenue is recognized
and the leased vehicle, together with the initial direct costs
of originating the lease, which are capitalized, appear on the
balance sheet as "vehicles under operating leases-net."
The capitalized cost of each vehicle is depreciated over the
lease term on a straight line basis down to the Company's
original estimate of the projected value of the vehicle at the
end of the scheduled lease term (the "Residual").
Monthly lease payments are recognized as rental income.
F-8
48
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Company finances substantially all of its leases, on a lease-
by-lease basis, with banks and financial institutions for the
duration of the lease term at a fixed interest rate and enters
into either a note or capital lease obligation in connection with
each lease with the respective bank or financial institution for
the amount financed. Such notes are non-recourse to the Company
during the term of the lease and, accordingly, the bank or
financial institution assumes all credit risk for the duration of
the lease term.
Lease rental payments are assigned and remitted to banks or
financial institutions when received to reduce the notes or
capital lease obligations, and the proceeds from the sale of
the automobiles at the lease termination are used to retire
such notes or obligations.
2. AUTOMOBILE RECEIVABLES.
The Company enters into or purchases from automobile dealers
certain retail installment contracts ("Contracts") in
connection with the sale of new and used motor vehicles, with
terms typically ranging from two to seven years. The Company
pools and sells the Contracts utilizing various structures
including private whole-loan sales or securitization
transactions. In June 1994, the Company completed its first
securitization transaction whereby the Company sold a pool of
Contracts to a special purpose corporate subsidiary which in
turn sold these Contracts to a grantor trust.
F-9
49
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The grantor trust issued certificates of beneficial interest and
used the proceeds from these certificates to purchase the pool of
Contracts. In subsequent securitization transactions, the
Company, through a special purpose corporate subsidiary, sold
pools of Contracts to an unaffiliated corporation which
administers a multi-seller commercial paper conduit. In this
structure, the Company sold each pool of Contracts for a price
equal to 100% of the then outstanding principal balance of the
Contracts, 3% of which was deferred as a holdback amount and
which is anticipated to be paid out of future cash flows from the
pool of sold Contracts (the "retained subordinated investments in
contracts sold"). Recourse to the Company in these sales is
limited to the extent of the retained subordinated investments in
contracts sold, if any, the restricted cash spread account
established as a credit enhancement and the excess servicing
receivable (hereinafter defined) recorded by the Company (Note
1(b)3) in the transactions. Additionally, the Company has
limited contractual recourse provisions relating to breach of
certain representations and warranties relating to the
eligibility of the sold Contracts. The Company retains the
servicing rights with respect to all sold Contracts.
3. SALE OF CONTRACTS
The Company recognizes gains and losses on the sale of Contracts
at each sale date based on a determination of the present value
of the estimated future amounts ("excess servicing cash flows")
to be realized by the Company in connection with such sale.
These estimates consider all cash flows which are estimated to be
generated by the sold Contracts over their life less 1) normal
servicing fees, which are retained by the Company in its capacity
as servicer and are recognized over the life of the transaction,
2) payments to investors in the transaction, 3) payments to the
Company with respect to its retained subordinated investments in
contracts sold, if any, and 4) credit enhancement expenses, if
any. Additionally, excess servicing cash flows are reduced by
both a credit loss provision, which is estimated to be adequate
to cover credit losses over the life of the sold Contracts, and
the impact of estimated prepayments.
F-10
50
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The gain on sale recognized is net of all transaction fees and
expenses, including dealer commissions incurred in connection
with the purchase of the sold Contracts and any unrealized
gain or loss on any short position.
The receivable related to the gain on sale is included on the
balance sheet as "excess servicing receivable" under the caption
Net Investment in Automobile Receivables. The Company
evaluates the carrying value of its excess servicing receivable
for each discreet sale transaction that the Company has
consummated at each reporting period considering the actual
prepayment and credit loss experience of the underlying sold
Contracts and makes adjustments to reduce the carrying value of
such asset, if appropriate. To date, the Company has not been
required to record any such adjustments. Any adjustment of the
Company's excess servicing receivable would be charged to
servicing income.
4. GAIN ON VEHICLE DISPOSITIONS AND LEASE TERMINATIONS.
The Company realizes gains and losses as the result of the
termination of leases, both at and prior to their scheduled
termination, and the disposition of the related vehicles. The
disposal of vehicles which reached scheduled termination of a
lease results in a gain or loss equal to the difference between
the proceeds received from the disposition of the vehicle and its
net book value, which equals the Residual at scheduled lease
termination. Lease terminations that occur prior to scheduled
maturity as the result of the lessee's voluntary request to
purchase the vehicle generally result in gains, equal to the
excess of the price received over the vehicle's net book value.
Early lease terminations also occur because of (i) a default by
the lessee or (ii) the physical loss of the vehicle. In those
instances, the Company receives the proceeds from either the
resale of the repossessed vehicle, or the payment by the lessee's
insurer. The Company records a gain or loss for the difference
between the proceeds received and the net book value of the
vehicle.
F-11
51
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Upon such early termination, the Company is required to remit to
its banks or financial institutions the proceeds received, up
to the remaining balance of the related non-recourse obligation.
The Company realizes an additional or offsetting gain to the
extent the proceeds received and remitted are less than the
balance of the related non-recourse obligation. Both the loss
from the disposal of the vehicle (the "credit losses on lessee
defaults and physicallosses") and the gain on the early
extinguishment of the non-recourse obligation are included in
the income statement caption "gain on vehicle dispositions and
lease terminations". The amounts included as a result of such
early terminations are as follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1996 1995 1994
---------------------------------------------------------------------------
<S> <C> <C> <C>
Gain on extinguishment of
non-recourse obligations $1,823,544 $1,300,944 $1,759,718
Credit losses on lessee defaults
and physical losses 1,373,979 930,608 1,360,259
---------------------------------------------------------------------------
Net gain included in "gain on
vehicle dispositions and lease
terminations" $ 449,565 $ 370,336 $ 399,459
---------------------------------------------------------------------------
---------------------------------------------------------------------------
</TABLE>
The strict application of Statement of Financial Accounting
Standards No. ("SFAS") No. 4 would require that the gain on
extinguishment of non-recourse obligations be presented as an
extraordinary item, net of related income taxes.
F-12
52
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Company records the gain on debt extinguishment as part of
continuing operations because (i) such terminations occur
frequently in the ordinary course of the Company's business, (ii)
each leased vehicle is pledged individually and separately to a
corresponding non-recourse obligation and, therefore, the
elimination of both the asset and the corresponding liability on
early termination is linked together, and (iii) such presentation
more properly matches the cost, in the form of higher interest
expense which the Company incurs to transfer credit risk to the
banks or financial institutions, with the associated benefit
of such risk transfer. Such benefit is the gain on
extinguishment of the non-recourse obligations which represents
the credit losses transferred to and incurred by the banks or
financial institutions. To reflect the gain on the debt
extinguishment as an extraordinary item, as prescribed by SFAS
No. 4, would, in the opinion of management, result in a
mismatched and misleading presentation insofar as it would not
properly portray the direct association between these gains and
the other income statement effects of these early terminations,
as presented above. Accordingly, these gains are included,
together with other gains and losses from early terminations and
scheduled terminations, in income from continuing operations.
This presentation has no effect on net income or shareholders'
equity.
5. SERVICING INCOME
The Company earns servicing income from substantially all of the
banks and financial institutions which finance the Company's
leases. Such services consist primarily of collections of
monthly payments from lessees and record-keeping functions.
Related servicing income is recognized during the periods in
which the services are provided.
For all of its Contract sale transactions, the Company retains
servicing rights and responsibilities and receives (i) normal
servicing fees over the life of the sold Contracts as the
services are provided and (ii) excess servicing cash flows.
F-13
53
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(c) AVAILABLE FOR SALE SECURITIES
The Company classifies and accounts for investments in marketable
securities, except for its positions of Treasury notes (see Note
1(d)), as available-for-sale since it is not the Company's objective
to generate profits on short-term differences in price. Unrealized
holding gains and losses (determined by specific identification) on
investments are carried as a separate component of shareholders'
equity.
(d) SHORT SALES OF TREASURY NOTES
The Company sells its Contracts on a quarterly basis. The Company
has utilitzed the short sale of Treasury notes, from time to time,
in an attempt to reduce its exposure to interest rate risk during
the period that the Company holds Contracts prior to their sale. These
transactions do not qualify for hedge accounting which allows for a
deferral of gains or losses on open positions. The Company utilizes
SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" to account for these transactions. Accordingly, the
Company marks to market any change in value of its open short
position on two-year Treasury notes which are held as of the balance
sheet date. At such time as a sale of Contracts is concluded, the
Company's short position is covered by the purchase of a like amount
of two-year Treasury notes to cover its open position and recognizes
any unrealized gain or loss (excluding the impact of any previously
recognized gain or loss resulting from marking any open positions to
market as described above). Such gain or loss is included as Gain
on Sale of Retail Installment Contracts in the Company's Statement
of Income. To date, unrealized gains or losses on open positions as
of balance sheet dates have not been material.
F-14
54
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(e) VEHICLE INVENTORIES
The inventories of used vehicles, which totalled $14,765,946 and
$15,559,689 at June 30, 1996 and 1995, respectively, are recorded at
original cost less accumulated depreciation, on the specific
identification method, which is not in excess of market.
(f) PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is provided
using the straight-line method over the estimated useful life of the
related asset ranging from five to twenty years.
(g) NET INCOME PER SHARE
Net income per share is calculated using the treasury stock method for
the three years in the period ended June 30, 1996. Under the treasury
stock method, options and warrants outstanding are assumed to be
exercised and the proceeds from such are assumed to be used to
repurchase shares of common stock at the average market price for the
period for primary earnings per share and the ending market price for
fully dilutive calculations. Net income per share for the three years
in the period ended June 30, 1996 is from continuing operations.
Discontinued operations for the year ended June 30, 1994 is
immaterial.
(h) STATEMENT OF CASH FLOWS
For purposes of this statement, cash equivalents include commercial
paper and certificates of deposit with original maturities of three
months or less.
(i) USE OF ESTIMATES
In preparing financial statements in conformity with generally
accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and revenues and
expenses during the reporting period. Actual results could differ
from those estimates.
F-15
55
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(j) FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments include cash, investments in
available for sale securities, excess servicing receivable and the
short sale of Treasury notes. Amounts recorded for these instruments
approximate fair value due to either their maturity or the nature of
these financial instruments. Contracts held for sale are accounted for
at amortized cost which approximates fair value as they are sold
shortly after purchase.
The fair value of the Company's notes payable and obligations under
capital leases - non-recourse, which approximates $1.4 billion and
$1.1 billion, respectively, as of June 30, 1996 and 1995, is estimated
based on current rates offered to the Company for debt of the same
initial maturities.
(k) RECENT ACCOUNTING PRONOUNCEMENTS
In March 1995, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 121, "Accounting for Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of." The Company will adopt
SFAS No. 121 as of July 1, 1996.
In October 1995, FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation." SFAS No. 123 establishes a fair value method for
accounting for stock-based compensation plans either through
recognition or disclosure. Effective July 1, 1996, the Company
intends to adopt the employee stock-based compensation provisions of
SFAS No. 123 by disclosing the pro forma net income and pro forma net
income per share amounts, assuming the fair value method was adopted
July 1, 1995.
In June 1996, FASB issued SFAS NO. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities". The
Company is required to adopt the SFAS for all such transactions which
occur subsequent to December 31, 1996.
The Company does not expect the adoption of SFAS Nos. 121,
123 or 125 to have a material effect on the Company's
Consolidated Financial Statements or results of operations.
F-16
56
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(l) RECLASSIFICATIONS
Certain amounts have been reclassified to conform to classifications
used at June 30, 1996.
2. VEHICLES UNDER OPERATING LEASES - NET
Vehicles under operating leases - net consists of the following:
JUNE 30, 1996 1995
- ----------------------------------------------------------------------------
Vehicles owned by the Company (Note 5) $ 925,197,562 $ 760,809,567
Vehicles leased by the Company under
capital leases (Note 5) for re-lease
under operating leases 639,261,718 509,756,264
Accumulated depreciation and
amortization (237,233,342) (204,572,078)
- ----------------------------------------------------------------------------
Vehicles, net of accumulated
depreciation and amortization 1,327,225,938 1,065,993,753
- ----------------------------------------------------------------------------
Lease termination fees receivable 16,533,494 12,787,776
Allowance for possible losses (6,245,000) (2,236,098)
- ----------------------------------------------------------------------------
Net receivable 10,288,494 10,551,678
- ----------------------------------------------------------------------------
Vehicles under operating leases net $1,337,514,432 $1,076,545,431
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
At June 30, 1996 and 1995, three vehicle models represented 68.0% and 65.3%,
respectively, of the vehicles under operating leases - net.
The following is a schedule by years of minimum future rentals on noncancellable
operating leases as of June 30, 1996:
YEAR ENDING JUNE 30,
- -----------------------------------------------------
1997 $243,753,135
1998 143,827,790
1999 49,582,824
2000 6,063,660
2001 822,248
- -----------------------------------------------------
$444,049,657
- -----------------------------------------------------
- -----------------------------------------------------
F-17
57
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. NET INVESTMENT IN AUTOMOBILE RECEIVABLES
The components of the net investment in automobile receivables are as follows:
JUNE 30, 1996 1995
- ----------------------------------------------------------------------------
Retail installment contracts
held for sale $20,672,495 $7,140,996
Retained subordinated investments in
contracts sold 12,379,298 6,638,067
- ----------------------------------------------------------------------------
33,051,793 13,779,063
Allowance for possible losses (1) (1,368,839) (795,623)
- ----------------------------------------------------------------------------
31,682,954 12,983,440
Excess servicing receivable (2) 29,025,727 9,963,315
- ----------------------------------------------------------------------------
Net investment in automobile receivables $60,708,681 $22,946,755
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
(1) Allowance for possible losses are provided for retail installment
contracts held for sale of $760,062 and $236,641 and for retained
subordinated investments in contracts sold of $608,777 and $558,982
for the years ended June 30, 1996 and 1995, respectively.
(2) Excess servicing receivable is net of an allowance for possible losses
of $6,232,376 and $2,606,845 for the years ended June 30, 1996 and
1995, respectively.
4. RECEIVABLES FROM RELATED PARTIES
The receivables from related parties consist primarily of an unsecured
interest bearing note due from a limited partnership. The sole shareholder of
the general partner and certain of the limited partners are executive
officers and directors of the Company. The interest, which accrues at the
blended "Applicable Federal Rate" (as defined in the Internal Revenue Code of
1986), and the note is due on September 1, 2000. The limited partnership
contributed the proceeds of such note to a general partnership for the
purchase of land and a building and the financing of improvements thereon.
The Company leases the building as its corporate headquarters (Note 9). The
initial term of the lease expires November 30, 2001 and the lease provides
for two five-year renewal terms at the Company's option. Principal and
interest payments are payable from all distributions from the cash flow of
the general partnership, except for such amounts required to satisfy tax
liabilities.
F-18
58
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. NOTES PAYABLE AND OBLIGATIONS UNDER CAPITAL LEASES - NON-RECOURSE
Notes payable to finance the purchase of leased vehicles, and obligations
under capital leases related to vehicles leased by the Company for re-lease,
are due in installments equal to the lease rentals receivable by the Company
from the lessee, with the final payments equal to the Residual at scheduled
lease termination. These notes and obligations are collateralized by the
lease receivables and the vehicles under operating leases. The vehicles
under operating leases (Note 2) are recorded upon purchase of vehicles. The
related notes payable and obligations under capital leases are recorded upon
the receipt of financing proceeds. Interest rates are fixed for the lives of
the loans, or terms of the leases, and ranged from 5.75% to 10.25% at June
30, 1996.
Future minimum payments are as follows:
OBLIGATIONS
NOTES UNDER CAPITAL
YEAR ENDING JUNE 30, PAYABLE LEASES TOTAL
- ------------------------------------------------------------------------------
1997 $314,197,186 $212,387,609 $526,584,795
1998 342,753,652 228,329,673 571,083,325
1999 197,199,949 177,368,795 374,568,744
2000 48,267,358 21,172,405 69,439,763
2001 5,407,572 1,469,020 6,876,592
- ------------------------------------------------------------------------------
907,825,717 640,727,502 1,548,553,219
Less:
Portion representing
future interest 87,631,330 61,104,846 148,736,176
Proceeds receivable from lenders 12,418,520 - 12,418,520
- ------------------------------------------------------------------------------
Notes payable and obligations
under capital leases -
non-recourse $807,775,867 $579,622,656 $1,387,398,523
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
F-19
59
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Interest expense on notes payable and obligations under capital leases - non-
recourse, was $94,152,251, $72,540,195 and $60,503,985 for the year ended
June 30, 1996, 1995, and 1994 respectively.
During the fiscal years ended June 30, 1996 and 1995, approximately 44.8% and
33.0%, respectively, of the dollar amount of the leases were financed by two
financial institutions.
6. TAXES ON INCOME
The provisions for federal and state income taxes consist of the following:
YEAR ENDED JUNE 30, 1996 1995 1994
- ----------------------------------------------------------------------------
CURRENT:
Federal $ - $ - $ -
State 100,000 73,000 100,000
- ----------------------------------------------------------------------------
100,000 73,000 100,000
- ----------------------------------------------------------------------------
DEFERRED:
Federal 9,243,000 6,120,000 3,966,000
State 2,765,000 2,118,000 970,000
- ----------------------------------------------------------------------------
12,008,000 8,238,000 4,936,000
- ----------------------------------------------------------------------------
TOTAL TAXES ON INCOME $12,108,000 $8,311,000 $5,036,000
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
For the year ended June 30, 1994, $18,000 of the tax provision was allocated to
discontinued operations.
For financial reporting purposes, the Company accounts for all leases as
operating leases. Vehicles under operating leases are depreciated over the
scheduled lease term to their estimated residual values, using the straight-line
method. However, for income tax purposes, income recognition differs as
follows:
(a) For those leases where the vehicle is owned by the Company, the cost
of the leased vehicles are depreciated over the statutory term using
accelerated or straight-line methods, without regard to estimated
salvage or residual values.
F-20
60
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(b) For those leases where the vehicle is leased by the Company for re-
lease, all proceeds received which are in excess of the original net
investment in operating leases are recognized as income at lease
inception.
The Company records a gain on sale of retail installment contracts at such time
it sells its Contracts in private whole-loan sales or in securitization
transactions. For income tax reporting, income is recognized upon receipt of the
cash flows for certain of the Company's sales transactions.
The net deferred tax liability consists of the following:
JUNE 30, 1996 1995
- ----------------------------------------------------------------------------
DEFERRED TAX LIABILITY RELATED TO:
Excess depreciation $ 75,216,000 $ 53,969,000
Gain on sale of retail installment
contracts 10,709,000 2,775,000
- ----------------------------------------------------------------------------
85,925,000 56,744,000
- ----------------------------------------------------------------------------
DEFERRED TAX ASSETS RELATED TO:
Loss carryforwards (50,420,000) (38,457,000)
Leasing income (9,437,000) (4,695,000)
Business tax credit carryforwards (3,778,000) (3,778,000)
Alternative minimum tax credit
carryforwards (418,000) (418,000)
- ----------------------------------------------------------------------------
(64,053,000) (47,348,000)
Less valuation allowance 3,778,000 3,778,000
- ----------------------------------------------------------------------------
(60,275,000) (43,570,000)
- ----------------------------------------------------------------------------
NET LIABILITY $ 25,650,000 $13,174,000
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
F-21
61
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Unused operating losses available to reduce future years' taxable income for tax
reporting purposes aggregate to $123.4 million. The loss carryforwards begin to
expire at June 30, 2000 through 2011 when the last $27.9 million expires.
Alternative minimum tax credit carryforwards of $418,000 are available at June
30, 1996 to reduce future years' federal tax liabilities computed under the
regular tax system.
Business tax credits of $3.8 million for income tax purposes are available at
June 30, 1996 to offset taxes on income through June 30, 2001.
The Company has established a valuation allowance against its deferred tax asset
where there is an uncertainty as to when such benefits will be utilizable.
A reconciliation of taxes computed at the Federal statutory rate to taxes
computed at the actual effective tax rate applicable to income from continuing
operations before taxes on income is as follows:
YEAR ENDED JUNE 30, 1996 1995 1994
- ----------------------------------------------------------------------------
Federal income taxes computed at
statutory rates $10,866,000 $7,459,000 $4,527,000
Increase (decrease) in taxes
resulting from:
State and local taxes 1,862,000 1,424,000 694,000
Other (620,000) (572,000) (203,000)
- ----------------------------------------------------------------------------
Taxes on income $12,108,000 $8,311,000 $5,018,000
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
F-22
62
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. SHAREHOLDERS' EQUITY
(a) CLASS A COMMON STOCK
On October 19, 1995, the Company consummated a public offering of
2,645,000 shares (including 1,200,000 primary shares, 345,000 primary
shares sold by the Company upon the exercise by the underwriters of
the over-allotment option granted to them and 1,100,000 secondary
shares sold by certain shareholders of the Company) of its Class A
Common Stock. The Company recorded the sale by it of an aggregate of
1,545,000 shares of Class A Common Stock at the public offering price
of $25.25 per share less underwriting discounts, commissions and
public offering expenses in the aggregate of $2,482,538 for total net
proceeds of $36,528,712.
Additionally, in conjunction with the public offering, certain
shareholders converted an aggregate of 276,000 shares of Class B
Common Stock into an equal number of shares of Class A Common Stock,
which were sold in the public offering.
On December 17, 1993, the Company consummated an initial public
offering of 2,437,000 shares of its Class A Common Stock. 268,000
shares of Class A Common Stock were subsequently sold on January 10,
1994 upon the exercise by the Underwriters of the over-allotment
option. The Company recorded the sale of its common stock at the
initial public offering price of $10.00 per share less underwriting
discounts, commissions and initial public offering expenses in the
aggregate of $3,152,531 for total net proceeds of $23,897,469.
(b) STOCK OPTION PLAN
During fiscal 1994, the Company adopted a stock option plan that
provides for the granting of non-qualified and/or incentive stock
options to purchase up to an aggregate of 1,300,000 shares of Class A
Common Stock. The options may be granted to employees, officers,
directors, advisors and independent consultants to the Company. The
options vest over a period of three years, beginning two years from
date of issuance, and expire ten years from the date of issuance,
except with respect to certain incentive stock options granted to
persons who are members of a group owning beneficially 10% or more
of the Class A Common Stock, which such options expire in five years.
F-23
63
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The following reflects the changes in outstanding options to purchase
the Company's Class A Common Stock:
Options
--------------------------------
Shares Option price
per share
- ----------------------------------------------------------------------------
Balance, July 1, 1993 - -
Granted 359,000 $10.00 - $11.00
- ----------------------------------------------------------------------------
Balance, June 30, 1994 359,000 $10.00 - $11.00
Granted 55,000 $12.25
Cancelled (6,000) $10.00
- ----------------------------------------------------------------------------
Balance, June 30, 1995 408,000 $10.00 - $12.25
Granted 191,036 $21.00 - $28.00
Cancelled (25,000) $12.25
Exercised (26,662) $10.00
- ----------------------------------------------------------------------------
Balance, June 30, 1996 547,374 $10.00 - $28.00
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
F-24
64
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. RETIREMENT PLANS
The Company has a qualified non-contributory money purchase pension plan and a
profit-sharing plan, which qualifies under section 401(k) ("401K") of the
Internal Revenue Code of 1986 (effective for the year ended June 30, 1994),
covering substantially all employees. Each plan provides for discretionary
Company contributions and additionally, the profit sharing plan provides for
matching of employees' contributions at a rate of 50% on the first 4% of gross
salary contributed by such employees.
Additionally, during the fiscal year ended June 30, 1995, the Company adopted
a non-qualified deferred compensation plan for employees of the Company whose
annual compensation exceeds $150,000 per year, and calculated in accordance
with the terms of the plan. The plan provides for discretionary Company
contributions. The plan contribution charged to continuing operations for
the years ended June 30, 1996 and 1995 was $55,201 and $33,112, respectively.
This amount is included in pension and profit-sharing expense.
Pension and profit-sharing expense, including 401K, charged to continuing
operations was $918,356, $546,324 and $584,547 for the years ended June 30,
1996, 1995 and 1994, respectively.
9. COMMITMENTS
(a) LEASE COMMITMENTS
The Company's lease for its corporate headquarters, which is with a
partnership in which certain of the Company's principal shareholders
have general or limited partnership interests (Note 4) and minimum
annual rental commitments under noncancelable operating leases,
exclusive of real estate taxes and maintenance, principally for other
office space and office equipment aggregate to approximately
$6,300,000 over the next five years. Rental expense charged to
continuing operations was approximately $1,134,000, $1,057,000 and
$1,028,000 for the years ended June 30, 1996, 1995 and 1994,
respectively. Rental expense paid to a related party net of a
sublease was approximately $564,000, $510,000 and $535,000 for the
years ended June 30, 1996, 1995 and 1994, respectively.
F-25
65
<PAGE>
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(b) LINES OF CREDIT
The Company maintains two revolving credit facilities totalling
$13,000,000. Interest rates on these facilities range from prime to
prime plus 1.0%. At June 30, 1996, the Company had an aggregate
availability under these facilities of $13,000,000.
10. SUPPLEMENTAL CASH FLOW INFORMATION
Interest and income taxes paid during the year were as follows:
YEAR ENDED JUNE 30, 1996 1995 1994
- ----------------------------------------------------------------------------
Interest $94,327,109 $72,603,101 $60,854,184
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Income taxes $53,835 $72,634 $99,559
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
11. UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION
The following table sets forth certain key financial data which was included in
the Company's quarterly filings of unaudited interim consolidated financial
information for the years ended June 30, 1996 and 1995.
First Second Third Fourth
Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------
1996
Total revenues $70,431,801 $73,896,686 $77,301,940 $79,690,302
Income from continuing
operations before taxes
on income 6,615,337 7,442,669 8,155,470 8,830,902
Net income 4,035,337 4,539,669 4,974,470 5,386,902
Net income per share $ 0.30 $ 0.31 $ 0.33 $ 0.36
First Second Third Fourth
Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------
1995
Total revenues $55,719,247 $59,666,111 $61,768,374 $65,957,341
Income from continuing
operations before taxes
on income 4,330,638 5,987,379 4,903,972 6,088,865
Net income 2,641,638 3,652,379 2,991,972 3,713,865
Net income per share $ 0.20 $ 0.28 $ 0.23 $ 0.28
F-26
66
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NUMBER DESCRIPTION PAGE NO.
- -------------- ----------- --------
<C> <S> <C>
2.01 Plan and Agreement of Merger dated December 10, 1993.
Incorporated by reference from Exhibit 2 to the Company's
Form 10-Q for the quarter ended December 31, 1993 and
filed with the Commission on February 10, 1994.
3.01(1) Restated Certificate of Incorporation
of Oxford Resources Corp.
3.02(1) By-laws.
4.01(1) Specimen of Class A Common Stock Certificate.
4.02 Specimen of Class B Common Stock Certificate.
Incorporated by reference from Exhibit 4(c) to the Company's
Form 10-Q for the quarter ended December 31, 1993 and
filed with the Commission on February 10, 1994.
!10.01 Form of Closed-End Vehicle Lease Agreement 74
and Disclosure Statement.
!10.02 Form of Retail Installment Contract. 85
**10.03(1) Master Trac Lease Agreement between Oxford
Resources Corp. and Box Leasing Corporation,
dated as of May 1, 1990; Security Agreement
between Oxford Resources Corp. and Box Leasing
Corp. dated as of May 1, 1990; Protection Agree-
ment between Oxford Resources Corp. and Bank One
Acceptance Corporation, dated as of June 14, 1991;
and Second Amendment to Protection Agreement be-
tween Oxford Resources Corp. and Bank One Accept-
ance Corporation, dated as of August 30, 1993.
+10.04(1) Employment Agreement between Oxford Resources Corp.
and John A. Danzi, dated July 1, 1993.
+10.05(1) Deferred Compensation Letter Agreement between
John A. Danzi and Oxford Resources Corp.,
dated November 30, 1984; as amended September
24, 1992.
+10.06(1) Deferred Compensation Letter Agreement between
Mark A. Freeman and Oxford Resources Corp.,
dated as of July 1, 1985.
+10.07(1) Oxford Resources Corp. 1993 Stock Option Plan.
10.08 Oxford Resources Corp. 401(k) Profit Sharing Plan.
67
<PAGE>
SEQUENTIAL
EXHIBIT NUMBER DESCRIPTION PAGE NO.
- -------------- ----------- --------
10.09(1) Lease Agreement between Oxford Resources Corp. and
LBA Melville Associates, dated July 31, 1990; First
Amendment to Lease between LBA Melville Associates
and Oxford Resources Corp., dated November 15, 1991.
10.10(1) Sublease Agreement between Oxford Resources Corp.
and WLIG-TV, Inc.
**10.11(a)(1) Primary Vehicle Residual Value Insurance Policy
dated May 1, 1993.
**10.11(b) Primary Vehicle Residual Value Insurance Policy
dated May 1, 1994.
10.11(c) (i) Certificate of insurance evidencing renewal of policy
identified as Exhibit 10.11(b) above for policy period
from May 1, 1995 to May 1, 1996. Incorporated by
reference to Exhibit 10.11(c) to the Company's
Form 10-K for the fiscal year ended June 30, 1995, filed
with the Commission on September 8, 1995.
!10.11(c)(ii) Certificate of insurance evidencing renewal of policy 93
identified as Exhibit 10.11(b) above for policy period
from May 1, 1996 to May 1, 1997.
10.11(d)(i) Certificate of Insurance evidencing Excess Residual
Value Insurance Policy dated May 1, 1995.
Incorporated by reference to Exhibit 10.11(d)(i) to the Company's
Form 10-K for the fiscal year ended June 30, 1995, filed
with the Commission on September 8, 1995.
!10.11(d)(ii) Certificate of insurance- evidencing renewal of policy identified 95
as Exhibit 10.11(d)(i) above for policy period from May 1, 1996 to
May 1, 1997.
**10.12(1) Excess Layer Residual Insurance Policy dated
July 1, 1993.
**10.13(a) Contingent and Excess Liability Automobile
Insurance Policy dated July 1, 1993.
10.13(b) Certificate of insurance- evidencing renewal of policy
identified as Exhibit 10.13(a) herein for policy period
from July 1, 1995 to July 1, 1996. Incorporated by
reference to Exhibit 10.13(b) to the Company's
Form 10-K for the fiscal year ended June 30, 1995, filed
with the Commission on September 8, 1995.
!10.13(c) Certificate of insurance- evidencing renewal of policy 97
identified as Exhibit 10.13(a) above for policy period
from July 1, 1996 to July 1, 1997.
**10.14 Contingent Liability Insurance Policy dated
March 2, 1994. Incorporated by reference to Exhibit
10.01 to the Company's Form 10-Q for the quarter
ended March 31, 1994 and filed with the Commission
on May 12, 1994.
68
<PAGE>
SEQUENTIAL
EXHIBIT NUMBER DESCRIPTION PAGE NO.
- -------------- ----------- --------
10.14(b) Certificate of insurance evidencing renewal of policies
identified as Exhibits 10.14 and 10.15 herein for policy
period from March 2, 1995 to March 2, 1996.
Incorporated by reference to Exhibit 10.14(b) to the Company's
Form 10-K for the fiscal year ended June 30, 1995, filed
with the Commission on September 8, 1995.
!10.14(c) Certificate of insurance evidencing renewal of the policies 99
identified as Exhibits 10.14 and 10.15 herein for policy period
from March 2, 1996 to March 2, 1997.
**10.15 Excess Liability Insurance Policy dated March 2, 1994.
Incorporated by reference to Exhibit 10.02 to the
Company's Form 10-Q for the quarter ended March 31, 1994
and filed with the Commission on May 12, 1994.
**10.16(1) Contingent Liability Insurance Policy dated
October 1, 1992, including Binder renewing
policy for October 1, 1993 - October 1, 1994 policy year.
10.16(b) Certificate of insurance evidencing renewal of policies
identified as Exhibits 10.16 and 10.17 herein for policy
period from October 1, 1994 to October 1, 1995.
Incorporated by reference to Exhibit 10.16(b) to the Company's
Form 10-K for the fiscal year ended June 30, 1995, filed
with the Commission on September 8, 1995.
!10.16(c)(i) Certificate of insurance evidencing renewal of the policies 101
identified as Exhibits 10.16 and 10.17 herein for the policy
period from October 1, 1995 to October 1, 1996.
!10.16(c)(ii) Certificate of insurance evidencing renewal of policies 102
identified as Exhibits 10.16 and 10.17 herein for policy
period from October 1, 1996 to October 1, 1997.
**10.17(1) Commercial Liability Insurance Policy dated
October 1, 1992, including Binder renewing
policy for October 1, 1993 - October 1, 1994
policy year.
10.18(1) Management and Services Agreement between
Oxford Resources Corp. and WLIG-TV, Inc.
10.19 Pooling and Servicing Agreement among the Bank of
New York, as trustee, Centrex Capital Automobile
Assets, Inc. as Seller, and Oxford Resources Corp.,
as Servicer, dated as of June 1, 1994.
10.20 Loan Purchase Agreement among Centrex Capital
Automobile Assets (Number Two), Inc., as Seller;
Oxford Resources Corp., as Servicer; The Bank of
New York, as Custodian and Stand-by Servicer;
Clipper Receivables Corporation, as Purchaser;
State Street Boston Capital Corporation, as Admin-
istrator; and State Street Bank and Trust Company,
as the Relationship Bank, dated as of March 31,
1995, filed as Exhibit 10.01 to the Company's
quarterly report on Form 10-Q for the quarter ended
March 31, 1995 and filed with the Commission on
May 9, 1995, and incorporated by reference herein.
69
<PAGE>
SEQUENTIAL
EXHIBIT NUMBER DESCRIPTION PAGE NO.
- -------------- ----------- --------
!10.20(b) First Amendment to Loan Purchase Agreement, 105
referred to in Exhibit 10.20 herein, dated as of
December 14, 1995.
!10.20(c) Second Amendment to Loan Purchase Agreement, 111
referred to in Exhibit 10.20 herein, dated as of
March 21, 1996.
+!10.21 Oxford Resources Corp. Deferred Compensation Plan
for Selected Employees dated June 30, 1995.
Incorporated by reference to Exhibit 10.21 to the Company's
Form 10-K for the fiscal year ended June 30, 1995, filed
with the Commission on September 8, 1995.
! 11.01 Statement regarding computation of per share earnings. 117
!21.01 List of Subsidiaries. 118
! 23.01 Consent of BDO Seidman, LLP. 121
! 27.01 Financial Data Schedule 122
</TABLE>
_________________________________________________
! Filed herewith
** Confidential treatment has been requested with respect to certain
information contained in this agreement.
+ Management contract or compensation plan or arrangement required to be
identified pursuant to Item 14(a) of this Report.
1 Incorporated by reference from the Company's Registration Statement on Form
S-1 (Registration No. 33-68106) declared effective by the Commission on
December 10, 1993.
70
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
PAGE
----
Report of Independent Certified Public Accountants
on Financial Statement Schedule. . . . . . . . . . . . . . . . . . . . . S-2
Schedule II
Valuation and Qualifying Accounts. . . . . . . . . . . . . . . . . . . . S-3
S-1
71
<PAGE>
[LOGO]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders of
Oxford Resources Corp.
Melville, N.Y.
The audits referred to in our report dated August 26, 1996 relating to the
consolidated financial statements of Oxford Resources Corp., which is
contained in Item 8 of this Form 10-K included the audit of the financial
statement schedule listed in the accompanying index. These financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement schedule
based on our audits.
In our opinion such financial statement schedule present fairly, in all
material respects, the information set forth therein.
BDO Seidman, LLP
August 26, 1996
S-2
72
<PAGE>
CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
COLUMN C - ADDITIONS
COLUMN B- --------------------------- COLUMN E-
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER COLUMN D- END OF
COLUMN A - DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS (1) PERIOD
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED
JUNE 30, 1994. . . . . . . . . . . . . . .
Allowance for possible losses
Lease termination fees (2) . . . . . . . . $1,005,245 $1,308,080 $593,325 $1,720,000
Investment in automobile receivables (3) . $496,865 $1,918,697 $1,733,470 $682,092
FOR THE YEAR ENDED
JUNE 30, 1995. . . . . . . . . . . . . . .
Allowance for possible losses
Lease termination fees (2) . . . . . . . . $1,720,000 $3,041,495 $2,525,397 $2,236,098
Investment in automobile receivables (3) . $682,092 $1,116,567 $1,003,036 $795,623
FOR THE YEAR ENDED
JUNE 30, 1996. . . . . . . . . . . . . . .
Allowance for possible losses
Lease termination fees (2) . . . . . . . . $2,236,098 $6,003,550 $1,994,648 $6,245,000
Investment in automobile receivables (3) . $795,623 $1,420,415 $847,199 $1,368,839
</TABLE>
- -------------------------------
(1) Write-offs, net of recoveries.
(2) Classified as a reduction of vehicles under operating leases - net
(3) Classified as a reduction of net investment automobile receivables
S-3
73
<PAGE>
Exhibit 10.01
CLOSED-END VEHICLE LEASE AGREEMENT AND DISCLOSURE STATEMENT
This Lease Agreement (this "Lease") dated between
---------- -------------------
(name & address)
as "Lessee" ("you and "your") and , as "Lessor" having its
--------------------
principal place of business at , regarding the vehicle
--------------------
described below. The following cost, term and liability disclosures are also
made on behalf of Oxford Resources Corp., having its principal place of
business at 270 South Service Road, Melville, NY 11747-0570 ("Oxford") to
whom we intend to assign this Lease, or any bank or other entity to whom this
Lease may be assigned. As used herein, "we", "us" or "our" refers to the
Lessor and, after the assignment of this Lease, Oxford.
1. DESCRIPTION OF VEHICLE.
- ----------------------------------------------------------------------------
Model Year Make Model Body Style Cylinder Vehicle I.D. Number
- ----------------------------------------------------------------------------
/ / New
/ / Used
- ----------------------------------------------------------------------------
A. INCLUDED EQUIPMENT
The vehicle includes the following equipment and accessories:
/ / Air Conditioning / / Power Seats(s) / / Vinyl Roof
/ / Power Brakes / / Cruise Control / / Sun Roof
/ / Power Steering / / Automatic Transmission / / Other
/ / Tilt Wheel / / AM / / FM / / Tape / / CD
/ / Power Windows / / Custom Wheels
------------------
/ / Power Door Locks / / Defroster-Rear Window
------------------
B. WARRANTIES
(i) If the vehicle is new (see "Description of Vehicle" above), then the
following warranty section applies to this Lease:
/ / Unless this box is checked, you have rights under the manufacturer's
standard new car warranty.
/ / If this box is checked, the following additional warranty(ies) is/are
being provided:
- --------------------------------------------------------------------------
(ii) If the vehicle is used (see "Description of Vehicle" above), then the
following warranty section applies to this Lease:
/ / Unless this box is checked, you have rights under the unexpired portion
of the manufacturer's standard new car warranty.
/ / If this box is checked, the following additional warranty(ies) is/are
being provided:
- --------------------------------------------------------------------------
For additional information on warranties, please refer to Item 17.
2. AGREEMENT TO LEASE. You agree to lease from us the vehicle described
above. You acknowledge that this is a true lease and that you will not own or
have any equity in the vehicle or its accessories or constituent or
replacement parts unless you are permitted to exercise your option to
purchase the vehicle under either Item 13 or Item 14 and do so exercise such
option under the terms of either such Item. The term of this Lease (the
"Lease Term") and your payment obligations under this Lease begin when the
vehicle is delivered to you. If the vehicle is not delivered to you upon
signing of this Lease, we will use our best efforts to deliver it to you as
soon as practicable. We will not be responsible for any damages caused by any
failure or delay in delivery, any damages caused by any interruption of
service or time lost in repairing or recovering the vehicle, or any damages
resulting from any other cause beyond our reasonable control.
3. TOTAL PAYMENT DUE AT LEASE SIGNING.
You must pay the following amounts upon signing this Lease:
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<PAGE>
/ / Cash Downpayment $
----------
/ / Trade-In Allowance $
----------
/ / Sales Tax on Cash Downpayment and/or Trade-In Allowance $
----------
/ / Current Title, License and Registration Fees $
----------
/ / First Monthly Lease Payment (including tax) $
----------
/ / Security Deposit (which may be refunded to you to the
extent provided in Item 8) $
----------
/ / Other (describe)
------------------------------------- $
---------
Total Payment Due Upon Signing $
---------
4. VALUE AND MONTHLY PAYMENT CALCULATIONS.
a. Lease Term - Number of Monthly Lease Payments
---------
b. Estimated Wholesale Value of Vehicle at the scheduled $
end of the Lease Term (based on ordinary wear and use ---------
and the vehicle being driven an average of 12,000 miles
annually or less during the Lease Term unless otherwise
indicated below)
75
<PAGE>
--------------------------------- ---------------------
Intended Maximum Annual Mileage Your Initials
c. Average Monthly Depreciation $
------------------
d. Average Monthly Lease Charge $
------------------
e. Total Base Monthly Payment (c + d) $
------------------
f. Sales/Use Tax (estimated based on current $
tax rates) ------------------
g. Monthly Personal Property/Excise Tax
(estimated based on current tax rates) $
------------------
h. Sales Tax on Excise Tax, if applicable $
------------------
i. Monthly Lease Payment (e + f + g + h) $
------------------
j. Total Monthly Lease Payments (a times i) $
-----------------
k. Total Lease Charge (a times d) $
-----------------
5. OFFICIAL FEES AND TAXES. You must pay when due or reimburse us for all
official fees and taxes, including, but not limited to, any personal
property, sales, use and excise taxes, parking violations and other vehicle
fines and charges imposed by any governmental authority, including any
interest and/or penalties thereon. You agree that we may, at our discretion,
determine the timing and procedures for payment of these fees and taxes.
Since the amounts to be collected will be estimates, and since your state's
tax rates may change from year to year, you also agree to pay us when billed
the difference, if any, between the amount collected and the amount actually
owed on any fee or tax incurred during the Lease Term. You understand that
in certain of those states which assess such taxes, the final tax bill may
not be received until after this Lease has terminated. In those states, you
agree to remain liable for the final tax bill when billed, even if you have
already satisfied the other obligations owed under this Lease. Once all your
obligations under this Lease have been paid in full, any excess taxes you
paid to us will be refunded to you.
You understand that based on current fee schedules and tax rates, we
estimate that the total amount you will pay during the Lease Term for
official fees, including registration, license, title and ownership fees, and
applicable taxes is: $
-------------------------
6. INSURANCE. You are required to maintain at your expense during the
Lease Term and until the vehicle is returned to us a split limit liability
and casualty insurance policy with the following minimum insurance on the
vehicle:
a. Fire, Theft and Comprehensive Insurance with a maximum deductible of
/ / $500 / /$
------------------------------------;
b. Collision insurance with a maximum deductible of
/ / $500 / /$
------------------------------------;
c. Automobile Liability Insurance for bodily injury or death to any 1
person in the amount of $100,000; and for any 1 accident in the amount of
$300,000; and
d. Property Damage Insurance in the amount of $50,000.
Prior to the delivery of the vehicle to you and prior to any renewal or
substitution of insurance, you shall provide us with evidence that the
insurance required under this Lease is in effect, and you shall cause to be
given to us a certificate of insurance, binder or certified policy copy,
issued by an authorized person, to such effect.
You are liable for the deductible amounts. The insurance must be issued
by an insurance company which we approve. It must provide that we are named
as an additional insured on your policy with respect to all liability
76
<PAGE>
coverages and as the loss payee on coverages a. and b. above. It must
further provide that we will be given 10-days' prior written notice in the
event of termination, cancellation or reduction in coverage.
You assign to us any and all rights you may at any time have to the
proceeds of any insurance on the vehicle, and you authorize us to receive and
collect all money paid or payable under such insurance and to make, adjust,
settle or release any claims under or relating to such insurance. You
further agree to fully cooperate in all accident investigation, claim and
litigation proceedings.
7. LATE CHARGE. Time is of the essence in connection with this Lease. If
any Base Monthly Payment is not received by us within 10 days of its due
date, you agree to pay a late charge of 5% of such Base Monthly Payment up to
a maximum late charge of $25 for such payment. In addition, if you make any
payment by check and that check is returned to us for any reason, you agree
to pay a $15 redeposit charge to us. These charges are intended to partially
compensate us for the additional collection expenses necessitated by our not
receiving the Monthly Lease Payment or other payment in a timely manner.
8. SECURITY DEPOSIT. We may require, if state law permits, a refundable
Security Deposit as security for the full payment and performance by you of
all terms, conditions and obligations which you have under the terms of this
Lease. You understand that any Security Deposit required by us will not be
considered rent, will not bear interest (except as may be required by law)
and will not release you from any of your obligations to us. We may, but
shall not be required to, apply any such Security Deposit towards the
discharge of any overdue obligations owed by you under the terms of this
Lease. To the extent that we have not been billed for personal property
taxes for the vehicle for the year or portion thereof in which the Lease Term
ends, you hereby authorize us to retain all or a portion of the Security
Deposit to apply to the personal property tax obligation for such year. You
understand that such deposit shall be segregated from our general funds and
that we will return any remaining balance of the Security Deposit after you
have paid your entire termination liability, and not before.
9. TERMINATION.
A. DEFAULT TERMINATION LIABILITY
At any time after you sign this Lease, we may terminate this Lease before
the scheduled end of the Lease Term if any damage or loss pursuant to Item 15
shall occur or you shall default pursuant to Item 18. Except as described in
Item 14 or as otherwise provided by law, you have no right to terminate this
Lease prior to its scheduled termination.
If this Lease is terminated early by us, you agree that your payment
liability to us upon such termination will be the sum of:
(i) Any Monthly Lease Payments which are due or past due plus any other
amounts or charges arising from your failure to keep your promises
under this Lease; plus
(ii) The "Net Investment" in the vehicle if Item 15 applies, or if Item 18
applies, the amount by which the "Net Investment" exceeds the Realized
Value of the vehicle (Item 9B).
The "Net Investment" in the vehicle is (a) the total amount of the
remaining Base Monthly Payments not yet due, plus (b) the Estimated
Wholesale Value (Item 4b); less (c) the "Unearned Lease Charge".
The "Unearned Lease Charge" is the portion of the Total Lease Charge
(Item 4k) which has not yet been earned, using a generally accepted
actuarial method assuming that the Lease is terminated on the day
immediately preceding the next scheduled lease payment date.
plus,
(iii) An amount equal to the product of (a) the amount of the Base Monthly
Payment times (b) the sum of (i) the number of years and/or fraction
thereof remaining in the Lease Term plus (ii) 1; plus
(iv) Any official fees and taxes imposed in connection with Lease
termination and any out-of-pocket expenses incurred in recovering the
vehicle; plus
(v) A vehicle disposition fee of $400
You acknowledge that it is likely that the vehicle's Realized Value will
be less than the "Net Investment" if this Lease is terminated before the
scheduled and of the Lease Term, and that you bear this risk. When this
Lease is terminated at the scheduled end of the Lease Term the risk of the
vehicle's value is borne by us except to the extent you may have liability
under the provisions of this Lease because of excess mileage or the vehicle's
condition.
B. REALIZED VALUE
Your Default Termination Liability will be affected by the Realized
Value of the vehicle. The Realized Value may be determined in any of the
following ways:
(i) By a written agreement between you and us;
77
<PAGE>
(ii) By a professional appraisal, obtained at your expense within 10
days after termination, of the wholesale value of the vehicle made by
an independent 3rd party agreeable to both of us, which appraisal
shall be final and binding upon both of us; or
(iii) If the Realized Value is not determined within 10 days after
termination, we will determine the Realized Value in accordance with
accepted practices in the automobile industry for determining the
wholesale value of used vehicles by obtaining a wholesale cash bid
for the purchase of the vehicle or by disposing of the vehicle in an
otherwise commercially reasonable manner.
You understand that the Realized Value amount will be exclusive of any
official fees and taxes imposed upon vehicle disposition.
C. SCHEDULED TERMINATION
You agree that the amount you will owe us at the scheduled end of the
Lease Term will be the sum of the following:
(i) An administrative fee of $400; plus
(ii) Any Monthly Lease Payments due and unpaid and any other amounts or
charges arising from your failure to keep your promises under this
Lease; plus
(iii) If the vehicle is new (see Item 1) at the beginning of this Lease,
a charge of 18 cents for each mile the vehicle has been driven by
you in excess of the mileage shown in Item 4b, or if the vehicle is
used (see Item 1) at the beginning of this Lease, a charge of 12
cents for each mile the vehicle has been driven by you in excess of
the mileage shown in Item 4b; plus
(iv) Our estimated costs in excess of $50 to restore the vehicle to
good working order and condition, ordinary wear and use excepted
(Item 12); plus
(v) Any official fees and taxes imposed in connection with Lease
termination and any out-of-pocket expenses incurred in recovering
the vehicle.
10. VEHICLE RETURN. You agree that upon termination of this Lease,
whether in the event of early termination or upon its scheduled termination,
you shall return the vehicle to the location we specify. If you fail to
return the vehicle to the location we specify, you agree to reimburse us our
costs in transporting the vehicle to such location. If the vehicle is not
returned on the scheduled termination date, you will be deemed to be in
default under this Lease and you will also owe us a pro rata portion of the
Monthly Lease Payment for each day after the end of the Lease Term that the
vehicle has not been returned or purchased pursuant to Item 13. You
acknowledge that our Net Investment shall not be reduced by any amount
received from you for your use of the vehicle after the scheduled termination
date. You understand that your obligations to reimburse us our
transportation costs whenever the vehicle is returned and to pay to us any
pro rata portion of the Monthly Lease Payment after the scheduled termination
date are in addition to your obligations to us for any termination liability
as calculated in Item 9.
78
<PAGE>
11. VEHICLE MAINTENANCE. You agree at your expense to have the vehicle
serviced in accordance with the manufacturer's recommendations, to maintain
the vehicle in good appearance and in good working order and condition, and
to make all necessary repairs and replacement of parts. You must maintain
the vehicle in a condition sufficient to comply with all applicable state
vehicle inspection laws. Unless you obtain our written consent beforehand,
you will not mark or alter the vehicle or install additional equipment or
otherwise make any changes to the vehicle which would decrease its economic
value or functional utility. In any event, if you mark or alter the vehicle
or install additional equipment or otherwise change the vehicle, you will
bear the cost of restoring the vehicle to its original condition. Any
changes made to the vehicle which cannot be removed without decreasing its
economic value or functional utility will become our property when made. You
agree that if we request, you shall make the vehicle available to us at any
reasonable time so that we may inspect the vehicle.
12. STANDARDS OF WEAR. You agree that when you return the vehicle to us
it will be in as good working order and condition as when you first received
it, ordinary wear and use excepted. You agree to obtain a good faith
estimate by a licensed independent appraiser acceptable to us of the cost, if
any, to restore the vehicle to such condition. If you fail to obtain such
estimate, we shall obtain an appraisal from a licensed independent appraiser
selected by us who is not an employee or otherwise affiliated with us.
Whether or not the repairs are made, you agree to pay all amounts in excess
of $50 to so restore the vehicle based upon the estimated, not the actual,
cost of repairs. You understand that the most common repair or replacement
items for which you would be responsible are (1) malfunctioning or
inoperative mechanical parts, (2) dents, scratches, chips or rusted areas
over 1 inch long on the body, or on any alloy wheels or rims, (3) cracks,
pits or chips more than 1 inch long on the windshield or broken or
inoperative lenses, sealed beams or window mechanisms (4) broken or missing
trim and grill work, (5) mismatched paint, (6) bumper dents or scratches more
than 2 inches long, (7) torn, stained or damaged upholstery, dashboard or
carpeting, including but not limited to holes and other damage caused by the
installation and/or removal of any phone, stereo or other equipment, (8)
missing parts, accessories or adornments, including radio and stereo
components, or the failure of any replacement parts accessories or,
adornments to be of at least equal value and quality as the vehicle's original
parts, accessories and adornments, and (9) any tire not part of a matching
set (same size, quality, brand and manufacturer) of 5 tires (or 4 with an
emergency "doughnut" spare) with each tire having at least 1/8 inch of
remaining tread at its shallowest point.
13. OPTION TO PURCHASE AT SCHEDULED TERMINATION. You shall have the
option to purchase the vehicle at the scheduled end of the Lease Term on an
AS IS-WHERE IS BASIS, provided that all sums due under this Lease have been
paid by you. The price you will pay us will be the amount set forth as the
average retail value for the vehicle, without regard to actual mileage,
including all equipment and accessories, in the N.A.D.A. Official Used Car
Guide (or, in the event that the N.A.D.A. Official Used Car Guide is no
longer available at the time such option is exercisable, then such other
comparable industry publication quoting retail used car values as we shall
select) for the month in which the scheduled end of the Lease Term occurs
plus the amount due at the scheduled end of the Lease Term as shown in Item
9C above (other than Item 9C (iii) and (iv)). You will also have to pay any
applicable taxes. In order to exercise your purchase option, you must notify
us in writing of your intent to purchase the vehicle at least 30 days prior
to the scheduled end of the Lease Term. You must pay us for the vehicle
within 5 days after the scheduled end of the Lease Term. After such payment
is made, we shall transfer to you title to the vehicle.
14. OPTION TO PURCHASE PRIOR TO SCHEDULED TERMINATION. You have the
option to purchase the vehicle prior to the scheduled termination of this
Lease on an AS IS - WHERE IS BASIS, as of any lease payment date. The price
you will pay us will be the Net Investment in the vehicle (as described in
Item 9) as of the lease payment date on which the purchase shall occur plus
the amounts due under Items 9A(i), (iii), (iv) and Item 9C(i). If the
proposed purchase date is in the last 6 months of the scheduled Lease Term,
however, the price you will pay will be the greater of the amount set forth
above or the amount set forth as the average retail value for the vehicle,
without regard to actual mileage, including all equipment and accessories, in
the N.A.D.A. Official Used Car Guide (or, in the event that the N.A.D.A.
Official Used Car Guide is no longer available at the time such option is
exercisable then such other comparable industry publication quoting retail
used car values as we shall select) for the month in which the purchase
occurs, plus the amounts set forth in Items 9C (i), (ii) and (v). You will
also have to pay any applicable taxes. In order to exercise your option to
purchase, you must notify us in writing of your intent to purchase the
vehicle at least 30 days prior to the lease payment date on which the
purchase is to occur. You must pay us for the vehicle within 5 days after the
lease payment date on which the purchase is to occur. After such payment is
made, we shall transfer to you title to the vehicle.
15. DAMAGE, LOSS OR POTENTIAL LOSS OF VEHICLE. You agree to be
responsible for the risk of loss, damage or destruction of the vehicle during
the Lease Term and until you return the vehicle to us. If the vehicle is
damaged or destroyed in an accident or other occurrence or is confiscated by
any governmental authority or is stolen or is abandoned or is subject to
undue peril, you will immediately notify us of such occurrence or condition.
If the vehicle is damaged but is in a condition which your insurance company
determines is reasonably repairable, you will have the necessary repairs made
promptly at your expense. If the vehicle is damaged and is in a condition
which your insurance company determines is beyond reasonable repair, this
Lease will be terminated by us upon notice to you. With respect to any other
event described above, we reserve the right to terminate this Lease
immediately. If this Lease is terminated, your termination liability will be
determined on the basis described in Item 9A. WHILE ANY LOSS PROCEEDS WE
RECEIVE FROM YOUR INSURANCE COMPANY WILL BE CREDITED TO YOUR DEFAULT
TERMINATION LIABILITY YOU ACKNOWLEDGE THAT UNLESS THIS BOX / / IS CHECKED,
YOU ARE RESPONSIBLE FOR ANY DIFFERENCE BETWEEN YOUR DEFAULT TERMINATION
LIABILITY AND THE LOSS PROCEEDS RECEIVED BY US. IF THE BOX ABOVE IS CHECKED,
AND PROVIDED (i) YOU ARE IN COMPLIANCE WITH YOUR INSURANCE OBLIGATIONS UNDER
THIS LEASE AND (ii) YOUR CLAIM FOR TOTAL LOSS OF THE VEHICLE IS ACCEPTED AND
PAID BY YOUR INSURANCE COMPANY, WE WAIVE YOUR RESPONSIBILITY FOR ANY SUCH
DIFFERENCE. EVEN IF THE BOX ABOVE IS CHECKED AND WE WAIVE YOUR
79
<PAGE>
RESPONSIBILITY FOR SUCH DIFFERENCE, YOU WILL CONTINUE TO BE LIABLE FOR (i)
THE DEDUCTIBLE AMOUNT UNDER YOUR INSURANCE POLICY, (ii) ANY MONTHLY LEASE
PAYMENTS OR OTHER OBLIGATIONS PAST DUE AND UNPAID UNDER THIS LEASE, AND (iii)
ANY AMOUNTS DEDUCTED BY YOUR INSURANCE COMPANY FROM THE LOSS PROCEEDS BECAUSE
OF DUE AND UNPAID PREMIUMS, OFFICIAL FEES AND CHARGES, ADMINISTRATIVE
EXPENSES AND ANY OTHER MISCELLANEOUS AND PERMISSIBLE DEDUCTIONS YOUR
INSURANCE COMPANY MAKES UNDER YOUR INSURANCE POLICY OR APPLICABLE LAW.
You authorize us to affix your signature to, and to negotiate on your
behalf, any check, draft or other instrument payable either to you or to you
and others jointly, received by us, directly or indirectly, from any
insurance company providing the insurance coverage required hereunder.
16. TITLE AND SECURITY INTEREST. This is an agreement of lease only. We
retain title to the vehicle and reserve the right to do as we deem advisable
with such title. YOU MAY NOT SUBLET THE VEHICLE, OR ASSIGN, PLEDGE OR
ENCUMBER IT OR THIS LEASE. We may assign to any person the vehicle the Lease
and/or all sums now or hereafter due under this Lease, or give a security
interest in the vehicle and/or this Lease and/or the proceeds of all of the
foregoing. We assume no liability and make no warranty as to the treatment
by you of this Lease or the Monthly Lease Payments for financial statement or
tax purposes. You are advised to consult your attorney or accountant with
respect thereto.
17. WARRANTIES AND DISCLAIMER. You and we agree (if permissible under
state law) that this Lease will be treated as a "finance lease" within the
meaning of Article 2A of the Uniform Commercial Code (if applicable) even
though this Lease may not meet the statutory definition of a finance lease.
This means that you will have only the warranties covering the vehicle which
are made by the manufacturer and may have certain other warranty rights. You
acknowledge that those warranties are indicated in Item 1B and that before
signing this Lease, you received an accurate and complete description of
those warranties, including a description of the limitations which apply to
each of those warranties. EXCEPT AS SET FORTH IN ITEM 1B, WE DO NOT MAKE AND
HAVE NOT MADE ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS
TO THE DESIGN, COMPLIANCE WITH SPECIFICATIONS, OPERATION OR CONDITION OF OR
AS TO THE QUALITY OF THE MATERIAL, EQUIPMENT OR WORKMANSHIP IN THE VEHICLE OR
ANY OF ITS COMPONENTS DELIVERED TO YOU, AND WE DO NOT MAKE ANY WARRANTY OF
MERCHANTABILITY OR FITNESS OF THE VEHICLE OR ANY OF ITS COMPONENTS FOR ANY
PARTICULAR PURPOSE, ANY WARRANTY AGAINST INTERFERENCE OR AGAINST INFRINGEMENT
BY ANY PERSON, OR ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THE VEHICLE OR ANY COMPONENTS THEREOF (EITHER UPON DELIVERY
TO YOU OR OTHERWISE). YOU ACKNOWLEDGE THAT YOU ARE LEASING THE VEHICLE FROM
US "AS IS". However, we assign to you all of our rights and remedies under
the manufacturer's new car warranty, if any (see Item 1B). You understand and
agree that all risks are to be borne by you, including any difference between
your Default Termination Liability (Item 9A) and the amount paid by the
manufacturer under any such warranty. We appoint you to be our agent and
attorney-in-fact during the term of this Lease to assert and enforce, from
time to time, in our name and for your or our account, as our interests may
appear, at your sole cost and expense, whatever claims and rights we may have
against any manufacturer or other seller of the vehicle or supplier of any
equipment installed on the vehicle. We shall have no responsibility or
liability to you or any other person with respect to (i) any liability, loss or
damage caused or alleged to be caused directly or indirectly by the vehicle
or by any inadequacy, deficiency or defect in the vehicle or by any other
circumstance in connection with it; (ii) the use, operation or performance of
the vehicle or any risks relating to it; (iii) any interruption of service,
loss of time, business or anticipated profit, inconvenience, consequential
damages, loss of pay, lodging bills, car rentals, travel costs and similar
items; or (iv) any claims or rights arising out of your purchase of the
vehicle from us, whether at or prior to scheduled end of the Lease Term.
18. DEFAULT. This Lease will be in default if any of the following occur:
(i) you do not make a payment when due; (ii) you or any guarantor of this
Lease dissolves, ceases active business affairs, dies or becomes incompetent,
or you or any guarantor becomes the subject of a proceeding in bankruptcy,
receivership or insolvency or you or any guarantor makes an assignment for
the benefit of creditors; (iii) you fail to comply with the insurance
requirements contained in Item 6; (iv) you fail to maintain or repair the
vehicle as required by Item 11; (v) you have or any guarantor has made any
material misrepresentation in any lease application related to this Lease; or
(vi) you fail to comply with any other term or condition of this Lease.
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If this Lease is in default, we may do any or all of the following
without giving you advance notice, except as otherwise required by law:
A. Take any reasonable measures designed either to correct the default
or to save us from loss, in which event you also agree to pay us on
demand for the costs and expenses incurred;
B. Terminate this Lease and your rights to possess and use the vehicle;
C. Take possession of the vehicle, and in connection with our taking
possession, require you to make the vehicle available to us at a
place we designate;
D. Determine your termination liability on a default termination basis as
described in Item 9A, which you agree to pay immediately; and
E. Pursue any other remedy the law allows.
In the event of default, you also agree to pay upon demand all collection,
repossession, storage and legal costs, including attorney's fees, we may
incur, to the extent permitted by law.
19. ODOMETER DISCLOSURE. Under Federal law, you must disclose the
vehicle's mileage in connection with the transfer of ownership of the
vehicle. Failure to comply with this requirement or making a false statement
may make you liable for civil damages and result in fines and/or imprisonment
pursuant to the Truth in Mileage Act. On lease termination, you agree to
complete, sign and deliver to us the required odometer disclosure form to be
provided by us.
20. INDEMNITY. You are responsible for indemnifying and holding us
harmless from and against any and all fines, forfeitures or penalties for
traffic violations or for the violation of any statute, law, ordinance, rule
or regulation of any duly constituted public authority, and any and all
losses, liabilities, liens, encumbrances and claims, including legal fees and
other defense expenses to the maximum extent permitted by law, arising out of
the use, maintenance, operation or condition of the vehicle or the execution,
delivery or performance by you of your obligations under this Lease. Without
limiting the generality of the foregoing, this indemnity includes any claim
under the doctrine of strict liability, which is a legal term that applies to
product liability.
21. USE OF VEHICLE. You understand that you are responsible for all
operating expenses (for example, gasoline and oil) incurred in connection
with the use of the vehicle. You are also responsible for keeping the vehicle
properly registered in the state in which the the vehicle is titled. You will
not use and will not permit use of the vehicle:
A. For any unlawful purpose or in violation of any law;
B. By a person not having a valid driver's license or one who for
insurance purposes is deemed an "assigned risk" or one who does not
exercise reasonable care in its operation;
C. For the transportation of goods or persons for hire;
D. Outside the state in which the vehicle is titled for a period exceeding
30 days without our prior written consent;
E. Outside the United States for any period without our prior written
consent; or
F. In any way which would cause cancellation or suspension of the required
insurance or cause the manufacturer's warranty to become void.
22. AGE REQUIREMENTS. In order to induce us to enter into this Lease, you
specifically represent you are 18 years of age or older and that under no
circumstances will you permit anyone under the age of 18 to operate the
vehicle.
23. GENERAL PROVISIONS.
You understand that:
A. Our waiver or delay in requiring you to keep your promises or in
enforcing our rights will not affect our ability to require you to keep
your promises or to enforce our rights afterwards.
B. We have no obligation to provide a replacement vehicle for any reason.
C. You do not have the right to terminate this Lease prior to the
scheduled end of the Lease Term unless you purchase the vehicle in
accordance with Item 14.
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D. The Monthly Lease Payments shall be paid when due for the Lease Term
without notice or demand, without counterclaim, set off, reduction,
abatement, deferment or any other kind of defense because of the
disappearance, theft, destruction, levy, judicial seizure or
unsatisfactory performance of the vehicle or for any other reason
whatever, unless this Lease is terminated by us or the vehicle is
purchased by you in accordance with Item 14.
E. Upon your acceptance of the vehicle, your promises under this Lease
become irrevocable and independent unless applicable law provides to the
contrary.
F. This Lease will be governed by the laws of the state in which you
reside on the date you sign this Lease; provided, however, that with
respect to business or commercial leases, the Lease will be governed
by the laws of the state of the dealer's place of business.
G. Notices under this Lease must be in writing addressed to the
appropriate party at the address shown above and mailed by prepaid U.S.
1st class postage. Each party will notify the other of a change in
address.
H. This Lease constitutes the entire agreement between you and us pertaining
to the lease of the vehicle and you have received no representations or
warranties, either orally or in writing, which are not contained in
this Lease.
I. If more than 1 lessee signs this Lease, each lessee will be jointly
and severally liable under this Lease.
J. Nothing in this Lease shall be construed as waiver by you of any
statutory rights to which you may be entitled, including your rights,
if any, under the "lemon law" of any jurisdiction.
K. You understand and agree that your obligations under Items 5, 9, 10, 15
and 20, as well as any other obligations in this Lease requiring you to
make any payment or render any performance after the end of the Lease
Term, will survive the termination of this Lease.
- -------------------------------------------------------------------------------
CONSUMER OR COMMERCIAL LEASE
You intend to use the leased vehicle (check applicable box).
/ / CONSUMER LEASE--Primarily for / / COMMERCIAL LEASE--Primarily for
personal, family or business, commercial or
household purposes; or agricultural purposes.
ABSENCE OF AUTHORITY: You hereby acknowledge that (1) YOU HAVE NOT RELIED AND
WILL NOT RELY ON ANY STATEMENTS OR REPRESENTATIONS MAY BY THE LESSOR, WHETHER
ORALLY OR BY WAY OF RIDER, ADDENDUM OR OTHERWISE, TO THE EXTENT NOT SET FORTH
IN THIS LEASE and (2) any payment (other than the total payment due at Lease
signing) made or delivered by you to anyone other than to Oxford or any bank
or other entity or person to whom Oxford may assign any payments due or to
become due under this Lease (if you have been given notice by Oxford of such
assignment) shall be at your risk, unless and until such payment is received
by Oxford or such assignee.
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----------- -----------
Your Initials Your Initials
CHANGES TO LEASE: By separately signing below, you acknowledge that any
changes to this Lease must be approved by us in writing and signed by the
party to be bound.
-----------------------------------
Your Signature
-----------------------------------
Your Signature
A. NOTICE TO THE LESSEE: (1)DO NOT SIGN THIS LEASE BEFORE YOU READ IT OR
IF IT CONTAINS ANY BLANK SPACES TO BE FILLED IN; (2)YOU ARE ENTITLED TO A
COMPLETELY FILLED IN COPY OF THIS LEASE; (3)IF YOU DEFAULT IN THE
PERFORMANCE OF YOUR OBLIGATIONS UNDER THIS LEASE, THE VEHICLE MAY BE
REPOSSESSED AND YOU MAY BE SUBJECT TO SUIT AND LIABILITY FOR THE UNPAID
INDEBTEDNESS EVIDENCED BY THIS LEASE.
B. WARNING: NO PUBLIC LIABILITY OR PROPERTY DAMAGE INSURANCE IS PROVIDED
BY OR UNDER THIS LEASE.
YOU HAVE READ AND RECEIVED A COMPLETED COPY OF THIS LEASE
-----------------------------(Lessor) -------------------------------------
Print Lessor's Name "YOU" (Lessee) Print Name
By--------------------- Date----- By----------------------------- Date----
Lessee Signature (and Title if applicable)
By---------------------------- Date-----
Lessee Signature (and Title if applicable)
NOTE: PLEASE BE CERTAIN TO EXECUTE ALL COPIES OF THIS LEASE.
DELIVERY RECEIPT
You acknowledge that you have received and examined the vehicle
described in Item 1 of this Lease, that the vehicle is equipped as described
and in good operating order and condition and that you accept the vehicle for
all purposes of this Lease.
Dated:-------------------- 19---- Current Odometer Mileage Reading:---------
- --------------------------------- By ---------------------------------------
"YOU" (Lessee) Print Name Signature
- --------------------------------- By ---------------------------------------
"YOU" (Lessee) Print Name Signature
- -------------------------------------------------------------------------------
GUARANTY
Each of us guarantees and promises to make all of the payments and perform
all the Lessee's obligations as specified in the above Lease. Each of our
liabilities is primary and joint and several and will not be affected by any
settlement, extension, renewal or modification of the Lease, by the discharge
or release of the Lessee's obligations or by the taking or release of
additional guarantors or security for the performance of the Lease. Each of
us waives any rights we may have to (a) presentment, demand, protest, notice
of protest, notice of dishonor, notice of default under the Lease and any
other notices related to this guaranty or the Lease and (b) the right to
require the Lessor to proceed against the Lessee or to pursue any other
remedy in the Lessor's power. Each of us agrees that we are liable for the
Lessor's attorney's fees and costs in enforcing this guaranty, whether or not
suit is filed. If this guaranty is secured by a guarantor's community
property, that guarantor agrees that recourse may be had against the
guarantor's separate property. Each of us acknowledges that this guaranty
inures to the benefit of the Lessor's assignees.
Date-------------------------- --------------------------------------------
Signature of Guarantor
--------------------------------------------
Signature of Guarantor
- ------------------------------------------------------------------------------
(FOR LESSOR'S USE ONLY)
ASSIGNMENT OF LEASE
The undersigned Lessor hereby sells, assigns and transfers to Oxford
Resources Corp., 270 South Service Road, Melville, N.Y. 11747-0570, all of
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its right, title and interest in and to the within Lease, all monies to
become due thereunder and the motor vehicle which is the subject thereof.
This assignment is subject to and in accordance with the provisions of a
separate dealer agreement (as may be amended from time to time) between
Lessor and Oxford which is incorporated herein by reference.
-----------------------------------(Lessor)
Date: ------------------------- By: ---------------------------------------
Name:
Title:
- ------------------------------------------------------------------------------
(FOR OXFORD'S USE ONLY)
ASSIGNMENT OF LEASE AND CREATION OF SECURITY INTEREST
The undersigned hereby assigns and transfers to -----------------------------
("Assignee") the within Lease and certain monies to become due thereunder,
subject to and in accordance with the provisions of a certain agreement
between the undersigned and said Assignee and any documents executed pursuant
thereto. This assignment is for security only and it is expressly understood
that Assignee does not assume any of the undersigned's obligations under the
within Lease.
OXFORD RESOURCES CORP.
Date: ------------------------- By: ---------------------------------------
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Exhibit 10.02
<TABLE>
<S> <C>
RETAIL INSTALLMENT CONTRACT AND SECURITY AGREEMENT Date: ____________________________
The words I, me, mine and my mean the Buyer, Co-Buyer and Registrant. Registrant means a buyer who is not responsible for
repayment of the debt under this Contract (and in whose name the Vehicle (as defined below) is registered pursuant to applicable
law. The words you, your and yours mean the Seller or Creditor, they also mean Centrex Capital Corp. of New York which will be
referred to in this contract as Assignee if and after this Contract is assigned to it.
Simultaneously with the execution of this Contract, Buyer (meaning all who sign this Contract as buyers, separately and together)
is entering into an agreement with the Seller identified below for the purchase of the vehicle described below (the "Vehicle") at
the price and on the terms and conditions set forth in such agreement and in which Vehicle the Seller retains a security interest.
Buyer states that the Vehicle has been delivered in good condition.
The Seller is ____________________________________________. I agree to pay you the "Total Payments" by way of the periodic payments
according to may payment schedule and the other terms and conditions of this Contract set forth below.
___________________________________________________________________________________________________________________________________
YEAR MAKE CYL. MODEL BODY TYPE IDENTIFICATION/SERIAL NO. Use for which purchased
/ / Personal / / Agricultural
/ / Business / / ________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
Buyer(s) - Name and Address of all Buyers (including zip code): Creditor/Sellers - Name and Address (including zip code):
___________________________________________________________________________________________________________________________________
ANNUAL PERCENTAGE FINANCE CHARGE AMOUNT FINANCED TOTAL OF PAYMENTS TOTAL SALE PRICE
RATE The dollar amount the
The cost of my credit credit will cost me. The amount of credit The amount I will have paid The total cost of my purchase
as a yearly rate. provided to me or on after I have made all on credit including my
my behalf. payments as scheduled. downpayment of
$_______________ is
% $ $ $ $
___________________________________________________________________________________________________________________________________
My payment schedule will be: DOLLAR
NUMBER AMOUNT DATE
______________________________ PAYMENT(S) OF __________________________________ DUE __________________________________
______________________________ PAYMENT(S) OF __________________________________ DUE __________________________________
______________________________ PAYMENT(S) OF __________________________________ DUE __________________________________
PAYMENTS TO BE MADE _______________STARTING ON _______________AND CONTINUING MONTHLY ON THE SAME DAY OF EACH FOLLOWING
MONTH UNTIL PAYMENT IN FULL OF THE TOTAL OF PAYMENTS DUE. TOTAL NUMBER OF PAYMENTS ___________________.
SECURITY INTEREST: I am giving you a security interest in the Vehicle being purchased.
LATE CHARGE: If a payment is more than 10 days late, I will be charged 5% of the payment, with a minimum charge of
$1.00 and a maximum charge of $25.
PREPAYMENT: If I pay off early, I may be entitled to a refund of a part of the Finance Charge.
I will refer to the Retail Installment Contract and Security Agreement for any additional information about nonpayment,
default, right to accelerate, security interests, any required repayment in full before the scheduled date, and prepayment
refund.
"e" means an estimate
___________________________________________________________________________________________________________________________________
</TABLE>
SUMMARY OF INSURANCE COVERAGE
NOTICE TO BUYER - LIABILITY INSURANCE COVERAGE FOR BODILY INJURY
AND PROPERTY DAMAGE IS NOT INCLUDED IN THIS CONTRACT. I am re-
quired by this Contract to provide Physical Damage Insurance
on the Vehicle, but I may buy it from a broker or agent of my
own choosing. Specifically, acknowledge that I am required to
maintain at my expense during the term of this Contract or any
extension of this Contract, the following minimum insurance on
the Vehicle:
a. Fire, Theft and Comprehensive Insurance with a maximum
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deductible of / / $500; / / $_____________; and
b. Collision Insurance with a maximum deductible of / / $500;
/ / $____________.
Prior to the delivery to me of the Vehicle and prior to any
renewal or substitution of insurance, I shall provide you with
evidence that the insurance required under this Contract is in
effect, and I shall cause to be given to you a certificate of
insurance, binder or certified policy copy, issued by an
authorized person, to such effect.
I am liable for the deductible amounts. The insurance
policy(s) must provide that you are named as an additional in-
sured and loss payee with respect to all coverages, and further,
that you be given a 10 day written notice in the event of
cancellation or reduction in coverage.
Physical Damage and Mechanical Breakdown coverages are not
obtainable from or through Assignee.
_______________________________________________________________
Vendor's Single Interest Insurance
If the box is checked below, I am required to provide Vendor's
Single Interest Insurance Coverage (which may be called VSI In-
surance in this Contract) until the due date of the last in-
stallment under this Contract, and I may obtain such insurance
through a broker or agent of my own choice. Seller or Assignee
offers such insurance at the following rate:
/ / Vendor's Single Interest Insurance $___________
______________________________________________________________
Credit Life, Accident and Health Insurance
CREDIT LIFE AND CREDIT ACCIDENT AND HEALTH INSURANCE ARE NOT
REQUIRED AND WILL MAKE NO DIFFERENCE IN THE APPROVAL OF MY
CREDIT APPLICATION. Assignee/Seller will upon request provide
credit life insurance at the cost indicated and in accordance
with the notice at right. I, as the insured party and first
signer of this Contract, voluntarily request the designated
insurance at the stated cost(s) as checked below. CREDIT LIFE
INSURANCE AND CREDIT ACCIDENT AND HEALTH INSURANCE MAY NOT
COVER THE ENTIRE AMOUNT DUE UNDER THIS CONTRACT. I SHOULD
CHECK MY POLICY OR CERTIFICATE TO DETERMINE THE EXACT COVER-
AGE. If I have elected to purchase credit life insurance or
credit accident and health insurance, I may be entitled to a
partial refund of my premium if I prepay my total outstanding
balance. I understand that Assignee assumes no responsibility
for providing any insurance certificates or refunds with re-
spect to any insurance I elect to purchase. In the event of a
prepayment, I should contact the Seller or my insurance com-
pany to see if a refund is due.
/ / I want optional Group Credit Life Insurance,
and understand the insurance will be provided
only to the Borrower who signs this request.
The total cost is $___________
/ / We want optional Group Credit Joint Life Insurance,
and understand that insurance will be provided to
both the Borrower and Co-Borrower who sign this request.
The total cost is $___________
/ / Credit Life Insurance obtained through Seller $___________
Group Credit Life Insurance to be issued by:__________________
________________________________ Policy No. __________________
(The following notice applies only to Credit Life Insurance
provided by Seller or Assignee.)
REQUEST AND SCHEDULE FOR GROUP CREDIT LIFE INSURANCE
I understand that Group Credit Life Insurance is voluntary and
is not required to obtain this loan. I further understand that
I may select another insurer to provide this coverage. Group
Credit Life Insurance premiums will be payable periodically
along with my normal periodic payments required by this Con-
tract. If I choose to become insured, I understand that in-
surance will be provided in accordance with the certificate of
Group Credit Life Insurance that will be given to me. I also
reserve the right to terminate my coverage at any time by
notifying you in writing. The cost of this insurance for the
entire term of this Contract is shown below. I understand
that I am eligible for Group Credit Life Insurance only if
this loan is made before my 55th Birthday. The maximum amount
of insurance on any one life is $30,000.
Insurer: _____________________________________________________
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______________________________________________________________
Buyer Date of Birth
______________________________________________________________
Co-Buyer Date of Birth
(To be signed only if Group Credit Joint Life Insurance is
selected.)
______________________________________________________________
I want Accident and Health Insurance.
/ / Accident and Health Insurance for a term of
___________ months may be obtained through
Seller. $____________
/ / Accident and Health Insurance to be issued by ____________
_____________________________________Policy No. ______________
______________________________________________________________
Signature of Insured Party - Must be same as Buyer.
Itemization of Amount Financed
1. Cash Price $____________
2. Less: Cash Down Payment $____________
Net Trade-In $____________
Total Downpayment and Net Trade-In $____________
3. Unpaid Balance of Cash Price $____________(3)
4. Plus: Amounts Paid to Others on my Behalf
* a. Paid to Insurance Companies for:
(i) Credit Life Insurance $____________
(ii) Accident and Health Insurance $____________
(iii) VSI Insurance $____________
b. Paid to Public Officials for:
(i) Sales and Other Taxes $____________
(ii) License and/or Registration
Fees $____________
(iii) Certificate of Title Fees $____________
(iv) Certificate of Title Lien
Recordation Fee $____________
(v) Official Fees to Government
Agencies (Specify)____________ $____________
* c. Paid to others (Specify):
(i) To ____________ For Service
Contract/Extended Warranty $____________
(ii) To ____________ For __________ $____________
(iii) To ____________ For __________ $____________
(iv) To ____________ For __________ $____________
Total Amount Paid to Others: $____________(4)
5. Subtotal (3 + 4) $____________(5)
6. Prepaid Finance Charges $____________(6)
7. Amount Financed - Unpaid Balance (5 - 6) $____________
* Seller/Creditor may receive/retain commissions or other forms
of payment from businesses to whom the charges listed in 4(a)
and (c) are paid.
________________________________________________________________
Liability Upon Total Loss
IF, DURING THE TERM OF THIS CONTRACT, THERE IS A TOTAL LOSS OF
THE VEHICLE DUE TO THEFT OR PHYSICAL DAMAGE, YOU WILL NOT BE
RESPONSIBLE FOR THE DIFFERENCE BETWEEN THE AMOUNT THEN OUTSTAND-
ING UNDER THIS CONTRACT AND ANY LOSS PROCEEDS RECEIVED BY US
UNDER THE INSURANCE ON THE VEHICLE MAINTAINED BY YOU PURSUANT TO
THE TERMS OF THIS CONTRACT PROVIDED (1) YOU ARE IN COMPLIANCE
WITH YOUR INSURANCE OBLIGATIONS UNDER THIS CONTRACT AND (2) YOUR
CLAIM FOR TOTAL LOSS OF THE VEHICLE IS ACCEPTED AND PAID BY YOUR
INSURANCE COMPANY TO US. NOTWITHSTANDING THE FOREGOING, YOU WILL
CONTINUE TO BE LIABLE FOR (A) THE DEDUCTIBLE PORTION OF THE IN-
SURANCE REQUIRED TO BE MAINTAINED BY YOU PURSUANT TO THIS CON-
TRACT; (B) ANY MONTHLY PAYMENTS OR OTHER OBLIGATIONS PAST DUE
AND UNPAID UNDER THIS CONTRACT; AND (C) ANY AMOUNTS DEDUCTED BY
YOUR INSURANCE CARRIER FROM THE INSURANCE PROCEEDS DUE TO UNPAID
PREMIUMS, OFFICIAL FEES AND CHARGES, ADMINISTRATIVE EXPENSES AND
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ANY OTHER PERMISSIBLE AND MISCELLANEOUS DEDUCTIONS YOUR INSUR-
ANCE CARRIER MAKES UNDER YOUR INSURANCE POLICY OR APPLICABLE
LAW.
________________________________________________________________
NOTICE TO THE BUYER (FOR THE PURPOSE OF THIS NOTICE, THE WORDS
YOU AND YOUR REFER TO THE BUYER(S).)
1. DO NOT SIGN THIS CONTRACT BEFORE YOU READ IT OR IF IT CON-
TAINS ANY BLANK SPACE. 2. YOU ARE ENTITLED TO A COMPLETELY
FILLED IN COPY OF THIS CONTRACT WHEN YOU SIGN IT. 3. UNDER THE
LAW, YOU HAVE THE FOLLOWING RIGHTS, AMONG OTHERS: (a) TO PAY OFF
IN ADVANCE THE FULL AMOUNT DUE AND TO OBTAIN A PARTIAL REFUND OF
THE CREDIT SERVICE CHARGE; (b) TO REDEEM THE PROPERTY IF RE-
POSSESSED FOR A DEFAULT; (c) TO REQUIRE, UNDER CERTAIN CON-
DITIONS, A RESALE OF THE PROPERTY IF REPOSSESSED; 4. ACCORDING
TO LAW YOU HAVE THE PRIVILEGE OF PURCHASING THE INSURANCE ON THE
MOTOR VEHICLE PROVIDED FOR IN THIS CONTRACT FROM AN AGENT OR
BROKER OF YOUR OWN SELECTION.
________________________________________________________________
EACH UNDERSIGNED BUYER AGREES TO THE TERMS ON THE FRONT AND BACK
OF THIS CONTRACT AND ACKNOWLEDGES RECEIPT OF AN EXECUTED COPY OF
THIS CONTRACT, COMPLETELY FILLED IN.
RETAIL INSTALLMENT CONTRACT
DATE OF DELIVERY OF VEHICLE ____________________________________
Signature of
1. Buyer ___________________________________________________
Signature of
2. Co-Buyer ________________________________________________
Signature of
3. a. Registrant ______________________________________________
b. Name and Address of
Registrant ______________________________________________
_______________________________________________(Name of Seller)
By: ___________________________________________________________
Seller (authorized signature and title)
THIS CONTRACT INCLUDES THE TERMS AND CONDITIONS ON BOTH SIDES OF THIS DOCUMENT.
(THE FOLLOWING NOTICE SHALL NOT APPLY TO ANY SALE FOR OTHER THAN PERSONAL,
FAMILY, OR HOUSEHOLD USE.)
NOTICE
ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND
DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR
SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY
HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR
HEREUNDER.
1. ASSIGNMENT OF CONTRACT - I understand that Seller intends to and may
assign this Contract to Assignee which shall after the assignment have all of
the Seller's rights under this Contract, but none of the Seller's duties or
responsibilities (except as set forth in the above Notice).
2. PAYMENT SCHEDULE - I agree to pay to the Seller the Total of Payments, as
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stated on the reverse side of this Contract, but after this Contract is
assigned such payments shall be made to Assignee.
3. PREPAYMENT - I shall have the right to prepay this obligation in full at
any time. If I do, or if you demand the entire balance because of my default,
you will refund the unearned Finance Charge (which is also called the Credit
Service Charge in this Contract) calculated by the actuarial method of
refunding such Finance Charge based on scheduled payment dates and fixed
periodic payments, but you may first deduct an acquisition charge of $15.00
before figuring a refund. Refunds of under $1.00 will not be made to me. I
further understand that I will not be entitled to any refund on partial
prepayments. If I prepay in full you may give an allowance for group credit
insurance premiums using a formula approved by the New York State Insurance
Department.
4. DISHONORED CHECK CHARGE - I agree that if I make a payment with a personal
check which is dishonored or returned by the Bank upon which it is drawn
because of insufficient funds or any other cause not attributable to you,
you may impose a dishonored check charge of $20.00 for each such check
dishonored or returned. This charge will be in addition to any other charges
provided in this Contract.
5. SECURITY INTEREST - As security for all amounts which I owe under this
Contract, I give Seller a security interest in: (a) the Vehicle and any
accessories, equipment and replacement parts, whether on the Vehicle on the
date of this Contract or added at a later date; and (b) the monies paid by
any insurance company on any loss for which the Vehicle is insured.
6. ADDITIONAL TERMS AND CONDITIONS - The additional terms and conditions on
the reverse side are part of this Contract.
7. LATE CHARGE - Whenever an installment is more than 10 days late, I agree
to pay at the time of and in addition to the amount of the next regularly
scheduled installment a late charge in the amount of 5% of the overdue
installment with a minimum charge of $1.00. This charge will be collected
only once for each late installment.
8. WARRANTIES - I UNDERSTAND THAT THE SELLER IS NOT OFFERING ANY WARRANTIES
AND THAT THERE ARE NO IMPLIED WARRANTIES OF MERCHANTABILITY, OR FITNESS FOR A
PARTICULAR PURPOSE, OR ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, BY THE
SELLER, COVERING THE VEHICLE, UNLESS THE SELLER EXTENDS A WRITTEN WARRANTY ON
A SEPARATE FORM SIGNED BY THE SELLER, OR UNLESS THE SELLER PROVIDES A SERVICE
CONTRACT WITHIN 90 DAYS FROM THE DATE OF THIS CONTRACT. An implied warranty
of merchantability generally means that the Vehicle is fit for the ordinary
purpose for which such vehicles are generally used. A warranty of fitness for
a particular purpose is a warranty that may arise when a seller has a reason
to know the particular purpose for which the buyer requires the Vehicle and
the buyer relies on the seller's skill or judgment to furnish a suitable
vehicle. This provision does not affect any warranties covering the Vehicle
which may be provided by the Vehicle manufacturer.
FOR THE PURPOSE OF THE FOLLOWING NOTICE, THE WORD "YOU" REFERS TO THE BUYER
THE INFORMATION YOU SEE ON THE WINDOW FORM FOR THE VEHICLE IS PART OF THIS
CONTRACT. INFORMATION ON THE WINDOW FORM OVERRIDES ANY CONTRARY PROVISIONS
IN THE CONTRACT OF SALE.
9. CARE AND USE OF VEHICLES - I agree to keep the Vehicle in good repair at
my own expense and I will neither remove it from the state where I first
received it for more than 30 days nor will I sell the Vehicle or give it away
without obtaining your written consent in advance. I agree to make sure your
security interest is shown on the title certificate for the Vehicle and I
will keep the Vehicle free of other liens and attachments and will not use it
for any illegal purpose. I agree not to use the Vehicle for hire or to rent
or lease the Vehicle to others. If the Vehicle is lost, stolen, destroyed or
damaged beyond repair you may demand payment in full of the unpaid balance of
the debt and if you are required to pay any repair bills, storage bills,
taxes, fines or other charges, I agree to pay such amounts when you ask for
them.
10. TAXES AND FEES - I will promptly pay all taxes, registration and license
fees on the purchase, ownership and operation of the Vehicle.
11. INSURANCE - As long as Seller or Assignee is the holder of this Contract
and this Contract is in effect, I agree to keep the Vehicle insured under a
policy of Physical Damage Insurance including comprehensive, collision, and
fire and theft coverages and (if required) Vendor's Single Interest
Insurance. These types of insurance will be in amounts at least large enough
to repay this debt, and if I fail to provide this insurance, you may purchase
89
<PAGE>
it, and I agree to repay you for the cost, plus a Finance Charge, upon
demand. All policies will provide that payment of claims will be made to you
to the extent of your security interest. If any charge for insurance required
to be provided by me under this Contract is returned to you, it may be
credited to my account or used to buy similar insurance or such insurance
which covers your interest or my interest in the Vehicle or both of our
interests in the Vehicle. Any refund on optional insurance received by you
will be credited to my account. Credits to my account will include both the
amounts received by you and the unearned Finance Charges on those amounts.
These credit will be applied to as many of my installment payments as they
will cover, beginning with the final installment.
12. DEFAULT AND REPOSSESSION - In the event of default, meaning that if I
fail to pay according to the payment schedule as provided on the reverse side
of this Contract, or if I fail to make any such payments, or if I break any
of the agreements in this Contract, or if any other creditor tries by legal
process to take the Vehicle or any money of mine in your possession, or if
any legal proceeding under any bankruptcy or insolvency law is started by or
against me, or if I make a materially false statement of fact in the credit
application submitted to you, or if I or any person providing the Third Party
Guarantee at the end of this Contract die(s) or a court determines that any
one of us is incompetent (meaning a person that is not legally capable of
handling his or her own affairs), then if any of these events occur, you can
take the Vehicle from me, without giving me or any guarantor any notice or
making any demand, and you can declare the entire amount owed under this
Contract Immediately due and payable, minus the part of the Finance Charge
which has not been earned, calculated by the actuarial method of refunding
such Finance Charge based on scheduled payment dates and fixed monthly
payments, but you may first deduct an acquisition charge of $15.00 before
figuring such refund. In order to take the Vehicle, you can enter my
property,or the property where it is stored so long as it is done peacefully.
If there is any personal property in the Vehicle, such as clothing, you can
store it for me and I agree to claim this personal property within 15 days.
Any accessories, equipment or replacement parts will remain with the Vehicle.
If you repossess the Vehicle, I have the right to get it back by paying the
past due amounts I owe on the Contract plus any late charges, the costs of
taking and storing the Vehicle and other expenses that you have had. My right
to get the Vehicle back will end when the Vehicle is sold. If you take the
Vehicle back, you will send a written notice of sale at least 10 days before
selling the Vehicle. If I do not pay the past due payments owed to you on the
Contract plus any late charges, the cost of taking and storing the Vehicle
and other expenses which you may have had, by the date on the notice of sale,
you can sell the Vehicle. You will use the net proceeds of the sale of the
Vehicle to pay all or part of my debt. The net proceeds of the sale will be
figured this way: any late charges and any charges for taking and storing the
Vehicle, cleaning and advertising, etc., and any reasonable attorneys' fees
and court costs as specified in this Contract will be subtracted from the
selling price, if I owe you less than the net proceeds of the sale, you will
pay me the difference, unless you are required by law to pay it to someone
else; if I owe you more than the net proceeds of the sale of the Vehicle, I
will pay you the difference between the net proceeds of the sale of the
Vehicle and what I owe you at that time and when you ask for it. If I do not
pay this amount when you ask for it , I will also be charged interest at the
highest rate permitted by law until I pay all I owe you. I agree that if you
are required to sell the Vehicle, 10 days notice to me of the sale is deemed
a reasonable notice. If I default, you will have all of the rights set out
above in this paragraph and, in addition, you will have any other rights
permitted by law.
13. ATTORNEY'S FEES - If you must hire an attorney to collect this debt, I
agree to pay all reasonable attorney's fees up to 15% of the amount I owe
plus any court costs.
14. PAYMENT VARIATIONS; DELAY IN ENFORCEMENT - You can accept late payments
or partial payments, even if marked "payment in full," without losing any of
your rights under this Contract, and you may delay enforcing any of your
rights without losing them.
15. NO ORAL AGREEMENTS; CONTRACT MODIFICATIONS - I acknowledge that this
written Contract and the various documents executed together with this
Contract represent the final and complete agreement between you and I and no
unwritten oral agreements exist between us. I agree that this Contract may
not be modified without a writing signed by you.
90
<PAGE>
16. GOVERNING LAW - This Contract is governed and interpreted by the laws of
the State of New York. If any provision of this Contract is found ineffective
under any law or regulation, the remainder of this Contract will still be
binding and effective.
17. BALLOON PAYMENT - If any last payment is a balloon payment, such payment
is due and payable on the due date for such payment, and I may refinance such
payment with you if all prior payments have been made on time in accordance
with this Contract. If I elect to refinance such payment, I will be required
to enter into a written agreement on terms and at an interest rate you then
offer. My ability to do so is subject to credit approval. I may be required
to complete a new credit application. I understand that in such event the
security interest I have granted you in the Vehicle will continue during the
term of the new agreement. If I want you to refinance the balloon payment, I
must give you written notice of any desire to do so at least 30 days prior to
the due date of such balloon payment.
18. REGISTRATION - I agree to register the Vehicle only in my name as required
by law, unless I have advised you that I desire to register the Vehicle in
the name of Registrant and Registrant has signed this Contract, by doing so
Registrant becomes an owner of the Vehicle, as the term "owner" is defined
under applicable law. By signing this Contract, Registrant is not an
applicant for credit and is not responsible for repayment of the debt created
by this Contract, but Registrant agrees to all of the other terms and
provisions of this Contract, including those specified in paragraphs 5, 6, 8,
9, and 12. Registrant and I specifically recognize your security interest as
described in paragraph 5. If I default under this Contract, Registrant shall
have no right to continue to operate, retain or possess the Vehicle.
19. NOTICE LIMITATION - The NOTICE at the top of this side of the Contract
applies only to me if the goods or services obtained under this Contract are
primarily for personal, family or household use. In all other cases, I will
not assert against any holders, subsequent holder or assignee of this
Contract any claims or defenses I may have against the Seller or against the
manufacturer of the Vehicle or equipment purchased under this Contract.
20. OBLIGATIONS INDEPENDENT - I understand that my obligation to pay this
loan is independent of the obligation of any other person who has also agreed
to pay it. You may, without notice, release me or any of us, give up any
right you may have against any of us, extend new credit to any of us, or
renew or change this Contract one or more times and for any term, and I will
still be obligated to pay this loan. You may, without notice, fail to perfect
your security interest in, impair, or release any security and I will still
be obligated to pay this loan.
- --------------------------------------------------------------------------------
THIRD PARTY GUARANTEE
In this Guarantee, the words I, me and my refer to each person signing this
Guarantee. The words you, your and yours refer to the Seller and the
Assignee, if there is an assignee, under this Contract, in order to persuade
you to accept the Contract with the Buyer and Co-Buyer, if there is a
Co-Buyer and the Registrant, if there is a Registrant, I guarantee that
everything the Buyer, Co-Buyer and Registrant is required to do by the terms
of this Contract shall be done, no matter what may happen. If the Buyer,
Co-Buyer or Registrant do not meet their obligations as required under the
Contract or if they violate the terms of the Contract including, without
reciting all of those obligations, the obligations to make payments, maintain
the Vehicle, provide required insurance and surrender possession of the
Vehicle, I promise that I will immediately, on your demand, pay the FULL
AMOUNT of money remaining unpaid at the time under the Contract and all other
monies due to you under the Contract. I agree that you may demand this
payment from me without notifying me or the Buyer, Co-Buyer or Registrant of
a default under the Contract and without first seeking payment from the
Buyer, Co-Buyer or Registrant. If you hire an attorney to collect this debt
from me, I agree to pay your reasonable attorney's fees plus court costs.
This Guarantee and my obligations to make the payments to you under the
Contract shall not be affected by any claim that I may have against you other
than those that arise out of the Contract. I agree that my Guarantee of the
obligations of the Buyer, Co-Buyer and Registrant shall remain in effect
until all payments due under the Contract are made. This Guarantee shall
remain in effect even if you extend payments over a longer period, or if
other changes are made in the terms of the Contract. My Guarantee shall
remain in effect no matter how you deal with the Vehicle or other security
interest you have received. If there are two or more guarantors guaranteeing
the obligations of the Buyer, Co-Buyer and Registrant, each separate
guarantor is fully responsible to you for the entire amount owing under the
91
<PAGE>
Contract. This means that you may demand full payment of the entire remaining
debt owing under the Contract from any one of the guarantors or from both or
all of the guarantors.
Date: _____________________
____________________________________ ________________________________________
Guarantor Guarantor
____________________________________ ________________________________________
Address Address
____________________________________ ________________________________________
City, State & Zip Code City, State & Zip Code
SELLER'S ASSIGNMENT
FOR VALUE RECEIVED, receipt of which is hereby acknowledged, the Seller
hereby sells, transfers and assigns without recourse, to Assignee named on
the face hereof, its successor, and assigns all right, title and interest in
and to this Contract, and to the Vehicle described in this Contract and to all
monies due and to become due under this Contract, any guaranty made in
connection with this Contract, and all rights and remedies under said
Contract, with power in the Assignee to assign the same, and either in
Assignee's own name, or in the name of the Seller, for the Assignee's
exclusive benefit, to take all such legal or other proceeding as the Seller
might have taken, except for this Assignment. Notwithstanding the foregoing,
this Assignment is subject to the undertakings, covenants, agreements,
representations and warranties contained in the Dealer Agreement between
Assignee and the undersigned.
Date of Assignment: ______________, 199__ ____________________________
(Seller)
By ________________________
92
<PAGE>
<TABLE>
<S> <C>
EXHIBIT 10.11(c)(ii)
DATE (MM/DD/YY)
ACORD CERTIFICATE OF INSURANCE 4/29/96
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER Lease Tracking Services, Inc. THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
110 West Road, Suite 107 NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND,
Towson, MD 21204 EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
------------------------------------------------------------------------
COMPANIES AFFORDING COVERAGE
------------------------------------------------------------------------
COMPANY FEDERAL INSURANCE COMPANY
A
- ------------------------------------------------------------------------------------------------------------------------------------
INSURED Oxford Resources Corp., et. al COMPANY
270 South Service Road B
Melville NY 11747 ------------------------------------------------------------------------
COMPANY
C
------------------------------------------------------------------------
COMPANY
D
- ------------------------------------------------------------------------------------------------------------------------------------
COVERAGE
- ------------------------------------------------------------------------------------------------------------------------------------
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL TERMS,
EXCLUSIONS, AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
- ------------------------------------------------------------------------------------------------------------------------------------
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION LIMITS
LTR DATE (MM/DD/YY) DATE (MM/DD/YY)
- ------------------------------------------------------------------------------------------------------------------------------------
GENERAL LIABILITY GENERAL AGGREGATE $
[ ] COMMERCIAL GENERAL LIABILITY ------------------------------------------
[ ][ ] CLAIMS MADE [ ] OCCUR PRODUCTS-COMP/OP AGG $
[ ] OWNERS & CONTRACTORS PROT ------------------------------------------
[ ] _________________________ PERSONAL & ADV INJURY $
[ ] ------------------------------------------
EACH OCCURRENCE $
------------------------------------------
FIRE DAMAGE (Any one fire) $
------------------------------------------
MED EXP (Any one person) $
- ------------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY COMBINED SINGLE UNIT $
[ ] ANY AUTO ------------------------------------------
[ ] ALL OWNED AUTOS BODILY INJURY
[ ] SCHEDULED AUTOS (Per person) $
[ ] HIRED AUTOS ------------------------------------------
[ ] NEW-OWNED AUTOS BODILY INJURY
[ ] ________________ (Per accident) $
[ ] ------------------------------------------
PROPERTY DAMAGE $
- ------------------------------------------------------------------------------------------------------------------------------------
GARAGE LIABILITY AUTO ONLY-EA ACCIDENT $
[ ] ANY AUTO ------------------------------------------
[ ] ________________ OTHER THAN AUTO ONLY:
[ ] ------------------------------------------
EACH ACCIDENT $
------------------------------------------
AGGREGATE $
- ------------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY EACH OCCURRENCE $
[ ] UMBRELLA FORM ------------------------------------------
[ ] OTHER THAN UMBRELLA FORM AGGREGATE $
------------------------------------------
$
93
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------------------
WORKERS' COMPENSATION AND [ ] STATUTORY LIMITS
EMPLOYERS' LIABILITY ------------------------------------------
EACH ACCIDENT $
THE PROPRIETOR/ [ ] INCL ------------------------------------------
PARTNERS/EXECUTIVE [ ] EXCL DISEASE-POLICY LIMIT $
OFFICES ARE ------------------------------------------
DISEASE-EACH EMPLOYEE $
- ------------------------------------------------------------------------------------------------------------------------------------
A OTHER $10,000,000
Residual Value 7966-72-73 5/01/96 5/01/97 $2,000,000 Ded.
- ------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE HOLDER CANCELLATION
- ------------------------------------------------------------------------------------------------------------------------------------
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL ___
DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT
FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF
ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
------------------------------------------------------------------------
AUTHORIZED REPRESENTATIVE /s/ Kenneth P. Seveir
- ------------------------------------------------------------------------------------------------------------------------------------
ACORD 25-S (3-93) ACORD CORPORATION 1993
- ------------------------------------------------------------------------------------------------------------------------------------
$
</TABLE>
94
<PAGE>
<TABLE>
<S> <C>
EXHIBIT 10.11(d)(ii)
CERTIFICATE OF INSURANCE 09/03/96
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
ALEXANDER & ALEXANDER OF NY NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND,
- ----------------------------------------------------------- EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
ONE HUNTINGTON QUADRANGLE ------------------------------------------------------------------------
MELVILLE, NY
11747 COMPANIES AFFORDING COVERAGE
PHONE 516-249-1500
- ------------------------------------------------------------------------------------------------------------------------------------
INSURED COMPANY LETTER A RELIANCE INSURANCE CO.
------------------------------------------------------------------------
OXFORD RESOURCES CORP., ETAL COMPANY LETTER B
270 SOUTH SERVICE ROAD ------------------------------------------------------------------------
MELVILLE, NY COMPANY LETTER C
11747 ------------------------------------------------------------------------
COMPANY LETTER D
------------------------------------------------------------------------
COMPANY LETTER E
COVERAGE----------------------------------------------------------------------------------------------------------------------------
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL TERMS,
EXCLUSIONS, AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
- ------------------------------------------------------------------------------------------------------------------------------------
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFF POLICY EXP ALL LIMITS IN THOUSANDS
LTR DATE DATE
- ------------------------------------------------------------------------------------------------------------------------------------
GENERAL LIABILITY GENERAL AGGREGATE
-------------------------------------
[ ] COMMERCIAL GEN LIABILITY PRODS-COMP/OPS AGG.
-------------------------------------
[ ] [ ] CLAIMS MADE [ ] OCC. PERS. & ADVG. INJURY
-------------------------------------
[ ] OWNERS & CONTRACTORS EACH OCCURRENCE
PROTECTIVE -------------------------------------
FIRE DAMAGE
[ ] (ANY ONE FIRE)
-------------------------------------
[ ] MEDICAL EXPENSE
(ANY ONE PERSON)
- ------------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIAB CSL 10000
-------------------------------------
[ ] ANY AUTO BODILY INJURY
[ ] ALL OWNED AUTOS (PER PERSON)
[ ] SCHEDULED AUTOS -------------------------------------
[ ] HIRED AUTOS BODILY INJURY
[ ] NEW-OWNED AUTOS (PER ACCIDENT)
[ ] GARAGE LIABILITY -------------------------------------
[ ] PROPERTY
- ------------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY EACH OCC AGGREGATE
[ ] UMBRELLA FORM
[ ] OTHER THAN UMBRELLA FORM
- ------------------------------------------------------------------------------------------------------------------------------------
WORKERS' COMP STATUTORY
AND EACH ACC
EMPLOYERS' LIAB DISEASE-POLICY LIMIT
DISEASE-EACH EMPLOYEE
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER
A EXCESS RESIDUAL NZB0122526 05/01/96 05/01/97 $5,000,000,000 AGG
- ------------------------------------------------------------------------------------------------------------------------------------
$
95
<PAGE>
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
FOR INFORMATION PURPOSES
CERTIFICATE HOLDER----------------------------------------- CANCELLATION------------------------------------------------------------
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL ___
DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT
FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF
ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
------------------------------------------------------------------------
ACORD 25-S (3/88) AUTHORIZED REPRESENTATIVE /s/ Jerrold Feinstein
- ------------------------------------------------------------------------------------------------------------------------------------
$
</TABLE>
96
<PAGE>
<TABLE>
Exhibit 10.13(c)
<S> <C> <C> <C> <C> <C>
CERTIFICATE OF INSURANCE 09/03/96
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
ALEXANDER & ALEXANDER OF NY NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND,
- ----------------------------------------------------------- EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
ONE HUNTINGTON QUADRANGLE ------------------------------------------------------------------------
MELVILLE, NY
11747 COMPANIES AFFORDING COVERAGE
PHONE 516-249-1500
- ------------------------------------------------------------------------------------------------------------------------------------
INSURED COMPANY LETTER A FEDERAL INSURANCE COMPANY
------------------------------------------------------------------------
OXFORD RESOURCES CORP., ETAL COMPANY LETTER B
270 SOUTH SERVICE ROAD ------------------------------------------------------------------------
MELVILLE, NY COMPANY LETTER C
11747 ------------------------------------------------------------------------
COMPANY LETTER D
------------------------------------------------------------------------
COMPANY LETTER E
COVERAGE----------------------------------------------------------------------------------------------------------------------------
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL TERMS,
EXCLUSIONS, AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
- ------------------------------------------------------------------------------------------------------------------------------------
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFF POLICY EXP ALL LIMITS IN THOUSANDS
LTR DATE DATE
- ------------------------------------------------------------------------------------------------------------------------------------
GENERAL LIABILITY GENERAL AGGREGATE
-------------------------------------
[ ] COMMERCIAL GEN LIABILITY PRODS-COMP/OPS AGG.
-------------------------------------
[ ] [ ] CLAIMS MADE [ ] OCC. PERS. & ADVG. INJURY
-------------------------------------
[ ] OWNERS & CONTRACTORS EACH OCCURRENCE
PROTECTIVE -------------------------------------
FIRE DAMAGE
[ ] (ANY ONE FIRE)
-------------------------------------
[ ] MEDICAL EXPENSE
(ANY ONE PERSON)
- ------------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIAB CSL 10,000
-------------------------------------
A [ ] ANY AUTO 7322-80-41 07-01/96 07-01-97 BODILY INJURY
[ ] ALL OWNED AUTOS 7973-95-05 (PER PERSON)
[ ] SCHEDULED AUTOS -------------------------------------
[ ] HIRED AUTOS BODILY INJURY
[ ] NEW-OWNED AUTOS (PER ACCIDENT)
[ ] GARAGE LIABILITY -------------------------------------
A [X] CONTINGENT/EXCESS PROPERTY
- ------------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY EACH OCC AGGREGATE
[ ] UMBRELLA FORM
[ ] OTHER THAN UMBRELLA FORM
- ------------------------------------------------------------------------------------------------------------------------------------
WORKERS' COMP STATUTORY
AND EACH ACC
EMPLOYERS' LIAB DISEASE-POLICY LIMIT
DISEASE-EACH EMPLOYEE
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER
- ------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
97
<PAGE>
FOR INFORMATION PURPOSES
CERTIFICATE HOLDER----------------------------------------- CANCELLATION------------------------------------------------------------
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL ___
DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT
FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF
ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
------------------------------------------------------------------------
ACORD 25-S (3/88) AUTHORIZED REPRESENTATIVE /s/ Jerrold Feinstein
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
98
<PAGE>
<TABLE>
<S> <C>
EXHIBIT 10.14(c)
ACORD CERTIFICATE OF INSURANCE 4/04/96
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER Lease Tracking Services, Inc. THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
110 West Road, Suite 107 NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND,
Towson, MD 21204 EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
------------------------------------------------------------------------
COMPANIES AFFORDING COVERAGE
------------------------------------------------------------------------
COMPANY FEDERAL INSURANCE COMPANY
A
- ------------------------------------------------------------------------------------------------------------------------------------
INSURED Oxford Resources Corp; Box Leasing Corp.; COMPANY
BOAC, inc., et al B
270 South Service Road ------------------------------------------------------------------------
Melville NY 11747 COMPANY
C
------------------------------------------------------------------------
COMPANY
D
- ------------------------------------------------------------------------------------------------------------------------------------
COVERAGES
- ------------------------------------------------------------------------------------------------------------------------------------
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL TERMS,
EXCLUSIONS, AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
- ------------------------------------------------------------------------------------------------------------------------------------
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION LIMITS
LTR DATE (MM/DD/YY) DATE (MM/DD/YY)
- ------------------------------------------------------------------------------------------------------------------------------------
GENERAL LIABILITY GENERAL AGGREGATE $
[ ] COMMERCIAL GENERAL LIABILITY ------------------------------------------
[ ][ ] CLAIMS MADE [ ] OCCUR PRODUCTS-COMP/OP AGG. $
[ ] OWNERS & CONTRACTORS PROT ------------------------------------------
[ ] _________________________ PERSONAL & ADV INJURY $
------------------------------------------
EACH OCCURRENCE $
------------------------------------------
FIRE DAMAGE (Any one fire) $
------------------------------------------
MED EXPENSE (Any one person) $
- ------------------------------------------------------------------------------------------------------------------------------------
A AUTOMOBILE LIABILITY COMBINED SINGLE UNIT $10,000,000
[ ] ANY AUTO ------------------------------------------
[ ] ALL OWNED AUTOS BODILY INJURY
[ ] SCHEDULED AUTOS 7320-90-72 & 3/02/96 03/02/97 (Per person) $
7909-30-43 ------------------------------------------
[ ] HIRED AUTOS BODILY INJURY
[ ] NEW-OWNED AUTOS (Per accident) $
[X] Contingent/Excess Liab. ------------------------------------------
[ ] PROPERTY DAMAGE $
- ------------------------------------------------------------------------------------------------------------------------------------
GARAGE LIABILITY AUTO ONLY-EA ACCIDENT $
[ ] ANY AUTO ------------------------------------------
[ ] ________________ OTHER THAN AUTO ONLY:
[ ] ------------------------------------------
EACH ACCIDENT $
------------------------------------------
AGGREGATE $
- ------------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY EACH OCCURRENCE $
[ ] UMBRELLA FORM ------------------------------------------
[ ] OTHER THAN UMBRELLA FORM AGGREGATE $
------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
99
<PAGE>
WORKERS' COMPENSATION AND [ ] STATUTORY LIMITS
EMPLOYERS' LIABILITY ------------------------------------------
EACH ACCIDENT $
THE PROPRIETOR/ [ ] INCL ------------------------------------------
PARTNERS/EXECUTIVE [ ] EXCL DISEASE-POLICY LIMIT $
OFFICES ARE ------------------------------------------
DISEASE-EACH EMPLOYEE $
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER
- ------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE HOLDER CANCELLATION
- ------------------------------------------------------------------------------------------------------------------------------------
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL ___
DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT
FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF
ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
------------------------------------------------------------------------
AUTHORIZED REPRESENTATIVE
- ------------------------------------------------------------------------------------------------------------------------------------
ACORD 25-S (3/93) ACORD CORPORATION 1993 /s/ Kenneth P. Seveir
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
100
<PAGE>
<TABLE>
<S> <C>
EXHIBIT 10.16(c))i)
DATE (MM/DD/YY)
ACORD CERTIFICATE OF INSURANCE 09/05/96
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER Lease Tracking Services, Inc. THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
110 West Road, Suite 107 NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND,
Towson, MD 21204 EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
------------------------------------------------------------------------
COMPANIES AFFORDING COVERAGE
------------------------------------------------------------------------
COMPANY FEDERAL INSURANCE COMPANY
A
- ------------------------------------------------------------------------------------------------------------------------------------
INSURED Oxford Truck Leasing Corporation COMPANY
270 South Service Road B
Melville NY 11747 ------------------------------------------------------------------------
COMPANY
C
------------------------------------------------------------------------
COMPANY
D
- ------------------------------------------------------------------------------------------------------------------------------------
COVERAGES
- ------------------------------------------------------------------------------------------------------------------------------------
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL TERMS,
EXCLUSIONS, AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
- ------------------------------------------------------------------------------------------------------------------------------------
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION LIMITS
LTR DATE (MM/DD/YY) DATE (MM/DD/YY)
- ------------------------------------------------------------------------------------------------------------------------------------
GENERAL LIABILITY GENERAL AGGREGATE $
[ ] COMMERCIAL GENERAL LIABILITY ------------------------------------------
[ ][ ] CLAIMS MADE [ ] OCCUR PRODUCTS-COMP/OP AGG. $
[ ] OWNERS & CONTRACTORS PROT ------------------------------------------
[ ] _________________________ PERSONAL & ADV INJURY $
------------------------------------------
EACH OCCURRENCE $
------------------------------------------
FIRE DAMAGE (Any one fire) $
------------------------------------------
MED EXPENSE (Any one person) $
- ------------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY COMBINED SINGLE UNIT
[ ] ANY AUTO ------------------------------------------
[ ] ALL OWNED AUTOS BODILY INJURY
[ ] SCHEDULED AUTOS (Per person) $10,000,000
[ ] HIRED AUTOS 7320-90-48 & 10/01/95 10/01/96 ------------------------------------------
7909-30-23 BODILY INJUYR
[ ] NEW-OWNED AUTOS (Per accident) $
[ ] _______________________ ------------------------------------------
[X] Contingent/Excess Liab. PROPERTY DAMAGE $
- ------------------------------------------------------------------------------------------------------------------------------------
GARAGE LIABILITY AUTO ONLY-EA ACCIDENT $
[ ] ANY AUTO ------------------------------------------
[ ] ________________ OTHER THAN AUTO ONLY:
[ ] ------------------------------------------
EACH ACCIDENT $
------------------------------------------
AGGREGATE $
- ------------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY EACH OCCURRENCE $
[ ] UMBRELLA FORM ------------------------------------------
[ ] OTHER THAN UMBRELLA FORM AGGREGATE $
------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
101
<PAGE>
WORKERS' COMPENSATION AND [ ] STATUTORY LIMITS
EMPLOYERS' LIABILITY ------------------------------------------
EACH ACCIDENT $
THE PROPRIETOR/ [ ] INCL ------------------------------------------
PARTNERS/EXECUTIVE [ ] EXCL DISEASE-POLICY LIMIT $
OFFICES ARE ------------------------------------------
DISEASE-EACH EMPLOYEE $
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER
- ------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
Long-term vehicle leasing.
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE HOLDER CANCELLATION
- ------------------------------------------------------------------------------------------------------------------------------------
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL ___
DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT
FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF
ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
------------------------------------------------------------------------
AUTHORIZED REPRESENTATIVE /s/ Kenneth P. Seveir
- ------------------------------------------------------------------------------------------------------------------------------------
ACORD 25-S (3/93) ACORD CORPORATION 1993
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
102
<PAGE>
<TABLE>
<S><C>
Exhibit 10.16(c)(ii)
--------------------
DATE (MM/DD/YY)
ACORD CERTIFICATE OF INSURANCE 09/05/96
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER Lease Tracking Services, Inc. THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
110 West Road, Suite 107 NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND,
Towson, MD 21204 EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
------------------------------------------------------------------------
COMPANIES AFFORDING COVERAGE
------------------------------------------------------------------------
COMPANY FEDERAL INSURANCE COMPANY
A
- ------------------------------------------------------------------------------------------------------------------------------------
INSURED Oxford Truck Leasing Corporation COMPANY
270 South Service Road B
Melville NY 11747 ------------------------------------------------------------------------
COMPANY
C
------------------------------------------------------------------------
COMPANY
D
- ------------------------------------------------------------------------------------------------------------------------------------
COVERAGES
- ------------------------------------------------------------------------------------------------------------------------------------
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL TERMS,
EXCLUSIONS, AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
- ------------------------------------------------------------------------------------------------------------------------------------
CD TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION LIMITS
LTF DATE (MM/DD/YY) DATE (MM/DD/YY)
- ------------------------------------------------------------------------------------------------------------------------------------
GENERAL LIABILITY GENERAL AGGREGATE $
[ ] COMMERCIAL GENERAL LIABILITY ------------------------------------------
[ ][ ] CLAIMS MADE [ ] OCCUR PRODUCTS-COMP/OP AGG. $
[ ] OWNERS & CONTRACTORS PROT ------------------------------------------
[ ] _________________________ PERSONAL & ADV INJURY $
------------------------------------------
EACH OCCURRENCE $
------------------------------------------
FIRE DAMAGE (Any one fire) $
------------------------------------------
MED EXPENSE (Any one person) $
- ------------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY COMBINED SINGLE UNIT
[ ] ANY AUTO ------------------------------------------
[ ] ALL OWNED AUTOS BODILY INJURY
[ ] SCHEDULED AUTOS (Per person) $10,000,000
[ ] HIRED AUTOS 7320-90-48 & 10/01/96 10/01/97 ------------------------------------------
7909-30-23 BODILY INJURY
[ ] NEW-OWNED AUTOS (Per accident) $
[ ] ______________________ ------------------------------------------
[X] Contingent/Excess Liab. PROPERTY DAMAGE $
- ------------------------------------------------------------------------------------------------------------------------------------
GARAGE LIABILITY AUTO ONLY-EA ACCIDENT $
[ ] ANY AUTO ------------------------------------------
[ ] ________________ OTHER THAN AUTO ONLY:
[ ] ------------------------------------------
EACH ACCIDENT $
------------------------------------------
AGGREGATE $
- ------------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY EACH OCCURRENCE $
[ ] UMBRELLA FORM ------------------------------------------
[ ] OTHER THAN UMBRELLA FORM AGGREGATE $
------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
103
<PAGE>
WORKERS' COMPENSATION AND [ ] STATUTORY LIMITS
EMPLOYERS' LIABILITY ------------------------------------------
EACH ACCIDENT $
THE PROPRIETOR/ [ ] INCL ------------------------------------------
PARTNERS/EXECUTIVE [ ] EXCL DISEASE-POLICY LIMIT $
OFFICES ARE ------------------------------------------
DISEASE-EACH EMPLOYEE $
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER
- ------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
Long-term vehicle leasing.
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE HOLDER CANCELLATION
- ------------------------------------------------------------------------------------------------------------------------------------
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL ___
DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT
FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF
ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
------------------------------------------------------------------------
AUTHORIZED REPRESENTATIVE /s/ Kenneth P. Seveir
- ------------------------------------------------------------------------------------------------------------------------------------
ACORD 25-S (3/93) ACORD CORPORATION 1993
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
104
<PAGE>
EXHIBIT 10.20(b)
FIRST AMENDMENT TO LOAN PURCHASE AGREEMENT
This FIRST AMENDMENT TO LOAN PURCHASE AGREEMENT (this "AMENDMENT") is dated
as of December 14, 1995 and is entered into by and among CENTREX CAPITAL
AUTOMOBILE ASSETS (NUMBER TWO), INC., a Delaware corporation, as seller (the
"SELLER"), OXFORD RESOURCES CORP., a New York corporation ("OXFORD"), as
servicer, THE BANK OF NEW YORK, a New York banking corporation ("BONY"), as
custodian and standby servicer, CLIPPER RECEIVABLES CORPORATION, a Delaware
corporation, as purchaser (the "PURCHASER"), STATE STREET BOSTON CAPITAL
CORPORATION, a Massachusetts corporation ("STATE STREET CAPITAL"), as
administrator for the Purchaser (the "ADMINISTRATOR"), and STATE STREET BANK AND
TRUST COMPANY, a bank organized under the laws of the Commonwealth of
Massachusetts ("STATE STREET BANK"), as relationship bank for the Purchaser.
W I T N E S S E T H:
WHEREAS, the parties hereto have entered into a certain Loan Purchase
Agreement, dated as of March 31, 1995 (the "LOAN PURCHASE AGREEMENT"), pursuant
to which the Seller agreed to sell to the Purchaser certain receivables and
related assets; and
WHEREAS, the parties desire to amend the Loan Purchase Agreement as
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and in the Loan Purchase Agreement as amended hereby and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. TERMS. All capitalized terms used and not otherwise defined herein shall
have the meanings given to such terms in the Loan Purchase Agreement.
2. AMENDMENTS TO LOAN PURCHASE AGREEMENT. Effective as of the date the
conditions set forth in SECTION 4 hereof are met, the Loan Purchase Agreement is
hereby amended as follows:
2.1 AMENDMENTS TO DEFINITIONS. (a) The definition of "Excess Yield
Percentage" set forth in Section 1.1 of the Loan Purchase Agreement is
hereby amended by adding the following new sentence at the end of such
definition:
105
<PAGE>
Notwithstanding any other provision of this Agreement, the calculation
of the Excess Yield Percentage will not include amounts described
above with respect to any Loan Tranche (and for purposes of CLAUSE (b)
of the definition of "Allocation Trigger", no Excess Yield Percentage
shall be calculated or included in the calculation of any average
Excess Yield Percentage with respect to such Loan Tranche) for any
Collection Period beginning before the date of the purchase of such
Loan Tranche hereunder.
(b) The definition of "Servicing Rate" set forth in Section 1.1 of the Loan
Purchase Agreement is hereby amended in its entirety to read as follows:
"SERVICING RATE" means 1.00% per annum.
2.2 AMENDMENT TO SECTION 2.6. Clause (xxvii) of Section 2.6 of the Loan
Purchase Agreement is hereby amended in its entirety to read as follows:
(xxvii) CONCENTRATION LIMITS. After giving effect to the transfer of
such Receivables to the Purchaser, the aggregate Principal Balance of
all Receivables included in the Purchased Assets (other than
Repurchased Receivables and Defaulted Receivables) (A) owed by
Obligors resident in any one state would not exceed 40% of the Pool
Balance, (B) classified as "Blue" in accordance with the Credit Policy
would not exceed 15% of the Pool Balance, (C) arising from sales of
Financed Vehicles previously leased by an Originator would not exceed
20% of the Pool Balance, (D) having a final scheduled payment date
later than 66 months after the Closing Date or Subsequent Transfer
Date, as applicable, would not exceed 45% of the Pool Balance, or (E)
owed by Obligors under the Originators' balloon note financing program
would not exceed 15% of the Pool Balance.
2.3 AMENDMENT TO SECTION 10.1(xiv). Clause (xiv) of Section 10.1 of the
Loan Purchase Agreement is hereby amended in its entirety to read as
follows:
(xiv) Oxford's shareholders' equity (as determined in accordance with
GAAP) shall be less than $55,000,000 at the end of any fiscal quarter
and shall remain less than $55,000,000 for more than 30 days after the
end of such fiscal quarter; or
3. REPRESENTATIONS AND WARRANTIES. The Seller and Oxford each represents and
warrants that the representations and warranties of such party contained in
Sections 7.1 and 8.1 of the Loan Purchase Agreement are correct in all material
respects on and as of the
-2-
106
<PAGE>
effective date hereof as though made on and as of the date hereof and the Seller
and Oxford hereby reaffirm such representations and warranties.
4. CONDITIONS PRECEDENT. The enforceability of this Amendment shall be
subject to the satisfaction of the following conditions precedent:
4.1 THIS AMENDMENT. The Administrator shall have received an original
counterpart (or counterparts) of this Amendment executed and delivered by a
duly authorized officer of each of the Seller, Oxford, BONY, the Purchaser,
the Administrator and State Street Bank, or other evidence satisfactory to
the Administrator of the execution and delivery of this Amendment by such
parties.
4.2 AMENDMENT TO CONTRIBUTION AGREEMENT. The Administrator shall have
received an original counterpart of the First Amendment to Contribution
Agreement (in the form attached hereto as ATTACHMENT A) executed and
delivered by a duly authorized officer of each of the parties thereto.
4.3 ACKNOWLEDGMENT AND CONSENT. The Administrator shall have received the
written acknowledgment of and consent to this Amendment from each of the
Liquidity Banks.
4.4 CREDIT BANK APPROVAL. The Administrator shall have received written
approval of this Amendment from State Street Bank and Trust Company, as
Credit Bank under the Credit Agreement.
4.5 REPRESENTATIONS AND WARRANTIES. The representations and warranties
set forth in SECTION 3 above shall be true and correct in all material
respects (and Seller and Oxford, as applicable, in the absence of notice to
the Administrator to the contrary, shall be deemed to so certify).
4.6 CONFIRMATION OF RATING. Each of Standard & Poor's Ratings Services
("S&P") and Moody's Investors Service, Inc. shall have confirmed (in
writing or, in the case of S&P, orally) the rating of the Commercial Paper
Notes or waived (in writing or, in the case of S&P, orally) such
requirement of confirmation.
5. CONSENT TO CONTRIBUTION AGREEMENT AMENDMENT. The Purchaser and the
Administrator, by their signatures hereto, hereby acknowledge and consent to the
First Amendment to Contribution Agreement in the form attached hereto as
ATTACHMENT A.
6. AMENDMENT TO CREDIT POLICIES. Oxford, by its signature hereto, hereby
agrees to cause each applicable Originator to amend
-3-
107
<PAGE>
its Credit Policy solely to include the parameters applicable to the
Originators' balloon note financing program, as delivered to the Administrator
prior to the date hereof. The Purchaser, the Administrator and State Street
Bank, by their signatures hereto, hereby consent to such amendments to the
Credit Policies.
7. MISCELLANEOUS.
7.1 EFFECTIVENESS OF THE LOAN PURCHASE AGREEMENT. The Loan Purchase
Agreement, as amended hereby, is hereby ratified, approved and confirmed in
all respects, and shall remain in full force and effect.
7.2 GOVERNING LAW. This Amendment, including the rights and duties of the
parties hereto, shall be governed by, and construed in accordance with, the
internal laws of the State of New York without reference to principles of
conflicts of law.
7.3 REFERENCE TO AND EFFECT ON LOAN PURCHASE AGREEMENT. Upon the
effectiveness of this Amendment in accordance with SECTION 4 hereof,
(i) this Amendment shall be part of the Loan Purchase Agreement, (ii) each
reference in the Loan Purchase Agreement to "this Agreement", "hereunder",
"hereof", "herein", or words of like import shall mean and be a reference
to the Loan Purchase Agreement, as amended by this Amendment, and
(iii) each reference to the Loan Purchase Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the
Loan Purchase Agreement shall mean and be a reference to the Loan Purchase
Agreement, as amended by this Amendment.
7.4 HEADINGS. The Section headings in this Amendment are inserted for
convenience of reference only and shall not affect the meaning or
interpretation of this Amendment or any provisions hereof.
7.5 COUNTERPARTS; EXPENSES. This Amendment may be executed in any number
of counterparts, and by the different parties on separate counterparts,
each of which shall constitute an original and all of which when taken
together shall constitute one and the same agreement. Oxford hereby
agrees to pay, or reimburse the parties hereto, upon demand, for any and
all costs and expenses, including reasonable attorneys' fees and expenses,
incurred by the parties hereto in connection with this Amendment.
-4-
108
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
CENTREX CAPITAL AUTOMOBILE
ASSETS (NUMBER TWO), INC.,
as Seller
By: /s/ Peter I. Cavallaro
---------------------------
Name: Peter I. Cavallaro
Title: Vice President
270 South Service Road
Melville, New York 11747
Facsimile: (516) 777-8440
Attention: President
OXFORD RESOURCES CORP.,
as Servicer
By: /s/ Robert B. Kay
---------------------------
Name: Robert B. Kay
Title: Senior Vice President
270 South Service Road
Melville, New York 11747
Facsimile: (516) 777-8440
Attention: President
THE BANK OF NEW YORK,
as Custodian and Standby
Servicer
By: /s/ Patricia M.F. Russo
--------------------------
Name: Patricia M.F. Russo
101 Barclay Street
New York, New York 10286
Facsimile: (212) 815-5999
Attention: Patricia M.F. Russo
109
<PAGE>
CLIPPER RECEIVABLES CORPORATION,
as Purchaser
By: /s/ Frederick M. Ramos II
--------------------------
Name: Frederick M. Ramos II
Title: Vice President
P.O. Box 4024
Boston, Massachusetts 02101
Facsimile: (617) 951-7050
Attention: R. Douglas Donaldson
STATE STREET BOSTON CAPITAL
CORPORATION, as Administrator
By: /s/ S. Sean Chen
---------------------------
Name: S. Sean Chen
Title: Vice President
225 Franklin Street
Boston, Massachusetts 02110
Facsimile: (617) 350-4020
Attention: Clipper Department
STATE STREET BANK AND TRUST
COMPANY, as Relationship Bank
By: /s/ Frederick M. Ramos II
-----------------------------
Name: Frederick M. Ramos II
Title: Vice President
225 Franklin Street
Boston, Massachusetts 02110
Facsimile: (617) 695-9232
Attention: Clipper Department
110
<PAGE>
EXHIBIT 10.20(c)
SECOND AMENDMENT TO LOAN PURCHASE AGREEMENT
This SECOND AMENDMENT TO LOAN PURCHASE AGREEMENT (this "AMENDMENT") is
dated as of March 21, 1996 and is entered into by and among CENTREX CAPITAL
AUTOMOBILE ASSETS (NUMBER TWO), INC., a Delaware corporation, as seller (the
"SELLER"), OXFORD RESOURCES CORP., a New York corporation ("OXFORD"), as
servicer, THE BANK OF NEW YORK, a New York banking corporation ("BONY"), as
custodian and standby servicer, CLIPPER RECEIVABLES CORPORATION, a Delaware
corporation, as purchaser (the "PURCHASER"), STATE STREET BOSTON CAPITAL
CORPORATION, a Massachusetts corporation ("STATE STREET CAPITAL"), as
administrator for the Purchaser (the "ADMINISTRATOR"), and STATE STREET BANK AND
TRUST COMPANY, a bank organized under the laws of the Commonwealth of
Massachusetts ("STATE STREET BANK"), as relationship bank for the Purchaser.
W I T N E S S E T H:
WHEREAS, the parties hereto have entered into a certain Loan Purchase
Agreement, dated as of March 31, 1995 and amended as of December 14, 1995 (the
"LOAN PURCHASE AGREEMENT"), pursuant to which the Seller agreed to sell to the
Purchaser certain receivables and related assets; and
WHEREAS, the parties desire to amend the Loan Purchase Agreement as
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and in the Loan Purchase Agreement as amended hereby and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. TERMS. All capitalized terms used and not otherwise defined herein shall
have the meanings given to such terms in the Loan Purchase Agreement.
2. AMENDMENTS TO LOAN PURCHASE AGREEMENT. Effective as of the date the
conditions set forth in SECTION 4 hereof are met, the Loan Purchase Agreement is
hereby amended as follows:
2.1 AMENDMENTS TO DEFINITIONS. (a) The definition of "Target Purchaser's
Tranche Investment" as set forth in Section 1.1 of the Loan Purchase
Agreement is hereby amended in its entirety to read as follows:
-1-
111
<PAGE>
"TARGET PURCHASER'S TRANCHE INVESTMENT" means for any Distribution
Date and with respect to any Loan Tranche, an amount equal to (i) 90% (in
the case of any Loan Tranche purchased before December 31, 1995) and (ii)
89% (in the case of any Loan Tranche purchased on or after December 31,
1995) of the Loan Tranche Balance with respect to such Loan Tranche,
calculated on the most recent Determination Date as of the end of the
related Collection Period.
(b) The definition of "Required Cash Collateral Amount" as set forth
in Section 1.1 of the Loan Purchase Agreement is hereby amended in its
entirety to read as follows:
"REQUIRED CASH COLLATERAL AMOUNT" means, for any Distribution Date,
an amount equal to the greatest of (x) two percent of the aggregate
Principal Balance of Receivables, calculated on the most recent
Determination Date as of the end of the related Collection Period, (y) in
the case of any Loan Tranche purchased before December 31, 1995, 0.375%,
and in the case of any Loan Tranche purchased on or after December 31,
1995, 1.25%, of the aggregate Principal Balance, as of the applicable Cut-
Off Dates, of all Receivables purchased hereunder on or prior to such
Distribution Date, and (z) on the occurrence and during the continuance of
an Event of Default, the Required Cash Collateral Amount in affect
immediately before the occurrence of such Event of Default; PROVIDED,
HOWEVER, that the Required Cash Collateral Amount shall not exceed the sum
of the Purchaser's Investment, accrued and unpaid Earned Discount and
accrued and unpaid Servicing Fee.
2.2 AMENDMENTS TO SECTION 2.6. Clause (xxvii) of Section 2.6 of the
Loan Purchase Agreement is hereby amended by deleting the figure "15%"
contained in subclause (E) thereof and inserting in its place the figure
"25%".
2.3 AMENDMENTS TO SECTION 4.6(c). Section 4.6(c) of the Loan Purchase
Agreement is hereby amended by inserting after the words "ten percent" in
clause THIRD thereof the following words: "(in the case of any Loan Tranche
purchased before December 31, 1995) and eleven percent (in the case of any
Loan Tranche purchased on or after December 31, 1995)".
2.4 AMENDMENTS TO SECTION 6.2. Section 6.2 of the Loan Purchase Agreement
is hereby amended (a) by deleting the figure "$125,000,000" in clause (c)
thereof and inserting in its place the figure "$250,000,000" and (b) by
deleting clause (e) thereof and substituting therefor and words "(e)
[intentionally omitted];".
-2-
112
<PAGE>
3. REPRESENTATIONS AND WARRANTIES. The Seller and Oxford each represents and
warrants that the representations and warranties of such party contained in
Sections 7.1 and 8.1 of the Loan Purchase Agreement are correct in all material
respects on and as of the effective date hereof as though made on and as of the
date hereof and the Seller and Oxford hereby reaffirm such representations and
warranties.
4. CONDITIONS PRECEDENT. The enforceability of this Amendment shall be
subject to the satisfaction of the following conditions precedent:
4.1 THIS AMENDMENT. The Administrator shall have received an original
counterpart (or counterparts) of this Amendment executed and delivered by a
duly authorized officer of each of the Seller, Oxford, BONY, the Purchaser,
the Administrator and State Street Bank, or other evidence satisfactory to
the Administrator of the execution and delivery of this Amendment by such
parties.
4.2 AMENDMENT TO CONTRIBUTION AGREEMENT. The Administrator shall have
received an original counterpart of the Second Amendment to Contribution
Agreement (in the form attached hereto as ATTACHMENT A) executed and
delivered by a duly authorized officer of each of the parties thereto.
4.3 ACKNOWLEDGMENT AND CONSENT. The Administrator shall have received the
written acknowledgment of and consent to this Amendment from each of the
Liquidity Banks.
4.4 CREDIT BANK APPROVAL. The Administrator shall have received written
approval of this Amendment from State Street Bank and Trust Company, as
Credit Bank under the Credit Agreement.
4.5 REPRESENTATIONS AND WARRANTIES. The representations and warranties
set forth in SECTION 3 above shall be true and correct in all material
respects (and Seller and Oxford, as applicable, in the absence of notice to
the Administrator to the contrary, shall be deemed to so certify).
4.6 CONFIRMATION OF RATING. Each of Standard & Poor's Ratings Services
("S&P") and Moody's Investors Service, Inc. shall have confirmed in writing
the rating of the Commercial Paper Notes.
4.7 OTHER DOCUMENTS. The Administrator shall have received such opinions
of counsel to Seller Parties, such certificates of officers of Seller
Parties and other documents as it may reasonably request.
-3-
113
<PAGE>
5. CONSENT TO CONTRIBUTION AGREEMENT AMENDMENT. The Purchaser and the
Administrator, by their signatures hereto, hereby acknowledge and consent to the
Second Amendment to Contribution Agreement in the form attached hereto as
ATTACHMENT A.
6. MISCELLANEOUS.
6.1 EFFECTIVENESS OF THE LOAN PURCHASE AGREEMENT. The Loan Purchase
Agreement, as amended hereby, is hereby ratified, approved and confirmed in
all respects, and shall remain in full force and effect.
6.2 GOVERNING LAW. This Amendment, including the rights and duties of the
parties hereto, shall be governed by, and construed in accordance with, the
internal laws of the State of New York without reference to principles of
conflicts of law.
6.3 REFERENCE TO AND EFFECT ON LOAN PURCHASE AGREEMENT. Upon the
effectiveness of this Amendment in accordance with SECTION 4 hereof,
(i) this Amendment shall be part of the Loan Purchase Agreement, (ii) each
reference in the Loan Purchase Agreement to "this Agreement", "hereunder",
"hereof", "herein", or words of like import shall mean and be a reference
to the Loan Purchase Agreement, as amended by this Amendment, and
(iii) each reference to the Loan Purchase Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the
Loan Purchase Agreement shall mean and be a reference to the Loan Purchase
Agreement, as amended by this Amendment.
6.4 HEADINGS. The Section headings in this Amendment are inserted for
convenience of reference only and shall not affect the meaning or
interpretation of this Amendment or any provisions hereof.
6.5 COUNTERPARTS; EXPENSES. This Amendment may be executed in any number
of counterparts, and by the different parties on separate counterparts,
each of which shall constitute an original and all of which when taken
together shall constitute one and the same agreement. Oxford hereby
agrees to pay, or reimburse the parties hereto, upon demand, for any and
all costs and expenses, including reasonable attorneys' fees and expenses,
incurred by the parties hereto in connection with this Amendment.
-4-
114
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
CENTREX CAPITAL AUTOMOBILE
ASSETS (NUMBER TWO), INC.,
as Seller
By:/s/ Robert Kay
---------------------------
Name: Robert Kay
Title: Vice President
270 South Service Road
Melville, New York 11747
Facsimile: (516) 777-8440
Attention: President
OXFORD RESOURCES CORP.,
as Servicer
By:/s/ Peter I. Cavallaro
---------------------------
Name: Peter I. Cavallaro
Title: Senior Vice President
270 South Service Road
Melville, New York 11747
Facsimile: (516) 777-8440
Attention: President
THE BANK OF NEW YORK,
as Custodian and Standby
Servicer
By:/s/ Patricia M.F. Russo
---------------------------
Name: Patricia M.F. Russo
101 Barclay Street
New York, New York 10286
Facsimile: (212) 815-5999
Attention: Patricia M.F. Russo
115
<PAGE>
CLIPPER RECEIVABLES CORPORATION,
as Purchaser
By:/s/ Frederick M. Ramos II
---------------------------
Name: Frederick M. Ramos II
Title: Vice President
P.O. Box 4024
Boston, Massachusetts 02101
Facsimile: (617) 951-7050
Attention: R. Douglas Donaldson
STATE STREET BOSTON CAPITAL
CORPORATION, as Administrator
By:/s/ S. Sean Chen
---------------------------
Name: S. Sean Chen
Title: Vice President
225 Franklin Street
Boston, Massachusetts 02110
Facsimile: (617) 350-4020
Attention: Clipper Department
STATE STREET BANK AND TRUST
COMPANY, as Relationship Bank
By:/s/ Frederick M. Ramos II
---------------------------
Name: Frederick M. Ramos II
Title: Vice President
225 Franklin Street
Boston, Massachusetts 02110
Facsimile: (617) 695-9232
Attention: Clipper Department
116
<PAGE>
EXHIBIT 11.01
OXFORD RESOURCES CORP.
AND SUBSIDIARIES
Statement of Computation of
Net Income Per Share
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
YEAR ENDED JUNE 30, 1996 1995 1994
- --------------------------------------------------------------------------------
(In thousands, except per share data)
Net income $18,936 $13,000 $7,943
------- ------- ------
------- ------- ------
Weighted average common shares outstanding 14,355 13,268 12,045
Common stock equivalents 233 37 -
------- ------- ------
Weighted average number of common and common
equivalent shares outstanding 14,588 13,305 12,045
------- ------- ------
------- ------- ------
Primary earnings per share $1.30 $0.98 $0.66
------- ------- ------
------- ------- ------
117
<PAGE>
EXHIBIT 21.01
<TABLE>
<CAPTION>
(As of 9/15/96)
SUBSIDIARIES OF OXFORD RESOURCES CORP.
DATE OF TYPE OF
CORPORATE NAME INCORPORATION BUSINESS
- -------------- ------------- ---------
<S> <C> <C>
USA Auto Mall, Inc. 4/2/93 Automobile Dealer
USA Auto Mall of New York Inc. 7/26/91 Automobile Dealer
USA Auto Mall of Florida Inc. 7/26/91 Automobile Dealer
USA Auto Mall of New Jersey, Inc. 10/21/91 Automobile Dealer
Oxford Servicing Corp. 3/12/93 (1)
XR Advertising, Inc. 10/26/96 (2)
Centrex Resources Corp. 5/20/93 Inactive(3)
Centrex Capital Corp. 8/7/91 Sales Finance Co.
Centrex Capital Corp. of New York 9/8/93 Sales Finance Co.
Centrex Capital Corp. of New Jersey 9/8/93 Sales Finance Co.
Centrex Capital Corp. of Connecticut 9/8/93 Sales Finance Co.
Centrex Capital Corp. of Pennsylvania 9/10/93 Sales Finance Co.
Centrex Capital Corp. of Florida 9/16/93 Sales Finance Co.
Centrex Capital Corp. of Alabama 2/14/94 Sales Finance Co.
Centrex Capital Corp. of District of Columbia 2/16/94 Sales Finance Co.
Centrex Capital Corp. of Maryland 2/16/94 Sales Finance Co.
Centrex Capital Corp. of New Hampshire 2/24/94 Sales Finance Co.
Centrex Capital Corp. of Rhode Island 2/17/94 Sales Finance Co.
Centrex Capital Corp. of Georgia 2/14/94 Sales Finance Co.
Centrex Capital Corp. of South Carolina 2/17/94 Sales Finance Co.
Centrex Capital Corp. of North Carolina 2/11/94 Sales Finance Co.
Centrex Capital Corp. of Virginia 2/18/94 Sales Finance Co.
Centrex Capital Corp. of West Virginia 2/15/94 Sales Finance Co.
Centrex Capital Corp. of Wisconsin 8/4/94 Sales Finance Co.
Centrex Capital Corp. of Tennessee 6/23/94 Sales Finance Co.
Centrex Capital Corp. of Illinois 8/12/94 Sales Finance Co.
Centrex Capital Corp. of Delaware 12/2/94 Sales Finance Co.
Centrex Capital Corp. of California 1/10/95 Sales Finance Co.
Centrex Capital Corp. of Indiana 1/27/95 Sales Finance Co.
Centrex Capital Corp. of Maine 1/4/95 Sales Finance Co.
Centrex Capital Corp. of Texas 11/16/95 Sales Finance Co.
Centrex Capital Corp. of Massachusetts 2/16/95 Sales Finance Co.
Centrex Capital Corp. of Vermont 9/23/95 Sales Finance Co.
Centrex Capital Corp. of Missouri 3/22/96 Sales Finance Co.
Centrex Capital Corp. of Michigan 5/13/96 Sales Finance Co.
Centrex Capital Corp. of Ohio 5/28/96 Sales Finance Co.
Centrex Capital Automobile Assets, Inc. 6/10/94 Special Purpose Corp. (Securitization)
Centrex Capital Automobile Assets(#2), Inc. 3/16/95 Special Purpose Corp. (Securitization)
Centrex Capital Automobile Assets(#3), Inc. 9/9/96 Special Purpose Corp. (Securitization)
Credit Car Sales of New York, Inc. 12/28/90 Inactive
Oxford Credit Corp. 9/12/87 Inactive(4)
Oxford Mortgage Corp. 1/11/84 Inactive(5)
Oxford Management Services Co., Inc. 11/18/87 Corp. Mgmt. Services
Oxford Equipment Leasing Corp. 3/21/89 Inactive(6)
</TABLE>
- ---------------
+ Each corporation listed is a direct or indirect subsidiary, and is owned
100% directly or indirectly. Indirect subsidiary corporations are indented
under their direct subsidiary parent corporation.
(1) Shelf Corporation - organized to serve lease and auto loan portfolios.
(2) Shelf Corporation - organized to purchase and broker/media advertising
time.
118
<PAGE>
(3) Formerly originated used vehicle leases.
(4) Formerly originated home improvement loans on residential real property.
(5) Formerly originated second mortgages on residential real property.
(6) Formerly conducted equipment leasing activities.
119
<PAGE>
<TABLE>
<S> <C> <C>
Oxford Truck Leasing Corp. 3/21/89 Inactive(7)
Zephia Services, Inc. 5/20/68 Inactive(8)
Oxford Planning Corp. 3/15/88 Insurance Brokerage/Financial Planning
Linden Tree Development Corp. 11/2/95 Property Holding Co.
Lyndhurst Properties Corp. 8/31/94 Property Holding Co.
Huntington Properties Development Corp. 1/3/96 Property Holding Co.
Melville Properties Development Corp. 1/3/96 Property Holding Co.
Trexar Corp. 5/21/96 Licensed Lending
Trexar Corp. of New York 5/28/96 Licensed Lending
</TABLE>
- ---------------
(7) Formerly conducted truck leasing activities.
(8) Formerly conducted home improvement business.
120
<PAGE>
EXHIBIT 23.01
[LOGO]
CONSENT OF BDO SEIDMAN, LLP
Oxford Resources Corp.
Melville, New York
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our reports dated
August 26, 1996, relating to the consolidated financial statements and
financial statement schedule of Oxford Resources Corp. and subsidiaries
appearing in the Company's Annual Report on Form 10-K for the year ended
June 30, 1996.
BDO Seidman, LLP
August 24, 1996
121
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 66,298,981
<SECURITIES> 7,684,401
<RECEIVABLES> 60,708,681<F1>
<ALLOWANCES> 0
<INVENTORY> 26,007,423<F2>
<CURRENT-ASSETS> 0
<PP&E> 10,702,456
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,520,662,557<F3>
<CURRENT-LIABILITIES> 0
<BONDS> 0<F4>
0
0
<COMMON> 148,397
<OTHER-SE> 91,314,907
<TOTAL-LIABILITY-AND-EQUITY> 1,520,662,557
<SALES> 0
<TOTAL-REVENUES> 301,320,729
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 175,949,242<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 94,327,109
<INCOME-PRETAX> 31,044,378
<INCOME-TAX> 12,108,000
<INCOME-CONTINUING> 18,936,378
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,936,378
<EPS-PRIMARY> 1.30
<EPS-DILUTED> 1.30
<FN>
<F1>Net investment in automobile receivables
<F2>Inventory and other assets
<F3>Includes vehicles under operating leases-net
<F4>Notes payable and obligations under capital leases-non-recourse
<F5>Selling, general and administrative and depreciation
</FN>
</TABLE>
