<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 9, 1997
REGISTRATION NO. 333-14431
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
----------------
BOMBARDIER RECEIVABLES MASTER TRUST I
(ISSUER WITH RESPECT TO CERTIFICATES)
----------------
BOMBARDIER CREDIT RECEIVABLES CORPORATION
(ORIGINATOR OF THE TRUST DESCRIBED HEREIN)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 9999 03-0340600
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
P.O. BOX 5544
BURLINGTON, VERMONT 05402
(802) 655-2824
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
BLAINE FILTHAUT
P.O. BOX 5544
BURLINGTON, VERMONT 05402
(802) 655-2824
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE
OF AGENT FOR SERVICE)
----------------
WITH COPIES TO:
ANDREW W. NELSON PAUL WEIFFENBACH
MORGAN, LEWIS & BOCKIUS LLP ORRICK, HERRINGTON & SUTCLIFFE LLP
101 PARK AVENUE WASHINGTON HARBOUR
NEW YORK, NY 10178 3050 K STREET, N.W.
WASHINGTON, D.C. 20007
----------------
Approximate date of commencement of proposed sale to the public: AS SOON AS
PRACTICABLE ON OR AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If any of the securities being registered on this form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT* OFFERING PRICE* FEE**
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<S> <C> <C> <C> <C>
Asset Backed
Certificates.......... $427,125,000 100% $427,125,000 $129,431.82
</TABLE>
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*Estimated for the purpose of calculating the registration fee.
**A portion of the registration fee has been previously paid ($303.03).
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
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<PAGE>
CROSS REFERENCE SHEET TO FORM S-1
<TABLE>
<CAPTION>
ITEM AND CAPTION IN FORM S-1 CAPTION OR LOCATION IN PROSPECTUS
---------------------------- ---------------------------------
<C> <S> <C>
1. Forepart of Registration Statement
and Outside Front Cover Page of
Prospectus......................... Forepart of Registration Statement;
Outside Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus................ Inside Front Cover Page; Outside
Back Cover Page
3. Summary Information; Risk Factors
and Ratio of Earnings to Fixed
Charges............................ Prospectus Summary; Risk Factors
4. Use of Proceeds..................... Use of Proceeds
5. Determination of Offering Price..... *
6. Dilution............................ *
7. Selling Security Holders............ *
8. Plan of Distribution................ Outside Front Cover Page;
Description of the Certificates;
Underwriting
9. Description of Securities to be
Registered......................... Prospectus Summary; Description of
the Certificates
10. Interests of Named Experts and
Counsel............................ *
11. Information with Respect to the
Registrant......................... Prospectus Summary; The Depositor
and the Trust; The Floorplan and
Asset-Based Financing Business; The
Accounts
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities........................ *
</TABLE>
- --------
* Not applicable or answer is negative.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JANUARY 9, 1997
PROSPECTUS
$427,125,000
BOMBARDIER RECEIVABLES MASTER TRUST I
$400,000,000 Floating Rate Class A
Asset Backed Certificates, Series 1997-1
$27,125,000 Floating Rate Class B
Asset Backed Certificates, Series 1997-1
BOMBARDIER CREDIT RECEIVABLES CORPORATION
DEPOSITOR
BOMBARDIER CAPITAL INC.
SERVICER
-----------
The Floating Rate Class A Asset Backed Certificates, Series 1997-1 (the "Class
A Certificates") and the Floating Rate Class B Asset Backed Certificates,
Series 1997-1 (the "Class B Certificates," and together with the Class A
Certificates, the "Certificates") offered hereby evidence undivided interests
in certain assets of the Bombardier Receivables Master Trust I (the "Trust")
created pursuant to a Pooling and Servicing Agreement among Bombardier Credit
Receivables Corporation, as depositor ("BCRC" or the "Depositor"), Bombardier
Capital Inc., as servicer ("BCI" or the "Servicer"), and Bankers Trust Company,
as trustee (the "Trustee"). The Trust assets include a pool (the "Pool") of
receivables (the "Receivables") generated from time to time in a portfolio
(together with any additional accounts added to the Trust from time to time as
described herein, the "Accounts") consisting of revolving financing
arrangements with certain dealers located in the United States to finance such
dealers' consumer, recreational and commercial product inventory. The Accounts
included in the Pool held by the Trust may, after the Series 1994-1 Final
Payment Date (as defined herein), also include accounts consisting of credit
extended to dealers to finance their working capital needs and to manufacturers
and distributors to finance their production, manufacturing and inventory. The
Receivables have been and will be transferred to BCRC by BCI pursuant to a
Receivables Purchase Agreement, described herein.
(continued on next page)
PROSPECTIVE INVESTORS SHOULD CONSIDER THE FACTORS SET FORTH UNDER "RISK
FACTORS" COMMENCING ON PAGE 21 HEREIN.
-----------
THE CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN CERTAIN PROPERTY OF THE
TRUST ONLY AND DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF BCI, BCRC OR ANY
AFFILIATE THEREOF. NEITHER THE CERTIFICATES NOR THE RECEIVABLES ARE INSURED OR
GUARANTEED BY BCI, BCRC, ANY AFFILIATE THEREOF OR BY ANY GOVERNMENTAL AGENCY.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) THE DEPOSITOR(1)(3)
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<S> <C> <C> <C>
Per Class A Certificates % % %
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Per Class B Certificates % % %
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Total $ $ $
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</TABLE>
(1) Plus accrued interest, if any, at the applicable Certificate Rate from the
Closing Date, expected to be January , 1997.
(2) The Depositor has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting expenses, estimated to be $709,431.82.
-----------
The Certificates are offered subject to prior sale, when, as and if issued by
the Trust and accepted by the Underwriters and subject to the Underwriters'
right to reject orders in whole or in part. It is expected that delivery of the
Certificates will be made in book-entry form only through the facilities of The
Depository Trust Company, Cedel Bank, societe anonyme and the Euroclear System
on or about January , 1997. The Certificates will be offered in Europe and the
United States of America.
J.P. MORGAN & CO.
CS FIRST BOSTON
MERRILL LYNCH & CO.
The date of this Prospectus is January , 1997.
<PAGE>
(continued from previous page)
Under the Pooling and Servicing Agreement, BCI is responsible for servicing,
managing and making collections on the Receivables, as further described
herein. Certain assets of the Trust will be allocated to the Class A and Class
B Certificateholders, including the right to receive a varying percentage of
each month's collections with respect to the Receivables at the times and in
the manner described herein. The Depositor has previously sold investor
certificates representing interests in assets of the Trust, and from time to
time, subject to certain conditions, the Depositor may offer other series of
investor certificates representing interests in assets of the Trust (each,
including the series offered hereby, a "Series") having terms similar to or
significantly different from the terms of the Certificates. The remaining
interests in the Trust that are not represented by the Certificates or the
investor certificates of any other Series issued by the Trust are represented
by the BCRC Certificate (held by BCRC) and a Variable Funding Certificate
(which is currently held by BCRC and pledged to BCI).
Interest with respect to the Certificates will accrue from the Closing Date,
expected to be January , 1997, and will be payable monthly on or about the
15th day of each month, commencing February 18, 1997. Principal with respect
to the Certificates will be payable monthly following the end of the Revolving
Period, as further described herein. Principal with respect to the Class A
Certificates is expected to be distributed monthly commencing on the November
2001 Distribution Date and the final principal distribution on the Class A
Certificates is expected to be made on the April 2002 Distribution Date;
however, principal on the Class A Certificates may be made earlier or later
under the circumstances described herein. Principal on the Class B
Certificates is expected to be distributed on the April 2002 Distribution
Date; however, distribution of principal on the Class B Certificates may also
be made earlier or later under the circumstances described herein, but will,
in no case, be distributed until all principal of the Class A Certificates has
been paid.
A portion of the Retained Interest held by BCRC will be subordinated to the
rights of the Certificateholders to receive distributions in respect of the
Certificates to the limited extent of the Available Subordinated Amount.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CERTIFICATES
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Depositor has filed a Registration Statement (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with the Securities and Exchange Commission (the "Commission") with
respect to the Certificates offered pursuant to this Prospectus. This
Prospectus, which forms part of the Registration Statement, does not contain
all of the information contained in the Registration Statement and the
Exhibits thereto. For further information, reference is made to the
Registration Statement and Amendments thereof and Exhibits thereto, which are
available for inspection without charge at the Public Reference Facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, and the Commission's regional offices at Seven World Trade Center, 13th
Floor, New York, New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of the Registration Statement and
Amendments thereof and Exhibits thereto may be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. In addition, the Commission maintains a
public access site on the Internet through the World Wide Web at which site
reports, proxy and information statements and other information regarding
registrants, including all electronic filings, may be viewed. The Internet
address of the Commission's World Wide Web site is http://www.sec.gov.
REPORTS TO CERTIFICATEHOLDERS
Unless and until definitive certificates are issued, monthly and annual
unaudited reports, containing information concerning the Trust, which reports
will be substantially based upon information provided by the Servicer, will be
sent on behalf of the Trust to Cede & Co. ("Cede"), as nominee of The
Depository Trust Company ("DTC") and registered holder of the Certificates,
pursuant to the Pooling and Servicing Agreement. Such reports may be available
to beneficial owners of Certificates ("Certificate Owners") in accordance with
the regulations and procedures of DTC. See "Description of the Certificates--
Reports" and "--Evidence as to Compliance." Such reports will not constitute
financial statements prepared in accordance with generally accepted accounting
principles. The Trust will file with the Commission such periodic reports with
respect to the Trust as are required under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus. Reference is made
to the Index of Defined Terms for the location herein of the definitions of
certain capitalized terms used herein.
TITLE OF SECURITIES....... $400,000,000 Floating Rate Class A Asset Backed
Certificates, Series 1997-1 (the "Class A
Certificates").
$27,125,000 Floating Rate Class B Asset Backed
Certificates, Series 1997-1 (the "Class B
Certificates").
The Class A Certificates and Class B Certificates
are referred to collectively herein as the
"Certificates."
ISSUER.................... Bombardier Receivables Master Trust I (the
"Trust").
DEPOSITOR................. Bombardier Credit Receivables Corporation ("BCRC"
or the "Depositor"), which, on the Closing Date,
will be a wholly-owned subsidiary of Bombardier
Capital Inc.
SERVICER.................. Bombardier Capital Inc. ("BCI" or the "Servicer").
A substitute servicer may be appointed under
certain circumstances. See "Description of the
Certificates--Servicer Default." In addition, BCI
has delegated and may from time to time in the
future delegate all or a portion of its servicing
responsibilities to third parties. See
"Description of the Certificates--Collection and
Other Servicing Procedures."
TRUSTEE................... Bankers Trust Company, a New York banking
corporation or any successor under the Pooling and
Servicing Agreement (the "Trustee").
THE TRUST................. The Trust was formed pursuant to a Pooling and
Servicing Agreement, dated as of January 1, 1994,
among the Depositor, BCI, as Servicer, and the
Trustee, as supplemented and amended from time to
time (the "Pooling and Servicing Agreement"). Each
of the previous two Series of investor
certificates and the Variable Funding Certificate
were issued pursuant to separate supplements and
the Certificates will be issued pursuant to the
Series 1997-1 Supplement (the "Series 1997-1
Supplement"). The assets of the Trust include (a)
certain Receivables existing under the Initial
Accounts on January 1, 1994 (the "Initial Cut-Off
Date"), and certain Receivables existing under
Additional Accounts which have been added to the
Trust and those which are expected to be added in
the future together with Receivables generated
from time to time in such Initial Accounts and
Additional Accounts (less Receivables paid or
charged-off and excluding (i) Receivables
generated in Removed Accounts or Ineligible
Accounts after the applicable Removal Commencement
Date, (ii) Receivables removed from the Trust from
time to time and (iii) after the Series 1994-1
Final Payment Date, any undivided interest (a
"Participation Interest") in the Receivables that
has been transferred to a third party), (b) all
funds collected or to be collected in respect of
such Receivables, (c) all funds on deposit in
certain accounts of the Trust, including the
Reserve Fund, the Excess Funding Account and the
Collection Account (as defined herein),
3
<PAGE>
(d) any Enhancement issued with respect to any
other Series (the drawing on or payment of such
Enhancement not being available to
Certificateholders), (e) an assignment of BCRC's
rights and remedies with respect to the
Receivables under the Receivables Purchase
Agreement and (f) an assignment of security
interests in certain products, contracts or other
assets (collectively, the "Collateral Security")
securing such Receivables. The term "Enhancement"
shall mean, with respect to any Series, any letter
of credit, surety bond, cash collateral account,
guaranteed rate agreement, maturity liquidity
facility, tax protection agreement, subordination,
interest rate swap agreement or other similar
arrangement for the benefit of certificateholders
of such Series. Interests in the Trust will be
evidenced by the Certificates, investor
certificates of other Series, the BCRC Certificate
(which represents the Retained Interest and is
retained by BCRC) and the Variable Funding
Certificate (which is currently held by BCRC and
pledged to BCI).
SERIES CUT-OFF DATE....... January 1, 1997.
THE ACCOUNTS.............. The Accounts initially included in the Trust and
those which have been added prior to the issuance
of the Certificates have been established pursuant
to inventory security agreements entered into with
BCI by U.S. dealers to purchase or finance
consumer, recreational and commercial product
inventory. Such Accounts have been selected from
all such inventory security agreements of BCI that
have been transferred to BCRC pursuant to the
Receivables Purchase Agreement and that meet the
criteria provided in the Pooling and Servicing
Agreement. Under certain circumstances, Accounts
may be added to, or removed from, the Trust. After
the Series 1994-1 Final Payment Date, the Trust
may also include Accounts created in favor of
United States dealers to purchase or finance
consumer, recreational and commercial product
inventory (a) which are inventory security
agreements entered into with affiliates of BCI,
(b) which are established by BCI or one of its
affiliates other than pursuant to an inventory
security agreement or (c) which are acquired by
BCI or one of its affiliates through the
acquisition of an Eligible Account from another
lender upon satisfying BCI's customary
underwriting standards. Furthermore, the Trust may
(at BCI's and BCRC's option), after the Series
1994-1 Final Payment Date, and subject to
satisfaction of the Rating Agency Condition prior
to the initial transfer of such type of Accounts,
also include Accounts established by BCI or one of
its affiliates or acquired by BCI or one of its
affiliates from another lender upon satisfying
BCI's customary underwriting standards, in each
case in connection with the extension of credit to
(i) dealers to finance such dealers' working
capital needs and (ii) manufacturers and
distributors to finance the production,
manufacturing and inventory of consumer,
recreational and commercial products. See "The
Floorplan and Asset-Based Financing Business,"
"Description of the Certificates--Addition of
Accounts" and "--Removal of Accounts and
Assignment of Receivables."
4
<PAGE>
THE RECEIVABLES........... The Receivables have arisen or will arise in the
Accounts. At the time of issuance of the
Certificates, the Receivables will consist solely
of amounts payable with respect to advances made
directly or indirectly by BCI to consumer,
recreational and commercial products dealers
located in the United States (the "Domestic
Inventory Receivables"). The Receivables may,
after the Series 1994-1 Final Payment Date, also
consist of amounts payable with respect to
extensions of credit made by BCI or one of its
affiliates (or made by another lender and acquired
by BCI or one of its affiliates upon satisfying
BCI's customary underwriting standards) to dealers
to finance such dealers' working capital needs and
to manufacturers and distributors to finance the
manufacturing, production and inventory of
consumer, recreational and commercial products
("Asset-Based Receivables") (such dealers,
manufacturers and distributors, together with the
dealers referred to in the preceding sentence, the
"Obligors"). After the Series 1994-1 Final Payment
Date, Domestic Inventory Receivables may be
originated by one of BCI's affiliates or acquired
by BCI or one of its affiliates through the
acquisition of an Eligible Account from another
lender upon satisfying BCI's customary
underwriting standards. Such advances with respect
to the Domestic Inventory Receivables are used by
the Obligors to purchase or finance consumer,
recreational and commercial products (the
"Eligible Products") which currently consist
primarily of products manufactured by BCI's
affiliates such as Ski-Doo(R) snowmobiles, Sea-
Doo(R) personal watercraft and jet boats and
Celebrity(R) boats, marine equipment (boats,
motors and trailers) manufactured by other
entities, and recreational vehicles, manufactured
housing, motorcycles, lawn and garden equipment,
horse trailers and consumer electronics and
appliances. Such advances with respect to the
Asset-Based Receivables will be used by the
Obligors to provide working capital and to finance
the manufacturing, production and inventory of
Eligible Products. The types of Eligible Products
financed by the Receivables may change over time.
See "The Floorplan and Asset-Based Financing
Business."
Any decision to transfer Asset-Based Receivables to
the Trust will be dependent upon a variety of
factors, including whether additional Series are
issued by the Trust as well as BCI's future
financing plans and needs, provided, however, that
Asset-Based Receivables cannot be transferred to
the Trust until after (i) the Series 1994-1 Final
Payment Date and (ii) the Rating Agency Condition
has been satisfied. Asset-Based Receivables may,
after such conditions are met, be included in the
Trust without specific limitation as to the amount
thereof. Neither BCI nor BCRC is under any
obligation to transfer Asset-Based Receivables to
the Trust in the future.
Generally, with respect to Domestic Inventory
Receivables, the principal amount of an advance in
respect of the related Eligible Product equals the
wholesale purchase price of the product and
becomes due upon either the retail sale of the
product or, in certain
5
<PAGE>
cases, in accordance with a payment schedule
agreed upon with the related Obligor. See "The
Floorplan and Asset-Based Financing Business--
Creation of the Receivables" and "--Payment
Terms." Collections of principal under the
Receivables are herein referred to as "Principal
Collections," and collections of interest and
other nonprincipal charges (including amounts
recovered with respect to Defaulted Receivables
and insurance proceeds) with respect to
Receivables are referred to herein as "Non-
Principal Collections." From time to time, subject
to certain conditions, certain of the amounts
described above that are included in "Principal
Collections" may be treated as "Non-Principal
Collections." The Domestic Inventory Receivables
currently bear interest at floating rates
described herein. See "The Floorplan and Asset-
Based Financing Business--Revenue Experience."
BCI, as seller, entered into a Receivables Purchase
Agreement dated as of January 1, 1994 (as
supplemented and amended from time to time, the
"Receivables Purchase Agreement") with BCRC, as
purchaser of the Receivables. Pursuant to the
Receivables Purchase Agreement, BCI (a) sold to
BCRC all of its right, title and interest in and
to all of the Receivables in the Eligible Accounts
currently included in the Trust and (b) assigned
its interests in the related Collateral Security
(to the extent such interests secure the
Receivables) to BCRC. See "Description of the
Receivables Purchase Agreement." BCRC in turn has
transferred such Receivables and such interests in
the Collateral Security to the Trust pursuant to
the Pooling and Servicing Agreement. At its
option, BCI may, in the future, rather than
selling Receivables to BCRC, contribute
Receivables and interests in the related
Collateral Security to BCRC.
All new Receivables arising under the Accounts
(including the Initial Accounts, the Additional
Accounts which have been added to the Trust and
any Additional Accounts subsequently added to the
Trust) during the term of the Trust will be sold
or contributed by BCI to BCRC pursuant to the
Receivables Purchase Agreement, and immediately
transferred by BCRC to the Trust pursuant to the
Pooling and Servicing Agreement. Accordingly, the
aggregate amount of Receivables in the Trust will
fluctuate daily as new Receivables are generated
and as existing Receivables are collected, charged
off as uncollectible or otherwise adjusted.
THE CERTIFICATES.......... The Certificates will be issued in the aggregate
initial principal amount of $427,125,000 (the
"Initial Principal Amount"), in minimum
denominations of $1,000 and in integral multiples
thereof. Except in certain limited circumstances
as described herein under "Description of the
Certificates--Definitive Certificates," the
Certificates will be issued in book-entry form
only. A portion of the Trust assets will be
allocated to the Certificateholders and to the
investor certificateholders of any other
outstanding Series (such other investor
certificateholders, together with the
Certificateholders, are referred to as "investor
certificateholders" or "certificateholders"), with
the remainder allocated to the Variable Funding
Certificate and the
6
<PAGE>
BCRC Certificate, as further described herein. The
Class A Certificates will evidence undivided
beneficial interests in the assets of the Trust
and will represent the right to receive from
distributions in respect of such assets funds up
to (but not in excess of) the amounts required (x)
to make monthly payments of interest on the
principal balance of the Class A Certificates at a
per annum rate (the "Class A Certificate Rate")
equal to the lesser of (i) the sum of (A) LIBOR
(as defined in "Description of the Certificates--
Interest") and (B) % and (ii) the Net Receivables
Rate (as defined in "Description of the
Certificates--Interest" herein) and (y) to make
monthly payments of principal beginning not later
than the Distribution Date in November 2001, in
six equal installments equal to the Class A
Controlled Distribution Amount (or to make
payments of principal earlier if BCI elects not to
extend the Initial Principal Payment Date or under
certain other circumstances or later under certain
limited circumstances, all as described herein),
in an aggregate amount up to the outstanding
principal balance of the Class A Certificates. The
Class B Certificates will evidence undivided
beneficial interests in the assets of the Trust
and will represent the right to receive from
distributions in respect of such assets funds up
to (but not in excess of) the amounts required (x)
to make monthly payments of interest on the
principal balance of the Class B Certificates at a
per annum rate (the "Class B Certificate Rate")
equal to the lesser of (i) the sum of (A) LIBOR
and (B) % and (ii) the Net Receivables Rate and
(y) to make payment of principal on the April 2002
Distribution Date (the "Class B Expected Payment
Date") (or to make payments of principal earlier
if BCI elects not to extend the Initial Principal
Payment Date or under certain other circumstances
or later under certain circumstances, all as
described herein), in an amount up to the
outstanding principal balance of the Class B
Certificates; provided, however, that no principal
will be distributed on the Class B Certificates
until the entire amount of principal has been
distributed on the Class A Certificates.
"Certificate Rate" means the Class A Certificate
Rate or the Class B Certificate Rate, as the
context requires.
On the date of the issuance of the Certificates
(the "Closing Date") the Invested Amount (which
term is used, among other things, to allocate
collections on the Receivables to the
Certificates) is expected to be $427,125,000
(based on information as of the Series Cut-Off
Date), representing the Initial Principal Amount
of the Certificates. The Invested Amount is
subject to reduction as a result of principal
distributions (other than distributions out of the
Excess Funding Account) and any net Investor
Charge-Offs and is subject to reduction to the
extent deposits are made to the Excess Funding
Account and is subject to increase to the extent
that amounts are subsequently withdrawn from the
Excess Funding Account as described under
"Description of the Certificates--Excess Funding
Account" and "--Allocation Percentages; Allocation
to the Certificates."
7
<PAGE>
The Certificates will represent beneficial
interests in the Trust only and will not represent
interests in or obligations of BCI, BCRC or any
affiliate thereof. Neither the Certificates nor
the Receivables are insured or guaranteed by BCI,
BCRC or any affiliate thereof. See "Risk Factors--
Trust's Relationship to BCRC and BCI."
REGISTRATION OF
CERTIFICATES.............. The Certificates will initially be represented by
one or more Certificates registered in the name of
Cede & Co., as the nominee of DTC. No person
acquiring an interest in the Certificates will be
entitled to receive a definitive certificate
representing such person's interest except in the
event that Definitive Certificates are issued
under the limited circumstances described under
"Description of the Certificates--Definitive
Certificates." Certificateholders may elect to
hold their interests through DTC, in the United
States, or Cedel Bank, societe anonyme ("Cedel")
or the Euroclear System ("Euroclear"), in Europe.
Transfers within DTC, Cedel or Euroclear, as the
case may be, will be in accordance with the usual
rules and operating procedures of the relevant
system. Cross-market transfers between persons
holding directly or indirectly through DTC, on the
one hand, and counterparties holding directly or
indirectly through Cedel or Euroclear, on the
other, will be effected in DTC through Citibank,
N.A. ("Citibank") or Morgan Guaranty Trust Company
of New York ("Morgan"), the relevant depositaries
(collectively, the "Depositaries") of Cedel or
Euroclear, respectively, and each participating
member of DTC. See "Description of the
Certificates --Book-Entry Registration."
PRIOR SERIES AND ISSUANCE
OF NEW SERIES............ Under the Pooling and Servicing Agreement the Trust
has issued two prior Series of investor
certificates, referred to in this Prospectus as
the "Series 1994-1 Certificates" and the "Series
1996-1 Certificates," respectively. Certain
information concerning such prior Series is set
forth in Annex I to this Prospectus. The Pooling
and Servicing Agreement provides that pursuant to
any one or more supplements thereto (each, a
"Supplement"), the Depositor may cause the Trust
to issue one or more new Series of investor
certificates (each, a "New Issuance"). The
issuance of the Certificates pursuant to the
Series 1997-1 Supplement will constitute a New
Issuance. The Pooling and Servicing Agreement also
provides that the Depositor may specify, with
respect to any Series, the Principal Terms of the
Series. The Depositor may offer any Series to the
public or other investors under a prospectus or
other disclosure document in transactions either
registered under the Securities Act or exempt from
registration thereunder, directly or through the
Underwriters or one or more other underwriters or
placement agents.
Under the Pooling and Servicing Agreement and
pursuant to a Supplement, a New Issuance may occur
only upon delivery to the Trustee of the
following: (a) a Supplement specifying the
Principal Terms of such Series, (b) the form of
any Enhancement and any related agreement, (c) an
opinion of counsel to the effect that, for federal
and Vermont state tax purposes, (x) such issuance
will not
8
<PAGE>
adversely affect the characterization of the
certificates of any outstanding Series or class as
debt of BCRC, (y) such issuance will not cause a
taxable event to any certificateholders or the
Trust and (z) the investor certificates of such
new Series will be characterized as debt of BCRC
and (d) the Rating Agency Condition shall have
been satisfied. See "Description of the
Certificates--New Issuances."
DISTRIBUTION ON THE Distributions on the Certificates will be made
CERTIFICATES.............. monthly on the 15th day of each month or, if such
day is not a business day, on the next succeeding
business day (each, a "Distribution Date"),
commencing February 18, 1997.
ALLOCATIONS............... The Class A and Class B Certificates represent the
right to receive varying percentages of Non-
Principal Collections and Principal Collections
collected during each calendar month (each, a
"Collection Period"). Non-Principal Collections,
Principal Collections and Defaulted Receivables
for any Collection Period will be allocated to the
Certificates as described below and as more fully
described under "Description of the Certificates--
Allocation Percentages." Non-Principal
Collections, Principal Collections and Defaulted
Receivables not allocated to the Certificates will
be allocated to other Series of investor
certificates, the Variable Funding Certificate or
the BCRC Certificate.
Non-Principal Collections and Defaulted Receivables
at all times and Principal Collections during the
Revolving Period will be allocated to the
Certificates based on the Floating Allocation
Percentage applicable to the related Collection
Period. Subject to the fifth succeeding paragraph
below, the Floating Allocation Percentage for any
Collection Period is the percentage (which shall
never exceed 100%) obtained by dividing (x) prior
to and including the Series 1994-1 Final Payment
Date, the Invested Amount on the last day of the
immediately preceding Collection Period by the
aggregate principal balances of the Receivables
that are Eligible Receivables (the "Pool Balance")
on such last day of such immediately preceding
Collection Period and (y) after the Series 1994-1
Final Payment Date, the Invested Amount as of each
day in such Collection Period by the Pool Balance
as of each such day; provided, however, that with
respect to the Collection Period in which the
Certificates are issued, the Floating Allocation
Percentage shall mean the percentage equivalent of
a fraction the numerator of which is the Invested
Amount and the denominator of which is the Pool
Balance on the Series Cut-Off Date, giving pro
forma effect as of the Series Cut-Off Date to the
issuance of the Certificates; provided, further,
that for purposes of allocating Principal
Collections, the Invested Amount used in
determining the Floating Allocation Percentage
shall be reduced by the Pre-Allocated Invested
Amount.
During the Revolving Period, subject to certain
limitations relating to deposits into the Excess
Funding Account, Principal Collections allocable
to the Certificates will be allocated to the BCRC
9
<PAGE>
Certificate and to any other outstanding Series
which is in an amortization, early amortization or
accumulation period in exchange for the allocation
to the Certificates of an equal interest in the
Receivables that are new or that would otherwise
be allocable to other outstanding Series of
investor certificates, the Variable Funding
Certificate or the BCRC Certificate. See
"Description of the Certificates--Allocation
Percentages" "--Allocation of Collections;
Deposits in Collection Account; Limited
Subordination of the Retained Interest" "--
Distributions from the Collection Account; Reserve
Fund."
During the Amortization Period and any Initial
Amortization Period or Early Amortization Period,
Principal Collections generally will be allocated
to the Certificates based on the Principal
Allocation Percentage. Subject to the third
succeeding paragraph, the Principal Allocation
Percentage for a Collection Period during the
Amortization Period and any Initial Amortization
Period or Early Amortization Period is the
percentage obtained by dividing the Invested
Amount on the last day of the Revolving Period
less the Pre-Allocated Invested Amount by the Pool
Balance provided that the calculation of the Pool
Balance will be made (x) prior to and including
the Series 1994-1 Final Payment Date, as of the
last day of the immediately preceding Collection
Period and (y) from and after the Series 1994-1
Final Payment Date as of each Deposit Date in such
Collection Period. During the Amortization Period,
distributions of principal on the Class A
Certificates will be limited to the Class A
Controlled Distribution Amount and Available
Investor Principal Collections not used to make
principal distributions on the Class A
Certificates will be paid to the holder of the
BCRC Certificate, deposited in the Excess Funding
Account or applied as Excess Principal Collections
to other Series. During an Initial Amortization
Period or Early Amortization Period, distributions
of principal on the Class A Certificates will not
be limited by the Class A Controlled Distribution
Amount. No distributions of principal on the Class
B Certificates will be made until the principal
amount of the Class A Certificates has been repaid
in full. See "Description of the Certificates--
Allocation Percentages--Principal Collections for
all Series" "--Distributions from the Collection
Account; Reserve Fund--Principal Collections."
The "Pre-Allocated Invested Amount" means, as of
the Closing Date, $251,000,000 and thereafter will
be increased by the aggregate amount of principal
payments made on the Series 1994-1 Certificates
since the Closing Date until the Series 1994-1
Certificates, which are currently in an
amortization period, are paid in full, which is
expected to be the April 1997 Distribution Date,
and after the date on which the Series 1994-1
Certificates are paid in full, the Pre-Allocated
Invested Amount will be zero. On the Closing Date,
the outstanding principal balance of the Series
1994-1 Certificates will be $149,000,000. See
"Description of the Certificates--Allocation
Percentages."
10
<PAGE>
The interest in the Trust equal to the excess of
the Pool Balance over the Required Pool Balance
(such excess, the "Variable Funding Amount") will
be represented by the Variable Funding
Certificate. During the Revolving Period, the
Variable Funding Amount generally will fluctuate
and could be eliminated as the Pool Balance
fluctuates relative to the Required Pool Balance.
However, upon the occurrence of a Liquidation
Event, the Variable Funding Percentage will be
fixed relative to the interests represented by the
Certificates and any other outstanding Series for
purposes of further allocations of Principal
Collections from the Pool, and the relative
interest of the Variable Funding Certificate in
further allocations of Non-Principal Collections
will not be less than the relative interest
thereof as of the Liquidation Event. See
"Description of the Certificates--Retained
Interest and Variable Funding Certificate" and "--
Allocation of Collections; Deposits in Collection
Account; Limited Subordination of the Retained
Interest."
If, for any Distribution Date, for the purpose of
allocating either Principal Collections or Non-
Principal Collections among the Series and the
Variable Funding Certificate, the sum of the
applicable allocation percentages for each Series
and the Variable Funding Percentage for the
applicable Collection Period exceeds 100%, then,
for such Distribution Date, the collections will
be allocated among the Series and the Variable
Funding Certificate pro rata on the basis of the
respective allocation percentages then in effect
for each Series and for the Variable Funding
Certificate after the pro rata reduction of such
percentages so that the sum thereof equals 100%.
See "Description of the Certificates--Allocation
Percentages."
INTEREST.................. Interest on the respective principal balance of
each class of Certificates will accrue at the
applicable Certificate Rate and will be payable
monthly to Certificateholders on each Distribution
Date, commencing February 18, 1997. Interest will
accrue from and including the preceding
Distribution Date (or, in the case of the first
Distribution Date, from and including the Closing
Date) to but excluding such Distribution Date
(each, an "Interest Period") and will be
calculated on the basis of the actual number of
days elapsed during the related Interest Period
and a 360-day year. Interest due but not paid on
any Distribution Date will be due on the next
Distribution Date together with, to the extent
lawfully payable, interest on such amount at the
applicable Certificate Rate. The Class A
Certificate Rate will equal the lesser of (i) the
sum of (A) LIBOR (as defined in "Description of
the Certificates--Interest") and (B) % and (ii)
the Net Receivables Rate. The Class B Certificate
Rate will equal the lesser of (i) the sum of (A)
LIBOR and (B) % and (ii) the Net Receivables
Rate. The "Net Receivables Rate" for any
Adjustment Date will equal the weighted average of
the interest rates borne by the Receivables during
the preceding Collection Period less, if BCI is
the Servicer, 2% or, if BCI is not the Servicer,
3%.
If the Class A Certificate Rate or the Class B
Certificate Rate for any Distribution Date is
based on the Net Receivables Rate, the Class A
Carry-Over Amount or Class B Carry-Over Amount, as
applicable,
11
<PAGE>
will be an amount equal to the excess of (a)
interest on the Class A Certificates or the Class
B Certificates, as applicable, for such
Distribution Date calculated on the basis of the
applicable LIBOR formula set forth above over (b)
interest for such Distribution Date on the Class A
Certificates or the Class B Certificates, as
applicable, calculated on the basis of the Net
Receivables Rate. On subsequent Distribution
Dates, after distribution of the required interest
payments (as described herein) on the Class A and
Class B Certificates, to the extent the Investor
Non-Principal Collections and Investment Proceeds
are sufficient, the Class A Certificateholders
will be paid the Class A Carry-Over Amount and
then the Class B Certificateholders will be paid
the Class B Carry-Over Amount. The ratings of the
Class A Certificates do not address the likelihood
of the payment of any Class A Carry-Over Amount.
The ratings of the Class B Certificates do not
address the likelihood of the payment of any Class
B Carry-Over Amount.
Interest payments on the Certificates will be
derived solely from (i) Investor Non-Principal
Collections for the related Collection Period,
(ii) any amount on deposit in the Reserve Fund,
(iii) Investment Proceeds, if any, and, (iv) under
certain circumstances, Series 1997-1 Available
Retained Collections to the extent of the Required
Subordination Draw Amount. Such amounts available
to make interest payments on the Certificates will
be distributed, first, to the Class A Certificates
and, second, to the Class B Certificates, in each
case up to the accrued and unpaid interest
thereon. See "Description of the Certificates--
Interest."
PRINCIPAL PAYMENTS........ Beginning not later than the November 2001
Distribution Date, Available Investor Principal
Collections will be used to make principal
distributions on the Certificates. Such principal
distributions will be applied first to the Class A
Certificates and are expected to be made in six
installments each equal to one-sixth of the
principal balance of the Class A Certificates as
of the October 2001 Distribution Date (the "Class
A Controlled Amortization Amount"). Such principal
payments will be made on each Distribution Date
with respect to the Amortization Period (each, a
"Class A Amortization Date") commencing on the
November 2001 Distribution Date until the
principal balance of the Class A Certificates has
been reduced to zero. The final distribution of
principal on the Class A Certificates is expected
to occur on the April 2002 Distribution Date (the
"Class A Expected Final Payment Date"). A single
principal payment in respect of the Class B
Certificates, in an amount equal to the principal
balance thereof, is expected to be made on the
April 2002 Distribution Date (the "Class B
Expected Payment Date"); provided, however, that
no principal payments will be made with respect to
the Class B Certificates during the Amortization
Period until the principal balance of the Class A
Certificates has been reduced to zero.
Principal with respect to the Class A Certificates
and the Class B Certificates will be distributed
earlier than the dates described in the preceding
paragraph if the Servicer elects not to extend the
Initial
12
<PAGE>
Principal Payment Date. The first "Initial
Principal Payment Date" will be the February 2000
Distribution Date; provided, however, principal
will be paid commencing on such date only if BCI
elects not to extend the Initial Principal Payment
Date. The Initial Principal Payment Date will
successively and automatically be extended from
one Distribution Date to the next (except that the
Initial Principal Payment Date may not be later
than the Class A Expected Final Payment Date)
unless BCI, at any time, elects not to extend the
Initial Principal Payment Date. If BCI elects not
to extend the Initial Principal Payment Date, then
the Revolving Period or the Amortization Period,
as applicable, will end and principal will be paid
to the Class A Certificateholders commencing on
the then-effective Initial Principal Payment Date
and continue on each Distribution Date thereafter
until the earlier of the date on which the Class A
Certificates have been paid in full or the Series
1997-1 Termination Date, and at such time as the
Class A Certificates have been paid in full,
principal will be paid to the Class B
Certificateholders on each Distribution Date until
the earlier of the date on which the Class B
Certificates have been paid in full or the Series
1997-1 Termination Date. The period during which
principal is distributed to the Class A
Certificateholders and the Class B
Certificateholders as a result of BCI's election
not to extend the Initial Principal Payment Date
is called the "Initial Amortization Period."
Principal may also be paid earlier than expected if
an Early Amortization Event occurs, or later under
certain circumstances described herein. See "Risk
Factors--Payments." The final principal
distribution with respect to the Certificates will
be made not later than the April 2004 Distribution
Date (the "Series 1997-1 Termination Date"). See
"Description of the Certificates--Distributions
from the Collection Account; Reserve Fund." If on
any Distribution Date the Available Subordinated
Amount is zero, Investor Charge-Offs for such
Distribution Date will first be allocated to the
Class B Certificates until the principal balance
thereof is reduced to zero, and thereafter to the
Class A Certificates. See "Description of the
Certificates--Investor Charge-Offs."
EXCESS FUNDING ACCOUNT.... During the Revolving Period and the Amortization
Period, Principal Collections and certain other
amounts allocable to the Certificates (on a
Deposit Date during the Amortization Period, after
an amount equal to Monthly Principal for the
related Distribution Date has been deposited in
the Collection Account) will be required to be
deposited in an account held by an Eligible
Institution for the benefit of the
Certificateholders (the "Excess Funding Account")
if the Pool Balance is less than the Required Pool
Balance on the dates described herein. The amount
to be deposited in the Excess Funding Account on
the required dates will be equal to the Excess
Funded Amount minus the amount then held in the
Excess Funding Account. The "Excess Funded Amount"
means an amount equal to the product of (a) the
excess, if any, of (i) the Required Pool Balance
13
<PAGE>
over (ii) the Pool Balance and (b) a fraction the
numerator of which is the Series 1997-1 Required
Balance and the denominator of which is the
aggregate of the required balances (including the
Series 1997-1 Required Balance) for all Series
providing for excess funding accounts or similar
arrangements.
Except as provided in the next sentence, funds on
deposit in the Excess Funding Account will be
withdrawn and paid (or made available) to the
holder of the BCRC Certificate or allocated to one
or more Series which are in amortization, early
amortization or accumulation periods if the excess
of subclause (i) over subclause (ii) referred to
in clause (a) of the preceding paragraph no longer
exists, which generally would occur as a result of
the addition of Receivables to the Trust. Upon the
commencement of the Initial Amortization Period or
the Early Amortization Period, funds on deposit in
the Excess Funding Account will be deposited in
the Collection Account for distribution as
principal to the Certificateholders as described
herein. In addition, no funds will be deposited in
the Excess Funding Account during any Initial
Amortization Period or Early Amortization Period.
See "Description of Certificates--Excess Funding
Account."
REVOLVING PERIOD.......... During the Revolving Period, Principal Collections
allocable to the Certificates generally will be
paid or made available to the holder of the BCRC
Certificate, deposited to the Excess Funding
Account or allocated to other outstanding Series
(in effect, in exchange for the allocation to the
Certificates of an equal interest in the
Receivables that are new or that would otherwise
be allocated to another outstanding Series or the
BCRC Certificate in order to maintain the sum of
the Invested Amount and the amount on deposit in
the Excess Funding Account at a constant level).
The "Revolving Period" will be the period
beginning on the Series Cut-Off Date and ending on
the earliest of (x) September 30, 2001, (y) the
date the Trustee mails notice to the
Certificateholders that BCI has elected not to
extend the Initial Principal Payment Date, and (z)
the business day immediately preceding the day on
which an Early Amortization Event occurs. See
"Description of the Certificates--Early
Amortization Events" for a discussion of certain
events which might lead to the early termination
of the Revolving Period and, in certain limited
circumstances, the recommencement of the Revolving
Period.
AMORTIZATION PERIOD,
INITIAL AMORTIZATION
PERIOD OR EARLY
AMORTIZATION PERIOD....... The "Amortization Period" is scheduled to commence
on October 1, 2001 and will continue until the
first to occur of (i) the payment in full to the
Certificateholders of the principal balance of the
Certificates, (ii) the commencement of an Early
Amortization Period or an Initial Amortization
Period and (iii) the Series 1997-1 Termination
Date. If an Early Amortization Event occurs prior
to October 1, 2001, the Revolving Period will
thereupon end and an "Early Amortization Period"
will commence. See "Description of
14
<PAGE>
the Certificates--Early Amortization Events."
Unless the Revolving Period recommences as
described in the third following paragraph, an
Early Amortization Period will end on the earlier
of the payment in full to the Certificateholders
of the Invested Amount and the Series 1997-1
Termination Date. If BCI elects not to extend the
Initial Principal Payment Date and the Initial
Principal Payment Date occurs during the Revolving
Period or the Amortization Period, the Revolving
Period or Amortization Period, as applicable, will
end and the "Initial Amortization Period" will
begin.
During the Amortization Period, Principal
Collections and certain other amounts allocable to
the Certificates in an amount equal to the Monthly
Principal for the related Distribution Date will
be deposited into the Collection Account and any
balance will be deposited in the Excess Funding
Account (if any deposit thereto is then required)
or allocated to the holder of the BCRC Certificate
or the holders of any other outstanding Series as
described above. Such Principal Collections and
other amounts attributable to principal deposited
into the Collection Account will be distributed
first to the Class A Certificateholders on each
Class A Amortization Date, in an amount up to the
Class A Controlled Distribution Amount, until the
principal balance of the Class A Certificates has
been reduced to zero, and then to the Class B
Certificateholders commencing on the Class B
Expected Payment Date or, if later, the
Distribution Date on which the principal balance
of the Class A Certificates has been reduced to
zero, in an amount up to the principal balance of
the Class B Certificates.
During an Initial Amortization Period or Early
Amortization Period, Principal Collections
allocable to the Certificates and certain other
amounts allocable to the Certificates will no
longer be deposited in the Excess Funding Account
or paid to the holder of the BCRC Certificate or
the holders of any other outstanding Series as
described above. Instead, such Principal
Collections and other amounts attributable to
principal, will be distributed monthly first to
the Class A Certificateholders until the principal
balance of the Class A Certificates is reduced to
zero and then to the Class B Certificateholders
until the principal balance of the Class B
Certificates is reduced to zero, which
distributions shall be made on each Distribution
Date beginning with the Distribution Date
following the Collection Period in which an Early
Amortization Period commences or, if applicable,
beginning on the Initial Principal Payment Date.
See "Description of the Certificates--Early
Amortization Events" for a description of events
that might result in the commencement of an Early
Amortization Period. See "Description of the
Certificates--Extension of Initial Principal
Payment Date" for a description of when an Initial
Amortization Period may occur. In addition, on the
first Distribution Date following the Collection
Period in which an Early Amortization Event occurs
or, if applicable, beginning on the Initial
Principal
15
<PAGE>
Payment Date, any amounts on deposit in the Excess
Funding Account will be distributed first to the
Class A Certificateholders up to the outstanding
principal balance of the Class A Certificates with
any remainder to be distributed to the Class B
Certificateholders up to the outstanding principal
balance of the Class B Certificates. See
"Description of the Certificates--Distributions
from the Collection Account; Reserve Fund."
BCRC is required to add Receivables to the Trust
under certain circumstances described under
"Description of the Certificates--Addition of
Accounts." The failure of BCRC to add Receivables
when required will result in the occurrence of an
Early Amortization Event. However, if no other
Early Amortization Event has occurred, the Early
Amortization Period resulting from such failure
will terminate and the Revolving Period will
recommence when BCRC is no longer required to add
Receivables to the Trust, so long as the scheduled
termination date of the Revolving Period has not
occurred. See "Description of the Certificates--
Early Amortization Events."
REALLOCATION OF EXCESS
PRINCIPAL COLLECTIONS.... To the extent that Principal Collections and other
amounts that are allocated to the
Certificateholders constitute Excess Principal
Collections, they may be applied to cover
principal distributions to
or for the benefit of certificateholders of other
Series or Enhancement Providers with respect to
other Series. Any such reallocation will not
result in a reduction in the Invested Amount. In
addition, Principal Collections (and certain other
amounts) otherwise allocable to other Series
during the Amortization Period or any Initial
Amortization Period or Early Amortization Period,
to the extent such collections constitute Excess
Principal Collections with respect to such other
Series, may be applied as principal distributions
to or for the benefit of the Certificateholders.
See "Description of the Certificates--Allocation
Percentages--Principal Collections for all
Series."
SUBORDINATION OF THE
RETAINED INTEREST AND
RESERVE FUND........ A portion of the Retained Interest will be
allocated to cover amounts payable with respect to
the Certificates and the Monthly Servicing Fee as
described below. The interest in the Trust
allocated to the Variable Funding Certificate will
rank pari passu with the Certificates and all
other Series and the BCRC Certificate. See
"Description of the Certificates--Retained
Interest and Variable Funding Certificate" herein.
If the Non-Principal Collections, Investment
Proceeds, amounts in the Reserve Fund and certain
other amounts allocable to the Certificates for
any Collection Period are not sufficient to cover
(i) the interest payable on the Certificates on
the next Distribution Date (plus any overdue
interest and interest thereon), (ii) the Net
Servicing Fee for such Distribution Date, (iii)
any Investor Default Amount for such Distribution
Date and (iv) the Series 1997-1 Investor
Allocation Percentage of any Adjustment Payment
required to be deposited in the Collection
Account, a portion of the Retained Interest will
be applied to make up such deficiency. The amount
of the Retained Interest subject to such
16
<PAGE>
subordination is the "Available Subordinated
Amount." It is expected that the Available
Subordinated Amount for the first Distribution
Date will be no less than $24,859,127. The
Available Subordinated Amount for subsequent
Distribution Dates will be determined pursuant to
the calculation described under "Description of
the Certificates--Allocation of Collections;
Deposits in Collection Account; Limited
Subordination of the Retained Interest." The
Available Subordinated Amount will fluctuate based
on, among other things, the increase and decrease,
if any, in the amount on deposit in the Excess
Funding Account and in the Incremental
Subordinated Amount, and will be reduced by the
excess of (x) the sum of (A) the portion of the
Defaulted Amount allocated to the Available
Subordinated Amount for the preceding Collection
Period, (B) the Required Subordination Draw Amount
for the preceding Distribution Date and (C) the
amount of Series 1997-1 Available Retained
Collections deposited in the Reserve Fund to
reimburse any withdrawal from the Reserve Fund
applied to cover any portion of the Investor
Default Amount on the preceding Distribution Date
over (y) the amount, if any, of Excess Servicing
for the preceding Distribution Date allocated and
available to be paid to the holder of the BCRC
Certificate as described under "Description of the
Certificates--Distributions from the Collection
Account; Reserve Fund--Excess Servicing." The
holder of the BCRC Certificate may, but is not
obligated to, increase at any time the Available
Subordinated Amount, but the aggregate amount of
such increases may not exceed an amount equal to
1% of the Initial Principal Amount of the
Certificates. Any such increase may have the
effect of avoiding an Early Amortization Event.
See "Description of the Certificates--Allocation
of Collections; Deposits in Collection Account;
Limited Subordination of the Retained Interest."
An Eligible Deposit Account will be established and
maintained in the name of the Trustee for the
benefit of the Certificateholders (the "Reserve
Fund"). On the Closing Date, BCRC will deposit in
the Reserve Fund an amount equal to $2,135,625.
Any amounts on deposit in the Reserve Fund will be
withdrawn to make payments of interest on the
Certificates and for certain other purposes, and
funds withdrawn from the Reserve Fund may be
replenished, in the circumstances described under
"Description of the Certificates--Distributions
from the Collection Account; Reserve Fund." A
withdrawal from the Reserve Fund will constitute
an Early Amortization Event in the circumstances
described under "Description of the Certificates--
Early Amortization Events."
SERVICING................. The Servicer is responsible for servicing, managing
and making collections on the Domestic Inventory
Receivables and will, except as provided below,
until the required amounts described herein have
been deposited for such Collection Period, make
deposits from such collections (as well as
collections and remittances with respect to Asset-
Based Receivables to the extent that Asset-Based
Receivables are then included in the Pool) in the
Collection Account within two business days
following BCI's receipt thereof. Generally, the
17
<PAGE>
Servicer is not required to deposit amounts into
the Collection Account in excess of the amount of
such collections required to be distributed with
respect to the Certificates for the related
Collection Period. See "Description of the
Certificates--Collection and Other Servicing
Procedures." In certain circumstances, the
Servicer will be permitted to use for its own
benefit and not segregate collections on the
Receivables received by it during each Collection
Period until no later than the business day prior
to the related Distribution Date. See "Description
of the Certificates--Allocation of Collections;
Deposits in Collection Account; Limited
Subordination of Retained Interest." The
Receivables may be subserviced by affiliates of
BCI on behalf of BCI as Servicer. BCI is permitted
to delegate all or a portion of its duties as
Servicer to any third parties, but any such
delegation will not relieve the Servicer of its
obligations under the Pooling and Servicing
Agreement.
The Servicer will calculate the amounts to be
allocated with respect to each Collection Period
to the holders of the Certificates, the investor
certificates of other outstanding Series, the
Variable Funding Certificate and the BCRC
Certificate as described herein. See "Description
of the Certificates--Allocation of Collections;
Deposits in Collection Account; Limited
Subordination of the Retained Interest" and "Risk
Factors--Certain Legal Aspects." In certain
limited circumstances BCI may resign or be removed
as Servicer, in which event either the Trustee,
or, so long as it meets certain eligibility
standards set forth in the Pooling and Servicing
Agreement, a third-party servicer may be appointed
as successor servicer. See "Description of the
Certificates--Certain Matters Regarding the
Servicer" and "--Servicer Default." The Servicer
will receive a monthly servicing fee and certain
other amounts as described herein as servicing
compensation from the Trust. See "Description of
the Certificates--Servicing Compensation and
Payment of Expenses."
MANDATORY REASSIGNMENT
AND TRANSFER OF CERTAIN
RECEIVABLES.............. BCI makes certain representations and warranties in
the Receivables Purchase Agreement with respect to
the Receivables in its capacity as seller or
contributor, which representations and warranties
also are made by BCRC to the Trustee in the
Pooling and Servicing Agreement. In addition, BCI
makes certain representations and warranties in
the Pooling and Servicing Agreement in its
capacity as Servicer. If BCI or BCRC breaches
certain of its representations and warranties with
respect to any Receivables and such breach remains
uncured for a specified period and has a
materially adverse effect on the interest of the
Certificateholders and the investor
certificateholders of other outstanding Series or
the Variable Funding Interest in such Receivables,
such Receivables will, subject to certain
conditions specified herein, be reassigned to BCRC
or BCI, as applicable, unless a Liquidation Event
has occurred. See "Description of the
Certificates--Representations and Warranties" and
"--Removal of Accounts and Assignment of
Receivables" and
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"Description of the Receivables Purchase
Agreement-- Representations and Warranties." If
BCI, as Servicer, fails to comply in all material
respects with certain covenants and warranties
with respect to any Receivables and such
noncompliance is not cured within a specified
period after BCI becomes aware or receives notice
thereof from the Trustee and such noncompliance
has a materially adverse effect on the interest of
the Certificateholders and the investor
certificateholders of other outstanding Series or
the Variable Funding Interest in such Receivables,
all Receivables affected will be purchased by BCI,
unless a Liquidation Event has occurred. See
"Description of the Certificates--Representations
and Warranties" and "--Removal of Accounts and
Assignment of Receivables" and "Description of the
Receivables Purchase Agreement-- Representations
and Warranties." In the event of a transfer of
servicing obligations to a successor Servicer,
such successor Servicer, rather than BCI, would be
responsible for any failure to comply with the
Servicer's covenants and warranties arising
thereafter. See "Description of the Certificates--
Servicer Covenants."
AMENDMENTS TO THE
AGREEMENT................. On or prior to the Closing Date, BCI, BCRC and the
Trustee will enter into Amendment Number 1 to the
Pooling and Servicing Agreement and BCI and BCRC
will enter into Amendment Number 1 to the
Receivables Purchase Agreement. Some of the
amendments contained in such documents will become
effective upon the execution of such documents and
some will become effective only after the date on
which the Series 1994-1 Certificates have been
paid in full (the "Series 1994-1 Final Payment
Date"). The terms of the Pooling and Servicing
Agreement and of the Receivables Purchase
Agreement, as so amended, are described in this
Prospectus. Those provisions which will become
effective only following the Series 1994-1 Final
Payment Date are so noted in this Prospectus. Such
delayed amendments (the "Delayed Amendments") are
more fully described throughout this Prospectus
and are summarized under the caption "Amendments
to Pooling and Servicing Agreement and Receivables
Purchase Agreement." Such Delayed Amendments
include, but are not limited to, (i) amendments to
the definitions of Eligible Accounts, Eligible
Receivables, Eligible Obligor and related terms,
(ii) amendments relating to the frequency of
additions and tests for adding Accounts to the
Trust, (iii) amendments to provide the terms under
which Asset-Based Receivables may be added to the
Trust and to make other revisions to accommodate
Asset-Based Receivables if included in the Trust,
(iv) amendments which allow certain calculations,
allocations and withdrawals to be made on a daily
basis, and (v) amendments which permit the
assignment of and the granting of participation
interests in the Receivables. By purchase and
acceptance of the Certificates, the holders of the
Certificates will accept the terms of the
documents as amended, including the Delayed
Amendments and the current amendments to the
Pooling and Servicing Agreeement and the
Receivables Purchase Agreement.
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TAX STATUS................ In the opinion of special tax counsel for the
Depositor and the Trust, the Certificates will be
characterized as debt for federal income tax
purposes. Each Certificateholder, by the
acceptance of a Certificate, will agree to treat
the Certificates as debt for federal, state and
local income tax purposes. See "Certain Federal
Income Tax Consequences."
EMPLOYEE BENEFIT PLAN
CONSIDERATIONS........... An employee benefit plan subject to the
requirements of the fiduciary responsibility
provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or the
provisions of Section 4975 of the Code shall not
be permitted to purchase the Class B Certificates.
Any such plan contemplating the purchase of Class
A Certificates should consult with its counsel
before making a purchase and the fiduciary and
such legal advisors should consider whether the
Class A Certificates will satisfy all of the
requirements of the "publicly offered securities"
exemption described herein or the possible
application of other ERISA prohibited transaction
exemptions described herein. See "Employee Benefit
Plan Considerations."
CERTIFICATE RATINGS....... It is a condition to the issuance of the
Certificates that the Class A Certificates be
rated "AAA" (or the equivalent) and that the Class
B Certificates be rated at least "A" (or the
equivalent) by at least one nationally recognized
rating agency. The ratings of the Certificates
address the likelihood of the ultimate payment of
principal and timely payment of interest on the
Certificates. However, the ratings of the
Certificates do not address, in the case of the
Class A Certificates, the likelihood of payment of
any Class A Carry-Over Amount, the likelihood that
any Class A Controlled Distribution Amount will be
paid on any Class A Amortization Date or the
likelihood of payment in full of the outstanding
principal balance of the Class A Certificates on
the Class A Expected Final Payment Date or, in the
case of the Class B Certificates, the likelihood
of payment of any Class B Carry-Over Amount, the
likelihood of payment in full of the outstanding
principal balance of the Class B Certificates on
the Class B Expected Payment Date. A rating is
based primarily on the credit underlying the
Receivables and the level of subordination of the
Retained Interest and any amounts in the Reserve
Fund and, in the case of the Class A Certificates,
the subordination of interest and principal
distributions of the Class B Certificates to the
prior distribution of interest and principal of
the Class A Certificates. A security rating is not
a recommendation to buy, sell or hold securities
and is subject to revision or withdrawal in the
future by the assigning rating agency. See "Risk
Factors--Ratings of the Certificates."
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RISK FACTORS
Limited Liquidity. There is currently no market for the Certificates. The
Underwriters currently intend to make a market in the Certificates, but the
Underwriters are under no obligation to do so. There can be no assurance that
a secondary market will develop or, if a secondary market does develop, that
it will provide the Certificateholders with liquidity of investment or that it
will continue for the life of the Certificates.
Certain Legal Aspects. There are certain limited circumstances under the
Uniform Commercial Code (the "UCC") and applicable federal law in which prior
or subsequent transferees of Receivables could have an interest in such
Receivables with priority over the Trust's interest. See "Certain Legal
Aspects of the Receivables--Transfer of Receivables and Certificates." Under
the Receivables Purchase Agreement BCI warrants to BCRC, and under the Pooling
and Servicing Agreement BCRC warrants to the Trust, that the Receivables have
been or will be transferred free and clear of the lien of any third party,
except for tax and other statutory liens (including liens in favor of the
Pension Benefit Guaranty Corporation) and, after the Series 1994-1 Final
Payment Date, any Participation Interest. Each of BCI and BCRC also covenants
that it will not sell, pledge, assign, transfer or grant any lien on any
Receivable other than pursuant to the Receivables Purchase Agreement and the
Pooling and Servicing Agreement, respectively, except for tax and other
statutory liens (including liens in favor of the Pension Benefit Guaranty
Corporation); provided that after the Series 1994-1 Final Payment Date, BCRC
and BCI may assign or participate out a portion of the Receivables. See "The
Floorplan and Asset-Based Financing Business--Participation Arrangements" and
"Description of the Certificates--Removal of Accounts and Assignment of
Receivables." BCRC also covenants that it will not sell, pledge, assign,
transfer or grant any lien on the Retained Interest or the Variable Funding
Interest other than pursuant to the Pooling and Servicing Agreement. The
Variable Funding Certificate has been pledged by BCRC to BCI. See "Description
of the Certificates--Retained Interest and Variable Funding Certificate."
BCI warrants in the Receivables Purchase Agreement that the transfer of the
Receivables by it to BCRC is a valid sale of the Receivables. In addition, BCI
and BCRC have agreed to treat the transactions described herein as a sale of
the Receivables to BCRC, and BCI has agreed take all actions that are required
under Vermont law to perfect BCRC's ownership interest in the Receivables. See
"Certain Legal Aspects of the Receivables--Transfer of Receivables and
Certificates." Notwithstanding the foregoing, if BCI were to become a debtor
in a bankruptcy case and if a creditor or bankruptcy trustee of such debtor or
such debtor itself were to take the position that the transfer of Receivables
to BCRC should be recharacterized as a pledge of such Receivables to secure a
borrowing of such debtor, then delays in payments of collections of
Receivables to BCRC could occur or (should the court rule in favor of any such
trustee, debtor or creditor) reductions in the amount of such payments could
result. If the transfer of Receivables to BCRC is recharacterized as a pledge,
a tax or government lien or other non-consensual lien on the property of BCI
arising before any Receivables come into existence may have priority over
BCRC's interest in such Receivables (and, therefore, the Trust's interest in
such Receivables). See "Certain Legal Aspects of the Receivables--Certain
Matters Relating to Bankruptcy." If the transactions contemplated herein are
treated as a sale, the Receivables would not generally be part of BCI's
bankruptcy estate and would not be available to BCI's creditors. BCRC's rights
under the Receivables Purchase Agreement (other than repurchase agreements and
other agreements with manufacturers, importers or distributors) have been
assigned to the Trust. In a 1993 case, however, the U.S. Court of Appeals for
the Tenth Circuit concluded that accounts receivable sold by a debtor prior to
a filing for bankruptcy remain property of the debtor's bankruptcy estate. If
the conclusions in that case were applied in a BCI bankruptcy, the Receivables
would be subject to claims of certain creditors and would be subject to the
potential delays and reductions in payment to BCRC and the Certificateholders.
In addition, if BCI were to become a debtor in a bankruptcy case and if a
creditor or bankruptcy trustee of BCI or BCI itself were to request a
bankruptcy court to order that BCI be substantively consolidated with BCRC,
delays in and reductions in the amount of distributions on the Certificates
could occur. BCRC has been structured such that (i) the voluntary or
involuntary application with respect to BCRC for relief under Title 11 of the
United States Code (the "Bankruptcy Code") or similar applicable state laws
and (ii) the substantive consolidation of BCRC and BCI are unlikely. BCRC is a
separate, limited purpose subsidiary, the certificate of incorporation of
which contains limitations on the nature of BCRC's business and restrictions
on the ability of BCRC to
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<PAGE>
commence voluntary cases or proceedings under such laws without the prior
unanimous vote of all its directors. Further, BCRC does not intend to file,
and BCI has agreed that it will not file, a voluntary petition for relief
under the Bankruptcy Code or any similar applicable state laws with respect to
BCRC.
BCRC represents in the Pooling and Servicing Agreement that the transfer of
the Receivables by it to the Trust is a valid transfer and assignment of such
Receivables to the Trust. See "Description of the Certificates--
Representations and Warranties." BCRC has agreed to take all actions required
under Vermont law to perfect the Trust's ownership interest in the
Receivables. BCRC warrants that if the transfer by it to the Trust is deemed
to be a grant to the Trust of a security interest in such Receivables, then
the Trustee will have, subject to certain exceptions, a first priority
perfected security interest therein at the time of such transfer and in the
proceeds thereof. Nevertheless, a tax, government or other lien on property of
BCRC arising before Receivables come into existence may have priority over the
Trust's interest in such Receivables. BCRC treats and intends to continue to
treat the transfer of the Receivables to the Trust as a sale for accounting
and financial reporting purposes. If BCRC were to become a debtor in a
bankruptcy case and if a creditor or bankruptcy trustee of such debtor or such
debtor itself were to take the position that the transfer of Receivables to
the Trust should be recharacterized as a pledge of such Receivables to secure
a borrowing of such debtor, then delays in distributions on the Certificates
could occur or (should the court rule in favor of any such trustee, debtor or
creditor) reductions in such distributions could result.
In the event of a Servicer Default relating to the bankruptcy or insolvency
of the Servicer, and no Servicer Default other than such bankruptcy or
insolvency-related Servicer Default exists, the bankruptcy trustee may have
the power to prevent the Trustee from appointing a successor Servicer. If
certain events relating to the bankruptcy of BCI or BCRC were to occur, then
an Early Amortization Event would occur and, pursuant to the terms of the
Pooling and Servicing Agreement, additional Receivables would no longer be
transferred to the Trust and distributions of principal on the Class A
Certificates would not be subject to the Class A Controlled Distribution
Amount. If no Early Amortization Event other than such bankruptcy or
insolvency of BCRC exists, then the bankruptcy trustee (or BCRC as debtor in
possession) may have the power to prevent the early sale, liquidation or
disposition of the Receivables and the commencement of the Early Amortization
Period and may be able to require that new Receivables be transferred to the
Trust. In addition, the trustee, receiver or conservator for BCRC may have the
power to cause the early sale of the Receivables and the early payment of the
Certificates or to prohibit the continued transfer of Receivables to the
Trust. See "Certain Legal Aspects of the Receivables--Transfer of Receivables
and Certificates" and "--Certain Matters Relating to Bankruptcy."
Application of federal and state bankruptcy and debtor relief laws could
affect the interests of the Certificateholders in the Receivables if such laws
result in any Receivables being reduced or written off as uncollectible or
result in delays in payments due on such Receivables. See "Description of the
Certificates--Defaulted Receivables and Recoveries."
BCI represents and warrants in the Receivables Purchase Agreement, and BCRC
represents and warrants in the Pooling and Servicing Agreement, that each
Domestic Inventory Receivable originated pursuant to an inventory security
agreement or other floorplan financing agreement is at the time of creation
secured by a first priority perfected security interest in the related
Eligible Product. Generally, under applicable state laws, a security interest
in consumer, recreational and commercial goods which secure Domestic Inventory
Receivables may be perfected by the filing of UCC financing statements. BCI
takes all actions necessary under applicable state laws to perfect such
security interest in the related Eligible Products. However, at the time such
Eligible Product is sold by the Obligor, the security interest in the Eligible
Product will terminate. Therefore, with respect to Domestic Inventory
Receivables originated pursuant to an inventory security agreement or other
floorplan financing agreement, if a dealer fails to remit to BCI amounts owed
with respect to Eligible Products that have been sold, the related Domestic
Inventory Receivables will no longer be secured by those Eligible Products. If
Asset-Based Receivables are added to the Trust, the obligations represented
thereby will at the time of transfer to the Trust be secured by a first
priority perfected security interest in goods, accounts, work in process, raw
materials, component parts or other assets of the Obligor. In the event that
Asset-Based Receivables are secured
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by assets that are subsequently sold by an Obligor, the same issues discussed
above with respect to Domestic Inventory Receivables may exist with respect to
the Asset-Based Receivables.
Payments. Domestic Inventory Receivables are generally payable by dealers
either upon the sale by the dealer of the Eligible Product or, in certain
cases, in accordance with a payment schedule set forth in the related inventory
security agreement or other floorplan financing agreement that at the time of
creation perfected the security interest in the Eligible Products. The timing
of the sale of the Eligible Products by dealers is uncertain. Asset-Based
Receivables are expected to be payable as described under "The Floorplan and
Asset-Based Financing Business--Payment Terms." There is no assurance that
there will be additional Receivables created under the Accounts or that any
particular pattern of Obligor repayments will occur. The payment of principal
on the Certificates is dependent on Obligor repayments and the Certificates may
not be fully amortized on the Series 1997-1 Termination Date. See "Description
of the Certificates--Termination." In addition, a significant decline in the
amount of Receivables generated could cause an Early Amortization Event.
However, a decline in the amount of Receivables generated during the Revolving
Period would initially be absorbed by an increase in the Excess Funded Amount
and the excess funded amounts for other outstanding Series. In certain
circumstances, BCRC will be required to designate additional Eligible Accounts
relating to Receivables of the same type as those which are then in the Trust
(which on the Closing Date will be Domestic Inventory Receivables); upon
transfer of Receivables arising under such additional Eligible Accounts from
BCI to BCRC pursuant to the Receivables Purchase Agreement, BCRC will convey
the Receivables arising under such additional Eligible Accounts to the Trust.
If such additional Eligible Accounts do not exist or the Receivables arising in
such additional Eligible Accounts otherwise are not transferred by BCRC when
required, an Early Amortization Event will occur and result in the commencement
of an Early Amortization Period, although in certain circumstances the
resulting Early Amortization Period may terminate and the Revolving Period
recommence. If an insolvency event relating to BCI or BCRC were to occur, then
an Early Amortization Event would occur, additional Receivables would not be
transferred to the Trust and distributions of principal on the Class A
Certificates would not be subject to the Class A Controlled Distribution
Amount. If no Early Amortization Event other than such bankruptcy or insolvency
of BCRC exists, then the bankruptcy trustee (or BCRC as debtor in possession)
may have the power to prevent the early sale, liquidation or disposition of the
Receivables and the commencement of the Early Amortization Period and may be
able to require that new principal Receivables be transferred to the Trust. In
addition, the trustee, receiver or conservator for BCRC may have the power to
cause early sale of the Receivables and the early payment of the Certificates
or to prohibit the continued transfer of Receivables to the Trust. See
"Maturity and Principal Payment Considerations" and see also "Description of
the Certificates--Early Amortization Events" for a discussion of other events
which might lead to the occurrence of an Early Amortization Period.
Addition to Trust Assets; Additional Product Types; Limited Experience. BCRC
expects, and in some cases will be obligated, to designate Additional Accounts,
the Receivables in which will be conveyed to the Trust. Although such
Additional Accounts must be Eligible Accounts, they may include accounts with
Obligors originated by BCI (or an affiliate of BCI) or another lender under
criteria different from those which were applied to the Obligors on the
Accounts previously designated and added to the Trust. Such Additional Accounts
may also provide financing for types of products different from those included
in the Trust on the Closing Date and, if the Rating Agency Condition is
satisfied, Asset-Based Receivables may be added to Trust. Consequently, there
can be no assurance that Additional Accounts designated in the future will
relate to the same types of products or will be of the same credit quality as
previously designated Accounts or that new product types, or other forms of
security, if any, that may secure the Receivables in new Accounts will provide
security that is as favorable as that provided by the Eligible Products
securing the Receivables currently included in the Trust.
The historical experience of the Domestic Inventory Receivables portfolio is
presented under "The Floorplan and Asset-Based Financing Business" and "The
Accounts." Because BCI to date has only had limited underwriting and servicing
experience, and very limited delinquency, default and loss experience, with
respect to its Asset-Based Receivables portfolio, no historical information
with respect to the Asset-Based Receivables portfolio or the related accounts
is provided in this Prospectus. BCI expects to create a number of Additional
Accounts that will be transferred to the Trust in the future. The actual
historical experience with respect to these Additional Accounts that
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will be held by the Trust may be different from the Accounts currently held by
the Trust. There can be no assurance that the historical experience of the
portfolio of Domestic Inventory Receivables and Asset-Based Receivables
included in the Trust in the future will be similar to the Receivables
currently included in the Trust.
Social, Economic and Other Factors; Competition. Payment of the Domestic
Inventory Receivables is largely dependent upon the retail sale of the related
Eligible Products. Generation of new Domestic Inventory Receivables and of
Asset-Based Receivables is dependent upon the general level of sales of
Eligible Products or expected need for Eligible Products. The level of sales
of Eligible Products and the manufacturing and acquisition of Eligible
Products may change as the result of a variety of social and economic factors.
Economic factors include interest rates, unemployment levels, the rate of
inflation and customer perception of economic conditions generally. The use of
incentive programs (e.g., manufacturers' rebate programs) may affect sales. If
any of the manufacturers, importers, or distributors of the Eligible Products
were temporarily or permanently no longer in their respective businesses, the
rate of sales of Eligible Products generating Domestic Inventory Receivables
and Asset-Based Receivables could decrease, adversely affecting payment rates
with respect to the Domestic Inventory Receivables and Asset-Based Receivables
and the generation of new Domestic Inventory Receivables and of Asset-Based
Receivables. Moreover, if any of the manufacturers, importers or distributors
were temporarily or permanently no longer manufacturing, importing or
distributing the related Eligible Products, the loss experience with respect
to the related Domestic Inventory Receivables could be adversely affected.
Similar issues relate to the Asset-Based Receivables. In addition, BCI
competes with various other financing sources, including, without limitation,
independent finance companies, captive finance companies of manufacturers,
banks, investment companies and leasing companies, who are in the business of
providing floorplan financing arrangements to dealers.
Trust's Relationship to BCRC and BCI. Neither BCRC nor BCI or any affiliate
thereof is obligated to make any payments in respect of the Certificates or
the Receivables (other than the obligation of BCRC or BCI to purchase certain
Receivables from the Trust due to the failure to comply with certain covenants
or the breach by BCRC or BCI of certain representations and warranties, as
described below and under "Description of the Certificates--Representations
and Warranties" and "--Servicer Covenants," and other than certain affiliate
support agreements relating to certain Receivables described under "The
Floorplan and Asset-Based Financing Business--Relationship with Manufacturers,
Importers and Distributors"). However, the Trust is completely dependent upon
BCI for the generation of new Receivables. The ability of BCI to generate
Receivables is in turn dependent to a large extent on the sales of Eligible
Products. There can therefore be no assurance that BCI will continue to
generate Receivables at the same rate as in prior years. In addition, if BCI
were to cease acting as Servicer, delays in processing payments on the
Receivables and information in respect thereof could occur and result in
delays in payments to the Certificateholders.
In connection with the transfer of Receivables by BCI to BCRC and the
transfer of Receivables by BCRC to the Trust, each of BCI and BCRC makes
representations and warranties with respect to the characteristics of such
Receivables. BCI and BCRC are required to determine the accuracy of such
representations and warranties and in certain circumstances they are required
to accept reassignment of Receivables with respect to which such
representations and warranties have been breached. See "Description of the
Certificates--Representations and Warranties" and "Description of the
Receivables Purchase Agreement--Representations and Warranties." In addition,
subject to certain limitations, BCI has the ability to change the terms of the
Accounts, including the amount or the timing of charge-offs and the rate of
the finance charge, if any, as well as underwriting procedures.
Credit Enhancement. Credit enhancement of the Certificates will be provided
by the subordination of the Retained Interest to the extent of the Available
Subordinated Amount as described herein as well as from amounts on deposit in
the Reserve Fund. The amount of such credit enhancement is limited and will be
reduced from time to time as described herein. See "Description of the
Certificates--Allocation of Collections; Deposits in Collection Account;
Limited Subordination of the Retained Interest."
Subordination of Class B Certificates. The distribution of principal on the
Class B Certificates will be made subsequent to the distribution in full of
principal on the Class A Certificates. Reductions of the Invested Amount as a
result of Investor Charge-Offs will result in reductions of amounts available
to distribute principal on the Class B Certificates before any such reductions
will be incurred in respect of the Class A Certificates.
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Negative Carry; Decrease in Investor Non-Principal Collections. Funds, if
any, deposited in the Excess Funding Account will be invested in Eligible
Investments and, as a result, will likely earn a rate of return lower than the
interest rates borne by a comparable amount of principal Receivables.
Accordingly, during any period during which funds are on deposit in the Excess
Funding Account, such funds will reduce the amount of Non-Principal
Collections available to the Certificates on each business day, until BCI
generates sufficient Eligible Receivables to permit such funds to be released
from the Excess Funding Account.
Control. Under certain circumstances, the consent or approval of the holders
of a specified percentage of the aggregate unpaid principal amount of all
outstanding certificates of all outstanding Series will be required to permit
or to take certain actions, including amending the Pooling and Servicing
Agreement in certain circumstances and directing a reassignment of the entire
portfolio of the Receivables. In addition, following the occurrence of an
insolvency event with respect to BCRC or an Early Amortization Event as a
result of BCRC violating its covenant not to create any lien on any
Receivable, the holders of investor certificates evidencing more than 50% of
the aggregate unpaid principal amount of each Series or, for Series with two
or more classes, of each class will be required, together with the holder of
the Variable Funding Certificate, to direct the Trustee not to sell or
otherwise liquidate the Receivables; provided, however, that if such sale,
disposition or liquidation is being made solely on account of BCRC's violation
of its covenant not to create any lien on any Receivable, the Trustee will
effect such sale only if the net proceeds would be sufficient to pay accrued
interest and the outstanding principal balance of each Series.
Basis Risk. The Domestic Inventory Receivables generally bear interest at
the prime rate as published from time to time in the Wall Street Journal plus
a margin ranging, as of October 25, 1996, from 0% to 8.5%. It is possible that
with respect to any Interest Period, LIBOR plus the margin used to compute the
applicable Class A Certificate Rate or Class B Certificate Rate will exceed
the Net Receivables Rate. In such event, interest will accrue on the Class A
Certificates or Class B Certificates, as applicable, during such Interest
Period at a rate equal to the Net Receivables Rate. In addition, BCI may
reduce the interest rates applicable to any of the Receivables, so long as BCI
does not reasonably expect any such reduction to result in an Early
Amortization Event. Furthermore, as of October 25, 1996, approximately 0.62%
(by principal balance) of all Domestic Inventory Receivables did not bear
interest. A reduction in interest rates on any Receivables, or the inclusion
of non-interest bearing Receivables in the Pool, could have the effect of
reducing or possibly eliminating the positive spread, if any, between the Net
Receivables Rate and the Class A Certificate Rate or the Class B Certificate
Rate based upon LIBOR, with a corresponding risk of a reduction in yield to
holders of the Class A Certificates or the Class B Certificates.
BCI Liquidation Event. Upon the occurrence of a Liquidation Event, the
interest represented by the Variable Funding Certificate will be fixed
relative to the interests represented by the Certificates for purposes of
further allocations of Principal Collections and the relative interest of the
Variable Funding Certificate in further allocations of Non-Principal
Collections will not be less than the relative interest thereof as of the
Liquidation Event. If a Liquidation Event occurs, delays in distributions on
the Certificates or reductions in such distributions could result. Prior to
the Series 1994-1 Final Payment Date, the definition of "Liquidation Event"
will include certain cross default provisions relating to other obligations of
BCI. The Variable Funding Certificate has been pledged to BCI to support the
payment of the Note (as defined herein) issued to BCI by BCRC as part of the
consideration for the sale of the Receivables by BCI to BCRC. Various lenders
to BCI may view the Variable Funding Certificate as an asset of BCI. If such
lenders were to accelerate performance of BCI's obligations under certain
credit documents, a Liquidation Event could occur and the interest represented
by the Variable Funding Certificate would be fixed as discussed and with the
consequences described above in this paragraph.
Master Trust Considerations. The Trust, as a master trust, has previously
issued two Series of investor certificates and may issue additional Series of
investor certificates (which may be represented by different classes within a
Series) from time to time. A Supplement delivered in connection with the
issuance of other Series will specify certain Principal Terms applicable to
such Series. Such Principal Terms may include provisions creating different or
additional security or other credit enhancement, different classes of investor
certificates (including subordinated classes of investor certificates),
different methods of allocating collections from the Pool and any
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other amendment or supplement to the Pooling and Servicing Agreement which is
made applicable only to such Series. No Supplement, however, may change the
terms of the Certificates or the terms of the Pooling and Servicing Agreement
as applied to the Certificates. There can be no assurance, however, that
previously issued Series or the issuance of any other Series from time to time
hereafter might not have an impact on the timing or amount of payments
received by the Certificateholders. Furthermore, Excess Principal Collections
may be available for reallocation to the Certificates during any Early
Amortization Period or Initial Amortization Period from other Series that are
not in amortization, early amortization or accumulation periods, which may
shorten the maturity of the Certificates. As long as the Certificates are
outstanding, a condition to the execution of any Supplement will be that
notice be given to the Rating Agencies and the Rating Agency Condition
satisfied. The issuance of an additional Series does not require the consent
of any Certificateholders. See "Description of the Certificates--New
Issuances."
Pre-Allocated Invested Amount. The Pre-Allocated Invested Amount will not be
included in the Invested Amount for purposes of allocating Principal
Collections to the Certificates and calculating the Required Pool Balance. The
"Pre-Allocated Invested Amount" is the portion of the Invested Amount that is
used in allocating Principal Collections to Series 1994-1, which is in an
amortization period. The initial Pre-Allocated Invested Amount will be
$251,000,000, and will be increased by the aggregate amount of principal
payments made on the Series 1994-1 Certificates after the Closing Date,
provided that after the date on which the Series 1994-1 Certificates have been
paid in full, which is expected to be on the April 1997 Distribution Date, the
Pre-Allocated Invested Amount will be zero; however, there can be no assurance
of the payment in full of the Series 1994-1 Certificates by April 1997. If an
Early Amortization Event occurs with respect to the Certificates prior to the
payment in full of the Series 1994-1 Certificates, Certificateholders will
receive principal payments at a reduced rate (due to the Pre-Allocated
Invested Amount reducing the amount of Principal Collections allocated to the
Certificates) until the Series 1994-1 Certificates are paid in full. See
"Description of Certificates--Allocation Percentages."
Ratings of the Certificates. It is a condition to the issuance of the
Certificates that the Class A Certificates be rated "AAA" (or the equivalent)
and that the Class B Certificates be rated at least "A" (or the equivalent) by
at least one nationally recognized rating agency (such rating agency and each
other rating agency designated by the Depositor in the related Supplement in
respect of any outstanding Series or class, a "Rating Agency"). A rating is
based primarily on the credit underlying the Receivables and the level of
subordination of the Retained Interest and amounts on deposit in the Reserve
Fund and, in the case of the Class A Certificates, the subordination of the
distribution of principal and interest on the Class B Certificates to the
prior distribution of principal and interest of the Class A Certificates. A
rating of the Certificates addresses the likelihood of the ultimate payment of
principal and timely payment of interest on the Certificates. A Rating Agency
does not evaluate, and a rating of the Certificates does not address, in the
case of the Class A Certificates, the likelihood that any Class A Carry-Over
Amount will be paid, the likelihood that any Class A Controlled Distribution
Amount will be paid on any Class A Amortization Date or the likelihood of
payment in full of the outstanding principal balance of the Class A
Certificates on the Class A Expected Final Payment Date or, in the case of the
Class B Certificates, the likelihood that any Class B Carry-Over Amount will
be paid or the likelihood of payment of the outstanding principal balance of
the Class B Certificates on the Class B Expected Payment Date. A rating is not
a recommendation to buy, sell or hold securities, inasmuch as such rating does
not comment as to the market price or suitability for a particular investor.
There is no assurance that a rating will remain for any given period of time
or that a rating will not be lowered or withdrawn entirely by a Rating Agency
if in its judgment circumstances so warrant.
Book-Entry Registration. The Certificates will be initially represented by
two or more certificates registered in the name of Cede, the nominee for DTC,
and will not be registered in the names of the Certificateholders or their
nominees. Because of this, unless and until Definitive Certificates are
issued, beneficial owners of Certificates ("Certificate Owners") will not be
recognized by the Trustee as "Certificateholders" (as that term is used in the
Pooling and Servicing Agreement). Consequently, until such time, Certificate
Owners will only be able to exercise the rights of Certificateholders
indirectly through DTC, Cedel, Euroclear and their participating
organizations. See "Description of the Certificates--Book-Entry Registration"
and "--Definitive Certificates."
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THE DEPOSITOR AND THE TRUST
THE DEPOSITOR
Bombardier Credit Receivables Corporation (the "Depositor" or "BCRC"),
which, as of the Closing Date, will be a wholly-owned subsidiary of BCI and an
indirect wholly-owned subsidiary of Bombardier Corporation (which is a direct
wholly-owned subsidiary of Bombardier Inc.), was incorporated on November 9,
1993. The Depositor was organized for limited purposes, which include
purchasing receivables, beneficial ownership interests and participation
interests in receivables, debt obligations secured by receivables and other
forms of indebtedness and transferring such receivables, interests, debt
obligations and indebtedness to third parties and any activities incidental to
and necessary or convenient for the accomplishment of such purposes
(including, without limitation, entering into and performing its obligations
under the Pooling and Servicing Agreement and the Receivables Purchase
Agreement).
The Depositor's mailing address is P.O. Box 5544, Burlington, Vermont 05402.
The Depositor's telephone number is (802) 655-2824.
The Depositor has taken steps intended to assure that the voluntary or
involuntary application with respect to Bombardier Corporation or BCI for
relief under the Bankruptcy Code or other bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
enforcement of creditors' rights generally (collectively, "Insolvency Laws")
will not result in the substantive consolidation of the assets and liabilities
of the Depositor with those of Bombardier Corporation or BCI. These steps
include the creation of the Depositor as a separate, limited-purpose
subsidiary pursuant to a certificate of incorporation containing certain
limitations (including restrictions on the nature of the Depositor's business,
as described above, and a restriction on the Depositor's ability to commence a
voluntary case or proceeding under any Insolvency Law without the unanimous
affirmative vote of all of its directors). The Depositor's certificate of
incorporation includes a provision that requires it to have among its
directors at least two directors who qualify under the certificate of
incorporation as independent directors. However, there can be no assurance
that the activities of the Depositor would not result in a court concluding
that the assets and liabilities of the Depositor should be substantively
consolidated with those of Bombardier Corporation or BCI in a proceeding under
any Insolvency Law.
In addition, tax and certain other statutory liabilities, such as
liabilities to the Pension Benefit Guaranty Corporation relating to the
underfunding of pension plans of Bombardier Inc. or any of its subsidiaries
including Bombardier Corporation and BCI, can be asserted against the
Depositor. To the extent that any such liabilities arise after the transfer of
Receivables to the Trust, the Trust's interest in the Receivables would be
prior to the interest of the claimant with respect to any such liabilities.
However, the existence of a claim against the Depositor could permit the
claimant to subject the Depositor to an involuntary proceeding under the
Bankruptcy Code or other Insolvency Law.
THE TRUST
The Trust was formed under and is administered in accordance with the laws
of the State of New York pursuant to the Pooling and Servicing Agreement. The
Depositor conveys to the Trust, without recourse, the Receivables arising
under the Accounts. To date, the Trust has issued the Series 1994-1
Certificates and the Series 1996-1 Certificates. The property of the Trust
consists of the Receivables existing in the Accounts on the Initial Cut-Off
Date, the Receivables existing in the Additional Accounts added since the
issuance of the Series 1994-1 Certificates as set forth in Annex II hereto and
all Receivables generated in the Accounts from time to time thereafter during
the term of the Trust as well as Receivables generated in any Accounts added
to the Trust from time to time hereafter (less Receivables paid or charged-off
and excluding (i) Receivables generated in Removed Accounts or Ineligible
Accounts after the applicable Removal Commencement Date, (ii) Receivables
removed from the Trust from time to time after the Initial Cut-Off Date, and
(iii) after the Series 1994-1 Final Payment Date, Participation Interests in
the Receivables that have been transferred to third parties as described under
"The Floorplan and Asset-Based Financing Business--Participation Arrangements"
and "Description of the Certificates--Removal of Accounts and Assignment of
Receivables"), an assignment of substantially all of
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BCRC's rights and remedies under the Receivables Purchase Agreement, all funds
collected or to be collected in respect of such Receivables included as
property of the Trust, all funds on deposit in certain accounts of the Trust
(including funds on deposit in the Excess Funding Account, the Collection
Account and the Reserve Fund), the Collateral Security relating to such
Receivables included as property of the Trust, and any Enhancement issued with
respect to any other Series. See "Description of the Certificates--Addition of
Accounts." See "Description of the Receivables Purchase Agreement" for a
summary of certain terms of the Receivables Purchase Agreement.
The property of the Trust may in the future include Enhancements for the
benefit of investor certificateholders of other Series. The Certificateholders
will not have any interest in any Enhancement provided for the benefit of the
investor certificateholders of other Series.
The Trust was formed for the transactions relating to the issuance of
certificates such as the Series 1994-1 Certificates, the Series 1996-1
Certificates, the Series 1997-1 Certificates and similar transactions, as
contemplated by the Pooling and Servicing Agreement, and prior to formation
had no assets or obligations. The Trust has not engaged and will not engage in
any business activity, other than as described herein, but rather will only
acquire and hold the Receivables and the other assets of the Trust and
proceeds therefrom, issue the Certificates, other Series of investor
certificates, the BCRC Certificate and the Variable Funding Certificate, issue
additional Series and make payments thereon and related activities. As a
consequence, the Trust is not expected to have any need for, or source of,
capital resources other than the assets of the Trust.
See also "Description of the Certificates--The Trustee."
USE OF PROCEEDS
The net proceeds from the sale of the Certificates will be paid to the
Depositor, which will use such proceeds, except the portion used to fund the
Reserve Fund, to repay amounts owing to BCI under the Note or to purchase
Receivables from BCI and to provide for amortization of a portion of the
principal amount of the Series 1996-1 Certificates. BCI will use the related
proceeds to reduce commercial paper borrowings and for general corporate
purposes.
THE FLOORPLAN AND ASSET-BASED FINANCING BUSINESS
GENERAL
The following discussion includes descriptions of the Domestic Inventory
Receivables and the Asset-Based Receivables. Currently, however, the Pool
consists solely of Domestic Inventory Receivables. The Pool may, in the
future, include Asset-Based Receivables as provided herein. The descriptions
below of practices and procedures apply to current practices and procedures;
these practices and procedures may change over time.
Without limiting the foregoing, BCI expects to provide financing to
additional dealers, and directly to manufacturers and distributors. In
addition, BCI expects that the financing needs of Obligors will change over
time, whether as a result of seasonality or other changes in such Obligors'
businesses. In certain cases, after the Series 1994-1 Final Payment Date,
designated Accounts and the Receivables arising thereunder transferred to the
Trust may be acquired by BCI (or an affiliate of BCI) from another lender.
Accordingly, the types of credit arrangements designated as Accounts and the
Receivables arising thereunder that are transferred to the Trust, the products
or other assets financed by those Receivables and the security, if any,
provided in connection with such arrangements, are expected to change over
time, and the relative proportions of the various types of credit arrangements
and collateral may change over time. Consequently, there can be no assurance
that Additional Accounts designated in the future will relate to the same
types of products or will be of the same credit quality as previously
designated Accounts or that the Receivables in the new Accounts will be
supported by the same security that is currently provided for the Domestic
Inventory Receivables. The (a) designation of Additional Accounts and (b)
addition of Asset-Based Receivables (which will not be permitted until after
the Series 1994-1 Final Payment Date) are subject to satisfaction of certain
conditions described herein under "Description of the Certificates--Addition
of Accounts."
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Currently, the Receivables sold to BCRC consist solely of extensions of
credit and advances (referred to as inventory, wholesale or floorplan
financing) made by BCI (or, after the Series 1994-1 Final Payment Date, made
by an affiliate of BCI or another lender and acquired by BCI or one of its
affiliates) to dealers (as of October 25, 1996, approximately 3228 Eligible
Obligors) of consumer, recreational and commercial products ("Domestic
Inventory Receivables"). The Receivables may, after the Series 1994-1 Final
Payment Date, at the options of BCI and BCRC (but subject to certain
conditions), also consist of extensions of credit and advances by BCI (or an
affiliate) (or made by another lender and acquired by BCI or one of its
affiliates) to (i) dealers to finance such dealers' working capital needs and
(ii) manufacturers and distributors to finance such manufacturers' and
distributors' production, manufacturing and inventory of consumer,
recreational and commercial products ("Asset-Based Receivables"). BCI and BCRC
are under no obligation to make the decision that the Trust will include
Asset-Based Receivables in addition to the Domestic Inventory Receivables. No
selection procedures believed by BCI to be adverse to the holders of the
Certificates were or will be used in selecting the Receivables to be sold or
contributed to BCRC. The accounts (whether or not they would be "Eligible
Accounts") with respect to Domestic Inventory Receivables are referred to in
this section and in the historical information provided under the sections
"The Accounts" and "Maturity and Principal Payment Considerations" as the "BCI
Domestic Inventory Portfolio." The Domestic Inventory Receivables are secured
by the products financed for such dealers and occasionally by mortgages,
assignments of certificates of deposit or letters of credit. The Asset-Based
Receivables would be generally expected to be secured by finished goods
inventory, accounts receivable arising from the sale of such inventory,
certain work-in-process, raw materials and component parts, as well as other
assets of the borrower.
With respect to Domestic Inventory Receivables, BCI generally provides
dealers with inventory financing by paying to manufacturers, importers or
distributors the wholesale cost of inventory items purchased by such dealers.
These dealers are located in the United States and the Domestic Inventory
Receivables are denominated in U.S. dollars. In most instances a manufacturer,
importer or distributor may make a number of financing sources other than BCI
available to its dealers. BCI has, however, in the past entered into, and may
in the future enter into, captive financing arrangements with manufacturers,
importers or distributors whereby BCI is made the primary source of financing
for such manufacturer's, importer's or distributor's dealers. In some cases,
BCI has in the past offered (and BCI may in the future offer) attractive
financing rates in order to obtain captive financing arrangements with certain
manufacturers, importers or distributors.
Asset-Based Receivables that may be sold to the Trust would be generally
expected to arise from asset-based revolving credit facilities provided to
dealers, manufacturers and distributors and would be denominated in U.S.
dollars.
As of October 25, 1996, no single Obligor represented more than 3% of the
BCI Domestic Inventory Portfolio.
The principal products for which BCI currently provides domestic inventory
financing (which gives rise to Domestic Inventory Receivables) include, but
are not limited to, marine products (boats, motors and trailers) other than
Bombardier products, Bombardier products (such as Ski-Doo(R) snowmobiles, Sea-
Doo(R) personal watercraft and jetboats and Celebrity(R) boats), recreational
vehicles, manufactured housing, motorcycles, lawn and garden equipment, horse
trailers and consumer electronics and appliances. BCI expects to expand the
type of products for which it provides domestic inventory financing to
include, among others, musical instruments, medical equipment, heating,
ventilation and air conditioning related products and specialty vehicles (e.g.
vehicles made specially for certain uses, such as ambulances or airport
buses). As of October 25, 1996, approximately 35.0% (based on outstanding
receivables) or 47.3% (based on financing volume for the nine month period
ended October 25, 1996) of the Domestic Inventory Receivables were
attributable to products manufactured by Bombardier Inc. or its subsidiaries.
The products for which BCI expects to provide dealer, manufacturer or
distributor financing (which gives rise to Asset-Based Receivables) would be
expected to be varied. The types of products covered by Domestic Inventory
Receivables and Asset-Based Receivables may change over time.
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BCI services the Domestic Inventory Receivables, and expects to service the
Asset-Based Receivables, through its executive offices in Colchester, Vermont
and through various regional offices.
CREATION OF THE RECEIVABLES
Domestic Inventory Receivables. BCI typically finances 100% of the wholesale
invoice price of new inventory financed by U.S. dealers through BCI.
Receivables in respect of the inventory are generally originated concurrently
with the shipment of such inventory to the financed dealers with BCI generally
advancing funds directly to the manufacturer, importer or distributor on
behalf of the dealer. In most cases, the products with respect to which BCI
provides domestic inventory financing are new products. However, in limited
circumstances, BCI provides financing of used inventory acquired by dealers
for whom BCI provides inventory financing.
Once a dealer has commenced the floorplanning of a manufacturer's,
importer's or distributor's inventory through BCI, BCI, if requested, will
generally finance all purchases of inventory by such dealer from such
manufacturer, importer or distributor, up to the credit limits established
from time to time for such dealer. BCI may limit or cancel this arrangement if
a dealer fails to perform its obligations under its inventory security
agreement or other floorplan financing agreement with BCI, if the relevant
manufacturer, importer or distributor fails to perform its obligations under
its repurchase agreement, if the aggregate outstanding amount of receivables
with respect to any one manufacturer, importer or distributor reaches BCI's
predetermined limit or if the dealer (or manufacturer, importer or
distributor) is experiencing financial difficulties.
Asset-Based Receivables. BCI expects to offer extensions of credit and
advances to dealers to finance such dealers' working capital needs and to
manufacturers and distributors to enable such manufacturers and distributors
to finance production, manufacturing and inventory of consumer, recreational
and commercial products. Asset-Based Receivables would typically be expected
to involve a revolving line of credit, for a contractually committed period of
time, pursuant to which the borrower may receive extensions of credit, subject
to availability of adequate collateral. The amount of Asset-Based Receivables
arising under an Account at any time would be determined primarily by the
financing needs of the borrower.
CREDIT UNDERWRITING PROCESS AND SECURITY
Domestic Inventory Receivables. BCI's credit underwriting process generally
begins by obtaining the endorsement of its program by a manufacturer, importer
or distributor and entering into a repurchase agreement with such
manufacturer, importer or distributor. Under the repurchase agreement, the
manufacturer, importer or distributor generally agrees to repurchase any of
its goods which were financed by BCI and which are repossessed by BCI after a
dealer defaults, subject to certain conditions which are contained in the
agreements (for further discussion of repurchase agreements, see "--
Relationship with Manufacturers, Importers and Distributors" below).
Thereafter, BCI will, with the assistance of such manufacturer, importer or
distributor, generally prepare and distribute promotional material for the
purpose of encouraging all eligible and credit worthy dealers of such
manufacturer, importer or distributor to participate in the program. In
certain cases, the manufacturer, importer or distributor is the primary
promoter of the program offered by BCI.
A list of dealers together with the recommended credit line limits for such
dealers is generally obtained from the manufacturer, importer or distributor.
The dealers are then normally contacted by either BCI's telemarketing
department or personnel from BCI's field force. If a dealer is interested in
the program, an application for financing is completed. After receipt of such
application, BCI currently investigates the dealer by reviewing, among other
things, the dealer's financial statements, trade references, past actual
performance and anticipated future performance and personal credit history.
Upon approval, credit limits are established for approved dealers and the
dealer executes an inventory security agreement or other floorplan financing
agreement in favor of BCI. Credit limits are generally subject to different
levels of management approval generally based on the amount of the proposed
credit limit.
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Domestic inventory financing originated by BCI is typically documented by an
inventory security agreement or other floorplan financing agreement providing
for a security interest in favor of BCI in all inventory of the dealer the
purchase of which was financed or floorplanned by BCI. The agreements
generally also set forth the dealer's obligations with respect to payment
terms, the maintenance and security (including insurance) of the inventory,
remedies of BCI upon a default by such dealer and other matters relating to
the dealer's inventory and business and BCI's rights. The inventory security
agreements and other floorplan financing agreements generally require the
dealer to maintain insurance (for the benefit of BCI) with respect to the
inventory being financed by BCI. Although BCI's right to the proceeds of such
insurance will not be transferred by BCI to BCRC (or by BCRC to the Trust),
BCI has agreed under the Pooling and Servicing Agreement to treat such
insurance proceeds received by BCI as recoveries on the related Domestic
Inventory Receivables. The inventory security agreements and other floorplan
financing agreements generally also require the dealer to take (or assist BCI
in taking) all actions as may be necessary for BCI to perfect its security
interest in the financed products. After the Series 1994-1 Final Payment Date,
BCI or one of its affiliates may also acquire Domestic Inventory Receivables
from third-party lenders, and although such receivables may not arise in an
account pursuant to an inventory security agreement or other floorplan
financing agreement established by BCI (or such affiliate), such account will
satisfy BCI's customary underwriting standards.
BCI generally maintains an active and ongoing relationship with the dealers
to whom it provides floorplan financing and generally reevaluates individual
dealers' credit limits (i) prior to increasing such credit limit, (ii) on an
annual basis and (iii) if a dealer is experiencing financial difficulties or
is not complying with its obligations under its inventory security agreement
or other floorplan financing agreement with BCI. BCI reserves the right to
deny any new or increased credit requests. At times, based upon BCI's
relationship with the manufacturer, importer or distributor and, in the case
of a manufacturer, importer or distributor who has entered into a repurchase
agreement, the past practice of such manufacturer, importer or distributor in
performing its obligations under such repurchase agreement (discussed under
"--Relationship with Manufacturers, Importers and Distributors" below), BCI
may establish a dealer line of credit that would otherwise not be granted on
the strength of dealer credit alone.
Asset-Based Receivables. BCI's credit underwriting process with respect to
Asset-Based Receivables is expected to give consideration to a variety of
factors, including, among others, the financial condition of the borrowing
entity, its credit history and relationship with current and previous lenders
and its historical performance and trends. Upon satisfaction of certain credit
criteria, terms and conditions, an account would be approved for a revolving
line of credit, the size of which would be based on a variety of factors
including the need of the borrower.
Upon approval of the credit, an evaluation of the borrowing base of the
borrower would be performed and advance rates would be established based on
the type of collateral. For purposes of evaluating items such as finished
goods inventory, work-in-process, raw materials, component parts and real
estate, an independent appraisal may be obtained and used in connection with
establishing advance rates. With respect to accounts receivable, eligibility
criteria, typically excluding items past due in excess of, or aged over, a
specific number of days from invoice date, would be established, and
concentration limits would be set with respect to the individual items within
the receivables base. Next, an advance rate on eligible receivables would be
determined based on a review of historical and projected data, giving
consideration to factors such as credit loss experience, dilution, contingent
sales and aged items. The intended result of the above analyses would be to
set eligibility criteria and advance rates such that, upon any necessary
collateral liquidation, BCI would fully recover any principal dollars advanced
on the revolving line of credit.
The adequacy of the borrowing base would be monitored periodically. In
addition, the financial condition of the borrower would be monitored in
connection with financial covenants set forth in the loan agreements, and the
borrower would be subject to audit by BCI.
PAYMENT TERMS
Domestic Inventory Receivables. BCI is generally entitled to receive
repayment in full of the related loan upon sale of the inventory for which
floorplan financing has been provided. This payment system is commonly
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known as the Pay-as-Sold Program. Interest is generally payable monthly. See
"--Billing and Collection Procedures" below. A scheduled payment program is
made available in limited instances to certain manufacturer's, importer's and
distributor's eligible dealers pursuant to which such dealers may schedule the
repayment of financed inventory over several months (generally 90 to 180
days), whether sold or not. The sum of all payments under the scheduled
payment program will equal the advance to the dealer, which advance in most
cases will be the full price of the financed product (rather than the
discounted price which is paid to the manufacturer, importer or distributor in
scheduled payment situations), plus in certain instances interest on the
amount advanced to the dealer. In certain cases where there is a scheduled
payment program, there is no interest collected on such Domestic Inventory
Receivable, since the advances were made at a discount from the face amount of
the receivables. See "Description of the Certificates--Discount Option." The
first payment is generally due 30 days from the invoice date and subsequent
payments are generally due each 30 days thereafter.
Asset-Based Receivables. Obligors would be generally obligated to pay
interest on outstanding borrowings pursuant to a schedule, which normally
would be expected to be monthly or quarterly. Principal payments and draws
would also generally be settled on a periodic basic (which may be weekly,
monthly or quarterly) or, if earlier, when and to the extent principal
outstanding balances exceed eligible collateral at negotiated advance rates
(i.e., the maximum percentage of the borrowing base, or portion thereof, that
the borrowed amount can represent).
BILLING AND COLLECTION PROCEDURES
Domestic Inventory Receivables. A statement setting forth billing and
related account information is prepared by BCI and generally mailed or
otherwise transmitted to each dealer on a monthly basis. Each dealer's
statement is generally generated and distributed on the second or third day
following BCI's month-end cut-off date. Interest and other nonprincipal
charges are usually required to be paid by the fifteenth day of each month and
in all cases prior to the month-end cut-off date for the month in which such
amounts are generally billed. Both interest and other nonprincipal charges are
generally billed in arrears. Generally, dealers remit payments to bank lock
boxes. In cases where a manufacturer, importer or distributor is responsible
for a payment (such as interest payments in certain situations), billing goes
to such manufacturer, importer or distributor.
REVENUE EXPERIENCE
Domestic Inventory Receivables. BCI generally charges dealers interest at a
floating rate determined by BCI on each business day. BCI is currently
determining the rate to be the "prime rate" designated in the "Wall Street
Journal," plus a spread generally ranging from 0% to 8.5% per annum based on
risk and/or other factors including the manufacturer's, importer's or
distributor's support of the dealer. The interest rate for any given period is
the average daily prime rate plus the applicable spread and is applied to the
average balances outstanding during the applicable period. The average spread
over the average prime rate charged to dealers for the Domestic Inventory
Receivables for the fiscal years ended January 31, 1996, 1995, 1994, 1993 and
1992 was approximately 3.98%, 4.45%, 4.50%, 4.85% and 4.71%, respectively. The
average prime rate for the fiscal years ended January 31, 1996, 1995, 1994,
1993 and 1992 was 8.85%, 7.34%, 6.00%, 6.21% and 8.21%, respectively.
There is seasonality in the level of outstanding Domestic Inventory
Receivables and in repayments of principal. See "Maturity and Principal
Payment Considerations." Dealer inventory financed by Domestic Inventory
Receivables typically increases during the fall and winter months reaching a
peak during the late winter or early spring, at which point the outstanding
Domestic Inventory Receivables then begin liquidating during the spring and
summer. In large part, this seasonality is attributable to the Domestic
Inventory Receivables related to marine products and Bombardier products.
RELATIONSHIP WITH MANUFACTURERS, IMPORTERS AND DISTRIBUTORS
Domestic Inventory Receivables. BCI's primary marketing focus is the
manufacturer, importer or distributor of the financed product. Affiliates of
BCI (which manufacture Ski-Doo(R) snowmobiles, Sea-Doo(R) personal watercraft
and jetboats and Celebrity(R) boats) in the aggregate manufacture products
which are financed
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directly by BCI and with respect to which the resulting Domestic Inventory
Receivables represented, as of October 25, 1996, approximately 34.96% of BCI's
Domestic Inventory Receivables portfolio. With the exception of four other
independent manufacturers who accounted, as of October 25, 1996, for
approximately 12.90%, 5.69%, 4.05% and 3.79%, respectively, of BCI's Domestic
Inventory Receivables portfolio, no other manufacturer, importer, or
distributor currently accounts for more than 2% of BCI's Domestic Inventory
Receivables portfolio.
In most instances, rates, terms and procedures are agreed upon at the
manufacturer, importer or distributor level, although for large dealers
specific arrangements may be made with the individual dealer. In the event of
the bankruptcy or insolvency of a manufacturer, importer or distributor, the
enforceability of the obligations of a dealer under its inventory security
agreement or other floorplan financing agreement with BCI would remain
unimpaired.
In certain situations, the manufacturer, importer or distributor will pay
all or a portion of the interest that would otherwise be payable for some
period by a dealer with respect to a Domestic Inventory Receivable; in such
cases, the manufacturer, importer or distributor makes such payment to BCI and
the dealer has a corresponding interest moratorium.
In the past, most financing to dealers has involved a commitment by the
manufacturer, importer or distributor to repurchase the financed products if
BCI repossesses such products after a dealer defaults. In some cases, these
repurchase obligations lapse when an unsold product reaches a certain age. The
repurchase price to be paid to BCI is generally equal to (i) the unpaid
principal amount of the Receivable with respect to the repossessed products
plus (ii) certain costs of repossession and (iii) in certain circumstances,
less a scheduled amount determined according to the age of the repossessed
products. In certain cases, manufacturers, importers and distributors are also
subject to recourse agreements which obligate the manufacturer, importer or
distributor to repurchase the receivables in the event of a dealer default.
The obligations of the manufacturer, importer or distributor do not relieve
the dealers of any of their obligations to BCI. However, in certain cases, the
manufacturer, importer or distributor who makes a payment with respect to a
Domestic Inventory Receivable due from a dealer may become subrogated to the
related claims by BCI against the dealer and may require a transfer of BCI's
corresponding claims against the dealer to the extent of the payment.
The terms of such repurchase commitments (including pricing) may vary, both
by industry and by manufacturer, importer or distributor. In addition, current
trends in the domestic inventory financing business indicate that repurchase
commitments may not always be available from manufacturers, importers and
distributors.
To the extent repurchase agreements and other agreements are entered into
with manufacturers, importers or distributors relating to the dealers who are
being financed by Domestic Inventory Receivables, such agreements will,
pursuant to the Receivables Purchase Agreement, be assigned by BCI to BCRC,
but not by BCRC to the Trust. BCI agrees under the Pooling and Servicing
Agreement to use reasonable efforts to collect under such agreements (on
behalf of BCRC) with manufacturers, importers and distributors with respect to
the Domestic Inventory Receivables, and BCRC and BCI will agree to deposit all
such collections into the Trust, where such collections will be treated as
recoveries on the related Domestic Inventory Receivables.
Asset-Based Receivables. Asset-Based Receivables are not expected to be
supported by any commitment from a manufacturer, importer or distributor to
repurchase any financed products.
MONITORING
Domestic Inventory Receivables. Once the dealer credit line is established,
the relevant manufacturer, importer or distributor may, after obtaining BCI's
approval for each shipment, ship products to the dealer and receive payment
therefor (as a loan to the dealer) from BCI so long as such dealer's BCI
financed inventory level remains within the limits of that dealer's credit
line. Provided the relevant account is in good standing,
33
<PAGE>
performing under its inventory security agreement or other floorplan financing
agreement and the credit line has not been withdrawn, approval will normally
be given.
In order to ensure compliance with the Pay-As-Sold Program, BCI periodically
conducts audit inspections of dealers. In most cases, inventory is normally
inspected at least four times a year. The audits are intended to ensure that
the dealers are paying for floorplanned products as they are sold. The
inspections are performed by BCI field representatives or outside inspection
service personnel who have been specially trained to audit the inventory of
dealers. The field representatives or outside inspection service personnel
performing the audit will generally do the following: (i) check the actual
inventory; (ii) inspect products for signs of use or excessive wear and tear;
(iii) spot check dealer sales orders; (iv) complete condition reports on
product that is worn; (v) inspect the dealer's place of business and report
unusual conditions; (vi) collect for interest and principal as needed; and
(vii) obtain the dealer's signature certifying the audit. Should discrepancies
in a dealer's inventory and payment schedule or other problems be discovered
by the auditing representative, BCI's management is promptly apprised of the
situation.
Asset-Based Receivables. Once BCI establishes a credit line with a borrower,
BCI expects to monitor the adequacy of the borrowing base on a periodic basis
and expects to perform periodic audits. In addition, BCI expects to monitor
the financial condition of the borrower periodically in connection with loan
covenants set forth in the loan agreements, and the borrower would be subject
to audit by BCI.
Outsourcing. BCI has delegated certain of its servicing, monitoring and
administrative duties to third parties and BCI may from time to time in the
future delegate all or a portion of its servicing, monitoring and
administrative duties with respect to the Receivables to third parties,
provided that no such delegation shall relieve BCI of its responsibility as
Servicer with respect to such duties.
COLLECTION ACTIVITY
Domestic Inventory Receivables. BCI's field management and representatives
are responsible for all normal collection activity with respect to Domestic
Inventory Receivables. When it has been determined that any further collection
activity will require repossession, any remaining inventory is generally
repossessed by BCI in conjunction with the applicable manufacturer, importer
or distributor. In such instances, if the manufacturer, importer or
distributor has entered into a repurchase agreement, such manufacturer,
importer or distributor is generally obligated under such repurchase agreement
to pay BCI (i) the unpaid principal amount of the Receivables with respect to
the repossessed product plus (ii) certain costs of repossession and (iii) in
certain circumstances, less a scheduled amount determined according to the age
of the repossessed products. The dealer, however, remains obligated to pay BCI
for any unpaid interest, other nonprincipal collections and any amounts not
otherwise collected from the manufacturer, importer or distributor. Any
payments collected by the Servicer from a manufacturer, importer or
distributor under any recourse obligation with respect to a defaulting dealer
will be treated under the Pooling and Servicing Agreement as a recovery in
respect of the related Receivables. Any legal action against a dealer is
generally initiated by BCI.
BCI has not had a formal loan extension policy in place with respect to the
Domestic Inventory Receivables. All payments on such receivables are due when
the related inventory is sold or when payment is otherwise scheduled to be
made and a default will exist if payment is not made when due. BCI has in the
past entered into (and may in the future agree to) an extended payment term
arrangement with a defaulted dealer, but such arrangements are considered to
be workout situations by BCI and no general policy is followed in this regard.
When a dealer is on a scheduled payment program and a payment is missed or
cannot be made, the usual course of action by BCI involves an inspection of
the dealer's inventory. Based on such inspection, a decision is generally made
either to extend the payment due date or to institute other collection
measures.
Asset-Based Receivables. Upon default by the borrower under an Asset-Based
Receivable credit arrangement, which, among other conditions, may arise as a
result of the borrower's failure to comply with certain covenants or failure
to maintain an adequate borrowing base to support outstanding balances, BCI
would be expected to continue its ongoing assessment of the borrower's
financial condition and determine its best course of action for purposes of
obtaining repayment, including the possibility of immediate liquidation of all
collateral.
34
<PAGE>
Charge-Off Policy. BCI's historical charge-off policy regarding accounts
included in the BCI Domestic Inventory Portfolio has been generally to pursue
all collection activities prudently before charging-off the account. The
accounts are reviewed semi-annually by BCI's chief executive officer, at which
time a decision is made as to which accounts to charge-off.
PARTICIPATION ARRANGEMENTS
From time to time BCI may permit other financing sources to participate in
certain of its financing arrangements with Obligors and in such cases, BCI
will provide for such participation by granting to or transferring to such
other financing sources an undivided interest in the receivables, related
collateral security and other rights associated therewith (a "Participation
Interest"). The documentation for the underlying line of credit will remain in
the name of BCI, as lender and BCI will be the Servicer under such
arrangement. In a separate contractual arrangement with BCI, the holder of the
Participation Interest will agree to provide a portion of the funding for such
financing to BCI and will have the right to receive a portion of the payments
received on account of principal, interest and other fees and charges due from
the Obligor and with respect to the related collateral security and other
rights associated therewith. BCI may advise an Obligor that the size of its
line of credit is conditioned upon participants in the financing. In other
circumstances, there will be no such condition and BCI may be obligated to
maintain the full amount of the line of credit notwithstanding its expectation
that a portion of it will be participated. After the Series 1994-1 Final
Payment Date and subject to the Rating Agency Condition being satisfied with
respect to the form of the documentation pursuant to which Participation
Interests are to be granted, the receivables, related collateral security and
other associated rights to be sold by BCI to the Depositor, and in turn by the
Depositor to the Trust, may be subject to Participation Interests granted
pursuant to such documentation.
In addition, after the Series 1994-1 Final Payment Date, the Depositor may
cause the Trust to transfer an undivided interest in certain Receivables,
related Collateral Security and other associated rights included in the
Trust's assets to the Depositor, which may thereafter transfer such interest
to a third party in the form of a Participation Interest subject to the Rating
Agency Condition being satisfied with respect to the form of the documentation
pursuant to which such Participation Interests are to be granted.
THE ACCOUNTS
GENERAL
The following discussion includes descriptions of the Domestic Inventory
Receivables and the Asset-Based Receivables. Currently, however, the Accounts
consist solely of Eligible Accounts in the BCI Domestic Inventory Portfolio as
provided herein. BCI and BCRC have the option, after the Series 1994-1 Final
Payment Date and subject to certain conditions, to include accounts containing
Asset-Based Receivables.
The Receivables arise in the Accounts. The Accounts consist of accounts in
the BCI Domestic Inventory Portfolio (and may in the future also consist of
all or a portion of the accounts in BCI's Asset-Based Receivables portfolio)
that were, in either case, Eligible Accounts at the time of such selection. In
order to be an Eligible Account, each Account must meet certain criteria
provided in the Pooling and Servicing Agreement. See "Description of the
Certificates--Representations and Warranties" and "--Eligible Accounts and
Eligible Receivables." All Eligible Accounts sold or contributed to BCRC by
BCI pursuant to the Receivables Purchase Agreement will be deposited by BCRC
into the Trust pursuant to the Pooling and Servicing Agreement. No selection
procedures believed by BCI to be adverse to the holders of the Series have
been or will be used by BCI in selecting the Accounts to be transferred to
BCRC.
As long as an Account is an Eligible Account, the Receivables in such
Account (which will be part of the Trust's assets) may be performing or non-
performing Receivables and may be Eligible Receivables or Ineligible
Receivables; however, only Eligible Receivables will be considered in
determining the Pool Balance (and therefore in determining various amounts or
percentages which are based on the Pool Balance).
35
<PAGE>
The Accounts pursuant to which the Domestic Inventory Receivables have been
or will be generated by BCI (or after the Series 1994-1 Final Payment Date, an
affiliate of BCI) are inventory security agreements or other floorplan
financing agreements entered into with BCI by dealers to finance the purchase
by the dealers of inventory. The standard form of inventory security agreement
currently used by BCI is filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. However, the actual inventory financing
agreements entered into with dealers, as well as the terms and conditions of
other floorplan financing agreements entered into by BCI (or after the Series
1994-1 Final Payment Date, an affiliate of BCI) with dealers, may differ
materially from the standard form of inventory security agreement filed as an
exhibit to the Registration Statement. The accounts pursuant to which the
Asset-Based Receivables will be generated (which accounts may in the future
also be included in the Pool as Accounts) are expected to be revolving credit
arrangements entered into with BCI or affiliates of BCI by dealers to finance
working capital needs and by manufacturers and distributors to finance such
manufacturers' and distributors' production, manufacturing and inventory of
consumer, recreational and commercial products. The terms of such revolving
credit arrangements would be generally negotiated between BCI (or an affiliate
of BCI) and its borrower and, therefore, no general form of financing
agreement exists with respect to the Asset-Based Receivables.
Pursuant to the Pooling and Servicing Agreement, BCRC has the right (subject
to certain conditions), and in some circumstances is obligated, to designate
from time to time additional qualifying accounts to be included as Accounts
and to convey to the Trust the Receivables of such Additional Accounts,
including Receivables thereafter created. These accounts must meet the
eligibility criteria to qualify as Eligible Accounts as of the date such
accounts are designated as Additional Accounts. Pursuant to the Receivables
Purchase Agreement, BCI will from time to time sell or contribute the
Receivables then existing, with certain exceptions, or thereafter created
under the Accounts and under any such Additional Accounts to BCRC, which will
transfer such Receivables to the Trust pursuant to the Pooling and Servicing
Agreement. See "Description of the Certificates--Addition of Accounts" and "--
Representations and Warranties." Eligible Receivables in the BCI Domestic
Inventory Portfolio or Asset-Based Receivables portfolio may consist of
performing Receivables which were previously non-performing. However, based on
the historical performance of the receivables in the BCI Domestic Inventory
Portfolio, the percentage of Eligible Receivables in the Trust which are
Domestic Inventory Receivables and which were previously non-performing should
be insignificant in relation to the aggregate amount of Domestic Inventory
Receivables in the Trust at any one time.
Subject to certain conditions specified in the Pooling and Servicing
Agreement, BCRC has the right to remove Accounts and Receivables from the
Trust. See "Description of the Certificates--Removal of Accounts and
Assignment of Receivables." Throughout the term of the Trust, the Accounts
from which the Receivables arise will be the Accounts designated by BCRC on
the Initial Cut-Off Date plus any Additional Accounts, minus any Accounts
removed from the Trust.
Pursuant to the Pooling and Servicing Agreement, the Servicer (expected to
be BCI) or any subservicer (which may include a BCI affiliate) may, subject to
certain conditions, change the terms relating to the Accounts and the
Receivables. See "Description of the Certificates--Collection and Other
Servicing Procedures."
As of October 25, 1996, with respect to the accounts in the BCI Domestic
Inventory Portfolio: (a) there were approximately 3,228 Eligible Accounts
which had been designated to the Trust; the Receivables in such Accounts had
an aggregate principal balance of approximately $678.05 million and all of
such Receivables in such Eligible Accounts had been transferred to BCRC and
deposited into the Trust; (b) with respect to such Eligible Accounts: (i)
10.48% of the Receivables were in Accounts with credit limits per Account
ranging from approximately $0 to $249,999, 24.64% of the Receivables were in
Accounts with credit limits per Account ranging from $250,000 to $499,999,
31.57% of the Receivables were in Accounts with credit limits per Account
ranging from $500,000 to $999,999, 31.05% of the Receivables were in Accounts
with credit limits per Account ranging from $1,000,000 to $14,999,999, and
2.26% of the Receivables were in Accounts with credit limits per Account
ranging from approximately $15,000,000 to $30,000,000, (ii) the average
aggregate credit limit per Account was approximately $410,880.59, and (iii)
the average principal balance of Receivables per Account was
36
<PAGE>
approximately $210,053.98; (c) with respect to such Eligible Accounts, the
aggregate principal balance of Receivables as a percentage of the aggregate
credit limits of such Eligible Accounts was approximately 51.12%; and (d) with
respect to such Eligible Accounts, approximately 8.00% of the Receivables were
in Accounts for which the related credit lines were initially established in
the 1996 calendar year, approximately 16.73% in the 1995 calendar year,
approximately 12.00% in the 1994 calendar year, approximately 8.53% in the
1993 calendar year and approximately 54.74% in the 1992 and prior calendar
years. With respect to Eligible Accounts pursuant to which Domestic Inventory
Receivables are generated, the weighted average spread over the prime rate
charged to dealers for the period January 1, 1996 through October 25, 1996 was
approximately 3.95%. All of the historical information (including tables and
numbers) contained in this Prospectus regarding BCI or any Receivables or
Accounts also includes receivables and accounts held by BCI Finance Inc.
(formerly BCI Recovery Inc.). BCI Finance Inc., which was incorporated in
1991, is a wholly-owned subsidiary of Bombardier Corporation, which is the
parent company of BCI. In October 1991 and June 1993, pools of then non-
performing receivables held by BCI were sold to BCI Finance Inc. In January
1993, an additional pool of non-performing receivables held by BCI was
transferred to BCI Finance Inc. in exchange for receivables held by BCI
Finance Inc. which had become performing receivables.
BCI and BCRC may designate Additional Accounts from time to time and
transfer the Receivables arising therein to the Trust. As a result, the actual
composition of the Receivables by business line represented by the Trust's
assets is expected to change over time. In addition, due to the variability
and uncertainty with respect to the rates at which Receivables in the Trust
are created, paid or otherwise reduced, the information set forth below may
vary significantly over time.
HISTORICAL SIZE
The following table sets forth aggregate year-end outstanding principal
balances of receivables in the BCI Domestic Inventory Portfolio for each of
the dates shown. The Eligible Accounts comprise only a portion of the entire
receivables in the BCI Domestic Inventory Portfolio, which portfolio would
also include accounts which would not qualify as Eligible Accounts. As a
result, the historical information with respect to Eligible Accounts may be
different than the historical information set forth below.
AGGREGATE YEAR-END OUTSTANDING PRINCIPAL BALANCES
<TABLE>
<CAPTION>
JANUARY 31,
----------------------------------
PORTFOLIO 1996 1995 1994 1993 1992
--------- ------ ------ ------ ------ ------
(U.S. DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Domestic Inventory Receivables........ $759.7 $652.8 $542.0 $432.5 $388.0
</TABLE>
The following table sets forth information on the average number of dealers
financed, average month-end outstanding principal balance on receivables and
average volume per dealer for each of the periods shown.
SIZE OF BCI DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31,
----------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ ------
(U.S. DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Average Number of Dealers............ 3,377 3,945 4,107 4,090 4,269
Average Month-End Principal Balances
Per Dealer.......................... $184.9 $131.8 $107.7 $ 92.0 $ 83.0
Average Financing Volume Per Dealer.. $527.7 $404.7 $330.6 $265.0 $195.0
</TABLE>
37
<PAGE>
DELINQUENCY
The following table shows delinquency information for the BCI Domestic
Inventory Portfolio as of the dates shown.
DELINQUENCY EXPERIENCE
<TABLE>
<CAPTION>
JANUARY 31,
--------------------------------------
OCTOBER 25, 1996 OCTOBER 27, 1995 1996 1995 1994 1993 1992
---------------- ---------------- ------ ------ ------ ------ ------
(U.S. DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Aggregate Principal Bal-
ance................... $773.1 $559.5 $759.7 $652.8 $542.0 $432.5 $388.0
Delinquent Amount (1)... $ 4.6 $ 8.4 $ 4.8 $ 9.6 $ 8.8 $ 19.7 $ 22.9
Delinquent
Amount/Aggregate Prin-
cipal Balance.......... 0.6% 1.5% 0.6% 1.5% 1.6% 4.6% 5.9%
Allowance for Credit
Losses on
BCI's Books............ $ 11.1 $ 13.2 $ 9.7 $ 12.8 $ 10.7 $ 19.4 $ 22.3
Allowance/Aggregate
Principal
Balance................ 1.4% 2.4% 1.3% 2.0% 2.0% 4.5% 5.7%
</TABLE>
- --------
(1) Consists of the total principal and past due charges on receivables which
were (i) unpaid when due as a result of retail sale of the underlying
product (i.e., sold out of trust) or (ii) unpaid when due under a
scheduled payment program and with respect to which BCI determined that
the payment was undercollateralized after the due date. The percentage of
outstanding Domestic Inventory Receivables which were on a scheduled
payment program as of the above dates was generally less than 4% by
principal balance.
See the last two paragraphs under "General" above.
LOSS EXPERIENCE
The following tables set forth BCI's average principal receivables balance
and loss experience for each of the periods shown with respect to the
receivables in the BCI Domestic Inventory Portfolio. The Eligible Accounts
will comprise only a portion of the entire receivables in the BCI Domestic
Inventory Portfolio, which also includes accounts that would be ineligible. In
addition, the Eligible Accounts may also in the future comprise all or a
portion of the receivables in the Asset-Based Receivables portfolio for which
there is currently no historical loss experience information available. As a
result, actual loss experience with respect to the Eligible Accounts may be
different. There can be no assurance that the loss experience for the
Receivables in the future will be similar to the historical experience set
forth below.
LOSS EXPERIENCE FOR DOMESTIC INVENTORY RECEIVABLES
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED JANUARY 31,
--------------------------------- --------------------------------------
OCTOBER 25, 1996 OCTOBER 27, 1995 1996 1995 1994 1993 1992
---------------- ---------------- ------ ------ ------ ------ ------
(U.S. DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Principal Re-
ceivables Balance(1)... $772.4 $603.9 $624.4 $520.1 $442.1 $378.0 $353.9
Net Losses(2)(4)........ $ 1.4 $ 2.4 $ 7.1 $ 0.7 $ 11.0 $ 7.6 $ 5.0
Net
Losses/Liquidations.... 0.08% 0.18% 0.42% 0.04% 0.88% 0.71% 0.62%
Net Losses/Average
Principal Receivables
Balance(3)............. 0.18% 0.39% 1.13% 0.13% 2.49% 2.02% 1.42%
</TABLE>
- --------
(1) Average Principal Receivables Balance is the average of the month-end
outstanding principal balances for the twelve months ending on the last
day of the period, except for the periods ended October 25, 1996 and
October 27, 1995, each of which is based on a nine-month average.
(2) Net losses in any period are gross losses less recoveries for such period.
Recoveries include recoveries from collateral security in addition to the
products.
(3) Percentages for the nine-month periods ended October 27, 1995 and October
25, 1996 are expressed on an annualized basis.
(4) Net losses in any period reflect losses recorded in such period on BCI's
books and records.
See the last two paragraphs under "General" above.
38
<PAGE>
PRODUCT MIX
The level of BCI's domestic inventory financing has increased over the last
four years. The following table details BCI's annual domestic inventory
financing activity by outstanding aggregate receivables and by volume based on
current product categories. The increase in financing is not across all
industry sectors. BCI has made a deliberate decision to limit its exposure in
the consumer electronics and appliances portfolio (which is included in the
"Other" product category below). While the information reflected in these
tables includes receivables arising under accounts that would not qualify as
Eligible Accounts, the relative product mix for receivables arising under
accounts that would qualify as Eligible Accounts would be similar to the
product mix reflected in these tables.
OUTSTANDING RECEIVABLES
<TABLE>
<CAPTION>
JANUARY 31,
OCTOBER 25, OCTOBER 27, ------------------------------------------------------------------------
PRODUCT 1996 1995 1996 1995 1994 1993 1992
------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
(U.S. DOLLARS IN MILLIONS/% OF TOTAL)
<S> <C> <C> <C> <C> <C> <C> <C>
Bombardier...... $270.3 (35.0%) $155.8 (27.8%) $291.5 (38.4%) $202.8 (31.1%) $141.4 (26.1%) $ 97.0 (22.4%) $ 70.2 (18.1%)
Marine.......... 258.0 (33.4) 209.4 (37.4) 270.1 (35.6) 228.9 (35.1) 180.1 (33.2) 157.0 (36.3) 147.3 (38.0)
Manufactured
Housing and
Recreational
Vehicles....... 192.8 (24.9) 158.3 (28.3) 164.3 (21.6) 179.9 (27.6) 169.4 (31.2) 127.3 (29.4) 116.2 (29.9)
Other........... 52.0 (6.7) 36.0 (6.4) 33.8 (4.5) 41.1 (6.3) 51.1 (9.4) 51.2 (11.8) 54.3 (14.0)
------------ ------------ ------------ ------------ ------------ ------------ ------------
TOTALS.......... $773.1(100.0%) $ 559.5(100.0%) $759.7(100.0%) $652.8(100.0%) $542.0(100.0%) $432.5(100.0%) $388.0(100.0%)
============ ============ ============ ============ ============ ============ ============
FINANCING VOLUME
<CAPTION>
NINE MONTHS ENDED YEAR ENDED JANUARY 31,
--------------------------- ------------------------------------------------------------------------
OCTOBER 25, OCTOBER 27,
PRODUCT 1996 1995 1996 1995 1994 1993 1992
------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
(U.S. DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Bombardier...... $ 774.9 $ 534.8 $ 837.6 $ 539.5 $ 387.5 $ 253.7 $ 160.1
Marine.......... 374.8 330.6 434.2 383.8 280.1 217.8 191.3
Manufactured
Housing and
Recreational
Vehicles....... 350.8 312.1 404.2 534.9 439.0 317.5 263.0
Other........... 135.3 80.6 106.1 138.1 251.2 264.0 217.0
------------ ------------ ------------ ------------ ------------ ------------ ------------
TOTALS.......... $ 1,635.9 $ 1,258.2 $ 1,782.1 $ 1,596.4 $ 1,357.7 $ 1,053.0 $ 831.4
============ ============ ============ ============ ============ ============ ============
</TABLE>
Currently, the above categories consist primarily of the following products
(which categories and products may change over time as types of products are
added or subtracted): (i) the Bombardier category currently consists primarily
of Ski-Doo(R) snowmobiles, Sea-Doo(R) personal watercraft and jetboats and
Celebrity(R) boats and related parts and accessories, (ii) the Marine category
currently consists primarily of boats (less than 25 feet), motors and
trailers, which may also be sold in packages consisting of all three
components, but does not include Bombardier products, (iii) the Manufactured
Housing and Recreational Vehicles category currently consists primarily of
single and double-wide mobile homes and Class A and Class C motor homes and
trailers and towables and (iv) the Other category currently consists primarily
of appliances, televisions, stereos, other electronics equipment and lawn and
garden equipment, motorcycles and horse trailers.
See the last two paragraphs under "General" above.
39
<PAGE>
AGING EXPERIENCE
The following table provides the age distribution of product inventory for
all dealers in BCI's portfolio of Domestic Inventory Receivables as a
percentage of total principal outstanding at the date indicated. Because the
Eligible Accounts will comprise only a portion of the entire BCI Domestic
Inventory Portfolio, which also includes accounts that would be ineligible,
actual age distribution with respect to the Eligible Accounts may be
different.
PRODUCT AGE DISTRIBUTION FOR THE DOMESTIC INVENTORY RECEIVABLES
<TABLE>
<CAPTION>
JANUARY 31,
OCTOBER 25, OCTOBER 27, ---------------------------------
DAYS 1996 1995 1996 1995 1994 1993 1992
---- ----------- ----------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
1-120......... 55.52% 60.75% 61.44% 64.79% 61.63% 53.40% 48.50%
121-180....... 14.69% 9.51% 13.92% 14.25% 14.55% 15.50% 14.20%
181-270....... 10.59% 9.31% 9.37% 8.95% 9.56% 10.00% 10.70%
Over 270...... 19.20% 20.32% 15.54% 12.01% 14.26% 21.10% 26.70%
</TABLE>
See the last two paragraphs under "General" above.
GEOGRAPHIC DISTRIBUTION
The following table provides the geographic distribution of dealers on the
basis of the principal amount of receivables outstanding and the number of
dealers generating such receivables with respect to the BCI Domestic Inventory
Portfolio. This table includes dealers who have either month-end outstanding
principal balances as of October 25, 1996 or who had a positive average daily
principal balance for the month ended October 25, 1996. While some of the
receivables included in this table arose under accounts that would not qualify
as Eligible Accounts, the relative geographic distribution of receivables
arising under accounts that would qualify as Eligible Accounts would be
similar to the distribution reflected in this table.
GEOGRAPHIC DISTRIBUTION OF ACCOUNTS REPRESENTED BY DOMESTIC INVENTORY
RECEIVABLES(1)
<TABLE>
<CAPTION>
RECEIVABLES
OUTSTANDING PERCENTAGE OF PERCENTAGE OF
(U.S. DOLLARS RECEIVABLES TOTAL NUMBER NUMBER OF
STATE IN THOUSANDS) OUTSTANDING OF ACCOUNTS ACCOUNTS
----- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Texas................ $69,733 9.0% 192 5.6%
California........... $62,402 8.1% 120 3.5%
Florida.............. $47,206 6.1% 110 3.2%
New York............. $41,686 5.4% 131 3.8%
Michigan............. $41,270 5.3% 100 2.9%
</TABLE>
- --------
(1) No other state represents more than 5% of the outstanding Domestic
Inventory Receivables. Eight states (North Carolina, Ohio, Minnesota,
Wisconsin, Vermont, Georgia, Maine and South Carolina) each represent
between approximately 4.2% and 2.5% of the outstanding Domestic Inventory
Receivables and ten states (Pennsylvania, Alabama, Illinois, Tennessee,
Arizona, Louisiana, Washington, Virginia, Montana and Indiana) each
represent between approximately 2.4% and 1.6% of the outstanding Domestic
Inventory Receivables. The remaining states each represent less than 1.6%
of the outstanding Domestic Inventory Receivables.
See the last two paragraphs under "General" above.
40
<PAGE>
BOMBARDIER CAPITAL INC.
BCI was incorporated in Massachusetts in 1974 and is a wholly-owned
subsidiary of Bombardier Corporation.
BCI is a financial services company which at the present time primarily
finances, on a secured basis, the purchases of inventory by dealers from
specified manufacturers, distributors and importers of recreational, consumer
and commercial products throughout the continental United States. BCI is also
currently involved in financing and leasing business jets and snow grooming
equipment sold by its affiliates, as well as financing the receivables of its
affiliates through its Commercial and Industrial Finance Division. Recently,
the Commercial and Industrial Finance Division has increased its scope and
offers financing and leasing products tailored for the truck trailer and
industrial equipment industries. BCI may engage in additional types of
financing and other activities in the future.
The principal products for which BCI currently provides inventory financing
(also referred to as wholesale or floorplan financing) include marine products
(boats, motors and trailers) which are not Bombardier products, Bombardier
products (such as Ski-Doo(R) snowmobiles, Sea-Doo(R) personal watercraft and
jetboats and Celebrity(R) boats), recreational vehicles, lawn and garden
equipment, horse trailers, motorcycles, manufactured housing and consumer
electronics and appliances and specialty vehicles. As of October 25, 1996, BCI
was providing inventory financing to approximately 3,475 dealers located
throughout the continental United States and acts as a financing source for
approximately 377 manufacturers and distributors.
Asset-Based Receivables would be expected to involve BCI providing
extensions of credit and advances to dealers to finance their working capital
needs and to manufacturers and distributors to finance such manufacturers' and
distributors' production and inventory of consumer, recreational and
commercial products.
In addition, BCI provides customer financing for Bombardier products that
currently primarily include Learjet and Challenger business jets and ski hill
resort snow grooming equipment, as well as providing financing assistance (in
certain cases) in connection with sales of commercial aircraft manufactured by
affiliates. Receivables and other related extensions of credit by BCI in
connection with such customer financing will not be included as assets in the
Trust. Currently, BCI provides two primary types of business jet financing.
The first type involves offering leasing and financing to customers
(independent third parties) with respect to new aircraft manufactured by a BCI
affiliate or a trade-in aircraft. The second type of activity involves the
purchase by BCI of trade-in aircraft from aircraft customers of BCI
affiliates, which trade-in aircraft purchased by BCI are then leased back to
the BCI affiliate or to the customer while the affiliate attempts to remarket
the aircraft. BCI's Commercial and Industrial Finance Division also provides
loan and lease financings for certain equipment not manufactured by
Bombardier. Receivables and other related extensions of credit by BCI in
connection with such loan and lease financing will not be included as assets
in the Trust.
As of January 31, 1994, January 31, 1995 and January 31, 1996, BCI's assets
(primarily financing assets) were approximately $495.6 million, $601.2 million
and $729.8 million, respectively, and shareholders' equity was approximately
$70.8 million, $72.1 million and $81.0 million, respectively. For the fiscal
years ended 1994, 1995 and 1996, total BCI revenues were approximately $64.3
million, $57.4 million and $82.3 million, respectively.
The mailing address of BCI's executive offices is currently 1600 Mountain
View Drive, Colchester, Vermont 05446. The telephone number of such offices is
currently (802) 654-8393.
As of the Closing Date, BCRC will be a wholly-owned direct subsidiary of
BCI. BCI is a wholly-owned direct subsidiary of Bombardier Corporation.
Bombardier Corporation is an Idaho corporation and a direct wholly-owned
subsidiary of Bombardier Inc.
41
<PAGE>
Bombardier Inc. is a Canadian corporation which, directly and through its
subsidiaries, is engaged in design, development, manufacture and marketing in
the transportation equipment, aerospace, defense and motorized consumer
products industries. In addition, five Bombardier subsidiaries are engaged in
financial services and one in real estate. Bombardier Inc. and its
subsidiaries operate plants in Austria, Belgium, Canada, Finland, France,
Germany, Mexico, the United Kingdom and the United States.
Bombardier Inc.'s equity securities are publicly traded on The Montreal
Exchange and The Toronto Stock Exchange and on the Brussels and Antwerp stock
exchanges in Belgium. Bombardier Inc. is a reporting issuer under the
securities laws of various provinces in Canada (including Quebec and Ontario)
and therefore makes various public filings with the securities commissions of
those provinces, as well as filings with the exchanges on which its securities
are traded.
The registered office of Bombardier Inc. is at 800 Rene-Levesque Boulevard
West, Montreal, Quebec, Canada H3B 1Y8.
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS
Principal payments with respect to the Certificates will not commence until
the Distribution Date in November 2001, unless an Early Amortization Event has
occurred or unless BCI elects not to extend the Initial Principal Payment
Date. Principal with respect to the Class B Certificates will not be
distributable until all principal with respect to the Class A Certificates has
been distributed (although distribution to the Class B Certificates may occur
on the same day as the final principal payment to the holders of the Class A
Certificates). It is expected that the final principal payment with respect to
the Class A Certificates will be made on the Class A Expected Final Payment
Date and that a single principal payment in respect of the Class B
Certificates will be made on the Class B Expected Payment Date, but the
principal of the Class A or the Class B Certificates may be paid earlier or,
depending on the actual payment rate on the Receivables, later, as described
herein. Because the majority of Domestic Inventory Receivables are payable
upon the retail sale of the related Eligible Product, the timing of such
payments is uncertain. In addition, there is no assurance that BCI will
generate additional Receivables under the Accounts or that any particular
pattern of payments will occur. In the event of a decline in the rate at which
additional Receivables are generated during the Revolving Period, BCRC may be
unable to convey new Receivables to the Trust (under existing Accounts
designated for the Trust) at the level anticipated or may be unable to
contribute Receivables in new Accounts when otherwise required to do so under
the Pooling and Servicing Agreement. (The obligation to designate additional
Accounts under certain circumstances applies to Accounts of the same type or
types as are then included in the Pool; therefore, if the Pool includes only
Accounts containing Domestic Inventory Receivables, only Domestic Inventory
Receivables would be required to be added to the Pool unless BCI and BCRC, at
their options, after the Series 1994-1 Final Payment Date, and subject to
certain conditions, decide to designate accounts containing Asset-Based
Receivables.) Such failure on the part of BCRC would constitute an Early
Amortization Event, causing principal payments on the Certificates to commence
earlier than would otherwise have been the case (and causing principal
payments to the Class A Certificateholders to be made without regard to the
Class A Controlled Distribution Amount). Further, during the Amortization
Period or any Initial Amortization Period or Early Amortization Period, a
decline in the rate at which additional Receivables are generated may have the
effect of reducing the rate of principal distributions on the Certificates,
thus extending the maturity of the Certificates and increasing their exposure
to losses in the Pool. Alternatively, the issuance of other Series may result
in the allocation of Excess Principal Collections from such other Series to
the Certificates during any Initial Amortization Period or Early Amortization
Period, which may shorten the maturity of the Certificates. See "Description
of the Certificates--Interest" and "--Principal" and "The Floorplan and Asset-
Based Financing Business."
Following the exhaustion of coverage provided by the Available Subordinated
Amount, the yield to maturity on the Certificates will be more sensitive to
the rate and timing of Defaulted Receivables. For a description of Investor
Charge-Offs, see "Description of the Certificates--Investor Charge-Offs."
42
<PAGE>
The amount of new Receivables generated in any month and monthly payment
rates on the Receivables may vary because of seasonal variations in Eligible
Product sales and inventory levels, retail incentive programs provided by the
manufacturers, importers and distributors of the Eligible Products covered by
Domestic Inventory Receivables, and various economic factors affecting
Eligible Product sales generally. The following table sets forth the highest
and lowest monthly payment rates for the Domestic Inventory Receivables
portfolio during any month in the periods shown and the average of the monthly
payment rates for all months during the periods shown, in each case calculated
as the percentage equivalent of a fraction, the numerator of which is the
aggregate of all collections of principal during the period and the
denominator of which is the average aggregate principal balance for such
period. There can be no assurance that the rate of Principal Collections will
be similar to the historical experience set forth below. Because the Eligible
Accounts will comprise only a portion of the entire BCI Domestic Inventory
Portfolio, actual monthly payment rates with respect to the Eligible Accounts
may be different.
MONTHLY PRINCIPAL PAYMENT RATES FOR THE BCI DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED JANUARY 31,
----------------------- ----------------------------
OCTOBER 25, OCTOBER 27,
1996 1995 1996 1995 1994 1993 1992
----------- ----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Highest Month........... 32.6% 35.9% 35.9% 37.3% 34.0% 29.5% 25.1%
Lowest Month............ 11.1% 11.1% 11.1% 14.4% 14.5% 15.3% 10.4%
Average of the Months in
the
Period................. 23.1% 24.6% 22.9% 24.4% 24.3% 23.8% 19.5%
</TABLE>
See the last paragraph under "The Accounts--General."
Because BCI may cause an Initial Amortization Period to commence on any
Initial Principal Payment Date and because the occurrence of an Early
Amortization Event would initiate an Early Amortization Period, the final
distribution of principal on the Certificates may be made, in the case of the
Class A Certificates, prior to the Class A Expected Final Payment Date and, in
the case of the Class B Certificates, prior to the Class B Expected Payment
Date. See "Description of the Certificates--Early Amortization Events" and "--
Extension of Initial Principal Payment Date."
DESCRIPTION OF THE CERTIFICATES
GENERAL
The Certificates will be issued pursuant to the Pooling and Servicing
Agreement, dated as of January 1, 1994, filed as an exhibit to the
Registration Statement of which this Prospectus is a part, as supplemented by
the respective supplements relating to prior Series of investor certificates
and to the Certificates and the Variable Funding Certificate and as amended by
Amendment Number 1 dated as of January 1, 1997 ("Amendment Number 1") (as so
supplemented and amended and as further supplemented and amended from time to
time, the "Pooling and Servicing Agreement"), among BCRC, as depositor, BCI,
as servicer (in such capacity, the "Servicer") and Bankers Trust Company, as
trustee (the "Trustee"). The Pooling and Servicing Agreement provides that it
is governed by New York law. The following discussion represents a summary of
certain terms of the Pooling and Servicing Agreement and does not purport to
provide a complete description. For further information, owners and
prospective owners of Certificates are advised to examine the Pooling and
Servicing Agreement, including Amendment Number 1, copies of which (without
certain exhibits or schedules) will be made available by the Trustee upon
written request.
The Certificates will evidence undivided beneficial ownership interests in
the Receivables representing the right to receive from the Trust, upon certain
terms as further described herein, funds up to (but not in excess of) the
amounts required to make payments of interest on and principal of the
Certificates pursuant to the Pooling and Servicing Agreement. The initial
principal balance of the Class A Certificates is $400,000,000 and the initial
principal balance of the Class B Certificates is $27,125,000.
43
<PAGE>
The Certificates will initially be represented by two or more certificates
registered in the name of the nominee of DTC (together with any successor
depository selected by the Depositor, the "Depository"), except as set forth
below. The Certificates will be available for purchase in minimum
denominations of $1,000 and integral multiples thereof in book-entry form. The
Depositor has been informed by DTC that DTC's nominee will be Cede & Co.
("Cede"). Accordingly, Cede is expected to be the holder of record of the
Certificates. No Certificate Owner will be entitled to receive a certificate
representing such person's beneficial interest in the Certificates, unless and
until Definitive Certificates are issued under the limited circumstances
described herein. All references herein to actions by Certificateholders shall
refer to actions taken by DTC upon instructions from its Participants (as
defined below), and all references herein to distributions, notices, reports
and statements to Certificateholders shall refer to distributions, notices,
reports and statements to Cede, as the registered holder of the Certificates.
See "Book-Entry Registration" and "Definitive Certificates" below.
INTEREST
Interest on the principal balance of the Class A Certificates will accrue at
a per annum rate (the "Class A Certificate Rate") equal to the lesser of (i)
the sum of (A) LIBOR (as defined in the third following paragraph) and (B) %
and (ii) the Net Receivables Rate (as defined in the second following
paragraph) and will be payable to the holders of the Class A Certificates on
each Distribution Date, commencing February 18, 1997. Interest on the
principal balance of the Class B Certificates will accrue at a per annum rate
(the "Class B Certificate Rate") equal to the lesser of (i) the sum of (A)
LIBOR (as defined in the third following paragraph) and (B) % and (ii) the
Net Receivables Rate (as defined in the second following paragraph) and will
be payable to the holders of the Class B Certificates on each Distribution
Date, commencing February 18, 1997. Interest due on a Distribution Date will
accrue from and including the preceding Distribution Date (or, in the case of
the first Distribution Date, from and including the Closing Date) to but
excluding such Distribution Date (each such period, an "Interest Period").
Interest due for any Distribution Date will be calculated on the basis of the
actual number of days elapsed during the related Interest Period and a 360-day
year. Interest due but not paid on any Distribution Date will be due on the
next Distribution Date together with, to the extent lawfully payable, interest
on such amount at the applicable Certificate Rate. Interest payments on the
Certificates will be derived solely from (i) Investor Non-Principal
Collections for a Collection Period, (ii) the amount, if any, then on deposit
in the Reserve Fund, (iii) any Investment Proceeds and (iv) Series 1997-1
Available Retained Collections to the extent of the Required Subordination
Draw Amount. See "Allocation Percentages" and "Distribution from the
Collection Account; Reserve Fund" below. Such amounts available to make
interest payments on the Certificates will be distributed first in respect of
the Class A Certificates and then to the Class B Certificates, in each case up
to the accrued and unpaid interest thereon.
"Adjustment Date" shall mean the second London Business Day preceding the
first day of the related Interest Period.
"Net Receivables Rate" shall mean, for any Adjustment Date, the weighted
average of the interest rates borne by the Receivables included in the Pool
for the preceding Collection Period less, if BCI is the Servicer, 2%, or, if
BCI is not the Servicer, 3%.
"LIBOR" with respect to any Interest Period will be based on the offered
rates for deposits in United States dollars having a maturity of one month
(the "Index Maturity") commencing on the related Adjustment Date which appears
on the Telerate Page 3750 as of 11:00 A.M., London time, on such date of
calculation. If such rate does not appear on Telerate Page 3750, LIBOR with
respect to such Interest Period will be determined at approximately 11:00
A.M., London time, on such Adjustment Date on the basis of the rates at which
deposits in United States dollars are offered by four major banks in the
London interbank market (selected by the Calculation Agent) to prime banks in
the London interbank market for a period equal to the Index Maturity and in a
principal amount equal to an amount of not less than U.S. $1,000,000 and that
is representative for a single transaction in such market at such time. The
Calculation Agent will request the principal London office of each such bank
to provide a quotation of its rate. If at least two such quotations are
provided, LIBOR will be the arithmetic mean
44
<PAGE>
(rounded up or down, as the case may be, to the nearest whole multiple of
0.0625% per annum; provided, however, that any amount falling in the middle
shall be rounded up to the nearest whole multiple of 0.0625%) of such
quotations. If fewer than two quotations are provided, LIBOR with respect to
such Interest Period will be the arithmetic mean (rounded upwards or downwards
as aforesaid) of the rates quoted at approximately 11:00 A.M., New York City
time, on such Adjustment Date by three major banks in New York, New York
selected by the Calculation Agent for loans in United States dollars to
leading European banks having the Index Maturity and in a principal amount
equal to an amount of not less than U.S. $1,000,000 and that is representative
for a single transaction in such market at such time; provided, however, that
if the banks selected as aforesaid are not quoting as mentioned in this
sentence, LIBOR in effect for the applicable period will be LIBOR in effect
for the previous period.
"Telerate Page 3750" means the display page currently so designated on the
Dow Jones Telerate Service (or such other page as may replace that page on
that service for the purpose of displaying comparable rates or prices).
"London Business Day" means any day on which dealings in deposits in United
States dollars are transacted in the London interbank market.
"Calculation Agent" means the Trustee or any other Calculation Agent
selected by the Depositor which is reasonably acceptable to the Trustee.
PRINCIPAL
In general, no principal payments will be made on the Certificates until the
Distribution Date in November 2001, unless (i) BCI elects not to extend the
Initial Principal Payment Date or (ii) an Early Amortization Event, as
described herein, occurs. If BCI elects not to extend the Initial Principal
Payment Date, principal distributions on the Certificates will begin on such
Initial Principal Payment Date, the earliest of which would be the February
2000 Distribution Date. If an Early Amortization Event occurs, principal
distributions on the Certificates will begin on the Distribution Date
following the end of the Collection Period in which such event occurs. During
the Revolving Period, Principal Collections allocable to the Certificates,
subject to certain limitations, will either (a) be deposited in the Excess
Funding Account as described herein, (b) be allocated to one or more
outstanding Series which are in amortization, early amortization or
accumulation periods to cover principal payments due to the certificateholders
of any such Series or which provide for excess funding accounts or similar
arrangements or (c) if no such Series is then amortizing or accumulating
principal or otherwise provides for excess funding accounts or similar
arrangements, either be paid (or made available) to the holder of the BCRC
Certificate to maintain at a constant level the interest in the Trust
represented by the Certificates, or held as Unallocated Principal Collections.
See "Allocation Percentages--Principal Collections for all Series" and
"Distributions from the Collection Account; Reserve Fund--Principal
Collections" below.
During the Amortization Period, the Initial Amortization Period or any Early
Amortization Period, Principal Collections allocable to the Certificates plus
certain other amounts comprising Available Investor Principal Collections will
no longer be deposited in the Excess Funding Account or allocated to another
outstanding Series or paid or made available to the holder of the BCRC
Certificate, as described above, but rather will be deposited (up to the
amount of Monthly Principal for the related Distribution Date) into the
Collection Account and distributed to the Certificateholders as Monthly
Principal until either the outstanding principal balance of each class of the
Certificates has been reduced to zero or the Series 1997-1 Termination Date
has occurred.
During the Amortization Period, Principal Collections allocable to the
Certificates will be distributed first to the Class A Certificateholders on
each Class A Amortization Date, in an amount up to the Class A Controlled
Distribution Amount, until the principal balance of the Class A Certificates
has been reduced to zero, and then to the Class B Certificateholders,
commencing on the Class B Expected Payment Date or, if later, the date when
the principal balance of the Class A Certificates has been reduced to zero, up
to an amount equal to the principal
45
<PAGE>
balance of the Class B Certificates. During any Initial Amortization Period or
Early Amortization Period, Principal Collections allocable to the Certificates
will be distributed first to the Class A Certificates (without regard to the
Class A Controlled Distribution Amount) until the principal balance thereof is
reduced to zero, and then to the Class B Certificates until the principal
balance thereof is reduced to zero.
It is expected that the final principal payment with respect to the Class A
Certificates will be made on the Class A Expected Final Payment Date and that
a single principal payment in respect of the entire principal balance of the
Class B Certificates will be made on the Class B Expected Payment Date, but
the principal of the Class A or the Class B Certificates may be paid earlier
or, depending on the actual payment rate on the Receivables, later, as
described under "Maturity and Principal Payment Considerations" herein. If an
interest in the Receivables represented by each outstanding Series is required
to be repurchased as described below under the last paragraph of
"Representations and Warranties," principal payments on the Certificates will
be made on the Distribution Date following such repurchase. See "Allocation
Percentages--Principal Collections for all Series" and "Distributions from the
Collection Account; Reserve Fund--Principal Collections" below.
Distributions on the Certificates will be made on each Distribution Date to
the holder of Certificates in whose names the Certificates were registered
(expected to be Cede, as nominee of DTC) at the close of business on the day
preceding such Distribution Date (or, if Definitive Certificates are issued,
on the last day of the preceding calendar month) (each a "Record Date").
However, the final distribution on the Certificates will be made only upon
presentation and surrender of the Certificates. Distributions will be made to
DTC in immediately available funds.
EXTENSION OF INITIAL PRINCIPAL PAYMENT DATE
Unless an Early Amortization Event occurs, principal with respect to the
Class A Certificates is expected to be paid monthly commencing on the November
2001 Distribution Date and principal with respect to the Class B Certificates
is expected to be paid, concurrently with the final distribution on the Class
A Certificates, on the April 2002 Distribution Date; provided, however, that
the Certificateholders will receive payments of principal earlier if BCI
elects not to extend the Initial Principal Payment Date. The first Initial
Principal Payment Date will be the February 2000 Distribution Date, but will
successively and automatically be extended to the next Distribution Date after
the then-current Initial Principal Payment Date unless BCI elects not to so
extend; provided further, however, that the Initial Principal Payment Date may
not extend beyond the Class A Expected Final Payment Date. In the event that
BCI elects not to extend the Initial Principal Payment Date, the Revolving
Period or the Amortization Period, as applicable, will end and the Available
Investor Principal Collections for each Distribution Date commencing on the
Initial Principal Payment Date will be paid (i) first, to the Class A
Certificateholders until the earlier of the date on which the outstanding
principal balance of the Class A Certificates has been reduced to zero or the
Series 1997-1 Termination Date and (ii) second to the Class B
Certificateholders until the earlier of the date on which the outstanding
principal balance of the Class B Certificates has been reduced to zero or the
Series 1997-1 Termination Date.
BCI will cause the Trustee to provide a copy of BCI's notice not to extend
the Initial Principal Payment Date to each Certificateholder, BCRC and the
Rating Agencies. The Servicer will cause the Trustee to mail such notice no
later than the fifth business day following the Distribution Date prior to the
effective Initial Principal Payment Date on which principal payments will
commence.
BOOK-ENTRY REGISTRATION
DTC is a limited-purpose trust company organized under the laws of the State
of New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the UCC and a "clearing agency" registered pursuant to
the provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participating organizations ("Participants") and facilitate
the clearance and settlement of securities transactions between Participants
through electronic book-entry changes in their accounts, thereby eliminating
the need for physical movement of certificates. Participants include the
Underwriters, securities brokers and dealers, banks, trust companies and
clearing corporations and may include certain other organizations. Indirect
46
<PAGE>
access to the DTC system also is available to others such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("Indirect
Participants").
Certificate Owners that are not Participants or Indirect Participants but
desire to purchase, sell or otherwise transfer ownership of, or other
interests in, Certificates may do so only through Participants and Indirect
Participants. In addition, Certificate Owners will receive all distributions
of principal of and interest on the Certificates from the Trustee through DTC
and its Participants. Under a book-entry format, Certificate Owners will
receive payments after the related Distribution Date because, while payments
are required to be forwarded to Cede, as nominee for DTC, on each such date,
DTC will forward such payments to its Participants which thereafter will be
required to forward them to Indirect Participants or Certificate Owners. It is
anticipated that the only Certificateholder (as such term is used in the
Pooling and Servicing Agreement) will be Cede, as nominee of DTC, and that
Certificate Owners will not be recognized by the Trustee as Certificateholders
under the Pooling and Servicing Agreement. Certificate Owners will only be
permitted to exercise the rights of Certificateholders under the Pooling and
Servicing Agreement indirectly through DTC and its Participants, who in turn
will exercise their rights through DTC.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among
Participants on whose behalf it acts with respect to the Certificates and is
required to receive and transmit distributions of principal of and interest on
the Certificates. Participants and Indirect Participants with which
Certificate Owners have accounts with respect to the Certificates similarly
are required to make book-entry transfers and receive and transmit such
payments on behalf of their respective Certificate Owners.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a
Certificate Owner to pledge Certificates to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
Certificates, may be limited due to the lack of a physical certificate for
such Certificates.
DTC has advised the Depositor that neither DTC nor Cede will consent or vote
with respect to any action permitted to be taken by the Certificateholders
under the Pooling and Servicing Agreement or any other agreement. Under its
usual procedures, DTC mails an omnibus proxy to the issuer as soon as possible
after the record date. The omnibus proxy assigns Cede's consenting or voting
rights to those Participants to whose accounts the Certificates are credited
on the record date (identified in a listing attached thereto).
Cedel is incorporated under the laws of Luxembourg as a professional
depository. Cedel holds securities for its participating organizations ("Cedel
Participants") and facilitates the clearance and settlement of securities
transactions between Cedel Participants through electronic book-entry changes
in accounts of Cedel Participants, thereby eliminating the need for physical
movement of certificates. Transactions may be settled in Cedel in any of 28
currencies, including United States dollars. Cedel provides to its Cedel
Participants, among other things, services for safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. Cedel interfaces with domestic markets in several
countries. As a professional depository, Cedel is subject to regulation by the
Luxembourg Monetary Institute. Cedel Participants are recognized financial
institutions around the world, including underwriters, securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Indirect access to Cedel is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Cedel Participant, either directly or
indirectly.
Euroclear was created in 1968 to hold securities for participants of
Euroclear ("Euroclear Participants") and to clear and settle transactions
between Euroclear Participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement
of certificates and any risk from
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lack of simultaneous transfers of securities and cash. Transactions may now be
settled in any of 32 currencies, including United States dollars. Euroclear
includes various other services, including securities lending and borrowing,
and interfaces with domestic markets in several countries generally similar to
the arrangements for cross-market transfers with DTC described above.
Euroclear is operated by the Brussels, Belgium office of Morgan Guaranty Trust
Company of New York (the "Euroclear Operator"), under contract with Euroclear
Clearance Systems S.C., a Belgian cooperative corporation (the "Cooperative").
All operations are conducted by the Euroclear Operator, and all Euroclear
securities clearance accounts and Euroclear cash accounts are accounts with
the Euroclear Operator, not the Cooperative. The Cooperative establishes
policy for Euroclear on behalf of Euroclear Participants. Euroclear
Participants include banks (including central banks), securities brokers and
dealers and other professional financial intermediaries. Indirect access to
Euroclear is also available to other firms that clear through or maintain a
custodial relationship with a Euroclear Participant, either directly or
indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions
govern transfers of securities and cash within Euroclear, withdrawals of
securities and cash from Euroclear, and receipts of payments with respect to
securities in Euroclear. All securities in Euroclear are held on a fungible
basis without attribution of specific certificates to specific securities
clearance accounts. The Euroclear Operator acts under the Terms and Conditions
only on behalf of Euroclear Participants, and has no record of or relationship
with persons holding through Euroclear Participants.
Distributions with respect to the Certificates held through Cedel or
Euroclear will be credited to the cash accounts of Cedel Participants or
Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its Depositary. Such distributions will
be subject to tax reporting in accordance with relevant United States tax laws
and regulations. See "Certain Federal Income Tax Consequences." Cedel or the
Euroclear Operator, as the case may be, will take any action permitted to be
taken by a Certificateholder under the Pooling and Servicing Agreement on
behalf of a Cedel Participant or Euroclear Participant only in accordance with
its relevant rules and procedures and subject to the ability of its Depositary
(as defined below) to effect such actions on its behalf through DTC.
Holders of Certificates may hold their Certificates through DTC (in the
United States) or Cedel or Euroclear (in Europe) if they are participants of
such systems, or indirectly through organizations which are participants in
such systems.
The Certificates will initially be registered in the name of Cede & Co., the
nominee of DTC. Cedel and Euroclear will hold omnibus positions on behalf of
their participants through customers' securities accounts in Cedel's and
Euroclear's names on the books of their respective depositaries which in turn
will hold such positions in customers' securities accounts in the
depositaries' names on the books of DTC. Citibank, N.A. ("Citibank") will act
as depositary for Cedel and Morgan Guaranty Trust Company of New York
("Morgan") will act as depositary for Euroclear (in such capacities,
individually the "Depositary" and collectively the "Depositaries").
Transfers between Participants will occur in accordance with DTC rules.
Transfers between Cedel Participants and Euroclear Participants will occur in
accordance with their respective rules and operating procedures.
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Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
Participants or Euroclear Participants, on the other, will be effected in DTC
in accordance with DTC rules on behalf of the relevant European international
clearing system by its Depositary; however, such cross-market transactions
will require delivery of instructions to the relevant European international
clearing system by the counterparty in such system in accordance with its
rules and procedures and within its established deadlines (European time). The
relevant European international clearing system will, if the transaction meets
its settlement requirements, deliver instructions to its Depositary to take
action to effect final settlement on its behalf by delivering or receiving
securities in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Cedel Participants
and Euroclear Participants may not deliver instructions directly to the
Depositaries.
Because of time zone differences, credits of securities received in Cedel or
Euroclear as a result of a transaction with a Participant will be made during
subsequent securities settlement processing and dated the business day
following the DTC settlement date. Such credits or any transactions in such
securities settled during such processing will be reported to the relevant
Euroclear or Cedel Participants on such business day. Cash received in Cedel
or Euroclear as a result of sales of securities by or through a Cedel
Participant or Euroclear Participant to a Participant will be received with
value on the DTC settlement date but will be available in the relevant Cedel
or Euroclear cash account only as of the business day following settlement in
DTC. For information with respect to tax documentation procedures relating to
the Certificates, see "Certain Federal Income Tax Consequences--Foreign
Investors."
Although DTC, Cedel and Euroclear have agreed to the foregoing procedures in
order to facilitate transfers of Certificates among participants of DTC, Cedel
and Euroclear, they are under no obligation to perform or continue to perform
such procedures and such procedures may be discontinued at any time.
DEFINITIVE CERTIFICATES
The Certificates will be issued in fully registered, certificated form to
Certificate Owners or their nominees ("Definitive Certificates"), rather than
to DTC or its nominee, only if (i) the Depositor advises the Trustee that DTC
is no longer willing or able to discharge properly its responsibilities as
Depository with respect to the Certificates and the Depositor is unable to
locate a qualified successor, (ii) the Depositor, at its option, advises the
Trustee that it elects to terminate the book-entry system with respect to the
Certificates through DTC or (iii) after the occurrence of a Servicer Default
under the Pooling and Servicing Agreement, Certificate Owners representing not
less than 50% of the aggregate unpaid principal amount of the Certificates or
of a class of the Certificates advise the Trustee and DTC through Participants
in writing that the continuation of a book-entry system through DTC (or a
successor thereto) is no longer in the best interests of such Certificate
Owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the Trustee is required through DTC to notify all
Certificate Owners of the availability through DTC of Definitive Certificates
for the Certificates. Upon surrender by DTC of the certificate or certificates
held by it or its nominee representing such Certificates and instructions for
registration, the Trustee will issue the Certificates in the form of
Definitive Certificates, and thereafter the Trustee will recognize the holders
of such Definitive Certificates ("Holders") as Certificateholders under the
Pooling and Servicing Agreement.
Distributions of principal of and interest on the Certificates will be made
by the Trustee directly to holders in accordance with the procedures set forth
herein and in the Pooling and Servicing Agreement. Distributions on each
Distribution Date will be made to holders in whose names the Definitive
Certificates were registered at the close of business on the preceding Record
Date. Distributions will be made by wire transfer to the address of each
holder as it appears on the register maintained by the Trustee. The final
distribution on any Certificate (whether Definitive Certificates or the
certificate or certificates registered in the name of Cede representing the
Certificates), however, will be made only upon presentation and surrender of
such Certificate on the final payment date at such office or agency as is
specified in the notice of final distribution to Certificateholders. The
Trustee will provide such notice to registered Certificateholders not later
than the fifth day of the month of the final distribution.
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Definitive Certificates will be transferable or exchangeable at the offices
of the Trustee, which shall initially be Bankers Trust Company. Unless
otherwise provided in the related Supplement, no service charge will be
imposed for any registration of transfer or exchange, but the Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge imposed in connection therewith.
RETAINED INTEREST AND VARIABLE FUNDING CERTIFICATE
The Trust's assets will be allocated in part to the Certificates and any
other Series of investor certificates that may be outstanding from time to
time, with the remainder being allocated to BCRC as holder of the "BCRC
Certificate" (evidencing the "Retained Interest") and to the holder (currently
BCRC) of the "Variable Funding Certificate" (evidencing the "Variable Funding
Interest"). The Retained Interest will consist of (x) the portion thereof that
will be in part subordinated from time to time to the Certificates and, in
part, to the investor certificates in respect of each prior Series and to any
additional Series (i.e., the Pool Available Subordinated Amount on such date
(after giving effect to the allocations, distributions, withdrawals and
deposits to be made on such date)) and (y) with respect to each Series on any
date of determination, a percentage (which in the case of the Certificates
will initially be 4%) of the related adjusted invested amount (including the
Adjusted Invested Amount) of each such Series, which will not be subordinated
to the Certificates. The sum of (x) and (y) is referred to as the "Retained
Participation Amount." As of the Closing Date, the amount under the foregoing
clause (x) allocable to the Certificates will be no less than $24,859,127 and
the amount under the foregoing clause (y) allocable to the Certificates will
be $17,085,000.
The Variable Funding Interest will consist of the Variable Funding Amount
(i.e., the excess, if any, of the Pool Balance over the Required Pool Balance)
which generally will fluctuate and could be eliminated as the Pool Balance
fluctuates relative to the Required Pool Balance. However, upon the occurrence
of a Liquidation Event, the proportionate interest in the Pool Balance
represented by the Variable Funding Certificate as of the date of such
Liquidation Event will be fixed relative to the interests represented by the
Certificates and the investor certificates of other Series for purposes of
further allocations of Principal Collections from the Pool and the relative
interest of the Variable Funding Certificate in further allocations of Non-
Principal Collections will not be less than the relative interest thereof as
of the Liquidation Event. See "Allocation of Collections; Deposits in
Collection Account; Limited Subordination of the Retained Interest" below. On
each business day on which Non-Principal Collections and Principal Collections
are received by the Servicer, the holder of the Variable Funding Certificate
will be entitled to receive a distribution equal to the product of (x) the
Variable Funding Percentage and (y) all Non-Principal Collections and
Principal Collections.
Pursuant to the Pooling and Servicing Agreement, the BCRC Certificate and
the Variable Funding Certificate have been issued to BCRC. BCRC holds the BCRC
Certificate and has pledged its interest in the Variable Funding Certificate
to BCI as security for the Note issued by BCRC to BCI as part of the
consideration for the sale of the Receivables by BCI to BCRC. Amounts
allocated to BCRC with respect to the Variable Funding Certificate or the BCRC
Certificate may be available to BCRC to pay principal and interest on such
Note. See "Description of the Receivables Purchase Agreement--Sale and
Transfer of Receivables." Except after the occurrence of a Liquidation Event
as described herein, the outstanding principal balance of the Variable Funding
Certificate will fluctuate to reflect increases or decreases in the aggregate
outstanding principal balance of the Receivables, including any increases due
to the transfer of additional Receivables to the Trust. The holder of the
Variable Funding Certificate will own an undivided interest in the Trust that
will rank pari passu with the interest of all Series in the aggregate and the
portion of the Retained Interest that is not subordinated to the Certificates
or to the investor certificates of any other Series.
NEW ISSUANCES
The Pooling and Servicing Agreement provides that, pursuant to one or more
supplements thereto (each, a "Supplement"), BCRC may cause the Trustee to
issue one or more new Series. Under the Supplement, BCRC may specify, among
other things, with respect to any Series: (a) its name or designation, (b) its
initial principal
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amount (or method for calculating such amount) and the currency in which it is
denominated, (c) its certificate rate (or the method for determining its
certificate rate), (d) the payment date or dates and the date or dates from
which interest shall accrue; (e) the method for allocating collections to
certificateholders, (f) the issuer and terms of any form of Enhancement with
respect thereto, (g) the terms on which the investor certificates of such
Series may be exchanged for investor certificates of another Series,
repurchased by the Depositor or remarketed to other investors, (h) the Series
termination date (i) the designation of any Series Accounts and the terms
governing the operation of any such Series Accounts, (j) the monthly servicing
fee and the investors' servicing fee, (k) the number of classes of investor
certificates of such Series and, if more than one class, the rights and
priorities of each such class, (l) the extent to which the investor
certificates of such Series will be issuable in temporary or permanent global
form, (m) whether the investor certificates of such Series may be issued in
bearer form and any limitations imposed thereon, (n) the priority of such
Series with respect to any other Series, (o) whether such Series will be part
of a group and (p) any other terms permitted by the related Supplement (all
such terms, the "Principal Terms" of such Series). The Depositor may offer any
Series under a prospectus or other disclosure document in transactions either
registered under the Securities Act or exempt from registration thereunder,
directly or through the Underwriters or one or more other underwriters or
placement agents. There is no limit to the number of investor certificates
that may be issued under the Pooling and Servicing Agreement.
As stated above, the Pooling and Servicing Agreement provides that BCRC may
specify the terms of a new Series such that each Series has an amortization
period, controlled amortization period or accumulation period which may have a
different length and begin on a different date than the amortization period or
accumulation period for any other Series. Further, one or more Series may be
in their early amortization periods, controlled amortization period or
accumulation periods while other Series are not. Thus, certain Series may be
amortizing or accumulating principal, while other Series are not amortizing or
accumulating principal. Moreover, different Series may have the benefits of
different forms of Enhancement issued by different entities. Under the Pooling
and Servicing Agreement, the Trustee will hold each form of Enhancement only
on behalf of the Series (or a particular class within a Series) to which it
relates. The Pooling and Servicing Agreement also provides that the Depositor
may specify different certificate rates and monthly servicing fees with
respect to each Series (or a particular class within a Series). In addition,
the Depositor has the option under the Pooling and Servicing Agreement to vary
between Series (or classes within a Series) the terms upon which a Series (or
classes within a Series) may be repurchased by the Depositor.
Under the Pooling and Servicing Agreement and pursuant to a Supplement, a
new Series may be issued only upon the satisfaction of certain specified
conditions. BCRC may cause the issuance of a new Series by notifying the
Trustee at least five business days in advance of the applicable issuance date
(each, a "Series Issuance Date"). The notice shall state the designation of
any Series and with respect to such Series: (a) its initial principal amount,
(b) its currency and certificate rate, (c) the issuer of any Enhancement with
respect to such Series and (d) the related Series Issuance Date. The Pooling
and Servicing Agreement provides that the Trust will issue any Series only
upon delivery to it of the following: (i) a Supplement in form satisfactory to
the Trustee signed by BCRC and the Servicer and specifying the Principal Terms
of such Series; (ii) any related Enhancement agreement executed by each of the
parties thereto other than the Trustee; and (iii) an opinion of counsel to the
effect that, for federal income and Vermont state income tax purposes, (x)
such issuance will not adversely affect the characterization of the investor
certificates of any outstanding Series or class as debt of BCRC, (y) such
issuance will not cause or constitute a taxable event with respect to any
certificateholder or the Trust and (z) the investor certificates of such new
Series will be characterized as debt of BCRC (an opinion of counsel to the
effect referred to in clauses (x) and (y) with respect to any action is
referred to herein as a "Tax Opinion"). Such issuance is also subject to the
conditions that (a) the Depositor shall have delivered to the Trustee and any
Enhancement Provider a certificate of a vice president or more senior officer,
dated the related Series Issuance Date, to the effect that the Depositor
reasonably believes that such issuance will not cause an Early Amortization
Event to occur, (b) after giving effect to such issuance, BCRC shall have an
interest in the Pool represented by the BCRC Certificate and the Variable
Funding Certificate equal in the aggregate to at least 2% of the aggregate
amount of Receivables included in the Pool, in each case as of the Series
Issuance Date and after giving effect to such issuance and (c) written notice
of the proposed New Issuance shall have been given to
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each Rating Agency at least five Business Days before the Series Issuance Date
and no Rating Agency shall have notified BCRC, BCI or the Trustee that such
issuance will result in a reduction or withdrawal of the ratings of any
outstanding Series or class of investor certificates. Upon satisfaction of all
such conditions, the Trust will issue such Series.
SUPPLEMENTAL CERTIFICATE
The Pooling and Servicing Agreement provides that the BCRC Certificate
shall, at all times, be beneficially owned by BCRC; however, under certain
conditions, BCRC may surrender the BCRC Certificate to the Trustee in exchange
for a newly issued BCRC Certificate and a second certificate (the
"Supplemental Certificate"). The Supplemental Certificate is not required to
be beneficially owned by BCRC and may be delivered to or at the direction of
BCRC to any entity. The Pooling and Servicing Agreement requires that any
Supplemental Certificate be created pursuant to a Supplement setting forth the
terms of the Supplemental Certificate. It is a condition to delivery of the
Supplemental Certificate that, following delivery of the Supplemental
Certificate to another entity, BCRC shall, nevertheless, have an interest in
the Pool (represented by the remaining BCRC Certificate and the Variable
Funding Certificate) equal to at least 2% of the aggregate amount of
Receivables included in the Pool. Additional conditions to the delivery of a
Supplemental Certificate are (i) BCRC shall have given the Rating Agencies 10
days' prior notice and the Rating Agency Condition shall have been satisfied
with respect to such exchange and (ii) a Tax Opinion shall be delivered to the
Trustee. In addition, if the Supplement pursuant to which the Supplemental
Certificate is issued amends any of the terms of the Pooling and Servicing
Agreement, the Supplement shall be subject to the conditions described under
the caption "Amendments" below.
If any Supplemental Certificate is to be transferred or exchanged, it shall
be transferred or exchanged only upon satisfaction of the conditions set forth
in clauses (i) and (ii) of the preceding paragraph.
If a Supplemental Certificate is issued, all references herein to the BCRC
Certificate and distributions made with respect to the BCRC Certificate shall
include the Supplemental Certificate and distributions to be made with respect
to the Supplemental Certificate and references to the holder of the BCRC
Certificate or to BCRC as holder of the BCRC Certificate shall include BCRC
and the holder of the Supplemental Certificate.
CONVEYANCE OF RECEIVABLES AND COLLATERAL SECURITY
On the date of the issuance of the Series 1994-1 Certificates (the "Initial
Closing Date"), BCRC sold and assigned to the Trust all of BCRC's right, title
and interest in and to the Receivables under the Eligible Accounts purchased
from BCI and the related Collateral Security as of the Initial Cut-Off Date,
all Receivables thereafter created in such Accounts and BCRC's interest in the
related Collateral Security and the Receivables Purchase Agreement (other than
repurchase agreements and other agreements with manufacturers, importers or
distributors), and the proceeds of all of the foregoing. Since the Initial
Closing Date, BCRC has twice added Additional Accounts to the Trust as shown
in Annex II hereto.
In connection with the sale of the Receivables then existing or thereafter
arising under the Eligible Accounts sold or contributed to BCRC by BCI and the
transfer of such Receivables by BCRC to the Trust, BCI has indicated in its
computer records that such Receivables and the related Collateral Security
have been transferred to BCRC and that BCRC has transferred its interest
therein to the Trust. In addition, BCI provided to BCRC, and BCRC has provided
to the Trustee, a computer file or microfiche or written list containing a
true and complete list of all the Eligible Accounts and the outstanding
balances of the Receivables therein as of the Initial Cut-Off Date and as of
the Additional Cut-Off Dates, as applicable. BCI has retained and will not
deliver to BCRC or to the Trustee any other records or agreements relating to
such Receivables. Except as set forth above, the records and agreements
relating to the Receivables in such Eligible Accounts have not and will not be
segregated from those relating to other accounts and receivables of BCI, and
the physical documentation relating to such Receivables will not be stamped or
marked to reflect the transfer of such Receivables to the Trust. BCRC has
filed one or more financing statements in accordance with Vermont state law to
perfect the Trust's interest in such Receivables, the Collateral Security, the
Receivables Purchase Agreement and the proceeds thereof. See "Risk Factors--
Certain Legal Aspects" and "Certain Legal Aspects of the Receivables."
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As described below under "Addition of Accounts," BCRC has the right (subject
to certain limitations and conditions), and in some circumstances is
obligated, to designate from time to time additional accounts to be included
as Additional Accounts, to acquire from BCI under the Receivables Purchase
Agreement the Receivables then existing or thereafter created in such
Additional Accounts and to convey to the Trust the Receivables then existing
or subsequently arising thereunder. Each such Additional Account must be an
Eligible Account. In respect of any conveyance of Receivables in Additional
Accounts, BCRC will follow the procedures set forth in the preceding
paragraph, except that the computer file or microfiche or written list will
show information for such Additional Accounts as of the date such Additional
Accounts are identified and selected (the "Additional Cut-Off Date").
REPRESENTATIONS AND WARRANTIES
In certain situations, BCRC is required from time to time to add or remove
or repurchase Receivables in certain designated Accounts to or from the Trust.
In addition, under certain conditions BCRC has the right at its option to add
or remove Receivables in certain designated Accounts to or from the Trust. The
following paragraphs as well as those set forth under the captions "Addition
of Accounts" and "Removal of Accounts and Assignment of Receivables" below
summarize the circumstances under which such actions must or may be taken and
the respective repurchase obligations of BCRC and BCI with respect to the
Accounts and the Receivables.
BCRC has made representations and warranties to the Trustee and will make
such representations and warranties on the Closing Date relating to the
Accounts, the Receivables and the Collateral Security to the effect, among
other things, that (a) as of the Initial Cut-Off Date, the Initial Closing
Date, the Closing Date and any future Series Issuance Date, each Account is an
Eligible Account and, in the case of Additional Accounts, as of the Additional
Cut-Off Date and the date the related Accounts are included as Accounts (an
"Addition Date") and on each Transfer Date, each Additional Account is an
Eligible Account, (b) each Receivable and all Collateral Security conveyed to
the Trust on the Initial Closing Date or, in the case of Additional Accounts,
on the Addition Date, and on each Transfer Date have been conveyed to the
Trust free and clear of any liens, except for liens created or permitted under
the Pooling and Servicing Agreement and (c) with respect to each Receivable
and all Collateral Security transferred to the Trust on the Initial Closing
Date or, in the case of Additional Accounts, the Addition Date, and on each
Transfer Date, all appropriate consents and governmental authorizations
required to be obtained by BCRC in connection with the conveyance of each such
Receivable or Collateral Security to the Trust have been duly obtained. If
BCRC breaches any representation and warranty described in this paragraph and
such breach remains uncured for 30 days or such longer period as may be agreed
to by the Trustee, after the earlier to occur of the discovery of such breach
or receipt of written notice of such breach by BCRC, and such breach has a
materially adverse effect on the Certificateholders and the holders of
investor certificates of each other outstanding Series or the interest
represented by the Variable Funding Certificate, such Receivable or, in the
case of a breach relating to an Account, all Receivables in the related
Account will be retransferred from the Trust to BCRC on the terms and
conditions set forth below (and in the case of an Account, such Account shall
no longer be designated for inclusion in the Trust).
"Transfer Date" means each business day on which Receivables are created in
the Eligible Accounts provided that such date is prior to the earlier of the
Appointment Date and the Termination Date. An "Appointment Date" occurs if a
Liquidation Event occurs or if BCRC violates its covenant not to create or
permit to exist any liens on the Receivables or the Collateral Security except
to the extent permitted by the Pooling and Servicing Agreement and such
violation becomes an Early Amortization Event.
Each such Receivable shall be retransferred from the Trust to BCRC on or
before the end of the Collection Period in which such retransfer obligation
arises, with a corresponding reduction in the principal balance of such
Receivable from the Pool Balance. Unless a Liquidation Event has occurred, in
the event that such deduction would cause the Pool Balance to be less than the
Required Pool Balance on the preceding Determination Date (after giving effect
to the allocations, distributions, withdrawals and deposits to be made on the
related
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Distribution Date), on the date on which such retransfer to BCRC is to occur,
BCRC will be obligated to make a deposit into the Collection Account in
immediately available funds in an amount equal to the amount by which the Pool
Balance would be less than the Required Pool Balance as a result of such
deduction (the amount of any such deposit being referred to herein as a
"Transfer Deposit Amount"), provided that if the Transfer Deposit Amount is
not so deposited, the related Receivables will not be reassigned to BCRC and
will remain part of the Trust. The reassignment of any such Receivable to BCRC
and the payment of any related Transfer Deposit Amount will be the sole remedy
respecting any breach of the representations and warranties described in the
preceding paragraph with respect to such Receivable available to the
Certificateholders or the Trustee on behalf of the Certificateholders.
In the Pooling and Servicing Agreement, BCRC also makes representations and
warranties to the Trustee to the effect, among other things, that as of the
Initial Closing Date and each Series Issuance Date (including the Closing Date
for the Certificates) (a) it is duly incorporated and in good standing and has
the authority to consummate the transactions contemplated by the Pooling and
Servicing Agreement and the Pooling and Servicing Agreement (or in the case of
Additional Accounts, the related assignment) constitutes a valid, binding and
enforceable agreement of BCRC and (b) the Pooling and Servicing Agreement
constitutes a valid sale, transfer and assignment to the Trust of all right,
title and interest of BCRC in the Receivables and the Collateral Security,
whether then existing or thereafter created, and the proceeds thereof, under
the UCC as then in effect in the State of Vermont, which is effective on the
Closing Date (or as of the Addition Date, if applicable). In the event that
(i) any of the representations and warranties described in clause (a) of this
paragraph has been breached, (ii) the representation and warranty with respect
to the Pooling and Servicing Agreement in clause (b) of this paragraph has
been breached and the Pooling and Servicing Agreement does not constitute the
grant of a perfected security interest in the Receivables and the Collateral
Security (and the proceeds thereof) under the UCC as then in effect in the
State of Vermont or (iii) certain other representations and warranties set
forth in the Pooling and Servicing Agreement are breached, and, in the case of
clause (i), (ii) or (iii), such breach has a material adverse effect on the
interests of the Certificateholders and the holders of investor certificates
of each other outstanding Series or the holder of the Variable Funding
Certificate, either the Trustee, the holder of the Variable Funding
Certificate, or the holders of investor certificates of all outstanding Series
(including the Certificates) evidencing not less than a majority of the
aggregate unpaid principal amount of all outstanding Series of investor
certificates, by written notice to BCRC and the Servicer (and to the Trustee
and the issuer or provider of any Enhancement (an "Enhancement Provider") if
given by certificateholders), may, unless a Liquidation Event has occurred,
direct the Depositor to repurchase the interest in the Receivables represented
by each outstanding Series or the Variable Funding Certificate (or both)
within 60 days of such notice, or within such longer period specified in such
notice. Such repurchase will not be required to be made, however, if at the
end of such applicable period, (x) each such representation and warranty shall
be satisfied in all material respects or (y) in the case of clause (b) of this
paragraph, the Pooling and Servicing Agreement then constitutes the grant of a
security interest in the Receivables and the Collateral Security (and proceeds
thereof) under the UCC as then in effect in the State of Vermont, and any
material adverse effect on the interest in the Receivables represented by each
outstanding Series or the Variable Funding Certificate (or both), as
applicable caused thereby shall have been cured. The portion of the price for
such repurchase in respect of the Certificates will be equal to the sum of (i)
the aggregate principal balance of the Certificates on the Distribution Date
on which the purchase is scheduled to be made and (ii) accrued and unpaid
interest on the unpaid principal balance of the Certificates at the applicable
Certificate Rate plus any Class A Carry-Over Amount or Class B Carry-Over
Amount (together with interest on overdue Monthly Interest, to the extent
lawfully payable). The deposit by or on behalf of BCRC with the Trustee of the
repurchase price for all outstanding Series or the Variable Funding
Certificate (or both), in immediately available funds, will be considered a
payment in full of such Series or the Variable Funding Certificate (or both).
If notice is given as provided above, the obligation of BCRC to make any such
deposit will constitute the sole remedy respecting a breach of the
representations and warranties available to the investor certificateholders or
the holder of the Variable Funding Certificate or the Trustee on behalf of
such certificateholders.
"Determination Date" means, with respect to any Distribution Date, the day
that is two Business Days prior to such Distribution Date.
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ELIGIBLE ACCOUNTS AND ELIGIBLE RECEIVABLES
An "Eligible Account" is defined to mean (i) each individual financing
account established by BCI or, after the Series 1994-1 Final Payment Date,
established by an affiliate of BCI or by a third party (but which satisfies
BCI's customary underwriting standards) and acquired by BCI (or an affiliate
of BCI), with an Obligor with respect to Eligible Products pursuant to an
inventory security agreement or, after the Series 1994-1 Final Payment Date,
pursuant to a floorplan financing agreement other than an inventory security
agreement, in the ordinary course of business, and (ii) after the Series 1994-
1 Final Payment Date, each individual line of credit or financing agreement
extended by BCI (or an affiliate of BCI) or by a third party (but which
satisfies BCI's customary underwriting standards) and acquired by BCI or an
affiliate of BCI to an Obligor for the purpose of financing working capital,
manufacturing, production or inventories and secured by assets of such
Obligor, which, in each case, as of the date of determination thereof (a)
relates to an Obligor that is an "Eligible Obligor" and (b) is in existence
and, after its establishment or acquisition by BCI or an affiliate of BCI, is
maintained and serviced by BCI. Prior to the Series 1994-1 Final Payment Date,
an Account shall not be an Eligible Account if BCI has assigned (or granted
any participation rights in) such Account or any Receivable therein to any
person (other than BCRC or the Trust). After the Series 1994-1 Final Payment
Date, BCI (or its affiliates) may assign (or grant participation rights in)
such Account or any Receivable therein to any person without affecting such
Account's status as an Eligible Account. See "Removal of Accounts and
Assignment of Receivables" below and "The Floorplan and Asset-Based Financing
Business--Participation Arrangements." Payments received on account of
Receivables arising in Accounts in which a third-party has a Participation
Interest are allocated to the Trust only to the extent of BCI's undivided
interest in the related advance and the amount of such payments allocated to
the undivided interest of the third party will not be included in the Trust.
In addition, Receivables arising under Accounts included in the Pool shall,
upon removal for assignment to a third party or removal for any other purpose,
no longer be included in the Trust's assets. The definition of Eligible
Account may be changed by amendment to the Pooling and Servicing Agreement
without the consent of the Certificateholders if the Rating Agency Condition
is satisfied.
An "Eligible Obligor" is defined to mean (a) in the case of Domestic
Inventory Receivables, a dealer that is located in the United States of
America (including its territories and possessions), (b) in the case of Asset-
Based Receivables, a dealer, distributor or manufacturer that is located in
the United States of America (including its territories and possessions) and
(c) which Obligor, in the case of Domestic Inventory Receivables and Asset-
Based Receivables, has not been identified by the Servicer as being the
subject of any voluntary or involuntary bankruptcy, insolvency, liquidation or
receivership proceedings.
An "Eligible Receivable" is defined to mean each Receivable: (a) which was
originated by BCI or, after the Series 1994-1 Final Payment Date, by an
affiliate of BCI or acquired by BCI (or an affiliate of BCI) (with respect to
Domestic Inventory Receivables and, after the Series 1994-1 Final Payment
Date, Asset-Based Receivables) in each case in the ordinary course of
business, (b) which arose under an Account that at the time such Receivable
was transferred to the Trust was an Eligible Account, (c) which is owned by
BCI at the time of sale or contribution by BCI to BCRC, (d) which represents
the obligation of an Obligor to repay an advance made to or on behalf of such
Obligor (or credit extended for such Obligor), in the case of Domestic
Inventory Receivables, to finance an Eligible Product and, in the case of
Asset-Based Receivables, to finance working capital or the production,
manufacturing or inventory of Eligible Products, (e) which in the case of (i)
Domestic Inventory Receivables, at the time of creation and (except with
respect to Receivables that are payable in accordance with a repayment
schedule regardless of whether the related Eligible Products have been sold
and with respect to which the related Eligible Products have then been sold)
at the time of transfer to the Trust, is secured by a first priority perfected
security interest in the Eligible Product relating thereto and, (ii) Asset-
Based Receivables included in the Trust, the obligations with respect thereto
at the time of transfer to the Trust are secured by a first priority perfected
security interest in goods, accounts, work in process, raw materials,
component parts or other rights or assets of the Obligor; (f) which is not
unenforceable as a result of any violation of requirements of law applicable
thereto and the related inventory security agreement or, after the Series
1994-1 Final Payment Date, the other floorplan financing agreement in the case
of Domestic Inventory Receivables or the related loan agreement in the case of
Asset-Based Receivables is not unenforceable as a result of any violation of
requirements of law applicable to any party thereto, (g) with respect to which
all consents and
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governmental authorizations required to be obtained by BCI (or an affiliate of
BCI) or BCRC in connection with the creation of such Receivable or the
transfer thereof to BCRC and the Trust or the performance by BCI (or an
affiliate of BCI) of the inventory security agreement or, after the Series
1994-1 Final Payment Date, the other floorplan financing agreement in the case
of Domestic Inventory Receivables or the related loan agreement in the case of
Asset-Based Receivables pursuant to which such Receivable was created, have
been duly obtained, effected or given and are in full force and effect, (h) as
to which at all times following the transfer of such Receivable to the Trust,
the Trust will have good and marketable title thereto free and clear of all
liens arising prior to the transfer or arising at any time, other than liens
permitted pursuant to the Pooling and Servicing Agreement and other than tax
and certain other statutory liens (including liens in favor of the Pension
Benefit Guaranty Corporation) which may arise thereafter and which relate to
affiliates of BCRC, (i) which has been the subject of a valid transfer and
assignment from the Depositor to the Trust of all the Depositor's right, title
and interest therein (including, with certain exceptions, any proceeds
thereof), (j) which will at all times be the legal and assignable payment
obligation of the Obligor relating thereto, enforceable against such Obligor
in accordance with its terms (as such terms may be modified or revised from
time to time with the consent of the Servicer), except as such enforceability
may be limited by the Bankruptcy Code or other applicable Insolvency Laws,
(k) which at the time of transfer to the Trust is enforceable against the
Obligor to the extent of the full principal amount of such Receivable, except
as such enforceability may be limited by the Bankruptcy Code or other
applicable Insolvency Laws, (l) as to which, at the time of transfer of such
Receivable to the Trust, BCI (or an affiliate of BCI) and BCRC have satisfied
all their respective obligations under the Pooling and Servicing Agreement
with respect to such Receivable required to be satisfied at such time, (m) as
to which, at the time of transfer of such Receivable to the Trust, neither BCI
(or any affiliate of BCI) nor BCRC has taken any action (or failed to take any
action required of it under the Receivables Purchase Agreement or the Pooling
and Servicing Agreement) which would impair the rights of the Trust or the
certificateholders therein and (n) which constitutes either an "account" or
"chattel paper" as defined in Article 9 of the UCC as then in effect in the
State of Vermont; provided, however, that "Eligible Receivables" do not
include any Domestic Inventory Receivables that have not been paid in full
within 491 days following the origination thereof subject, for the period from
the Closing Date through May 31, 1998, to the limitation that with respect to
Domestic Inventory Receivables included in the Pool Balance on the Closing
Date, no more than 10% of the aggregate principal balance of such Domestic
Inventory Receivables (which percentage is expected to equal approximately
$79,000,000) will be excluded from Eligible Receivables pursuant to this
proviso, and subject further, commencing June 1, 1998, to the limitation that
with respect to each four month period commencing June 1, October 1, and
February 1, of each year (each, an "Origination Period"), no more than 10% of
the aggregate principal balance of Domestic Inventory Receivables originated
and transferred to the Trust during the four month period commencing 16 months
prior to each Origination Period will be excluded from Eligible Receivables
pursuant to this proviso; in addition, prior to and including the Series 1994-
1 Final Payment Date, but not thereafter, Domestic Inventory Receivables in
the following categories shall also be excluded from Eligible Receivables:
(1) in the case of a Domestic Inventory Receivable which is to be repaid upon
sale of the related Eligible Product and not pursuant to a scheduled payment
program, and such related Eligible Product has been sold by the Obligor and
the principal of which Receivable has not been paid in full within 21 days,
(2) in the case of a Domestic Inventory Receivable which is to be repaid
pursuant to a scheduled payment program, any principal payment of such
Receivable has not been paid in full within 21 days and (3) in the case of
Domestic Inventory Receivables with respect to which interest payments
(aggregating at least $150 with respect to Receivables under the same Account)
are more than 120 days delinquent. The foregoing definition of "Eligible
Receivables" may be changed by amendment to the Pooling and Servicing
Agreement without the consent of the Certificateholders if the Rating Agency
Condition for such amendment is satisfied.
It is not required or anticipated that BCRC or the Trustee will make any
initial or periodic general examination of the Receivables or any records
relating to the Receivables for the purpose of establishing the presence or
absence of defects, compliance with representations and warranties of BCI or
for any other purpose. In addition, it is not anticipated or required that
BCRC or the Trustee will make any initial or periodic general examination of
the Servicer for the purpose of establishing the compliance by the Servicer
with its representations or warranties, the observation of its obligations
under the Pooling and Servicing Agreement or for any other purpose.
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INELIGIBLE RECEIVABLES
Any Receivable that is not an Eligible Receivable is an "Ineligible
Receivable." Although Ineligible Receivables existing or arising in Eligible
Accounts will from time to time be transferred to the Trust, the Pool Balance
will for all purposes be calculated solely on the basis of the aggregate
principal balance of Receivables that are Eligible Receivables.
ADDITION OF ACCOUNTS
Subject to the conditions described below, BCRC has the right to designate
from time to time additional Eligible Accounts (the Receivables in which
Accounts would be transferred to BCRC by BCI under the Receivables Purchase
Agreement) to be included in the Pool as Accounts. In addition, unless a
Liquidation Event has occurred, BCRC is required to designate and to add to
the Pool the Receivables of additional Eligible Accounts if, as of the date
for which such calculation is made, either (i) the Pool Balance is less than
the Required Pool Balance (as defined below) or (ii) the aggregate interest in
the Pool represented by the BCRC Certificate and the Variable Funding
Certificate held by BCRC is less than 2% of the aggregate amount of
Receivables included in the Pool. In either case referred to in the preceding
sentence, unless a Liquidation Event has occurred with respect to BCI or BCRC,
BCRC under the Receivables Purchase Agreement will be required to purchase or
acquire from BCI (but BCI will have no obligation to sell to BCRC), within 10
business days after the event described in (i) or (ii) has occurred, the
Receivables arising in such Additional Accounts to the extent necessary to
cure the above deficiency. Any provision under the Pooling and Servicing
Agreement (and the Receivables Purchase Agreement) requiring BCRC to designate
Additional Accounts to the Pool means accounts of the same type, i.e.,
Accounts giving rise to Domestic Inventory Receivables or if, after the Series
1994-1 Final Payment Date, Asset-Based Receivables have already been added to
the Pool, then Accounts giving rise to either Domestic Inventory Receivables
or Asset-Based Receivables. However, at the options of BCRC and BCI and
subject to certain conditions (including satisfaction of the Rating Agency
Condition referred to below), after the Series 1994-1 Final Payment Date,
Asset-Based Receivables may be added in satisfaction of such a requirement
even if the only Accounts then in the Trust are Accounts containing Domestic
Inventory Receivables. Additional accounts referred to in this paragraph are
"Additional Accounts" and the term "Accounts" as used herein shall include
Additional Accounts.
Any designation of Additional Accounts referred to in the preceding
paragraph is subject to the following conditions, among others: (i) each such
Additional Account must be an Eligible Account and with respect to Additional
Accounts designated at the option of BCRC, the Rating Agency Condition shall
have been satisfied; provided, that after the Series 1994-1 Final Payment
Date, the Rating Agency Condition need not be satisfied if the Automatic
Addition Condition (described below) has been satisfied; (ii) the addition of
the Receivables arising in such Additional Accounts shall not, in the
reasonable belief of BCRC, cause an Early Amortization Event to occur; (iii)
BCRC shall not select such Additional Accounts in a manner that it believes is
adverse to the interests of the certificateholders or any Enhancement
Provider; and (iv) unless the Accounts are being added pursuant to the
Automatic Addition Condition, BCRC shall deliver certain legal opinions to the
Trustee and any Enhancement Providers.
Each Additional Account must be an Eligible Account at the time of its
addition and, unless all necessary conditions (including, without limitation,
if not already included in the Pool, satisfaction of the Rating Agency
Condition with respect to the inclusion of Asset-Based Receivables) have been
met, such Additional Accounts may not include Asset-Based Receivables.
However, since Additional Accounts (as well as Receivables in general arising
under Accounts subsequent to the Series Cut-Off Date or arising under
Additional Accounts) may have been originated or, after the Series 1994-1
Final Payment Date, acquired by BCI or its affiliates at a later date using
credit criteria, or having other characteristics, different from those which
were applicable to the Accounts and the Receivables therein transferred to the
Trust prior to the Closing Date, they may not be of the same credit quality as
such Accounts and such Receivables.
The "Automatic Addition Condition" means, with respect to the designation of
Additional Accounts after the Series 1994-1 Final Payment Date, that (i) such
Accounts do not contain Asset-Based Receivables unless
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Asset-Based Receivables have been previously added to the Trust after having
met the Rating Agency Condition, (ii) during the calendar quarter in which
such addition occurs, the number of new Accounts which have been added (after
taking into account such addition) will not exceed 5% of the number of all
Accounts at the end of the preceding calendar quarter and the aggregate dollar
amount of Principal Receivables in such new Accounts added pursuant to the
Automatic Addition Condition during such calendar quarter shall not exceed 5%
of the Pool Balance at the end of the preceding calendar quarter, and (iii)
during the 12 consecutive calendar months ending with the calendar month in
which the addition is made and including such addition, the number of such new
Accounts does not exceed 20% of the number of all Accounts at the beginning of
such 12-month period and the aggregate dollar amount of Principal Receivables
in such new Accounts added pursuant to the Automatic Addition Condition during
such 12-month period shall not exceed 20% of the Pool Balance at the beginning
of such 12-month period. When determining the amount of Accounts and Principal
Receivables which have been added to the Trust for purposes of the tests set
forth in (ii) and (iii) of this paragraph, only those Accounts which have been
added pursuant to the Automatic Addition Condition will be taken into
consideration. Additions made under other provisions of the Pooling and
Servicing Agreement will not be included. If Accounts have been added pursuant
to the Automatic Addition Condition certain legal opinions related to such
Accounts are to be delivered to the Trustee every six months to the extent
that the addition of such Accounts have not been covered by legal opinions
previously delivered to the Trustee.
"Rating Agency Condition" means, with respect to any action, if the terms of
the Pooling and Servicing Agreement or the Series 1997-1 Supplement set forth
a specific time in advance of the effectiveness of the action that notice must
be given to the Rating Agencies, notice shall have been given in accordance
with such requirement or if no advance notice is required or no specific time
is stated for such notice, the Rating Agencies have received written notice of
the proposed action at least 10 days prior to the proposed effective date of
such action and either (i) as of the proposed effective date of the action, no
Rating Agency shall have notified the Depositor, the Servicer or the Trustee
in writing that such action will result in a reduction or withdrawal of any
rating of any outstanding Series or class with respect to which it is a Rating
Agency, or (ii) each such Rating Agency shall have confirmed in writing to the
Depositor, the Servicer or the Trustee that such action will not result in a
reduction or withdrawal of the rating of any outstanding Series or class with
respect to which it is a Rating Agency.
"Required Pool Balance" for any date means an amount equal to (x) the sum of
the amounts for each Series obtained by multiplying the required investor
percentages (including the Required Investor Percentage) by the respective
adjusted invested amounts (including the Adjusted Invested Amount), before
giving effect to any withdrawals or additions to any excess funding accounts
(including the Excess Funding Account) or similar arrangements for any Series
on the Distribution Date for which the Required Pool Balance is calculated,
plus (y) the Pool Available Subordinated Amount for the most recent preceding
Distribution Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on such preceding Distribution Date) minus
(z) any amount on deposit in any reserve fund on such date, except that, for
Series 1997-1, the amount for this clause (z) will be equal to the positive
difference, if any, between the amount on deposit in the Reserve Fund and the
Reserve Fund Required Amount; provided that, after the Series 1994-1 Final
Payment Date, the Required Pool Balance will mean the amount calculated as of
the end of any business day equal to (x) the sum of the amounts for each
Series obtained by multiplying the required investor percentages (including
the Required Investor Percentage) by the respective adjusted invested amounts
(including the Adjusted Invested Amount) plus (y) the Pool Available
Subordinated Amount as of the end of such Business Day; minus (z) any amount
on deposit in any reserve fund on such date, except that, for Series 1997-1,
the amount for this clause (z) will be equal to the positive difference, if
any, between the amount on deposit in the Reserve Fund and the Reserve Fund
Required Amount; provided, further, that with respect to Series 1997-1, for
the purpose of calculating the Required Pool Balance, the Pre-Allocated
Invested Amount will be subtracted from the product of the Required Investor
Percentage and the Adjusted Invested Amount.
The "Series 1997-1 Required Balance" with respect to any date is the sum of
(x) (i) the Required Investor Percentage of the Adjusted Invested Amount minus
(ii) the Pre-Allocated Invested Amount and (y) the Available Subordinated
Amount.
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"Required Investor Percentage" will mean, with respect to the Certificates,
104%; provided, however, that BCRC may, reduce or otherwise adjust the
Required Investor Percentage without the consent of the Certificateholders so
long as the Rating Agency Condition has been satisfied.
REMOVAL OF ACCOUNTS AND ASSIGNMENT OF RECEIVABLES
BCRC shall have the right at any time to cease transferring newly originated
Receivables in certain designated Accounts (the "Removed Accounts") to the
Trust. To cease transferring any newly originated Receivables in such Removed
Account, BCRC (or the Servicer on its behalf) shall, among other things, (a)
on or before the fifth business day prior to the date on which the transfer of
such Receivables will cease (the "Removal Commencement Date"), furnish to the
Trustee, any Enhancement Provider and each Rating Agency a written notice (the
"Removal Notice") specifying the Removal Commencement Date; (b) on or before
the fifth business day after the Removal Commencement Date, BCRC shall have
furnished to the Trustee a computer file, microfiche list or other list of the
Removed Accounts, specifying for each Removed Account as of the date of the
Removal Notice its number, the aggregate amount outstanding in such Removed
Account and the aggregate amount of Receivables therein as of the Removal
Commencement Date; (c) represent and warrant that the removal of such Removed
Accounts will not, in the reasonable belief of BCRC, cause an Early
Amortization Event to occur or cause the Pool Balance to be less than the
Required Pool Balance; (d) represent and warrant that no selection procedures
believed by BCRC to be adverse to the holders of certificates of any Series
were utilized in selecting the Removed Accounts; (e) represent and warrant
that the removal of such Removed Accounts will not result in a reduction or
withdrawal of the ratings of the Certificates or any other outstanding Series
or class of investor certificates by any Rating Agency; and (f) on or before
the related Removal Commencement Date, deliver to the Trustee and any
Enhancement Provider an officers' certificate confirming the items set forth
in clauses (c), (d) and (e) above. Under certain conditions, the Pooling and
Servicing Agreement may be amended without the consent of the
Certificateholders or any Rating Agency to permit BCRC to also remove existing
Receivables in Removed Accounts (including all amounts then held or thereafter
received in respect of such Receivables). See "Amendments."
On the fifth business day after any date on which an Account becomes an
Ineligible Account (the "Removal Commencement Date"), BCRC will commence the
removal of the Receivables of such Ineligible Account from the Trust by (a)
furnishing to the Trustee, any Enhancement Provider and the Rating Agencies a
Removal Notice specifying the Removal Commencement Date and the Ineligible
Accounts to be removed; (b) on or before the fifth business day after the
Removal Commencement Date, furnishing to the Trustee a computer file,
microfiche list or other list of the Ineligible Accounts, specifying for each
Ineligible Account as of the date of the Removal Notice, its number, the
Receivables therein as of the date immediately preceding the Removal
Commencement Date and the aggregate amount and outstanding principal balance
of such Receivables and (c) from and after such Removal Commencement Date,
ceasing to transfer to the Trust any Receivables arising in the Ineligible
Accounts.
With respect to the removal of Accounts pursuant to either of the two
immediately preceding paragraphs, whether such removal occurs at the option of
BCRC prior to the time that BCRC is permitted to remove existing Receivables
in Removed Accounts or upon a required removal of an Ineligible Account, (a)
from and after the applicable Removal Commencement Date, all Principal
Collections in respect of each Removed Account or Ineligible Account will be
allocated first to the oldest outstanding principal balance of such Account,
until the Determination Date on which the outstanding principal balance of
Receivables (the "Designated Balance") in such Account is reduced to zero
(with respect to any such Account, the "Removal Termination Date"); and (b) on
each business day from and after such Removal Commencement Date until the
related Removal Termination Date, BCRC will allocate (x) to the Trust (to be
further allocated pursuant to the Pooling and Servicing Agreement), Non-
Principal Collections in respect of such Accounts based on the ratio of (1)
the amount of Principal Receivables in such Accounts on such business day that
were previously sold to the Trust to (2) the total amount of Principal
Receivables in such Account on such business day and (y) to the Depositor the
remainder of the Non-Principal Collections in respect of such Accounts on such
business day.
Upon satisfaction of the above conditions on the related Removal Termination
Date, such Removed Accounts or Ineligible Accounts shall be deemed to have
been removed from the Trust and BCRC shall be permitted to sell, transfer,
assign, set over and otherwise convey, without recourse, representation or
warranty,
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all the right, title and interest in and to the Receivables remaining and
thereafter arising in the Removed Accounts or Ineligible Accounts, all amounts
received or to be received with respect thereto and all proceeds thereof.
After the Series 1994-1 Final Payment Date, BCRC shall have the right at any
time to remove specific Receivables from the Trust, including all amounts then
held or thereafter received in respect of such Receivables, without removing
any other Receivables in the related Account then existing or thereafter
arising, and shall have the right to remove the related Collateral Security
and other rights associated with such Receivables, provided the Receivables
are removed from the Trust in connection with an assignment of such
Receivables to a third party in return for payment for such Receivables. As a
condition to the assignment and removal of such Receivables, the payment
therefor shall be in an amount at least equal to the principal amount of such
Receivables plus accrued interest to the removal date. All of such payments
shall be included as collections. BCRC has agreed pursuant to the Pooling and
Servicing Agreement that any such removal will take place only if, in the
reasonable belief of BCRC, no Early Amortization Event will occur as a result
of such removal.
During any Collection Period after the Series 1994-1 Final Payment Date,
BCRC shall have the right to cause the Trustee to remove from the Trust and
reassign to BCRC (i) at any time during the period from the Closing Date
through May 31, 1998, Domestic Inventory Receivables included in the Pool
Balance on the Closing Date that continue to be unpaid in full 450 or more
days following the origination thereof, provided that the aggregate amount of
such Domestic Inventory Receivables that may be so removed and reassigned
shall not exceed 10% of the aggregate principal balance of Domestic Inventory
Receivables included in the Pool Balance on the Closing Date (which percentage
is expected to equal approximately $79,000,000), and (ii) at any time during
any Origination Period commencing after May 31, 1998, Domestic Inventory
Receivables originated and transferred to the Trust during the four month
period commencing 16 months prior to such Origination Period that continue to
be unpaid in full 450 or more days following the origination thereof, provided
that the aggregate amount of such Domestic Inventory Receivables that may be
so removed and reassigned shall not exceed 10% of the aggregate principal
balance of Domestic Inventory Receivables originated and transferred to the
Trust during such four month period commencing 16 months prior to such
Origination Period. BCRC shall effect such removal and reassignment by
depositing in the Collection Account for application as collections on the
Receivables an amount equal to the principal amount of such Receivables plus
accrued interest to the date of such reassignment. The Trust will be under no
obligation to hold any such Receivables for the purpose of allowing BCRC to
cause a reassignment of such Receivables.
In addition to the provisions described above, the Pooling and Servicing
Agreement provides that, after the Series 1994-1 Final Payment Date, in
connection with the granting of Participation Interests in Receivables in the
Trust, BCRC shall have the right to remove from the Trust the undivided
interest which is to be granted to a third party. If an interest in a
Receivable is removed, the Collateral Security or interest in the Collateral
Security attributable to such interest may also be removed. The requirements
for removing an undivided interest include the requirement that BCRC or the
Servicer on BCRC's behalf, represent and warrant that such removal will not,
in the reasonable belief of BCRC, cause an Early Amortization Event to occur
or cause the Pool Balance to be less than the Required Pool Balance. See "The
Floorplan and Asset-Based Financing Business--Participation Arrangements."
CREDIT SUPPORT FOR THE CERTIFICATES
The following sections summarize the structure for allocating collections
made on the Receivables and certain other amounts among the Classes of
Certificates, the other Series, the Variable Funding Certificate and the BCRC
Certificate.
COLLECTION ACCOUNT
The Servicer has established and is required to maintain, or cause to be
established and maintained, an Eligible Deposit Account for the benefit of
certificateholders in the name of the Trustee (the "Collection Account").
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution or trust company organized under
the laws of the United States or any one of the states thereof (or any
domestic branch of a foreign bank), having corporate trust powers and acting
as trustee for funds deposited in such account, so long as any of the
securities of such depository institution or trust company has a credit rating
from each Rating
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Agency in one of its generic rating categories which signifies investment
grade. "Eligible Institution" means (a) the corporate trust department of the
Trustee or (b) a depository institution or trust company organized under the
laws of the United States or any one of the states thereof (or a domestic
branch of a foreign bank) which at all times (i) has either (x) a long-term
unsecured debt rating acceptable to each such Rating Agency or (y) a
certificate of deposit rating acceptable to each such Rating Agency and (ii)
is a member of the FDIC. Funds in the Collection Account generally will be
invested in (i) obligations of or fully guaranteed by the United States, (ii)
demand deposits, time deposits or certificates of deposit of depository
institutions or trust companies incorporated under the laws of the United
States or any state thereof (or any domestic branch of a foreign bank) and
subject to supervision and examination by Federal or state banking or
depository institution authorities, the commercial paper or other short-term
unsecured debt obligations (other than such obligations the rating of which is
based on the credit of a person or entity other than such depository
institution or trust company) of which at the time of the Trust's investment
or contractual commitment to invest therein has a credit rating from any
individual Rating Agency in the highest investment category granted thereby,
(iii) commercial paper at the time of the Trust's investment of contractual
commitment to invest therein having a credit rating from any individual Rating
Agency in the highest investment category granted thereby, (iv) demand
deposits, time deposits and certificates of deposit which are fully insured by
the FDIC, (v) bankers' acceptances issued by any depository institution or
trust company described in (ii) above, (vi) investments in money market funds
which have the highest rating from, or have otherwise been approved in writing
by, any individual Rating Agency, (vii) certain repurchase obligations entered
into with depositor institutions or trust companies with respect to securities
which are direct obligations of or obligations guaranteed by the United States
or any agency or instrumentality thereof which is backed by the full faith and
credit of the United States, and (viii) other investments acceptable to any
individual Rating Agency as being consistent with the then-current rating of
the Certificates (collectively, "Eligible Investments"). Any earnings (net of
losses and investment expenses) on funds in the Collection Account will be
credited to the Collection Account. The Servicer will have the revocable power
to instruct the Trustee to make withdrawals and payments from the Collection
Account for the purpose of carrying out the Trustee's or the Servicer's duties
under the Pooling and Servicing Agreement.
EXCESS FUNDING ACCOUNT
The Excess Funding Account is intended to preserve for the benefit of the
Certificateholders certain Principal Collections otherwise payable in respect
of other Series or the BCRC Certificate during the Revolving Period and the
Amortization Period. The Excess Funding Account is held for the benefit of the
Certificateholders in the name of the Trustee.
The following is a discussion of how deposits to and withdrawals from the
Excess Funding Account will be made prior to the Series 1994-1 Final Payment
Date. The succeeding paragraph specifies how such withdrawals and deposits
will be made pursuant to the Delayed Amendments after the Series 1994-1 Final
Payment Date. On each Distribution Date during the Revolving Period, if the
Pool Balance at the end of the preceding Collection Period is less than the
Required Pool Balance for such Distribution Date, the Servicer will cause
Available Investor Principal Collections to be deposited by the Servicer in
the Excess Funding Account in an amount equal to the Excess Funded Amount as
of such Distribution Date, minus the amount then held in the Excess Funding
Account. The "Excess Funded Amount" as of a Distribution Date is equal to the
product of (a) the excess, if any, of (i) the Required Pool Balance on the day
immediately prior to such Distribution Date over (ii) the Pool Balance at the
end of the preceding Collection Period and (b) a fraction the numerator of
which is the Series 1997-1 Required Balance and the denominator of which is
the aggregate of the required balances for all Series (including the Series
1997-1 Required Balance) providing for excess funding accounts or similar
arrangements. On each Distribution Date during the Revolving Period, funds on
deposit in the Excess Funding Account (including without limitation the Excess
Funded Amount) will be withdrawn and paid (or made available) to the holder of
the BCRC Certificate or allocated to one or more Series which are in
amortization, early amortization or accumulation periods if the excess
referred to in the preceding sentence (i.e., the excess of the amount under
clause (i) over the amount under clause (ii)) has been reduced or no longer
exists, which would generally occur as a result of the addition of Receivables
to the Trust.
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Following the Series 1994-1 Final Payment Date, on each Business Day during
the Revolving Period and the Amortization Period, if the Pool Balance at the
end of the preceding Business Day was less than the Required Pool Balance also
calculated as of the end of such preceding Business Day, the Servicer will
cause Principal Collections allocable to the Certificates (during an
Amortization Period, after depositing into the Collection Account an amount
equal to the Monthly Principal for the related Distribution Date) to be
deposited by the Servicer in the Excess Funding Account in an amount equal to
the Excess Funded Amount (such amount having been also calculated as of the
end of the preceding Business Day), minus the amount then held in the Excess
Funding Account. The "Excess Funded Amount" shall, following the Series 1994-1
Final Payment Date, be calculated for each Business Day and shall be an amount
equal to the product of (a) the excess, if any, of (i) the Required Pool
Balance as of the end of the preceding day over (ii) the Pool Balance as of
the end of such preceding day and (b) a fraction the numerator of which is the
Series 1997-1 Required Balance and the denominator of which is the aggregate
of the required balances for all Series (including the Series 1997-1 Required
Balance) providing for excess funding accounts or similar arrangements.
Following the Series 1994-1 Final Payment Date, on each Business Day during
the Revolving Period or the Amortization Period, funds on deposit in the
Excess Funding Account (including without limitation the Excess Funded Amount)
will be withdrawn and paid (or made available) to the holder of the BCRC
Certificate or allocated to one or more Series which are in amortization,
early amortization or accumulation periods to the extent that as of the end of
the preceding day, the excess referred to the preceding sentence (i.e., the
amount under clause (a) (i) over the amount under clause (a) (ii)) has been
reduced or no longer exists.
Funds on deposit in the Excess Funding Account will be invested at the
direction of the Servicer in Eligible Investments. On each Distribution Date,
all net investment income earned on amounts in the Excess Funding Account
since the preceding Distribution Date will be withdrawn from the Excess
Funding Account and applied as described herein.
ALLOCATION PERCENTAGES
This section sets forth the procedure for calculating the Certificates'
allocable share of certain distributions and other payments made with respect
to the Receivables. Amounts not allocated to the Certificates as described
below will be allocated to other Series, the Variable Funding Certificate or
the BCRC Certificate.
Allocation to the Certificates. The Servicer will allocate amounts to the
Certificates for each Collection Period as follows:
(i) Non-Principal Collections and the Defaulted Amount will be allocated
to the Certificates based on the Floating Allocation Percentage;
(ii) during the Revolving Period, Principal Collections will be allocated
to the Certificates based on the Floating Allocation Percentage;
(iii) during the Amortization Period, any Initial Amortization Period and
any Early Amortization Period, Principal Collections will be allocated to
the Certificates based on the Principal Allocation Percentage; and
(iv) Miscellaneous Payments will be allocated to the Certificates on the
basis of the Series 1997-1 Investor Allocation Percentage;
provided, however, that with respect to the allocation of Principal
Collections among Series and the Variable Funding Certificate for any
Collection Period, if the sum of (i) the sum of the floating allocation
percentages (including the Floating Allocation Percentage, if applicable) for
each Series in its revolving period, (ii) the principal allocation percentage
(including the Principal Allocation Percentage, if applicable) for each Series
in its amortization, accumulation or early amortization period and (iii) the
Variable Funding Percentage exceeds 100%, then Principal Collections for such
Collection Period will be allocated among the Series and the Variable Funding
Certificate pro rata on the basis of such allocation percentages after the pro
rata reduction of such percentages so that the sum thereof equals 100% for
such period; provided further, that with respect to the allocation of Non-
Principal Collections among Series and the Variable Funding Certificate for
any Collection
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Period, if the sum of (i) the sum of the floating allocation percentages
(including the Floating Allocation Percentage) for each Series and (ii) the
Variable Funding Percentage exceeds 100%, then Non-Principal Collections for
such Collection Period will be allocated among the Series and the Variable
Funding Certificate on the basis of such allocation percentages after the pro
rata reduction of such percentages so that the sum thereof equals 100% for
such period.
"Floating Allocation Percentage" means the percentage (which shall never
exceed 100%) obtained (x) prior to and including the Series 1994-1 Final
Payment Date, for any Collection Period, by dividing the Invested Amount as of
the last day of the immediately preceding Collection Period by the Pool
Balance as of such last day and (y) after the Series 1994-1 Final Payment
Date, for each day in a Collection Period, by dividing the Invested Amount as
of the close of business on the preceding day by the Pool Balance as of the
close of business on such preceding day; provided, however, that, with respect
to the Collection Period in which the Certificates are issued, the Floating
Allocation Percentage shall mean the percentage obtained by dividing the
Invested Amount of the Certificates by the Pool Balance on the Series Cut-Off
Date (giving pro forma effect as of the Series Cut-Off Date to the issuance of
the Certificates); provided further, that for purposes of allocating Principal
Collections, when calculating the Floating Allocation Percentage, the Invested
Amount shall be reduced by the Pre-Allocated Invested Amount.
"Principal Allocation Percentage" means the percentage (which shall never
exceed 100%) obtained by dividing the Invested Amount as of the last day of
the Revolving Period less the Pre-Allocated Invested Amount by the Pool
Balance (x) prior to and including the Series 1994-1 Final Payment Date, for
any Collection Period, as of the last day of the immediately preceding
Collection Period and (y) after the Series 1994-1 Final Payment Date, as of
each day in such Collection Period.
"Invested Amount" means for any date an amount equal to (a) the Adjusted
Invested Amount of the Certificates, minus (b) the amount, without
duplication, of principal payments (except principal payments made from the
Excess Funding Account and any transfers from the Excess Funding Account to
the Collection Account) made on the Certificates prior to such date minus (c)
the excess, if any, of the aggregate amount of Investor Charge-Offs for all
Distribution Dates preceding such date over the aggregate amount of any
reimbursements of Investor Charge-Offs for all Distribution Dates preceding
such date.
"Adjusted Invested Amount" means the Initial Principal Amount of the
Certificates plus (x) the amount of any withdrawals from the Excess Funding
Account in connection with an increase in Receivables in the Trust since the
Closing Date minus (y) the amount of any additions to the Excess Funding
Account in connection with a reduction in the Receivables in the Trust since
the Closing Date.
"Pre-Allocated Invested Amount" (i) until the Series 1994-1 Final Payment
Date, means $251,000,000 plus the aggregate amount of all principal payments
made with respect to the Series 1994-1 Certificates since the Closing Date,
and (ii) after the Series 1994-1 Final Payment Date, means zero.
"Miscellaneous Payments" for any Collection Period means the sum of (a)
Adjustment Payments and Transfer Deposit Amounts on deposit in the Collection
Account on the related Distribution Date received with respect to such
Collection Period and (b) Unallocated Principal Collections available to be
treated as Miscellaneous Payments as of the Distribution Date following such
Collection Period as described below under "Principal Collections for all
Series."
"Pool Available Subordinated Amount" means for any date the sum of the
Available Subordinated Amount and the aggregate available subordinated amounts
for all other outstanding Series.
"Pool Invested Amount" means for any date the sum of the Invested Amount and
the invested amounts for all other outstanding Series.
"Series 1997-1 Investor Allocation Percentage" means, for any Collection
Period, the percentage obtained by dividing the Invested Amount as of the last
business day preceding such Collection Period by the Pool Invested Amount on
such day.
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Principal Collections for all Series. Principal Collections allocable to the
Certificates for any Collection Period during the Revolving Period will first
be allocated to the Excess Funding Account to the extent described above under
"--Excess Funding Account." Principal Collections allocable to the
Certificates for any Collection Period with respect to the Amortization
Period, any Initial Amortization Period or any Early Amortization Period will
first be allocated to make required payments of Monthly Principal on the
Certificates. See "Distributions from the Collection Account; Reserve Fund--
Principal Collections" below. Principal Collections allocable to the
Certificates for any Collection Period during the Amortization Period
remaining after the allocation to provide for the payment of the Monthly
Principal on the Certificates will then be allocated to the Excess Funding
Account to the extent described above under "Excess Funding Account."
Thereafter, the Servicer will determine the amount of Available Investor
Principal Collections remaining after such required payments are made and the
amount of any similar excess for any other Series (collectively, "Excess
Principal Collections"). The Servicer will allocate Excess Principal
Collections to cover any principal distributions on any Series which are
either scheduled or permitted and which have not been covered out of Principal
Collections and certain other amounts allocated to such Series ("Principal
Shortfalls"). Excess Principal Collections will generally not be used to cover
investor charge-offs for any Series. If Principal Shortfalls exceed Excess
Principal Collections for any Collection Period, Excess Principal Collections
will be allocated pro rata among the applicable Series entitled to receive
monthly principal (and giving effect to any requirements to apply such
distributions sequentially among classes of the same Series) based on the
relative amounts of Principal Shortfalls. To the extent that Excess Principal
Collections exceed Principal Shortfalls, the balance will be paid (or made
available) to the holder of the BCRC Certificate only if the Pool Balance for
the related Distribution Date (determined after giving effect to any
Receivables transferred to the Trust on such date) exceeds the Required Pool
Balance for the immediately preceding Determination Date (after giving effect
to the allocations, distributions, withdrawals and deposits to be made on such
Distribution Date). Any amount not paid to the holder of the BCRC Certificate
because the Pool Balance does not exceed the Required Pool Balance will be
held unallocated ("Unallocated Principal Collections") in the Collection
Account until the Pool Balance exceeds the Required Pool Balance, at whichtime
such amount will be paid to the holder of the BCRC Certificate, or until an
early amortization event occurs or an accumulation or amortization period
commences for any Series, after which event or commencement such amount will
be treated as a Miscellaneous Payment.
ALLOCATION OF COLLECTIONS; DEPOSITS IN COLLECTION ACCOUNT; LIMITED
SUBORDINATION OF THE RETAINED INTEREST
Except as otherwise provided in the following paragraphs, the Servicer, no
later than two business days after the date of receipt of any collections on
the Receivables, will deposit such collections (net of the Variable Funding
Percentage of such collections and the Excess Retained Percentage of such
collections) into the Collection Account.
Notwithstanding the foregoing, for so long as (i) BCI remains the Servicer
under the Pooling and Servicing Agreement, (ii) no Servicer Default has
occurred and is continuing and (iii) (x) BCI is a subsidiary of Bombardier
Corporation (which shall own at least 80% of the voting common stock of BCI)
and BCI has and maintains a short-term debt rating of at least A-1 by Standard
& Poor's and P-1 by Moody's, (y) BCI arranges for and maintains a letter of
credit or other form of Enhancement in respect of the Servicer's obligation to
make deposits of collections on the Receivables in the Collection Account that
is acceptable in form and substance to each Rating Agency or (z) BCI otherwise
obtains the Rating Agency confirmations described below, then, subject to any
limitations in the confirmations referred to below, BCI need not deposit
collections into the Collection Account on the days indicated in the preceding
paragraph but may use for its own benefit all such collections until the
business day immediately preceding the related Distribution Date, at which
time BCI will make such deposits in a single deposit into the Collection
Account in an amount equal to the net amount of such deposits and withdrawals
which would have been made had the conditions described in this paragraph not
applied; provided, however, that prior to ceasing daily deposits as described
above, BCI shall have delivered to the Trustee written confirmation from each
of the Rating Agencies that the failure by BCI to make daily deposits will not
result in a reduction or withdrawal of the ratings of the Certificates or any
other outstanding Series or class of investor certificates.
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In addition to and notwithstanding the foregoing, with respect to any
Collection Period, the Servicer will only be required to deposit collections
into the Collection Account up to the aggregate amount of collections required
to be deposited into all Series Accounts or, without duplication, distributed
on the related Distribution Date to all investor certificateholders and to
each Enhancement Provider pursuant to the terms of any Supplement or
Enhancement agreement, and if, at any time prior to such Distribution Date,
the amount of collections deposited in the Collection Account exceeds the
amount required to be deposited, the Servicer will be permitted to withdraw
such excess from the Collection Account.
The requirements of the preceding paragraphs are subject to the following
exceptions. On any date on which collections are received, the Servicer may
distribute (or make available) directly (a) to the holder of the Variable
Funding Certificate, an amount equal to the Variable Funding Percentage of
such collections and (b) to the holder of BCRC Certificate, the Excess
Retained Percentage of such collections. In addition, prior to the Series
1994-1 Final Payment Date and subject to certain limitations, the Servicer may
instruct the Trustee to distribute (or make available) directly to the holder
of the BCRC Certificate on each such date of receipt during a Collection
Period an amount equal to the Available Retained Collections if the Pool
Balance (determined after giving effect to any Principal Receivables
transferred to the Trust on such date) exceeds the Required Pool Balance for
the Related Distribution Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such Distribution Date);
provided, however, that Available Retained Collections will be paid to the
holder of the BCRC Certificate with respect to any Collection Period only
after an amount equal to the sum of (i) the Deficiency Amount, if any,
relating to the immediately preceding Collection Period and (ii) the excess,
if any, of the Reserve Fund Required Amount over the amount in the Reserve
Fund on the immediately preceding Distribution Date (after giving effect to
the allocations of, distributions from, and deposits in, the Reserve Fund on
such Distribution Date), has been deposited in the Collection Account from
such Available Retained Collections. After the Series 1994-1 Final Payment
Date, on any date on which collections are received during the Revolving
Period, the Amortization Period or any Initial Amortization Period, the
Servicer will allocate to Series 1997-1 an amount equal to the sum of (1) the
product of (x) the Floating Allocation Percentage for such date and (y) the
aggregate amount of Non-Principal Collections on such date and (2) the Series
1997-1 Available Retained Collections for such date (such amount for any such
date, the "Daily Allocation"), and of that allocation, the Servicer will
deposit and retain in the Collection Account an amount equal to the lesser of
(a) the Daily Allocation on such date and (b) the difference between (I) the
sum of the amounts required to be distributed on the related Distribution Date
pursuant to clauses (i) through (viii) under "Distributions from the
Collection Account; Reserve Fund--Non-Principal Collections" below (provided
that if BCI is the Servicer, such amounts shall not include the Monthly
Servicing Fee) and (II) the sum of the Daily Allocations previously deposited
in the Collection Account for the current Collection Period, and the remainder
of such Daily Allocation will be retained by the Servicer for application as
described herein. During the Early Amortization Period, the entire Daily
Allocation for each date will be deposited and retained in the Collection
Account. On each Determination Date with respect to the Revolving Period, the
Amortization Period or any Initial Amortization Period, the Servicer will
deposit in the Collection Account an amount equal to the excess, if any, of
any Daily Allocation retained by the Servicer and not deposited in the
Collection Account during the related Collection Period over the amounts
required to be distributed on the related Distribution Date pursuant to
clauses (i) through (viii) under "Distributions from the Collection Account;
Reserve Fund--Non-Principal Collections" below, provided that if BCI is the
Servicer, BCI may make such deposit net of the Monthly Servicing Fee and the
amounts payable from Series 1997-1 Available Retained Collections on the
related Distribution Date as described under "Distributions from the
Collection Account; Reserve Fund" below.
"Available Retained Collections" for any date on which the Servicer
receives collections (each, a "Deposit Date") means the sum of (a) the
Available Retained Non-Principal Collections for such date and (b) the
Available Retained Principal Collections for such date; provided, however,
that the Available Retained Collections will be zero for any Collection
Period with respect to which the Available Subordinated Amount is zero for
the Distribution Date occurring in such Collection Period.
"Available Retained Non-Principal Collections" for any Deposit Date means
an amount equal to the product of (a) the excess of (i) the Retained
Percentage for the related Collection Period (or, after the Series
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1994-1 Final Payment Date for such Deposit Date) over (ii) the Excess
Retained Percentage for such Collection Period (or, after the Series 1994-1
Final Payment Date for such Deposit Date) multiplied by (b) Non-Principal
Collections for such date.
"Available Retained Principal Collections" for any Deposit Date means an
amount equal to the product of (a) the excess of (i) the Retained
Percentage for the related Collection Period (or, after the Series 1994-1
Final Payment Date for such Deposit Date) over (ii) the Excess Retained
Percentage for such Collection Period (or, after the Series 1994-1 Final
Payment Date, for such Deposit Date) and (b) Principal Collections for such
date.
"Series 1997-1 Available Retained Collections" means, for any Deposit
Date, an amount equal to the product of (a) the Available Retained
Collections for such day and (b) a fraction, the numerator of which is the
Available Subordinated Amount and the denomninator of which is the Pool
Available Subordinated Amount, in each case on such day.
"Excess Retained Percentage" prior to and including the Series 1994-1
Final Payment Date, for any Collection Period means (x) the Retained
Percentage for such Collection Period minus (y) the percentage equivalent
of a fraction the numerator of which is equal to the Pool Available
Subordinated Amount for the Distribution Date preceding such Collection
Period (or the Pool Available Subordinated Amount as of the Closing Date
with respect to the first two Collection Periods) and the denominator of
which is the Pool Balance at the end of the preceding Collection Period (or
as of the Series Cut-Off Date with respect to the first Collection Period);
and after the Series 1994-1 Final Payment Date means, for any date of
determination, (x) the Retained Percentage for such date minus (y) the
percentage equivalent of a fraction, the numerator of which is equal to the
Pool Available Subordinated Amount as of the end of the immediately
preceding day and the denominator of which is the Pool Balance as of the
end of the immediately preceding day.
"Retained Percentage" prior to and including the Series 1994-1 Final
Payment Date, for any Collection Period and after the Series 1994-1 Final
Payment Date, for any date of determination, means 100% minus (a) when used
with respect to Non-Principal Collections, the sum of (i) the aggregate of
the floating allocation percentages for each outstanding Series (including
the Certificates) and (ii) prior to and including the Series 1994-1 Final
Payment Date, the Variable Funding Percentage for the related Collection
Period, and after the Series 1994-1 Final Payment Date, the Variable
Funding Percentage for such date of determination and (b) when used with
respect to Principal Collections, the sum of (i) the aggregate of the
floating allocation percentages for each outstanding Series (including the
Certificates, if applicable) in its revolving period, (ii) the aggregate of
the principal allocation percentages for each outstanding Series (including
the Certificates, if applicable) in its amortization, accumulation or early
amortization period and (iii) prior to and including the Series 1994-1
Final Payment Date, the Variable Funding Percentage for the related
Collection Period and after the Series 1994-1 Final Payment Date, the
Variable Funding Percentage for such date of determination, but in each
case the Retained Percentage shall not be less than 0%.
"Variable Funding Percentage" prior to and including the Series 1994-1
Final Payment Date, for any Collection Period and after the Series 1994-1
Final Payment Date, for any date of determination, means a percentage
(which percentage shall never be less than 0% nor more than 100%) equal to
(x) prior to and including the Series 1994-1 Final Payment Date, the
Variable Funding Amount as of the last day of the immediately preceding
Collection Period divided by the Pool Balance as of such last day and (y)
after the Series 1994-1 Final Payment Date, the Variable Funding Amount as
of such day divided by the Pool Balance as of the close of business on the
day preceeding such day; provided, however, that for purposes of allocating
Principal Collections following the occurrence of a Liquidation Event, the
Variable Funding Percentage will be calculated on the basis of the Variable
Funding Amount as of the last day immediately preceding the date of such
Liquidation Event; provided, further, that following a Liquidation Event,
the relative interest of the Variable Funding Certificate in further
allocations of Non-Principal Collections will not be less than the relative
interest thereof as of the Liquidation Event.
Limited Subordination of Retained Interest. A portion of the Retained
Participation Amount up to the Available Subordinated Amount will be available
to fund payment of principal and interest on the Certificates in
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the event that the proportionate interests of the Certificates in collections
received with respect to the Receivables during any particular Collection
Period are less than the required distributions thereon. The following
paragraphs describe the extent to which collections otherwise allocable to the
BCRC Certificate will be available to satisfy shortfalls with respect to the
payment of principal and interest on the Certificates.
Deficiency Amount. For each Distribution Date, the Servicer will determine
for the Certificates the amount (the "Deficiency Amount"), if any, by which
(a) the sum of (i) Monthly Interest for such Distribution Date, (ii) Monthly
Interest accrued but not paid with respect to prior Distribution Dates (and
interest thereon), (iii) the Net Servicing Fee for such Distribution Date,
(iv) the Investor Default Amount for such Distribution Date, and (v) the
Series 1997-1 Investor Allocation Percentage of any Adjustment Payment for
such Distribution Date that has not been deposited in the Collection Account
as required under the Pooling and Servicing Agreement, exceeds (b) the sum of
(i) Investor Non-Principal Collections and Investment Proceeds for such
Distribution Date and (ii) the amount of funds in the Reserve Fund on such
Distribution Date available to fund the amount by which the amount in clause
(a) exceeds the amount in clause (b) (i) as described below under
"Distributions from the Collection Account; Reserve Fund--Non-Principal
Collections." The lesser of the Deficiency Amount and the Available
Subordinated Amount is the "Required Subordination Draw Amount."
"Class A Monthly Interest" for any Distribution Date means an amount
equal to the product of (x) the actual number of days elapsed in the
related Interest Period divided by 360 days and (y) the product of (i) the
Class A Certificate Rate and (ii) the outstanding principal balance of the
Class A Certificates as of the close of business on the preceding
Distribution Date (or for the first Distribution Date, the Closing Date)
after giving effect to any payments of principal on the Class A
Certificates on such preceding Distribution Date.
"Class B Monthly Interest" for any Distribution Date means an amount
equal to the product of (x) the actual number of days elapsed in the
related Interest Period divided by 360 days and (y) the product of (i) the
Class B Certificate Rate and (ii) the outstanding principal balance of
Class B Certificates as of the close of business on the preceding
Distribution Date (or for the first Distribution Date, the Closing Date)
after giving effect to any payments of principal on the Class B
Certificates on such preceding Distribution Date.
"Monthly Interest" for any Distribution Date means the sum of the Class A
Monthly Interest and the Class B Monthly Interest with respect to such
Distribution Date.
Required Subordinated Amount. The "Required Subordinated Amount" means, as
of any date of determination, the sum of (i) the product of (A) the
Subordinated Percentage and (B) the Invested Amount and (ii) the Incremental
Subordinated Amount for the immediately preceding Distribution Date or, if
such date of determination is a Distribution Date, for such date; provided,
however, that for any date prior to the end of the Revolving Period, the
Required Subordinated Amount shall in no event be less than an amount equal to
the sum of (x) 3.75% of the Initial Principal Amount of the Certificates and
(y) the Incremental Subordinated Amount for the immediately preceding
Distribution Date or, if such date of determination is a Distribution Date,
for such date; provided further, that upon the commencement of the Initial
Amortization Period or the Amortization Period or if an Early Amortization
Event occurs, the Required Subordinated Amount for each date of determination
thereafter will equal the Required Subordinated Amount as of the close of
business on the day preceding the first day of the Initial Amortization Period
or the Amortization Period or the day on which such Early Amortization Event
occurs.
Available Subordinated Amount. The "Available Subordinated Amount" for any
date of determination after the first Distribution Date means an amount equal
to the sum of:
(i) the lesser of:
(a) the Available Subordinated Amount for the preceding Distribution
Date, minus, with certain limitations, the Required Subordination Draw
Amount for the preceding Distribution Date, minus the amount of any
deposits in the Reserve Fund from Series 1997-1 Available Retained
Collections for the purpose of reimbursing funds withdrawn from the
Reserve Fund applied to cover any portion of the Investor Default
Amount on the preceding Distribution Date, minus an amount equal to the
Defaulted Amount for the immediately preceding Collection Period
multiplied by a fraction, the numerator of
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which is the Available Subordinated Amount as of the last day of the
preceding Collection Period (or in the case of the first Distribution
Date, the Required Subordinated Amount as of the Closing Date) and the
denominator of which is the Pool Balance as of the last day of the
preceding Collection Period (or in the case of the first Distribution
Date, the Pool Balance as of the Closing Date), plus the aggregate
amount of Excess Servicing paid to the holder of the BCRC Certificate
on the previous Distribution Date as described below under
"Distributions from the Collection Account; Reserve Fund--Excess
Servicing," minus the Incremental Subordinated Amount for the second
preceding Distribution Date or if such date of determination is a
Distribution Date, the preceding Distribution Date, plus the
Incremental Subordinated Amount for the immediately preceding
Distribution Date, or if such date of determination is a Distribution
Date, such Distribution Date plus the Subordinated Percentage
multiplied by the aggregate amount of any increases in the Invested
Amount resulting from any withdrawals from the Excess Funding Account
since the preceding Distribution Date; and
(b) the Required Subordinated Amount for such date of determination;
and
(ii) the amount of any optional increase in the Available Subordinated
Amount exercised by BCRC as described below in the final paragraph of this
section "Allocation of Collections; Deposits in Collection Account; Limited
Subordination of the Retained Interest--Available Subordinated Amount." The
Available Subordinated Amount for any date of determination during the
period from the Closing Date through the first Distribution Date is equal
to the Required Subordinated Amount as of such date of determination, which
will equal at least $24,859,127 on the Closing Date.
The "Subordinated Percentage" will equal the percentage equivalent of a
fraction, the numerator of which is 5.5% and the denominator of which will
be the excess of 100% over 5.5%.
The "Incremental Subordinated Amount" on any Distribution Date will equal
the product of (a) a fraction, the numerator of which is the sum of the
Invested Amount on the last day of the immediately preceding Collection
Period (or with respect to the first Distribution Date, the Invested Amount
on the Closing Date) and the Available Subordinated Amount for such
Distribution Date (calculated without subtracting or adding the Incremental
Subordinated Amount for such Distribution Date as described in clause (a)
of the definition of Available Subordinated Amount or clause (ii) of the
definition of Required Subordinated Amount), and the denominator of which
is the Pool Balance on such last day and (b) the Overconcentration Amount
on such Distribution Date.
"Obligor Overconcentrations" on any Distribution Date means, with respect
to any Account, the excess of (x) the aggregate principal amount of
Eligible Receivables in such Account on the last day of the Collection
Period immediately preceding such Distribution Date over (y) 2% of the Pool
Balance with respect to Specified Obligors and 1.5% of the Pool Balance
with respect to all other Obligors, in each case on the last day of such
immediately preceding Collection Period. As used in this definition,
"Specified Obligors" means any Obligor with respect to the six largest
Accounts in the Trust calculated on the basis of the amount of Principal
Receivables in such Account. The percentages set forth in this description
of Obligor Overconcentrations and the manner of determining the Specified
Obligors may be adjusted from time to time without the consent of the
Certificateholders if the Rating Agency Condition is satisfied.
"Manufacturer Overconcentrations" on any Distribution Date means the
excess of (x) the aggregate amount of Eligible Receivables created in
connection with the financing of products manufactured by any single
manufacturing entity (other than the Designated Manufacturer described
below in the definition of Designated Manufacturer Overconcentrations)
which Eligible Receivables are in the Pool on the last day of the
Collection Period immediately preceding such Distribution Date over (y) 15%
of the Pool Balance on the last day of such immediately preceding
Collection Period; provided, however, that the percentage specified in
clause (y) may be adjusted from time to time without the consent of the
Certificateholders, if the Rating Agency Condition is satisfied.
"Designated Manufacturer Overconcentrations" on any Distribution Date
means the excess of (x) the aggregate amount of Eligible Receivables
created in connection with the financing of products manufactured by the
Designated Manufacturer which Eligible Receivables are in the Pool on the
last day of the Collection Period immediately preceding such Distribution
Date over (y) 50% of the Pool Balance on the last day of such immediately
preceding Collection Period where the "Designated Manufacturer" is
collectively
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Bombardier Inc. and its subsidiaries; provided, however, that the
percentage specified in clause (y) and the entities included as Designated
Manufacturer may be adjusted from time to time without the consent of the
Certificateholders, if the Rating Agency Condition is satisfied.
"Industry Overconcentrations" on any Distribution Date means the excess
of (x) the aggregate amount of Eligible Receivables created in connection
with the financing of products manufactured by manufacturing entities that
are part of the same industry (i.e., producing the same principal product,
provided that products manufactured by Bombardier Inc. and its affiliates
will not be included in the calculation of Industry Overconcentration)
which Eligible Receivables are in the Pool on the last day of the
Collection Period immediately preceding such Distribution Date over (y) an
amount equal to 35% of the Pool Balance on the last day of such immediately
preceding Collection Period; provided, however, that with respect to each
industry specified below, the percentage in clause (y) of this definition
shall be deemed to equal the percentage set forth opposite such industry:
<TABLE>
<CAPTION>
INDUSTRY PERCENTAGE
-------- ----------
<S> <C>
Marine Products................................................ 45%
Recreational Vehicles.......................................... 15%
Lawn and Garden................................................ 10%
Consumer Electronics and Appliances............................ 10%
</TABLE>
Some or all of the percentages specified in this description of Industry
Overconcentrations may be adjusted from time to time without the consent of
the Certificateholders, if the Rating Agency Condition is satisfied.
"Overconcentration Amount" on any Distribution Date means the sum of
(without duplication) the Obligor Overconcentrations, the Manufacturer
Overconcentrations, the Designated Manufacturer Overconcentrations and the
Industry Overconcentrations on such Distribution Date.
If the Available Subordinated Amount for any Distribution Date is less than
the Required Subordinated Amount for such Distribution Date, an Early
Amortization Event will occur. The holder of the BCRC Certificate could elect
to increase the Available Subordinated Amount (but the aggregate amount of
such increases may not exceed an amount equal to 1% of the Initial Principal
Amount of the Certificates) at the time such an Early Amortization Event would
otherwise occur, thus preventing or delaying the occurrence of such Early
Amortization Event.
DISTRIBUTIONS FROM THE COLLECTION ACCOUNT; RESERVE FUND
Non-Principal Collections. On each Distribution Date, the Trustee will apply
Investor Non-Principal Collections and Investment Proceeds for such
Distribution Date to make the following distributions in the following order
of priority:
(i) an amount equal to Class A Monthly Interest for such Distribution
Date, plus the amount of any Class A Monthly Interest previously due but
not distributed on a prior Distribution Date (plus, but only to the extent
permitted under applicable law, interest at the Class A Certificate Rate on
Class A Monthly Interest previously due but not distributed), shall be
distributed on the Class A Certificates;
(ii) an amount equal to Class B Monthly Interest for such Distribution
Date, plus the amount of any Class B Monthly Interest previously due but
not distributed on a prior Distribution Date (plus, but only to the extent
permitted under applicable law, interest at the Class B Certificate Rate on
Class B Monthly Interest previously due but not distributed) shall be
distributed on the Class B Certificates;
(iii) an amount equal to the Net Servicing Fee for such Distribution Date
shall be distributed to the Servicer (unless such amount has been deducted
from amounts that would otherwise be deposited to the Collection Account as
described above under "Allocation of Collections; Deposits in Collection
Account; Limited Subordination of the Retained Interest" or waived as
described under "Servicing Compensation and Payment of Expenses" below);
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(iv) an amount equal to the Reserve Fund Deposit Amount, if any, for such
Distribution Date shall be deposited in the Reserve Fund;
(v) an amount equal to the Investor Default Amount, if any, for such
Distribution Date shall be treated as a portion of Available Investor
Principal Collections for such Distribution Date and shall be allocated by
the Trustee in the manner described under "Principal Collections" below;
(vi) an amount equal to the remainder of the Monthly Servicing Fee for
such Distribution Date, if any, due but not paid the Servicer shall be paid
to the Servicer (unless such amount has been deducted from amounts that
would otherwise be deposited to the Collection Account as described above
under "Allocation of Collections; Deposits in Collection Account; Limited
Subordination of the Retained Interest" or waived as described under
"Servicing Compensation and Payment of Expenses" below);
(vii) any Class A Carry-Over Amount for such Distribution Date, plus the
amount of any Class A Carry-Over Amount previously due but not distributed
on a previous Distribution Date, shall be distributed to the Class A
Certificateholders;
(viii) any Class B Carry-Over Amount for such Distribution Date, plus the
amount of any Class B Carry-Over Amount previously due but not distributed
on a previous Distribution Date, shall be distributed to the Class B
Certificateholders; and
(ix) the balance, if any, shall constitute Excess Servicing and shall be
allocated by the Trustee in the manner described under "Excess Servicing"
below.
If such Investor Non-Principal Collections and Investment Proceeds are not
sufficient to make the distributions required by clauses (i), (ii), (iii) and
(v), the Trustee shall withdraw funds from the Reserve Fund and apply such
funds to complete, to the extent available, the distributions pursuant to such
clauses (i), (ii), (iii) and (v) in the numerical order thereof.
If there is a Deficiency Amount for such Distribution Date, the Servicer
will apply or cause the Trustee to apply the aggregate amount of Series 1997-1
Available Retained Collections for the related Collection Period on such
Distribution Date, but only up to the Required Subordination Draw Amount, to
make the distributions required by clauses (i), (ii), (iii) and (v) above that
have not been made through the application of funds from the Reserve Fund as
described in the preceding paragraph. Any such Series 1997-1 Available
Retained Collections remaining after the application thereof pursuant to the
preceding sentence shall be treated as a portion of the Available Investor
Principal Collections, but only up to the amount of unpaid Adjustment Payments
allocated to the Certificates. Prior to the Series 1994-1 Final Payment Date,
if the Required Subordination Draw Amount for the Certificates and the
required subordination draw amounts for all other Series exceeds such
Available Retained Collections, the Available Retained Collections shall be
allocated among such Series pro rata on the basis of such required
subordination draw amounts (including the Required Subordination Draw Amount).
The holder of the BCRC Certificate may elect to increase the Available
Subordinated Amount, up to a maximum aggregate increase equal to 1% of the
Initial Principal Amount of the Certificates, in order to avoid the occurrence
of an Early Amortization Event.
"Investor Non-Principal Collections" for any Distribution Date means the
portion of Non-Principal Collections for the related Collection Period
allocated to the Certificates as described above under "Allocation
Percentages--Allocation to the Certificates" and "Allocation of
Collections; Deposits in Collection Account; Limited Subordination of the
Retained Interest."
"Investment Proceeds" for any Distribution Date means an amount equal to
the sum of (a) all interest and other investment earnings (net of losses
and investment expenses) on funds on deposit in the Reserve Fund and the
Excess Funding Account and (b) the Series 1997-1 Investor Allocation
Percentage of net investment earnings credited to the Collection Account on
the second Business Day prior to the Distribution Date with respect to
funds held in the Collection Account.
"Excess Servicing" for any Distribution Date means the amount described
in clause (ix) above.
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Reserve Fund. An Eligible Deposit Account will be established and maintained
in the name of the Trustee for the benefit of the Certificateholders (the
"Reserve Fund"). BCRC will make an initial deposit into the Reserve Fund on
the Closing Date in an amount equal to $2,135,625. The "Reserve Fund Required
Amount" means an amount which on any Distribution Date will equal 0.50% of the
outstanding principal balance of the Certificates on such Distribution Date
(after giving effect to any reduction thereof on such Distribution Date). If,
after giving effect to the allocations, distributions and deposits in the
Reserve Fund described herein under the caption "Non-Principal Collections,"
the amount in the Reserve Fund is less than the Reserve Fund Required Amount
for such Distribution Date, the Trustee shall deposit any remaining Series
1997-1 Available Retained Collections (to the extent of the Available
Subordinated Amount) for the related Collection Period into the Reserve Fund
until the amount in the Reserve Fund is equal to the Reserve Fund Required
Amount. The "Reserve Fund Deposit Amount" means, with respect to any
Distribution Date, the amount, if any, by which the Reserve Fund Required
Amount for such Distribution Date exceeds the amount on deposit in the Reserve
Fund after giving effect to any withdrawal therefrom on such Distribution
Date. Funds in the Reserve Fund will be invested in the same manner in which
funds in the Collection Account may be invested. On each Distribution Date,
the Servicer will credit to the Collection Account any investment earnings
(net of losses and investment expenses) with respect to the Reserve Fund.
After the payment in full of the aggregate principal balance of the
Certificates, any funds remaining on deposit in the Reserve Fund will be paid
to the holder of the BCRC Certificate.
If, for any Distribution Date with respect to an Early Amortization Period,
after giving effect to the allocations, distributions and deposits described
in the preceding paragraph, the amount in the Reserve Fund is less than the
Excess Reserve Fund Required Amount as of such Distribution Date, the Trustee
shall deposit the remaining Series 1997-1 Available Retained Collections (to
the extent of the Available Subordinated Amount) for the related Collection
Period into the Reserve Fund until the amount in the Reserve Fund is equal to
such Excess Reserve Fund Required Amount. The "Excess Reserve Fund Required
Amount" for any Distribution Date with respect to an Early Amortization
Period, means an amount equal to the greater of (a) 5% of the Initial
Principal Amount of the Certificates and (b) the excess of (i) the Required
Pool Balance (after giving effect to any changes thereto on such Distribution
Date) over (ii) the Pool Balance (after giving effect to changes thereto on
such Distribution Date); provided that the Excess Reserve Fund Required Amount
shall in no event exceed the Available Subordinated Amount for such
Distribution Date.
In connection with the allocations to the Reserve Fund referred to in the
two preceding paragraphs, prior to the Series 1994-1 Final Payment Date, if
the remaining Available Retained Collections are not sufficient to fund the
reserve funds for all outstanding Series (including the Reserve Fund), then
such remaining Available Retained Collections will be allocated to such
reserve funds (including the Reserve Fund, if applicable) pro rata on the
basis of the respective amounts required to be deposited therein.
Excess Servicing. On each Distribution Date, the Trustee will allocate
Excess Servicing with respect to the Collection Period immediately preceding
such Distribution Date, in the following order of priority:
(a) an amount equal to the aggregate amount of Investor Charge-Offs which
have not been previously reimbursed (after giving effect to the allocation
on such Distribution Date of the Series 1997-1 Investor Allocation
Percentage of Miscellaneous Payments with respect to such Distribution
Date) will be included in Available Investor Principal Collections for such
Distribution Date;
(b) an amount equal to the aggregate outstanding amounts of the Monthly
Servicing Fee which have been previously waived as described below under
"Servicing Compensation and Payment of Expenses" will be distributed to the
Servicer; and
(c) the balance, if any, shall be distributed (or made available) to the
holder of the BCRC Certificate and shall also increase the Available
Subordinated Amount to the extent described in the definition thereof.
Principal Collections. The Trustee will allocate Available Investor
Principal Collections as follows:
(a) prior to and including the Series 1994-1 Final Payment Date, for each
Distribution Date with respect to the Revolving Period, first, to make a
deposit to the Excess Funding Account if the Pool Balance
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at the end of the preceding Collection Period is less than the Required
Pool Balance for such Distribution Date (calculated as provided above under
"Excess Funding Account," before giving effect to any deposits to any
excess funding account for any other Series to be made on such Distribution
Date) and, second, to Excess Principal Collections as described above under
"Allocation Percentages--Principal Collections for all Series"; after the
Series 1994-1 Final Payment Date, on each business day, with respect to the
Revolving Period, first, to make a deposit to the Excess Funding Account if
the Pool Balance at the end of the preceding business day was less than the
Required Pool Balance for such day (calculated as provided above under
"Excess Funding Account") and, second, to Excess Principal Collections as
described above under "Allocation Percentages--Principal Collections for
all Series";
(b) for each Distribution Date with respect to the Amortization Period:
(i) an amount equal to the Class A Controlled Distribution Amount is
expected to be distributed to the Class A Certificateholders on each
Class A Amortization Date, until the principal balance of the Class A
Certificates is reduced to zero; and
(ii) an amount equal to the principal balance of the Class B
Certificates is expected to be distributed to the Class B
Certificateholders on the later of the Class B Expected Payment Date
and the date on which the principal balance of the Class A Certificates
has been reduced to zero; and
(iii) an amount, if any, equal to the difference between the Excess
Funding Amount and the amount then on deposit in the Excess Funding
Account shall be deposited into the Excess Funding Account; and
(iv) the balance, if any, will be allocated to Excess Principal
Collections; and
(c) for each Distribution Date with respect to any Initial Amortization
Period or Early Amortization Period:
(i) an amount equal to Monthly Principal for such Distribution Date
will be distributed first to the holders of Class A Certificates until
the principal amount thereof is reduced to zero and then to holders of
the Class B Certificates until the principal amount thereof is reduced
to zero; and
(ii) the balance, if any, will be allocated to Excess Principal
Collections.
In the event that the Invested Amount is greater than zero on the Series
1997-1 Termination Date, any funds remaining in the Reserve Fund (after the
application of funds in the Reserve Fund as described above under "Non-
Principal Collections") will be treated as a portion of Available Investor
Principal Collections for the Distribution Date occurring on the Series 1997-1
Termination Date.
"Available Investor Principal Collections" for any Distribution Date
means the sum of (a) the product of (i) the Floating Allocation Percentage,
with respect to the Revolving Period, or the Principal Allocation
Percentage, with respect to the Amortization Period, any Initial
Amortization Period or any Early Amortization Period, for the related
Collection Period and (ii) Principal Collections for the related Collection
Period, (b) the amount, if any, of Investor Non-Principal Collections,
funds in the Reserve Fund and Series 1997-1 Available Retained Collections
allocated to cover any Investor Default Amount or any unpaid Adjustment
Payments allocated to the Certificates or to reimburse Investor Charge-
Offs, (c) the Series 1997-1 Investor Allocation Percentage of Miscellaneous
Payments for such Distribution Date, (d) Excess Principal Collections, if
any, from other Series allocated to the Certificates, (e) if an Initial
Amortization Period or an Early Amortization Period began during the
related Collection Period, any amounts on deposit in the Excess Funding
Account and (f) on the Series 1997-1 Termination Date, any funds remaining
in the Reserve Fund (after the application of funds in the Reserve Fund as
described above under "Non-Principal Collections"). If the sum of the
Floating Allocation Percentage (during the Revolving Period) or the
Principal Allocation Percentage (during the Early Amortization Period,
Initial Amortization Period or Amortization Period), the floating
allocation percentages for all other outstanding Series of investor
certificates in their revolving periods and the principal allocation
percentages for all other outstanding Series in their amortization or early
amortization periods exceeds 100%, then the Principal Collections shall be
allocated among all Series pro rata on the basis of such floating
allocation percentages and principal allocation percentages.
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"Monthly Principal" with respect to any Distribution Date relating to the
Amortization Period or any Initial Amortization Period or Early
Amortization Period will equal Available Investor Principal Collections for
such Distribution Date; provided, however, that for any Distribution Date
that corresponds to a Class A Amortization Date, Monthly Principal in
respect of the Class A Certificates shall not exceed the Class A Controlled
Distribution Amount; and provided, further, that Monthly Principal will not
exceed the applicable outstanding principal balances of the Class A and
Class B Certificates, respectively.
"Class A Amortization Date" means each Distribution Date with respect to
the Amortization Period.
"Class A Amortization Period Length" means six months.
"Class A Controlled Amortization Amount" for any Class A Amortization
Date means an amount equal to the principal balance of the Class A
Certificates as of the October 2001 Distribution Date divided by the number
of months comprising the Class A Amortization Period Length.
"Class A Controlled Distribution Amount" for any Class A Amortization
Date means the Class A Controlled Amortization Amount plus any Class A
Controlled Amortization Amounts that were not paid on any previous Class A
Amortization Date.
"Class A Expected Final Payment Date" means the April 2002 Distribution
Date.
"Class B Expected Payment Date" means the April 2002 Distribution Date.
DISCOUNT OPTION
The Pooling and Servicing Agreement provides that, after the Series 1994-1
Final Payment Date, BCRC may at any time designate a fixed percentage of the
amount of collections in respect of Receivables arising in the Accounts on and
after the date of such designation that otherwise would be treated as
Principal Collections to be treated as Non-Principal Collections. BCRC must
provide 10 days' prior written notice to the Servicer, the Trustee and each
Rating Agency of any such designation, and such designation will become
effective on the date specified therein only if (i) an officer's certificate
is delivered to the Trustee to the effect that in the reasonable belief of
BCRC such designation would not result in an Early Amortization Event or have
a materially adverse effect on the certificateholders and (ii) the Rating
Agency Condition shall have been satisfied.
DEFAULTED RECEIVABLES AND RECOVERIES
"Defaulted Receivables" on any Distribution Date are (i) all Receivables
(other than Receivables that were designated as Ineligible Receivables at the
time of transfer to the Trust and Receivables which became Ineligible
Receivables because they were not paid in full within 491 days after the
origination thereof) which were charged off by the Servicer as uncollectible
in respect of the immediately preceding Collection Period, (ii) all
Receivables that have been SAU for more than 60 days, (iii) all Receivables in
an Account in which interest in the amount of $150 or more has been delinquent
for 90 days or more, and (iv) all Receivables which were Eligible Receivables
when transferred to the Trust, which arose in an Account which became an
Ineligible Account and which were not Eligible Receivables for any six
consecutive Distribution Dates after such Account became an Ineligible
Account. (Receivables are not Defaulted Receivables merely because they become
Ineligible Receivables.) The "Defaulted Amount" for any Collection Period will
be an amount (which shall not be less than zero) equal to (a) the aggregate
principal amount of Receivables that became Defaulted Receivables during the
preceding Collection Period less (b) the full amount of any Defaulted
Receivables subject to retransfer from the Trust to BCRC or purchase by the
Servicer for such Collection Period unless certain events of bankruptcy,
insolvency, or receivership have occurred with respect to either of BCRC or
the Servicer (or unless a Liquidation Event has occurred), in which event the
Defaulted Amount will not be reduced for those Defaulted Receivables.
Receivables will be charged off as uncollectible in accordance with the
written policies of BCI and its affiliates and otherwise in accordance with
procedures that are customary and usual in the industry. A portion of the
Defaulted Amount equal to the product of (x) the Defaulted Amount for such
Collection Period and (y) the Floating Allocation Percentage for such
Collection Period will be allocated to the Certificates. The portion of the
Defaulted Amount allocated to the Certificates is referred to as the "Investor
Default Amount."
"SAU" means, with respect to a Receivable, that if such Receivable was
originally secured by a security interest in an Eligible Product, such
Eligible Product has been sold and such Receivable has not been paid in full.
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If the Servicer adjusts downward the outstanding principal balance of any
Eligible Receivable because of a rebate, billing error, refund, credit
adjustment or billing error to an Obligor, or because such Receivable was
created in respect of a product which was refused or returned by an Obligor,
the amount of such adjustment will be deducted from the Pool Balance.
Furthermore, to the extent that the reduction in the Pool Balance would reduce
the Pool Balance below the Required Pool Balance on the immediately preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the related Distribution Date), then
unless a Liquidation Event has occurred, the Depositor will be required to
deposit a cash amount equal to such deficiency (up to the amount of such
adjustment) into the Collection Account in immediately available funds (an
"Adjustment Payment") on the day on which such adjustment occurs.
INVESTOR CHARGE-OFFS
If the Available Subordinated Amount is reduced to zero, and on any
Distribution Date the Deficiency Amount is greater than zero, the Invested
Amount will be reduced by the excess of such Deficiency Amount over any
remaining Available Subordinated Amount on the related Determination Date, but
not by more than the Investor Default Amount for such Distribution Date (an
"Investor Charge-Off"). Any reduction in the Invested Amount may have the
effect of slowing or reducing the return of principal on the Certificates. If
the Invested Amount has been reduced by any Investor Charge-Offs, it will
thereafter be increased on any Distribution Date (but not by an amount in
excess of the aggregate Investor Charge-Offs) by the sum of (a) the Series
1997-1 Investor Allocation Percentage of Miscellaneous Payments for such
Distribution Date and (b) the amount of Excess Servicing allocated and
available for such purpose as described above.
OPTIONAL REPURCHASE
On any Distribution Date occurring on or after the date on which the
Invested Amount is reduced to 10% or less of the initial aggregate principal
balance of the Certificates, BCRC will have the option, subject to certain
conditions, to repurchase the entire amount of the Certificates. The purchase
price will be equal to the sum of the aggregate principal balance of the
Certificates on such Distribution Date, accrued and unpaid interest due on the
Certificates (together with interest on overdue Monthly Interest to the extent
lawfully payable) on the date of such repurchase and any Class A Carry-Over
Amount or Class B Carry-Over Amount for such Distribution Date or previously
due but not distributed on a prior Distribution Date. The purchase price will
be deposited in the Collection Account in immediately available funds on the
Distribution Date on which BCRC exercises such option. Following any such
deposit, the Certificateholders will have no further rights with respect to
the Certificates, other than the right to receive the final distribution on
the Certificates. In the event that BCRC fails for any reason to deposit such
purchase price, payments will continue to be allocated to the Certificates as
described above under "Distributions from the Collection Account; Reserve
Fund."
EARLY AMORTIZATION EVENTS
Commencing on the first Distribution Date following the Collection Period in
which an Early Amortization Event has occurred, Principal Collections
allocable to the Certificates will no longer be allocated to any other Series
or the BCRC Certificate but instead will be allocated to the Certificates
monthly on each Distribution Date, except as described below, and the Class A
Controlled Distribution Amount will no longer apply to distributions of
principal on the Class A Certificates. An "Early Amortization Event" refers to
any of the following events:
(a) a failure by BCRC to convey Receivables in Additional Accounts to the
Trust within five business days after the day on which it is required to
convey such Receivables pursuant to the Pooling and Servicing Agreement;
(b) failure on the part of BCRC, the Servicer or BCI, as applicable, (i)
to make any payment or deposit required by the terms of the Pooling and
Servicing Agreement, including but not limited to any Transfer Deposit
Amount or Adjustment Payment, on or before the date occurring five (5)
business days after the date such payment or deposit is required to be
made, which failure is not cured within five business days after notice
from the Trustee of such failure; (ii) with respect to any Series, to
deliver a Distribution Date Statement within ten business days after notice
from the Trustee of such failure; (iii) to duly comply with,
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observe or perform in any material respect the covenant of the Depositor
not to create any lien (other than tax and certain other statutory liens
(including liens in favor of the Pension Benefit Guaranty Corporation) and
certain other liens and interests permitted by the Pooling and Servicing
Agreement on any Receivable which failure has a material adverse effect on
the holders of the investor certificates or the holder of the Variable
Funding Certificate and which continues unremedied for a period of 60 days
after written notice of such failure, requiring the same to be remedied,
has been given to the Depositor by the Trustee or any Enhancement Provider;
provided, however, that an Early Amortization Event shall not be deemed to
have occurred if the Depositor shall have repurchased the related
Receivables or, if applicable, all the Receivables during such period in
accordance with the provisions of the Pooling and Servicing Agreement; or
(iv) to duly observe or perform in any material respect any other of its
covenants or agreements set forth in the Pooling and Servicing Agreement,
which failure has a materially adverse effect on the holders of the
investor certificates or the holder of the Variable Funding Certificate and
which continues unremedied for a period of 45 days after written notice of
such failure, requiring the same to be remedied, shall have been given to
the Depositor by the Trustee or any Enhancement Provider;
(c) any representation or warranty made by BCRC in the Pooling and
Servicing Agreement or any information required to be given by BCRC to the
Trustee to identify the Accounts proves to have been incorrect in any
material respect when made or when delivered and continues to be incorrect
in any material respect for a period of 60 days after written notice (or
within such longer period as may be specified in such notice) of such
failure, requiring the same to be remedied, shall have been given to BCRC
by the Trustee, and as a result the interests of the holders of the
investor certificates or the holder of the Variable Funding Certificate are
materially and adversely affected (excluding, however, any representation
or warranty made by BCRC that the Pooling and Servicing Agreement
constitutes, or the transfer of the Receivables to the Trust is, a valid
sale, transfer and assignment to the Trust of all right, title and interest
of BCRC in the Receivables and the Collateral Security if the Pooling and
Servicing Agreement constitutes the grant of a security interest in the
Receivables and Collateral Security); provided, however, that an Early
Amortization Event shall not be deemed to occur thereunder if BCRC has
repurchased the related Receivables or all such Receivables, if applicable,
during such period in accordance with the provisions of the Pooling and
Servicing Agreement;
(d) the occurrence of certain events of bankruptcy, insolvency or
receivership relating to any of Bombardier Corporation, the Depositor or
the Servicer (or BCI if it is not the Servicer);
(e) BCRC or the Trust becomes an investment company within the meaning of
the Investment Company Act of 1940, as amended;
(f) on any Distribution Date, the Available Subordinated Amount is less
than the Required Subordinated Amount after giving effect to the
distributions to be made on such Distribution Date;
(g) on any Distribution Date, the balance of the Reserve Fund is less
than the Reserve Fund Required Amount, in each case after giving effect to
all deposits and distributions on such Distribution Date;
(h) any Servicer Default occurs;
(i) any Class A Carry-Over Amount or Class B Carry-Over Amount, as
applicable, is outstanding on six consecutive Distribution Dates, where the
"Class A Carry-Over Amount" for any Distribution Date on which the Class A
Certificate Rate is calculated on the basis of the Net Receivables Rate, is
the excess of (x) Class A Monthly Interest for such Distribution Date
determined as if the Class A Certificate Rate were based on the LIBOR
formula set forth in the definition of "Class A Certificate Rate" over (y)
the actual Class A Monthly Interest for such Distribution Date and the
"Class B Carry-Over Amount" for any Distribution Date on which the Class B
Certificate Rate is calculated on the basis of the Net Receivables Rate, is
the excess of (x) Class B Monthly Interest for such Distribution Date
determined as if the Class B Certificate Rate were based on the LIBOR
formula set forth in the definition of "Class B Certificate Rate" over (y)
the actual Class B Monthly Interest for such Distribution Date;
(j) the ratio (expressed as a percentage) of (x) the average for each
month of the net losses on the Receivables in the Pool (i.e., gross losses
less recoveries on any Receivables (including, without limitation,
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recoveries from Collateral Security in addition to the products financed by
the Receivables, recoveries from manufacturers, distributors or importers
and insurance proceeds)) during any three consecutive calendar months to
(y) the average of the month-end Pool Balances for such three-month period,
exceeds 5% on an annualized basis; provided, that this clause (j) may be
revised or waived without the consent of the Certificateholders if the
Rating Agency Condition is satisfied;
(k) the average Monthly Payment Rate (x) with respect to the three
Collection Periods included in the period from January through March of any
calendar year is less than 12% and (y) with respect to any other three
consecutive Collection Periods is less than 14%, where the "Monthly Payment
Rate" for a Collection Period is the percentage obtained by dividing the
aggregate Principal Collections for such Collection Period by the average
daily Pool Balance for such Collection Period; provided, that this clause
(k) may be revised or waived without the consent of the Certificateholders
if the Rating Agency Condition is satisfied;
(l) the failure to pay the outstanding principal amount of the Class A
Certificates on the Class A Expected Final Payment Date or the failure to
pay the outstanding principal amount of the Class B Certificates on the
Class B Expected Payment Date;
(m) a Liquidation Event occurs; at all times the term "Liquidation Event"
will refer to certain events of bankruptcy, insolvency or receivership
relating to BCI or BCRC. In addition, prior to and including the Series
1994-1 Final Payment Date, but not thereafter, a Liquidation Event shall
occur if: (i) there occurs an Event of Default under (and as defined in)
any credit or loan agreement pursuant to which credit facilities (including
loans, loan commitments and letter of credit facilities) in excess of
$10,000,000 in the aggregate have been established or made available to
BCI, (ii) BCI, BCRC and the Trustee receive written notice (the "First
Notice") from any party to such agreement stating that by reason of such
Event of Default the loans outstanding to BCI or BCRC under such agreement
in an aggregate amount in excess of $10,000,000 (the "Defaulted Agreement")
are immediately due and payable and/or any credit commitment established
thereunder in an aggregate amount in excess of $10,000,000 is terminated
and (iii) the party delivering the First Notice delivers, within 30 days
after delivery of the First Notice, a second notice (the "Second Notice")
to BCI, BCRC and the Trustee stating (1) that the First Notice has not been
rescinded, (2) that the Event of Default has not been waived, (3) that the
acceleration of loans under the Defaulted Agreement or the termination of
any credit commitment established thereunder has not been rescinded or
annulled, and (4) that BCI has not paid all its indebtedness and has not
satisfied all its other obligations, contingent or otherwise, under the
Defaulted Agreement (other than obligations which by the terms of the
Defaulted Agreement survive the termination of the Defaulted Agreement and
the repayment of the credit extended thereunder);
(n) the sum of all Eligible Investments and amounts on deposit in the
Excess Funding Account and excess funding accounts for all other Series
represents more than 50% of the total assets of the Trust on each of six or
more consecutive Distribution Dates, after giving effect to all payments
made or to be made on such Distribution Date: or
(o) either (i) at any time during the period from and including the
Closing Date through May 31, 1998, more than 10% of the aggregate principal
amount of Domestic Inventory Receivables that were included in the Pool
Balance on the Closing Date and are then owned by the Trust have not been
paid in full within 491 days following the date of origination thereof or
(ii) at any time during any Origination Period commencing after May 31,
1998, more than 10% of the aggregate principal amount of Domestic Inventory
Receivables originated and transferred to the Trust during the four month
period commencing 16 months prior to such Origination Period and are then
owned by the Trust have not been paid in full within 491 days following the
date of origination thereof.
Upon the occurrence of any event described above, an Early Amortization
Event will be deemed to have occurred without any notice or other action on
the part of any other party immediately upon the occurrence of such event. The
Early Amortization Period will commence as of the day on which the Early
Amortization Event occurs. Monthly distributions of principal on the
Certificates will begin on the first Distribution Date following the
Collection Period in which an Early Amortization Period has commenced.
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If an Early Amortization Period results from the failure by BCRC to convey
Receivables in Additional Accounts to the Trust as described in clause (a)
above during the Revolving Period and no other Early Amortization Event has
occurred, the Early Amortization Period resulting from such failure will
terminate and the Revolving Period will recommence (unless the scheduled
termination date of the Revolving Period has occurred) as of the end of the
first Collection Period during which an Early Amortization Event would no
longer be deemed to exist as described in clause (a) above. An Early
Amortization Event would no longer be deemed to exist as described in clause
(a) above as a result of a reduction in the Invested Amount or the invested
amounts of other Series occurring due to principal payments distributed on the
Certificates and the certificates at other outstanding Series during the Early
Amortization Period or as a result of the subsequent addition of Receivables
to the Trust.
In addition to the consequences of an Early Amortization Event discussed
above, if a Liquidation Event occurs, or BCRC violates its covenant set forth
in clause (b)(iii) above (and such violation of such covenant becomes an
"Early Amortization Event" as described in clause (b)(iii) above), on the day
of such Liquidation Event or such Early Amortization Event occurring because
of such violation, as applicable, BCRC will immediately cease to transfer
Receivables to the Trust and promptly give notice to the Trustee of such
Liquidation Event or Early Amortization Event occurring because of such
violation, as applicable. Furthermore, under the terms of the Pooling and
Servicing Agreement, within 15 days following an insolvency event with respect
to BCRC or an Early Amortization Event as described in the preceding sentence
as a result of the occurrence of a violation set forth in (b)(iii) above, the
Trustee will publish a notice of such insolvency event or Early Amortization
Event occurring because of such violation stating that the Trustee intends to
sell, liquidate or otherwise dispose of all Receivables in the Trust in a
commercially reasonable manner and on commercially reasonable terms and,
unless within a specified period of time holders of Certificates and
certificates of each other outstanding Series representing more than 50% of
the aggregate outstanding principal balance of the certificates of each such
Series (or, with respect to any Series with two or more classes, the
certificates of each such class) and the holder of the Variable Funding
Certificate, instruct the Trustee not to sell, liquidate or dispose of the
Receivables in the Trust, the Trustee will proceed to dispose of the
Receivables. In the event of any such sale, liquidation or disposition, the
related proceeds will be allocated pro rata (based on the applicable
allocation percentages for each Series and the Variable Funding Percentage)
among the Certificates, any other outstanding Series and the interest
represented by the Variable Funding Certificate. If the portion of such
proceeds allocated to the Certificates and the proceeds of any collections on
the Receivables in the Collection Account allocable to the Certificates are
not sufficient to pay the aggregate unpaid principal balance of the
Certificates in full plus accrued and unpaid interest thereon,
Certificateholders will incur a loss. Notwithstanding the above, in the case
of the violation of the covenant described in clause (b)(iii) above, the
Trustee will not sell the Receivables upon an Early Amortization Event
occurring because of such violation unless the proceeds allocable to the
Certificates are sufficient to pay the aggregate unpaid principal balance of
each Series of certificates in full plus accrued and unpaid interest thereon.
TERMINATION
The Trust and the respective obligations and responsibilities of the
Depositor, the Servicer and the Trustee created by the Pooling and Servicing
Agreement will terminate on the earlier to occur of (a) the day following the
Distribution Date on which the aggregate of the invested amounts for all
Series is zero and (b) January 1, 2014 (the "Termination Date"). Upon
termination of the Trust, all right, title and interest in the Receivables and
the Collateral Security and other funds related thereto (other than amounts in
the Collection Account for the final distribution of principal and interest to
certificateholders) will be conveyed and transferred to the Depositor.
In any event, the last payment of principal and interest on the Certificates
will be due and payable no later than the Series 1997-1 Termination Date. In
the event that the Invested Amount is greater than zero on the Series 1997-1
Termination Date, the Trustee will use its best efforts to sell or cause to be
sold an interest in the Pool Balance then represented by the Certificates. The
net proceeds of such sale will be paid pro rata to Certificateholders as of
the Series 1997-1 Termination Date, up to the amount necessary to pay
principal of and accrued and unpaid interest on outstanding Certificates, as
the final payment of the Certificates.
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INDEMNIFICATION
The Pooling and Servicing Agreement provides that (x) the Depositor will
indemnify the Trust and the Trustee from and against any loss, liability,
reasonable expense, damage or injury suffered or sustained by reason of any
acts or omissions or alleged acts or omissions arising out of or based upon
the arrangement created by the Pooling and Servicing Agreement, including any
judgment, general settlement, reasonable attorneys' fees and other costs and
expenses incurred by the Trustee in connection with the defense of any actual
or threatened action, proceeding or claim (other than any losses on
Receivables and amounts due with respect thereto) and (y) the Servicer will
indemnify (i) the Trust and the Trustee from and against any loss, liability,
reasonable expense, damage or injury suffered or sustained by the Trust or the
Trustee arising out of or based upon the arrangement created by the Pooling
and Servicing Agreement, including any judgment, general settlement,
reasonable attorney fees and other costs and expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim
(other than losses on Receivables and amounts due with respect thereto) and
(ii) the Trustee and its officers, directors, employees and agents from and
against any loss, liability, reasonable expense, damage or injury suffered or
sustained by reason of the acceptance of the Trust by the Trustee, the
issuance by the Trust of the Certificates or any of the other matters
contemplated in the Pooling and Servicing Agreement or in any Supplement
thereto (other than losses on Receivables and amounts due with respect
thereto); provided that, in any such case, the Trust, the Trustee, and its
officers, directors, employees and agents will not be so indemnified if such
acts or omissions constitute, or such actual or threatened action, proceeding
or claim arises out of, or such loss, liability, expense, damage or injury is
caused by, fraud, gross negligence, breach of fiduciary duty or willful
misconduct by the Trustee and provided further that neither BCRC nor the
Servicer shall be liable, directly or indirectly, for or in respect of any
indebtedness or obligation evidenced or created by any certificate, recourse
as to which is limited solely to the assets of the Trust allocated for the
payment thereof as provided in the Pooling and Servicing Agreement and any
applicable Supplement. In addition, neither the Servicer nor the Depositor
will indemnify the Trust, the Trustee or the certificateholders or any other
beneficiaries of the Trust for any act taken by the Trustee at the request of
the certificateholders or for any federal, state or local income or franchise
tax (or any interest or penalties with respect thereto) required to be paid by
the Trust or the certificateholders or any other beneficiaries. Furthermore,
any such indemnification by the Depositor will only be from assets of the
Depositor not pledged to third parties or otherwise encumbered as permitted
under the Depositor's certificate of incorporation and will be made only after
the deposit by the Depositor of any amounts required to be made in the
Collection Account. Any indemnification by the Servicer shall not be payable
from the assets of the Trust.
The Pooling and Servicing Agreement provides that, except as described above
and with certain other specified exceptions, neither the Servicer nor BCRC nor
any of their affiliates, directors, officers, employees, stockholders, agents,
representatives or advisors will be under any liability to the Trustee or any
other person for taking any action, or for refraining from taking any action,
pursuant to the Pooling and Servicing Agreement or otherwise. However, neither
the Servicer nor BCRC will be protected against any liability which would
otherwise be imposed by reason of their willful misfeasance, bad faith or
gross negligence.
In addition, the Pooling and Servicing Agreement provides that the Servicer
is not under any obligation to appear in, prosecute or defend any legal action
other than as part of the good faith performance of its servicing obligations.
The Servicer may, in its sole discretion, undertake any such legal action
which it may deem necessary or desirable for the benefit of the Trust.
COLLECTION AND OTHER SERVICING PROCEDURES
Pursuant to the Pooling and Servicing Agreement, the Servicer is responsible
for servicing, collecting, enforcing and administering the Receivables in
accordance with procedures that are customary and usual in the industry for
servicing receivables comparable to such Receivables, except where the failure
to so act would not materially and adversely affect the rights of the Trust or
any beneficiaries thereof. BCI has delegated certain of its servicing,
collection, enforcement and administrative duties to third parties and BCI may
from time to time in the future delegate all or a portion of such duties to
third parties in accordance with the terms of the Pooling and Servicing
Agreement, provided that no such delegation will relieve BCI of its
responsibilities as Servicer with respect to such duties.
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Subject to compliance with all requirements of law, the Servicer (or BCI) and
any affiliate of BCI may change the terms and provisions of the Accounts,
including the inventory security agreements and other floorplan financing
agreements and the financing guidelines, in any respect (including the
calculation of the amount or the timing of charge-offs and the rate of the
finance charge) only if, in the Servicer's reasonable judgment, no Early
Amortization Event will occur as a result of the change.
Servicing activities to be performed by the Servicer include collecting and
recording payments, communicating with Obligors, investigating payment
delinquencies, evaluating the increase of credit limits, and maintaining
internal records with respect to each Account. Managerial and custodial
services performed by the Servicer include providing assistance in any
inspections of the documents and records relating to the Accounts and
Receivables by BCRC or the Trustee (on behalf of the Certificateholders),
maintaining the agreements, documents and files relating to the Accounts and
Receivables as custodian and providing related data processing and reporting
services for holders of certificates and on behalf of the Trustee.
SERVICER COVENANTS
In the Pooling and Servicing Agreement the Servicer covenants that: (a) it
will duly satisfy all obligations on its part to be fulfilled under or in
connection with the Receivables and Accounts, will maintain in effect all
qualifications required in order to service properly the Receivables and the
Accounts and will comply in all material respects with all requirements of law
in connection with servicing the Receivables and the Accounts, except where
the failure to do any of the foregoing would not have a material adverse
effect on the beneficiaries of the Trust; (b) it will do nothing to impair the
rights of the beneficiaries of the Trust in the Receivables or in the
certificates; and (c) it will not reschedule, revise, defer, cancel or settle
payments due on any Receivable except in accordance with sound industry
practices for servicing receivables comparable to the Receivables.
Under the terms of the Pooling and Servicing Agreement, if the Depositor or
the Servicer receives written notice from the Trustee or any Enhancement
Provider that any covenant of the Servicer set forth above has not been
complied with in all material respects and such noncompliance has not been
cured within 30 days thereafter (or such longer period as the Trustee may
agree to) and has a materially adverse effect on the interests of all
certificateholders or the Variable Funding Interest in any Receivable or
Account, then, unless a Liquidation Event has occurred, the Servicer will
purchase such Receivable or all Receivables in such Account, as applicable.
Such purchase will be made on the Determination Date following the expiration
of the 30-day cure period by deposit into the Collection Account of an amount
equal to the amount of such Receivable or Receivables plus accrued and unpaid
interest thereon. The amount of such deposit shall be deemed a Transfer
Deposit Amount. The purchase by the Servicer constitutes the sole remedy
available to certificateholders if such covenant or warranty of the Servicer
is not satisfied and such purchased Receivables shall be automatically
assigned to the Servicer.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicer's compensation for its servicing activities under the Pooling
and Servicing Agreement and reimbursement for its expenses will be a monthly
servicing fee (the "Servicing Fee") in an amount payable in arrears on each
Distribution Date on or prior to the Termination Date equal to the aggregate
of the monthly servicing fees specified in the Supplements. The share of the
Servicing Fee allocable to the Certificates with respect to any Distribution
Date (the "Monthly Servicing Fee") will generally be equal to one-twelfth of
the product of (a) 2% or, for any Distribution Date in respect of which the
Monthly Servicing Fee has been waived, 0% (the "Servicing Fee Rate") and (b)
the Invested Amount as of the last day of the second preceding Collection
Period, provided that the Monthly Servicing Fee for the first Distribution
Date will be equal to $ . A portion of the Monthly Servicing Fee (the "Net
Servicing Fee") will be payable in the priority set forth above in
"Description of the Certificates--Distribution from the Collection Account;
Reserve Fund" and will generally be equal to one-twelfth of the product of (a)
1%, if BCI is the Servicer, or 2%, if BCI is not the Servicer, or for any
Distribution Date in respect of which the Monthly Servicing Fee has been
waived, 0% (the "Net Servicing Fee Rate") and (b) the Invested Amount as of
the last day of the second preceding Collection Period, provided that the Net
Servicing Fee for the first Distribution Date will be equal to $ . The
portion of the Monthly Servicing Fee in excess of the Net Servicing Fee will
be payable at a lower priority level after provision is made for any required
deposit to
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the Reserve Fund and for allocations with respect to any Investor Default
Amount as set forth above in "Description of the Certificates--Distribution
from the Collection Account; Reserve Fund." The remainder of the Servicing Fee
not allocable to the Certificates shall be paid by the holders of the Variable
Funding Certificate and the BCRC Certificate and the holders of the
certificates of other outstanding Series. The Monthly Servicing Fee shall be
payable to the Servicer solely to the extent amounts are available for
distribution therefor in accordance with the terms of the Series 1997-1
Supplement.
The Servicer will be permitted to waive its right to receive the Monthly
Servicing Fee on any Distribution Date, so long as it believes that sufficient
Non-Principal Collections will be available on a future Distribution Date to
pay the Monthly Servicing Fee relating to the amount thereof so waived, in
which case the Monthly Servicing Fee (including the Net Servicing Fee) for
such Distribution Date shall be deemed to be zero.
The Servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the Accounts and the Receivables
including, without limitation, payment of fees and disbursements of the
Trustee and independent accountants and all other fees and expenses which are
not expressly stated in the Pooling and Servicing Agreement to be payable by
the Trust or the certificateholders other than federal, state and local income
and franchise taxes, if any, of the Trust or the certificateholders.
CERTAIN MATTERS REGARDING THE SERVICER
The Servicer may not resign from its obligations and duties under the
Pooling and Servicing Agreement, except upon determination that such duties
are no longer permissible under applicable law. No such resignation will
become effective until the Trustee or a successor to the Servicer has assumed
the Servicer's responsibilities and obligations under the Pooling and
Servicing Agreement.
Any person into which, in accordance with the Pooling and Servicing
Agreement, the Servicer may be merged or consolidated or any person resulting
from any merger or consolidation to which the Servicer is a party, or any
person succeeding to the business of the Servicer, will be the successor to
the Servicer under the Pooling and Servicing Agreement.
SERVICER DEFAULT
In the event and during the continuance of any Servicer Default, the Trustee
by written notice to the Servicer, may terminate all of the rights and
obligations of the Servicer, as servicer, under the Pooling and Servicing
Agreement and in and to the Receivables and the proceeds thereof and appoint a
new Servicer (a "Service Transfer"). The Trustee shall as promptly as possible
appoint a successor Servicer and if no successor Servicer has been appointed
by the Trustee and has accepted such appointment by the time the Servicer
ceases to act as Servicer, all rights, authority, power and obligations of the
Servicer under the Pooling and Servicing Agreement shall pass to and be vested
in the Trustee. Prior to any Service Transfer, the Trustee will review any
bids obtained from potential servicers meeting certain eligibility
requirements set forth in the Pooling and Servicing Agreement to serve as
successor Servicer for servicing compensation not in excess of the Servicing
Fee (provided that if all such bids exceed the Servicing Fee, the Depositor at
its own expense will pay when due the amount of any compensation in excess of
the Servicing Fee).
A "Servicer Default" refers to any of the following events:
(a) failure by the Servicer to make any payment, transfer or deposit into
the Trust (or into any Series Account), on or before the date the Servicer
is required to do so under the Pooling and Servicing Agreement, which
failure is not cured within a five business day grace period after notice
from the Trustee of such failure;
(b) failure on the part of the Servicer duly to observe or perform (x)
its covenant not to create any lien on any Receivable which failure has a
material adverse effect on the certificateholders and which continues
unremedied for a period of 60 days after written notice to it; provided,
however, that a Servicer Default shall not be deemed to have occurred if
BCRC or the Servicer shall have repurchased the related
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Receivables or, if applicable, all the Receivables during such period in
accordance with the terms and provisions of the Pooling and Servicing
Agreement or (y) any other covenants or agreements of the Servicer in the
Pooling and Servicing Agreement (exclusive of breaches of covenants in
respect of which the Servicer repurchases the related Receivables, as
described above under "--Servicer Covenants") which failure has a
materially adverse effect on the certificateholders or the holder of the
Variable Funding Certificate and which continues unremedied for a period of
30 days after written notice thereof to the Servicer;
(c) any representation, warranty or certification made by the Servicer in
the Pooling and Servicing Agreement or in any certificate delivered
pursuant to the Pooling and Servicing Agreement proves to have been
incorrect when made and continues to be incorrect in any material respect
for a period of 60 days after written notice thereof has been given to the
Servicer by the Trustee and as a result the interests of the
certificateholders or the holder of the Variable Funding Certificate are
materially and adversely affected; provided, however, that a Servicer
Default shall not be deemed to have occurred if BCRC shall have repurchased
the related Receivables or, if applicable, all the Receivables during such
period in accordance with the provisions of the Pooling and Servicing
Agreement; or
(d) the occurrence of certain events of bankruptcy, insolvency or
receivership with respect to the Servicer.
Notwithstanding the foregoing, a delay in or failure of performance referred
to under clause (a) above for a period of up to ten business days after the
applicable grace period or a delay in or failure of performance (or the
continuance of any such delay or failure) referred to under clauses (b) or (c)
for a period of up to 60 business days, shall not constitute a Servicer
Default if such delay or failure or continuance was caused by an act of God or
other similar occurrence. Upon the occurrence of any such event, the Servicer
shall not be relieved from using its best efforts to perform its obligations
in a timely manner in accordance with the terms of the Pooling and Servicing
Agreement and the Servicer shall provide the Trustee, any Enhancement Provider
and BCRC prompt notice of such failure or delay by it, together with a
description of its efforts to so perform its obligations. In addition, the
Servicer shall immediately notify the Trustee in writing of any Servicer
Default.
REPORTS
On each Distribution Date, the Trustee will forward (or cause to be
forwarded) to each Certificateholder of record (which is expected to be Cede,
as nominee for DTC, unless Definitive Certificates are issued) a statement
(the "Distribution Date Statement") prepared by the Servicer setting forth the
following information (which, where appropriate, will be stated on the basis
of an original principal amount of $1,000 per Certificate if the Amortization
Period, an Initial Amortization Period or an Early Amortization Period has
commenced): (a) the aggregate amount of principal paid or distributed on the
Certificates and the aggregate amount of interest paid or distributed on the
Certificates on such Distribution Date; (b) the Floating Allocation Percentage
and the Principal Allocation Percentage for such Collection Period (or, after
the Series 1994-1 Final Payment Date, the average for the Deposit Dates in
such Collection Period); (c) the Investor Default Amount for such Distribution
Date; (d) the Required Subordination Draw Amount, if any, for the preceding
Collection Period (or, after the Series 1994-1 Final Payment Date, for such
Distribution Date); (e) the amount of the Investor Charge-Offs and the amounts
of reimbursements thereof for the preceding Collection Period; (f) the amount
of Class A Carry-Over Amount, if any, and the amount of Class B Carry-Over
Amount, if any, being paid and the amount remaining unpaid; (g) the Pool
Balance; (h) the outstanding principal amount of Class A Certificates and
Class B Certificates after giving effect to distributions on such date; (i)
the applicable Class A Certificate Rate and Class B Certificate Rate; (j) the
amount of the Monthly Servicing Fee for the preceding Collection Period; (k)
the "pool factor" for the Certificates as of such Distribution Date
(consisting of an eleven-digit decimal expressing the Invested Amount as of
such Distribution Date (determined after taking into account any reduction in
the Invested Amount which will occur on such Distribution Date) as a
percentage of the Adjusted Invested Amount); (l) the Available Subordinated
Amount for such Distribution Date; (m) the Reserve Fund balance for such
Distribution Date; (n) the Excess Funding Account balance; (o) the Collection
Account balance with respect to such Distribution Date and (p) whether an
Early Amortization Event has occurred or whether BCI has elected to not extend
the Initial Principal Payment Date.
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On or before January 31 of each calendar year, beginning with January 31,
1998, the Trustee will furnish (or cause to be furnished) to each person who
at any time during the preceding calendar year was a Certificateholder of
record (which is expected to be Cede, as nominee for DTC, unless Definitive
Certificates are issued) a statement prepared by the Servicer containing the
information that is required to be contained in the Distribution Date
Statement, aggregated for such calendar year, together with information
required to be provided by an issuer of indebtedness under the Code for such
preceding calendar year or the applicable portion thereof during which such
person was a Certificateholder, together with such other customary information
as is necessary to enable the Certificateholders to prepare their tax returns.
In addition, the Trustee from time to time will furnish to each
Certificateholder of record information furnished by the Servicer regarding
material changes in the servicing or crediting procedures required under the
Pooling and Servicing Agreement. As long as the Certificateholder of record is
Cede, as nominee for DTC, Certificate Owners will receive tax and other
information from Participants and Indirect Participants rather than from the
Trustee. See "Certain Federal Income Tax Consequences."
EVIDENCE AS TO COMPLIANCE
The Pooling and Servicing Agreement provides that on or before April 30 of
each calendar year the Servicer will cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer or BCRC) to furnish a report relating to certain matters in
connection with the servicing of BCI's portfolio of Receivables.
The Pooling and Servicing Agreement provides for delivery to the Trustee on
or before April 30 of each calendar year of a statement signed by an officer
of the Servicer to the effect that the Servicer has fully performed, or caused
to be fully performed its obligations in all material respects under the
Pooling and Servicing Agreement throughout the preceding year or, if there has
been a default in the performance of any such obligation, specifying the
nature and status of the default.
Copies of all statements, certificates and reports furnished to the Trustee
may be obtained by any Certificateholder (which is expected to be Cede, as
nominee for DTC, unless Definitive Certificates are issued), upon request in
writing delivered to the Trustee.
AMENDMENTS
The Pooling and Servicing Agreement may be amended from time to time
(including in connection with the issuance of a Supplemental Certificate) by
BCRC, the Servicer, the Trustee and BCI (if BCI is not then the Servicer),
without additional consent, so long as any such action shall not, as evidenced
by an opinion of counsel, adversely affect in any material respect the
interests of the certificateholders or the holder of the Variable Funding
Certificate. In addition, the Pooling and Servicing Agreement may be amended
by BCRC, the Servicer, the Trustee and BCI (if BCI is not then the Servicer)
to conform the provisions regarding removal of Accounts with those in effect
prior to the Closing Date to allow for the removal of existing Receivables in
Removed Accounts (including all amounts then held or thereafter received in
respect of such Receivables) if, at the time of such amendment, such
provisions will be consistent with sale treatment of the Receivables by BCRC
under generally accepted accounting principles. Notwithstanding the above, the
Trustee, with the consent on any Enhancement Providers, may at any time and
from time to time amend, modify or supplement the form of Distribution Date
Statement.
The Pooling and Servicing Agreement may also be amended by BCRC, the
Servicer, the Trustee and BCI (if not the Servicer) with the consent of the
holder of the Variable Funding Certificate, if it would be adversely affected
by such amendment, and holders of certificates evidencing not less than a
majority of the aggregate unpaid principal amount of the certificates of all
adversely affected Series for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Pooling and
Servicing Agreement or of modifying in any manner the rights of the
certificateholders. No such amendment, however, may (a) reduce in any manner
the amount of, or delay the timing of, distributions required to be made on
any certificate (including the Variable Funding Certificate) or the deposits
to be made therefor, (b) change the definition or the manner of calculating
interest on any certificate, (c) reduce the amount available under any
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Enhancement, (d) adversely affect the rating of any Series or class by any
Rating Agency which rated such Series or class or (e) reduce the percentage of
the unpaid principal balance of certificates the holders of which are required
to consent to any such amendment, without, in the case of (a), (b), (c) or (e)
the consent of each affected certificateholder or the Variable Funding
Certificate, as applicable and, in the case of (d), the consent of the holders
of certificates of such Series or class evidencing not less than 66 2/3% of
the aggregate unpaid principal amount of the certificates of such Series or
class. Promptly following the execution of any amendment to the Pooling and
Servicing Agreement (other than an amendment described in the preceding
paragraph), the Trustee will furnish notice of the substance of such amendment
to each certificateholder.
The Pooling and Servicing Agreement may not be amended in any manner which
materially adversely affects the interests of any Enhancement Provider without
its prior consent.
LIST OF CERTIFICATEHOLDERS
Upon written request of any three or more certificateholders of record, the
Trustee will afford such certificateholders access during business hours to
the current list of registered certificateholders of a Series or of all
Series, as applicable, for purposes of communicating with other
certificateholders with respect to their rights under the Pooling and
Servicing Agreement. It is anticipated that the only Certificateholder will be
Cede, as nominee of DTC, and that Certificate Owners will not be recognized by
the Trustee as Certificateholders for this purpose. See "Book-Entry
Registration" and "Definitive Certificates" above.
The Pooling and Servicing Agreement does not provide for any annual or other
meetings of Certificateholders.
THE TRUSTEE
Bankers Trust Company, a New York banking corporation, is Trustee under the
Pooling and Servicing Agreement. The Trustee is located at Four Albany Street,
New York, New York 10006. BCI and BCRC and their respective affiliates may
from time to time enter into other banking and trustee relationships with the
Trustee and its affiliates. The Trustee may hold Certificates in its own name
and may deal with BCRC, the Servicer or any Enhancement Provider with the same
rights it would have if it were not the Trustee. In addition, for purposes of
meeting the legal requirements of certain local jurisdictions, the Trustee
shall have the power to appoint a co-trustee or separate trustees of all or a
part of the Trust. In the event of such appointments, all rights, powers,
duties and obligations shall be conferred or imposed upon the Trustee and such
separate trustee or co-trustee jointly, or, in any jurisdiction in which the
Trustee shall be incompetent or unqualified to perform certain acts, singly
upon such separate trustee or co-trustee, who shall exercise and perform such
rights, powers, duties and obligations solely at the direction of the Trustee.
The Trustee may resign at any time, in which event BCRC will be obligated to
appoint a successor Trustee. The Servicer may also remove the Trustee if the
Trustee ceases to be eligible to continue as such under the Pooling and
Servicing Agreement or if the Trustee becomes insolvent. In such
circumstances, the Servicer may appoint a successor Trustee. Any resignation
or removal of the Trustee and appointment of a successor Trustee does not
become effective until the acceptance of the appointment by the successor
Trustee. See "Description of the Certificates--Indemnification."
The fees and expenses of the Trustee will be paid by the Servicer out of its
servicing compensation. See "Description of the Certificates--Servicing
Compensation and Payment of Expenses."
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AMENDMENTS TO POOLING AND SERVICING AGREEMENT
AND RECEIVABLES PURCHASE AGREEMENT
On the Closing Date, BCRC, BCI and the Trustee will enter into certain
amendments to the Pooling and Servicing Agreement and to the Receivables
Purchase Agreement. The terms of the Pooling and Servicing Agreement and the
Receivables Purchase Agreement, as described in this Prospectus, include such
amendments. Certain of such amendments will not become effective until after
the Series 1994-1 Final Payment Date (the "Delayed Amendments"). Provisions
which will not become effective until after the Series 1994-1 Final Payment
Date are so noted in this Prospectus wherever the affected terms are
described. Numerous Delayed Amendments are contained in the documents which
amend the Pooling and Servicing Agreement and the Receivables Purchase
Agreement. The following lists, in brief and general terms, some of the
Delayed Amendments contained in Amendment Number 1 to the Pooling and
Servicing Agreement and Amendment Number 1 to the Receivables Purchase
Agreement; however this listing does not purport to provide a complete
description of such amendments. For further information, owners and
prospective owners of Certificates are advised to examine the Pooling and
Servicing Agreement and Amendment Number 1 thereto and the Receivables
Purchase Agreement and Amendment Number 1 thereto, copies of which (without
certain exhibits or schedules) will be made available by the Trustee upon
written request.
--The definition of "Eligible Accounts" will be amended (i) to provide
that such accounts may include, in addition to accounts "established" by
BCI or an affiliate of BCI, accounts "acquired" by BCI or an affiliate,
(ii) to allow BCI to assign or grant participation rights in an Eligible
Account or the Receivables therein and the security and rights related
thereto, (iii) to make provision for the inclusion of accounts in which
Asset-Based Receivables will arise, (iv) to provide that the obligors with
respect to such accounts may, in addition to dealers, include manufacturers
and distributors and (v) to provide that the definition of "Eligible
Accounts" may be further amended without consent of the holders of the
Certificates if the Rating Agency Condition is satisfied. See "Description
of the Certificates--Eligible Accounts and Eligible Receivables."
--The definition of "Eligible Receivables" will be amended (i) to provide
for the inclusion of Asset-Based Receivables, (ii) to include Receivables
acquired by BCI or an affiliate of BCI in addition to those originated by
BCI or an affiliate of BCI, (iii) to remove the restriction on assigment
and participation of Receivables and (iv) to provide that the definition of
Eligible Receivables may be further amended without consent of the holders
of the Certificates if the Rating Agency Condition is satisfied. See
"Description of the Certificates--Eligible Accounts and Eligible
Receivables."
--The provisions relating to the Excess Funding Account and the
calculation of Excess Funded Amount (including the definition of "Required
Pool Balance") will be amended to provide for a calculation as of each
business day of the amount required to be on deposit in the Excess Funding
Account and to provide for deposits and withdrawals on a daily basis. See
"Description of the Certificates--Excess Funding Account" and "--Required
Pool Balance."
--The provisions relating to the designation of Additional Accounts will
be amended to allow the addition of a limited amount of Accounts in each
quarter and in each year without review or approval by the Rating Agencies.
See "Description of the Certificates--Addition of Accounts."
--Provisions are added which permit the granting of Participation
Interests in Receivables and which permit the assignment of Receivables
including interests in the collateral securing such Receivables. See "The
Floorplan and Asset-Based Financing Business--Participation Arrangements"
and "Description of the Certificates--Removal of Accounts and Assignment of
Receivables."
--Numerous calculations, allocations, deposits and releases of funds,
which currently are done on a monthly basis, will be made on a daily basis.
The holders of the Certificates, by the purchase and acceptance of the
Certificates, will accept the terms of the documents as amended including such
Delayed Amendments and those amendments to the Pooling and Servicing Agreement
and Receivables Purchase Agreement effective as of or prior to the Closing
Date.
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DESCRIPTION OF THE RECEIVABLES PURCHASE AGREEMENT
The Receivables transferred and to be transferred to the Trust have been and
will be acquired by BCRC from BCI pursuant to the Receivables Purchase
Agreement, dated as of January 1, 1994, between BCI, as seller, and BCRC, as
purchaser, filed as an exhibit to the Registration Statement of which this
Prospectus is a part (as amended by Amendment Number 1 dated as of January 1,
1997 to the Receivables Purchase Agreement ("RPA Amendment Number 1") and as
otherwise supplemented or amended from time to time, the "Receivables Purchase
Agreement"). The Receivables Purchase Agreement provides that it is governed
by New York law. The following discussion represents a summary of certain
terms of the Receivables Purchase Agreement relating to the sale or
contribution of the Receivables to BCRC and does not purport to provide a
complete description. For further information, owners and prospective owners
of Certificates are advised to examine the Receivables Purchase Agreement, a
copy of which (without certain exhibits or schedules) including RPA Amendment
Number 1, will be made available by the Trustee upon written request.
SALE AND TRANSFER OF RECEIVABLES
Pursuant to the Receivables Purchase Agreement, BCI has sold and transferred
to BCRC all of its right, title and interest in and to all of the Domestic
Inventory Receivables and the Collateral Security (and the related repurchase
agreements and other agreements with manufacturers, importers or distributors)
relating to the Accounts as of the Initial Cut-Off Date and from time to time
has sold and transferred and will sell or contribute and transfer to BCRC
Domestic Inventory Receivables created thereafter (and the related Collateral
Security) with respect to the Accounts and Additional Accounts and, after the
Series 1994-1 Final Payment Date, subject to satisfaction of the Rating Agency
Condition, may sell or contribute and transfer Asset-Based Receivables in
Accounts designated for the Trust.
Under the Receivables Purchase Agreement, BCI has transferred and will
continue to transfer the Receivables to BCRC in exchange for (i) the net cash
proceeds received by BCRC from the sale of the investor certificates (which
proceeds equals the proceeds, after expenses, raised from the sale of the
investor certificates), less any amounts deposited by BCRC in the Reserve Fund
and (ii) a promissory note (the "Note") issued by BCRC in favor of BCI. The
value of and the purchase price in the case of sales of Eligible Receivables
transferred will be deemed to equal the principal amount of such Receivables
plus accrued and unpaid interest thereon on the date of transfer (less, if
applicable, the amount of principal and interest allocable to any
Participation Interest). The value of and the purchase price in the case of
sales with respect to Ineligible Receivables transferred will equal the net
book value of such Receivables (less, if applicable, the amount of principal
and interest allocable to any Participation Interest). With respect to
Receivables which are sold to BCRC, the principal amount of the Note will be
increased from time to time in connection with the sale of additional
Receivables by BCI to BCRC for inclusion in the Trust pursuant to the
Receivables Purchase Agreement to the extent the purchase price for such
Receivables is not paid in cash by BCRC. As security for the Note, BCRC has
pledged to BCI the Variable Funding Certificate held by BCRC. Principal and
interest payable on the Note may be paid by BCRC from time to time out of
monies available to BCRC from any source (including through BCRC's interest in
the BCRC Certificate and Variable Funding Certificate). Interest on the Note
will accrue at a rate per annum equal to 15%. In the event of a bankruptcy
where BCRC and the Trust are substantively consolidated or in any other
instance where the holder of the Note and the holders of the investor
certificates will be claiming against a common fund, the portion of the
aggregate amounts then due under the Note in excess of the amount by which (x)
the Variable Funding Amount plus the Retained Participation Amount exceeds (y)
the Available Subordinated Amount will be subordinate to the prior
indefeasible payment in full of the investor certificates. RPA Amendment
Number 1 will provide, among other things, that, in addition to the sale of
Receivables by BCI to BCRC, BCI may transfer the Receivables to BCRC as a
capital contribution. When Receivables are transferred by contribution, BCRC
will not be required to pay cash to BCI or to increase the amount of the Note
as consideration for such Receivables.
In connection with the sale or contribution of the Receivables to BCRC, BCI
will indicate in its computer files that the Receivables have been transferred
to BCRC, and that BCRC has transferred its interest therein to the Trust. In
addition, BCI will provide to BCRC and the Trustee a computer file or
microfiche or written list
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containing a true and complete list of all Accounts, identifying the balances
of the Receivables as of the Initial Cut-Off Date and Receivables in the
Additional Account as of the applicable Additional Cut-Off Date. The records
and agreements relating to the Accounts and Receivables have not been, and will
not be, segregated by BCI from other documents and agreements relating to other
accounts and receivables and will not be stamped or marked to reflect the sale
of the Receivables, but the computer records of BCI have been marked to
evidence such transfer. BCI has filed and will file UCC financing statements
with respect to the sale or contribution of the Receivables meeting the
requirements of Vermont state law. See "Risk Factors--Certain Legal Aspects"
and "Certain Legal Aspects of the Receivables--Transfer of Receivables and
Certificates."
REPRESENTATIONS AND WARRANTIES
BCI makes certain representations and warranties to BCRC to the effect that,
among other things, as of the Closing Date and each Series Issuance Date, it
was duly incorporated and in good standing and that it has the authority to
consummate the transactions contemplated by the Receivables Purchase Agreement.
BCI also makes representations and warranties to BCRC relating to the
Receivables to the effect that, among other things, as of the Initial Cut-Off
Date, the Closing Date and each Series Issuance Date each Account is an
Eligible Account and, in the case of Additional Accounts, as of the Additional
Cut-Off Date and each Addition Date, each such Additional Account is an
Eligible Account. In the event of a breach of any representation and warranty
set forth in this paragraph which results in the requirement that BCRC accept
retransfer of Receivables from the Trust pursuant to the Pooling and Servicing
Agreement, then BCI shall, unless a Liquidation Event has occurred, repurchase
such Receivables from BCRC. The purchase price for such Receivables shall be
the principal balance thereof (together with accrued interest), which amount
shall be paid by BCI in immediately available funds on the business day
preceding the date of such retransfer.
BCI also makes representations and warranties to BCRC to the effect, among
other things, that as of the Initial Closing Date, the Closing Date and each
Series Issuance Date (a) the Receivables Purchase Agreement constitutes a
legal, valid and binding obligation of BCI and (b) the Receivables Purchase
Agreement constitutes a valid sale to BCRC of all right, title and interest of
BCI in and to the Receivables, whether then existing or thereafter created in
the Accounts, the Collateral Security and, with certain exceptions, the
proceeds thereof which is effective as to each Receivable upon the creation
thereof. If the breach of any of the representations and warranties described
in this paragraph results in the obligation of BCRC under the Pooling and
Servicing Agreement to repurchase an interest in Receivables from the Trust,
BCI will be obligated to repurchase such interest retransferred to BCRC for the
amount which BCRC was required to pay to the Trust in connection with such
retransfer.
CERTAIN COVENANTS
BCI has covenanted that, except for the sale or contribution and conveyances
under the Receivables Purchase Agreement, BCI will not sell, pledge, assign or
transfer any interest in the Receivables (except for certain tax and
governmental and other statutory liens) being transferred to BCRC to any other
person; provided that after the Series 1994-1 Final Payment Date, BCRC may
remove Receivables from the Trust for the purpose of assigning or selling such
Receivables to a third party and may grant Participation Interests in the
Receivables. See "The Floorplan and Asset-Based Financing Business--
Participation Arrangements" and "Description of the Certificates--Removal of
Accounts and Assignment of Receivables." BCI also has covenanted to defend and
indemnify BCRC for any loss, liability or expense incurred by BCRC in
connection with a breach by BCI of certain of its representations, warranties
or covenants contained in the Receivables Purchase Agreement.
In addition, BCI has expressly acknowledged and consented to BCRC's
assignment of its rights relating to the Receivables under the Pooling and
Servicing Agreement to the Trustee.
TERMINATION
The Receivables Purchase Agreement will terminate immediately after the Trust
terminates. In addition, if BCI becomes party to any bankruptcy or similar
proceeding (other than as a claimant) and, if such proceeding
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either is voluntary or is involuntary and, in the case of an involuntary
proceeding, such involuntary proceeding is not dismissed within 60 days of its
institution, BCI will immediately cease to sell or transfer Receivables to
BCRC and will promptly give notice of such event to BCRC and the Trustee.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES AND CERTIFICATES
In connection with any Receivables sold or contributed and assigned by BCI
to BCRC, BCI represents and warrants that such transfer constitutes a valid
transfer and assignment to BCRC of all right, title and interest in and to the
Receivables and that, under the UCC (as in effect in Vermont), there exists in
favor of BCRC a valid, subsisting and enforceable first priority perfected
ownership interest in the Pool of Receivables transferred to BCRC. BCI also
represents and warrants with respect to any Receivables subsequently created
in the Accounts or Additional Accounts transferred to BCRC that there exists
in favor of BCRC a valid, subsisting and enforceable first priority perfected
ownership interest in all such Receivables subsequently created in such
Accounts or Additional Accounts on and after their creation. For a discussion
of BCRC's rights arising from these representations and warranties not being
satisfied, see "Description of the Certificates--Representations and
Warranties."
Each of BCI and BCRC have represented that the Receivables are either
"accounts" or "chattel paper" for purposes of the UCC as in effect in Vermont.
If the Receivables are deemed to be either accounts or chattel paper, the UCC
as in effect in Vermont applies and the transferee must (i) in the case of
Receivables that are deemed to be accounts, file an appropriate financing
statement or statements and (ii) in the case of Receivables that are deemed to
be chattel paper, either take possession of the chattel paper or file an
appropriate financing statement or statements, in order to perfect its
interest therein. Financing statements relating to the transfer of the
Receivables have been filed under the UCC as in effect in Vermont by BCI and
BCRC to perfect the interests of BCRC and the Trust, respectively, in the
Receivables. Continuation statements will be filed as required to continue the
perfection of such interests. The Receivables will not be stamped to indicate
the interest of BCRC or the Trust.
In addition, in connection with any Domestic Inventory Receivables conveyed
to the Trust BCI represents and warrants in the Receivables Purchase
Agreement, and BCRC represents and warrants in the Pooling and Servicing
Agreement, that except for certain liens permitted by the Pooling and
Servicing Agreement each such Domestic Inventory Receivable included in the
Pool Balance is and will be secured by a first priority perfected security
interest in the related Eligible Product and if Asset-Based Receivables are
included in the Trust, the obligations with respect thereto will be secured by
a first priority perfected security interest in goods, accounts, work in
process, raw materials, component parts or other assets of the Obligor.
However, when an Eligible Product is sold by an Obligor, BCI's security
interest in the Eligible Product will terminate in most instances. Therefore,
if an Obligor fails to remit to BCI amounts owed with respect to Eligible
Products that have been sold, the related Domestic Inventory Receivables may
no longer be secured by Eligible Products, although they may, in certain
circumstances, still be secured by the proceeds of such Eligible Products. In
the event that Asset-Based Receivables are included in the Trust, the same
issues discussed above with respect to Domestic Inventory Receivables may
exist with respect to Asset-Based Receivables.
There are certain limited circumstances under the UCC and applicable federal
law in which prior or subsequent transferees of Receivables could have an
interest in such Receivables with priority over the Trust's interest. A
purchaser of the Receivables who gives new value and takes possession of the
instruments which evidence the Receivables (i.e., the chattel paper) in the
ordinary course of such purchaser's business may, under certain circumstances
(e.g., where the purchaser is without notice of any adverse claim), have
priority over the interest of the Trust in the Receivables. The failure to
stamp the Receivables to indicate the interest of BCRC and the Trust therein,
as described above, could support a claim by a subsequent purchaser of the
Receivables that such purchaser acted without notice of any claim by BCRC or
the Trust with respect to the Receivables. A tax or other government lien or
non-consensual lien on property of BCI or BCRC arising prior to the time a
Receivable is conveyed to the Trust may also have priority over the interest
of the Trust in such Receivable.
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Under the Receivables Purchase Agreement, in connection with any Receivables
sold or contributed and assigned by BCI to BCRC, BCI warrants to BCRC that the
Receivables have been transferred free and clear of the lien of any third party
except for tax and other statutory liens (including liens in favor of the
Pension Benefit Guaranty Corporation) and, after the Series 1994-1 Final
Payment Date, any Participation Interests. Under the Pooling and Servicing
Agreement, BCRC warrants to the Trust that, except for the conveyances
contemplated by the Pooling and Servicing Agreement, the Receivables have been
transferred to the Trust free and clear of the lien of any third party, except
for tax and other statutory liens (including liens in favor of the Pension
Benefit Guaranty Corporation) and after the Series 1994-1 Final Payment Date,
any Participation Interests. Each of BCI and BCRC also has covenanted that it
will not sell, pledge, assign, transfer or grant any lien on any Receivable
included in the Trust other than to BCRC and the Trust and except (i) for tax
and other statutory liens (including liens in favor of the Pension Benefit
Guaranty Corporation) and (ii) after the Series 1994-1 Final Payment Date, BCRC
and BCI may assign or participate out a portion of the Receivables. See
"Floorplan and Asset-Based Financing Business--Participation Arrangements" and
"Description of the Certificates--Removal of Accounts and Assignment of
Receivables." In addition, while BCI is the Servicer, cash collections on the
Receivables may be commingled with the funds of BCI prior to each Distribution
Date and, in the event of the bankruptcy of BCI, the Trust may not have a
perfected interest in such collections. In the event of such commingling, the
amount so commingled at any given time (and to which the Certificateholders
would otherwise be entitled) may exceed the amount distributable to
Certificateholders on the following Distribution Date.
BCRC has represented and warranted to the Trustee that the transfer of the
Receivables on the Initial Closing Date constitutes, and the transfer of BCRC's
right to any subsequent Receivables in the Accounts (and in any Additional
Accounts) will constitute, a valid transfer and assignment to the Trust of all
right, title and interest of BCRC in and to the Receivables, including any
additional Receivables thereafter created in the Accounts (and in any
Additional Accounts) (except for certain tax and governmental liens and
claims), all monies due or to become due thereon and, with certain exceptions,
the proceeds thereof which is effective as to each Receivable upon the transfer
thereof to the Trust.
Tax and certain other statutory liabilities, such as liabilities to the
Pension Benefit Guaranty Corporation relating to the underfunding of pension
plans of Bombardier Inc. or any of its subsidiaries including Bombardier
Corporation and BCI, can be asserted against the Depositor. To the extent that
any such liabilities arise after the transfer of Receivables to the Trust, the
Trust's interest in the Receivables would be prior to the interest of the
claimant with respect to any such liabilities. However, the existence of a
claim against the Depositor could permit the claimant to subject the Depositor
to an involuntary proceeding under the Bankruptcy Code or other Insolvency Law.
A case decided in 1993 by the United States Court of Appeals for the Tenth
Circuit concluded that accounts receivable sold by a debtor prior to a filing
for bankruptcy remain property of the debtor's bankruptcy estate. If, following
a bankruptcy of BCI or BCRC, a court were to follow the reasoning of the Tenth
Circuit, delays in distributions of collections on or in respect of the
Receivables could occur, and reductions (which, in certain circumstances, could
be substantial) in the amount of payments to Certificateholders could result.
CERTAIN MATTERS RELATING TO BANKRUPTCY
In connection with any Receivables sold or contributed and assigned by BCI to
BCRC under the Receivables Purchase Agreement, BCI warrants to BCRC in the
Receivables Purchase Agreement that the sale of such Receivables by it to BCRC
is a valid sale of such Receivables. In addition, BCI and BCRC have agreed to
treat the transfer of Receivables by BCI to BCRC under the Receivables Purchase
Agreement as a sale of the Receivables to BCRC, and BCI has or will take all
actions that are required under Vermont law to perfect BCRC's ownership
interest in the Receivables. Notwithstanding the foregoing, if BCI were to
become a debtor in a bankruptcy case and a bankruptcy trustee for BCI as
debtor-in-possession or a creditor of BCI were to take the position that the
sale of Receivables from BCI to BCRC under the Receivables Purchase Agreement
should be recharacterized as a pledge of such Receivables to secure a borrowing
by BCI, then delays in payments of collections of Receivables to BCRC could
occur or (should the court rule in favor of any such trustee, debtor in
possession or creditor) reductions (which, in certain circumstances, could be
substantial) in the amount of such payments could result.
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In addition, if BCI were to become a debtor in a bankruptcy case and a
creditor or bankruptcy trustee of such debtor or such debtor itself were to
request a court to order that BCI should be substantively consolidated with
BCRC, delays in payments on the Receivables and, accordingly, the Certificates
could result. Should the bankruptcy court rule in favor of any such creditor,
bankruptcy trustee or such debtor, reductions (which, in certain circumstances
could be substantial) in the amount of such payments could result.
BCRC represents and warrants to the Trustee in connection with the transfer
of any Receivables to the Trust that the transfer of such Receivables to the
Trust and of BCRC's right to additional Receivables will constitute a valid
transfer and assignment to the Trust of all right, title and interest of BCRC
in and to the Receivables, including any additional Receivables thereafter
created (except for certain tax and government liens and claims), all monies
due or to become due thereon and, with certain exceptions, the proceeds
thereof which is effective as to each Receivable upon the transfer thereof to
the Trust.
BCRC's certificate of incorporation provides that BCRC is required to have
two independent directors and that it shall not file a voluntary application
for relief under Title 11 of the United States Code (the "Bankruptcy Code")
without the affirmative vote of its two independent directors. Pursuant to the
Pooling and Servicing Agreement, BCI, the Servicer and any Enhancement
Provider covenant that they will not at any time institute against BCRC any
bankruptcy, reorganization or other proceedings under any federal or state
bankruptcy or similar law. In addition, certain other steps have been taken to
avoid BCRC's becoming a debtor in a bankruptcy case. Notwithstanding such
steps, if BCRC were to become a debtor in a bankruptcy case, and a bankruptcy
trustee for BCRC or BCRC as debtor in possession or a creditor of BCRC were to
take the position that the transfer of the Receivables from BCRC to the Trust
should be recharacterized as a pledge of the Receivables, then delays in
payments on the Certificates or (should the court rule in favor of any such
trustee, debtor in possession or creditor) reductions (which, in certain
circumstances, could be substantial) in the amount of such payments could
result.
BCRC does not intend to file, and BCI has agreed that it will not cause BCRC
to file, a voluntary or involuntary petition for relief under the Bankruptcy
Code or any similar applicable state law with respect to BCRC so long as BCRC
is solvent and does not foresee becoming insolvent. If BCI were to become a
debtor under the Bankruptcy Code, the applicable bankruptcy court might hold
unenforceable or invalid BCI's agreement not to cause BCRC to file any such
petition and permit BCI as creditor of BCRC (on account of the Note issued by
BCRC to BCI as partial consideration for the transfer of the Receivables to
BCRC and on account of the related pledge of the Variable Funding Certificate
as security for the Note) to commence an involuntary petition against BCRC.
If BCI or BCRC were to become a debtor in a bankruptcy case causing an Early
Amortization Event to occur, then, pursuant to the Pooling and Servicing
Agreement and the Receivables Purchase Agreement, new Receivables would no
longer be transferred to BCRC by BCI and, pursuant to the Pooling and
Servicing Agreement, only collections on Receivables theretofore sold to BCRC
and transferred to the Trust would be available to be applied to pay interest
accruing on the Certificates and to pay the principal amount of the
Certificates. Under such circumstances, the Servicer is obligated to allocate
all principal collections on Receivables to the oldest principal balance
first. If such allocation method were to be altered by the bankruptcy court,
the rate of payment on the Certificates might be adversely affected. In
addition, distributions of principal on each Class A Certificate would not be
subject to the Class A Controlled Distribution Amount.
The occurrence of certain events of bankruptcy, insolvency or receivership
with respect to the Servicer will result in a Servicer Default, which Servicer
Default, in turn, will result in an Early Amortization Event. If no other
Servicer Default other than the commencement of such bankruptcy or similar
event exists, a bankruptcy trustee of the Servicer may have the power to
prevent either the Trustee or the Certificateholders from appointing a
successor Servicer.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain United States federal
income tax consequences relating to the purchase, ownership and disposition of
the Certificates. This discussion is based on current law, which is subject to
retroactive or prospective change, either of which could adversely affect the
tax consequences described herein. The discussion does not address all of the
tax consequences that may be relevant to a particular Certificateholder in
light of its own circumstances (for example, banks, insurance companies, tax-
exempt organizations and persons whose functional currency is not the U.S.
dollar), and some Certificateholders may be subject to special tax rules and
limitations not discussed herein. Prospective purchasers are urged to consult
their own tax advisors as to the federal, state, local, foreign and other tax
consequences to them of the purchase, ownership and disposition of the
Certificates.
CHARACTERIZATION OF THE CERTIFICATES AND THE TRUST
Although no transaction closely comparable to the issuance of the
Certificates has been the subject of any Treasury regulation, public ruling or
judicial decision, Morgan, Lewis & Bockius LLP, special U.S. tax counsel to
BCRC and the Trust ("Special U.S. Tax Counsel") is of the opinion that, for
federal income tax purposes, the Certificates will be characterized as
indebtedness of BCRC secured by the Receivables, and the Trust will be treated
as a mere security device. The Internal Revenue Service ("IRS") could assert
that the Certificates are not indebtedness but rather are an interest in the
nature of an equity interest and that the Trust is not a mere component of a
security device but rather is either a partnership (between BCRC and some or
all classes of Certificateholders) or a publicly traded partnership taxable as
a corporation (in which BCRC owns common stock and some or all classes of
Certificateholders own preferred stock).
Because BCRC will retain the benefits of ownership and most of the risk of
loss with respect to the Receivables, and the Certificateholders will be
entitled only to the payment of a fixed return on their investments and the
repayment of those investments (which payments and repayments will be
adequately secured by the Receivables, and other collateral to be held by the
Trust), Special U.S. Tax Counsel is of the opinion that the IRS would not
prevail in any attempt to characterize the Certificates as other than
indebtedness. Accordingly, notwithstanding that the transaction will be
treated as a sale of the Receivables for regulatory and financial accounting
purposes, Special U.S. Tax Counsel is of the opinion that such treatment will
not apply for U.S. federal income tax purposes.
POSSIBLE CHARACTERIZATION OF THE TRUST AS A PARTNERSHIP
If (contrary to the views expressed above) some or all classes of
Certificates were characterized as interests in the nature of equity
interests, then the Trust could be characterized as a partnership or a
publicly traded partnership ("PTP"). If the Trust were treated as a
partnership (other than a PTP taxable as a corporation), such partnership
would not be subject to federal income tax. Instead, each item of income,
gain, deduction and loss generated through the partnership's ownership and
servicing of the Receivables would be taken into account directly in computing
the taxable income of BCRC and the Certificateholders treated as partners, in
accordance with their respective ownership of the interests of such
partnership. The amount and timing of the items of income and deductions of
the Certificateholders could differ if the Certificates were held to
constitute partnership interests, rather than indebtedness of BCRC. In
addition, if the Trust were treated as a partnership, income derived from the
partnership by a Certificateholder that is a pension fund or other tax-exempt
entity treated as a partner may be treated as unrelated business taxable
income. Partnership characterization also may have adverse state and local
income or franchise tax consequences for a Certificateholder.
POSSIBLE CHARACTERIZATION OF THE TRUST AS A CORPORATION
If the Trust were treated in whole or in part as a partnership in which some
or all of the Certificateholders were treated as partners rather than holders
of indebtedness, that deemed partnership could be classified as a PTP taxable
as a corporation. In that event the Trust would be subject to federal income
tax at corporate rates on
90
<PAGE>
the taxable income that the Trust derives from the Receivables. Such tax would
reduce the amounts available for distribution to the Certificateholders. Cash
distributions to the Certificateholders would be treated as dividends for tax
purposes to the extent of the Trust's earnings and profits (and, for corporate
Certificateholders, eligible for the dividends received deduction, subject to
limitations). Moreover, the amounts available for distribution to
Certificateholders would be substantially diminished by the taxes imposed on
the Trust.
The remainder of this section assumes that, for U.S. federal income tax
purposes, the Certificates will be characterized as indebtedness of BCRC
secured by the Receivables. BCRC and the Certificateholders have agreed to
treat the Certificates as indebtedness for federal income tax purposes and
neither the Trustee nor BCRC will comply with the reporting requirements
applicable to corporations, PTPs or partnerships.
TAXATION OF INTEREST INCOME TO CERTIFICATEHOLDERS
General. In general, stated interest, original issue discount and market
discount received or accrued on a Certificate will be ordinary income, and
principal payments on a Certificate will be a return of capital to the extent
of the Certificateholder's basis in the Certificate allocable to those
payments. A holder of a Certificate issued with original issue discount must
use the accrual method of accounting with respect to original issue discount
accruing on such Certificate regardless of its regular method of accounting.
Original Issue Discount. It is not anticipated that the Certificates will be
issued with original issue discount ("OID"). However, because the failure to
pay interest currently on the Certificates does not give rise to any remedy to
compel payment, the IRS may take the position on the basis of Treasury
regulations that all of the interest payments on the Certificates should be
treated as payments of principal and the Certificates should be treated as
having OID. A holder of a Certificate having OID generally must include OID in
ordinary income as it accrues in advance of receipt of the cash attributable
to the discount, regardless of the holder's regular method of accounting.
The amount of OID on a Certificate is the excess of its "stated redemption
price at maturity" over its "issue price." The issue price of a Certificate in
a particular class is the price at which a substantial amount of the
Certificates of that class are first sold to the public. The stated redemption
price at maturity of a Certificate is the total of all payments on the
Certificate other than "qualified stated interest" payments. A qualified
stated interest payment generally is stated interest that is unconditionally
payable in cash or in property at least annually at a single fixed rate, a
single objective rate or one or more qualified floating rates.
A Certificateholder generally must include in gross income for any taxable
year the sum of the "daily portions" of the OID that occur on the Certificate
for each day during the Certificateholder's taxable year on which the
Certificate is held. A calculation will be made of the portion of the OID that
accrues on each Certificate during each "accrual period," which in general is
the period corresponding to the period between Distribution Dates. The OID
accruing during any accrual period is divided by the number of days in the
period to determine the daily portion of OID for each day in the period. The
amount of OID that accrues in each year will be computed under a constant
yield method, with the consequence that a United States holder will include in
gross income progressively larger amounts of OID over time.
Market Discount A Certificateholder who purchases a Certificate at more than
a de minimis discount may be subject to the "market discount" rules of Section
1276 through 1278 of the Code. These rules provide, in part, that gain on the
sale or other disposition of a Certificate and partial principal payments on a
Certificate are treated as ordinary income to the extent of accrued market
discount. The market discount rules also provide for deferral of a portion of
interest deductions with respect to debt incurred to purchase or carry a
Certificate that has market discount. Alternatively, a Certificateholder may
elect to include market discount in income as it accrues in lieu of the tax
treatment described in the two preceding sentences.
Market Premium. A Certificateholder who purchases a Certificate at a premium
price may elect to offset the premium against interest income over the
remaining term of the Certificate in accordance with the provisions of Section
171 of the Code.
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<PAGE>
SALE OR EXCHANGE OF CERTIFICATES
Upon a sale of a Certificate, a Certificateholder generally will recognize
gain or loss equal to the difference between the amount realized on the sale
or exchange and the Certificateholder's adjusted basis in the Certificate. The
adjusted basis in the Certificate will equal its cost, increased by any OID or
market discount includible in income with respect to the Certificate prior to
its sale, and reduced by any principal payments previously received with
respect to the Certificate and any amortized premium. Generally, gain or loss
will be capital gain or loss if the Certificate was held as a capital asset,
and will be long-term gain or loss if held for more than one year. Generally,
capital losses may be used only to offset capital gains.
FOREIGN INVESTORS
In general, a Certificateholder that is not (A) a citizen or resident of the
United States, (B) a domestic partnership, (C) a domestic corporation, (D) a
domestic estate or domestic trust or (E) any other person or entity whose
income in respect of a Certificate is "effectively connected" with a United
States trade or business (a "non-U.S. Certificateholder") will not be subject
to U.S. federal income tax on interest (including original issue discount) on
a Certificate unless the non-U.S. Certificateholder is a direct or indirect 10
percent or greater shareholder of, or a controlled foreign corporation related
to, BCRC. To qualify for the exemption from taxation, the last U.S. Person in
the chain of payment prior to payment to a non-U.S. Certificateholder (the
"Withholding Agent") must have received (in the year in which a payment of
interest or principal occurs, or in either of the two preceding years) a
statement that (i) is signed by the non-U.S. Certificateholder under penalties
of perjury, (ii) certifies that the non-U.S. Certificateholder is not a U.S.
Person and (iii) provides the name and address of the non-U.S.
Certificateholder. The statement may be made on an IRS Form W-8 or
substantially similar substitute form, and the non-U.S. Certificateholder must
inform the Withholding Agent of any change in the information on the statement
within 30 days of the change. If a Certificate is held through a securities
clearing organization or certain other financial institutions, the
organization or institution may provide a signed statement to the Withholding
Agent. However, in that case, the signed statement must be accompanied by an
IRS Form W-8 or substitute form provided by the non-U.S. Certificateholder to
the organization or institution holding the Certificate on behalf of the non-
U.S. Certificateholder.
Generally, any gain or income realized by a non-U.S. Certificateholder upon
retirement or disposition of a Certificate will not be subject to U.S. federal
income tax, provided that (i) in the case of a Certificateholder that is an
individual, such Certificateholder is not present in the United States for 183
days or more during the taxable year in which such retirement or disposition
occurs (or satisfies a "substantial presence" test for such year) and (ii) in
the case of gain representing accrued interest, the conditions described in
the preceding paragraph for exemption from withholding are satisfied. Certain
exceptions may be applicable, and an individual non-U.S. Certificateholder
should consult a tax adviser.
A Certificate will not be includible in the estate of a non-U.S.
Certificateholder unless the non-U.S. Certificateholder is a direct or
indirect 10 percent or greater shareholder of BCRC.
If the Certificates were treated as an interest in a partnership, the
recharacterization could cause a non-U.S. Certificateholder to be treated as
engaged in a trade or business in the United States. In that event, the non-
U.S. Certificateholder would be required to file a federal income tax return
and, in general, would be subject to U.S. federal income tax (including the
branch profits tax) on its net income from the partnership. Further, certain
withholding obligations apply with respect to income allocable or
distributions made to a foreign partner. That withholding may be at a rate as
high as 39.6 percent. If the Certificates were treated as stock in a
corporation, distributions to a non-U.S. Certificateholder, to the extent
treated as dividends, generally would be subject to withholding of tax at the
rate of 30 percent, unless that rate were reduced by an applicable tax treaty.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Under certain circumstances interest (including OID), principal or proceeds
of the sale of a Certificate may be subject to information reporting or to
"backup withholding" of United States federal income tax at a 31%
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<PAGE>
rate. Information reporting and backup withholding generally do not apply to
corporations and certain other exempt recipients, which may be required to
establish their exempt status. Backup withholding generally applies if, among
other circumstances, a non-exempt United States person holding a Certificate
fails to furnish that person's correct social security number or other
taxpayer identification number. Information reporting and backup withholding
generally do not apply to a non-United States person holding a Certificate who
satisfies the applicable identification requirements.
STATE AND LOCAL TAXATION
The discussion above does not address the tax consequences of purchase,
ownership or disposition of the Certificates under any state or local tax law.
Investors should consult their own tax advisers regarding state and local tax
consequences.
ALL INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE
FEDERAL, STATE, LOCAL OR FOREIGN INCOME OR ESTATE TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF THE CERTIFICATES.
EMPLOYEE BENEFIT PLAN CONSIDERATIONS
Section 406 of ERISA and section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code"), prohibit certain pension, profit sharing or other
employee benefit plans, individual retirement accounts or annuities and
employee annuity plans (collectively, "Benefit Plans") from engaging in
certain transactions involving "plan assets" with persons that are "parties in
interest" under ERISA or "disqualified persons" under the Code with respect to
the Benefit Plan. A violation of these "prohibited transaction" rules may
generate excise tax and other liabilities under ERISA and the Code for such
persons.
A possible violation of the prohibited transaction rules could occur if the
Certificates were to be purchased with assets of, and held by, any Benefit
Plan if BCRC, the Trustee, the Underwriter or any of their affiliates were a
"fiduciary" or other "party in interest" or a "disqualified person," with
respect to such Benefit Plan. BCRC, the Trustee, the Underwriter and their
affiliates are "parties in interest" or "disqualified persons" with respect to
many Benefit Plans. Prior to the purchase of a Certificate, the fiduciary of
any Benefit Plan should consider whether a prohibited transaction might arise
by virtue of the relationship between the Benefit Plan and BCRC, the Trustee,
the Underwriter or any affiliate of any thereof and, if so, should consult
counsel regarding the purchase. The Department of Labor (the "DOL") has issued
three class exemptions that may apply to otherwise prohibited transactions
arising from the purchase or holding of the Certificates: DOL Prohibited
Transaction Exemption 84-14 (Class Exemption for Plan Asset Transactions
Determined by Independent Qualified Professional Asset Managers), 91-38 (Class
Exemption for Certain Transactions Involving Bank Collective Investment Funds)
and 90-1 (Class Exemption for Certain Transactions Involving Insurance Company
Pooled Separate Accounts).
Other prohibited transactions may arise through the operation of a
regulation (the "Plan Asset Regulation") issued by the DOL. Under certain
circumstances, the Plan Asset Regulation treats the assets of an entity in
which a Benefit Plan has an equity interest as assets of such Benefit Plan. An
equity interest is defined as an interest in an entity other than an
instrument treated as debt under applicable local law and that has no
substantial equity features. Although BCRC and the Certificateholders have
agreed to treat the Certificates as debt instruments for federal income tax
purposes, the Certificates may be considered equity interests in the Trust for
purposes of the Plan Asset Regulation. In such a case, unless one of the two
exceptions described below applies, the Plan Asset Regulation may apply to
treat assets of the Trust as assets of an investing Benefit Plan. If the Plan
Asset Regulation were to apply so that the Trust is considered to hold "plan
assets," transactions involving the Trust and "parties in interest" or
"disqualified persons" with respect to a Benefit Plan that is a
Certificateholder, or the acquisition or holding of the Certificates by a
Benefit Plan, might be prohibited under Section 406 of ERISA and section 4975
of the Code unless an exemption is applicable. The three DOL class exemptions
mentioned above may not provide relief for all transactions involving the
Trust's assets even if they would otherwise be applicable to the purchase of a
Certificate by a Benefit Plan.
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The first exception applies if equity participation in the entity by
"benefit plan investors" (i.e., Benefit Plans and other plans not subject to
ERISA, such as governmental plans, as well as entities holding assets deemed
to be plan assets) is not "significant." Equity participation in an entity by
benefit plan investors is not significant on any date on which the
Certificates are issued and outstanding if, immediately after the most recent
acquisition of any equity interest in the entity, less than 25% of the value
of each class of beneficial interests in the entity (excluding interests held
by BCRC, the Trustee or their affiliates) is held by benefit plan investors.
No assurance can be given by BCRC or the Underwriter as to whether the value
of any class of beneficial interests in the Trust held by benefit plan
investors will be less than that amount at the completion of the offering or
thereafter and no monitoring or other measures will be taken with respect to
the satisfaction of the conditions to this exception.
The second exception applies to a "publicly-offered security." A publicly-
offered security is a security that is (a) freely transferable, (b) part of a
class of securities that is owned, immediately subsequent to the initial
offering, by 100 or more investors independent of the issuer and of one
another and (c) either is (i) part of a class of securities registered under
section 12(b) or 12(g) of the Exchange Act or (ii) sold to the plan as part of
an offering of securities to the public pursuant to an effective registration
statement under the Securities Act and the class of securities of which such
security is a part is registered under the Exchange Act within 120 days (or
such later time as may be allowed by the Commission) after the end of the
fiscal year of the issuer during which the offering of such securities to the
public occurred. Each of the Class A Certificates and the Class B Certificates
should be deemed a "class" of securities that would be tested separately from
any other securities that may be issued by the Trust. There are no
restrictions imposed on the transfer of the Class A Certificates and the Class
B Certificates and the Certificates will be sold as part of an offering
pursuant to an effective registration statement under the Securities Act and
then will be timely registered under the Exchange Act. However, the
Underwriter does not expect that the Class B Certificates will be held by 100
persons at the conclusion of the offering. Therefore, since no exception under
the Plan Asset Regulation is readily available, Benefit Plans, or any entity
using the assets of a Benefit Plan, will be prohibited from purchasing the
Class B Certificates. The Underwriter will notify the Trustee as to whether or
not the Class A Certificates will be held by 100 independent persons at the
conclusion of the offering. If so, then Benefit Plans, or any entity using the
assets of a Benefit Plan, will not be prohibited from purchasing the Class A
Certificates (although BCRC will not determine whether the 100-investor
requirement of the second exception is satisfied). If not, then Benefit Plans,
or any entity using the assets of a Benefit Plan, will be prohibited from
purchasing the Class A Certificates.
Fiduciaries of a Benefit Plan considering the purchase of Certificates
should consult their own counsel regarding whether the assets of the Trust
which are represented by the Certificates would be considered plan assets, the
consequences that would apply if the Trust's assets were considered plan
assets and the possibility of exemptive relief from the prohibited transaction
rules. Prospective investors that are insurance companies should consider the
impact of the 1993 Supreme Court decision in John Hancock Mutual Life
Insurance Co. v. Harris Trust and Savings Bank, pursuant to which general
account assets of an insurance company may be treated as assets of Benefit
Plans subject to ERISA under certain circumstances.
Finally, fiduciaries of a Benefit Plan should consider the fiduciary
standards under ERISA or other applicable law in the context of the Benefit
Plan's particular circumstances before authorizing an investment of a portion
of a Benefit Plan's assets in the Certificates. Accordingly, among other
factors, such fiduciaries should consider whether the investment (i) satisfies
the diversification requirement of ERISA or other applicable law, (ii) is in
accordance with the Benefit Plan's governing instruments and (iii) is prudent
considering the "Risk Factors" and other factors discussed in this Prospectus.
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UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement among the
Depositor, BCI and the underwriters named below (the "Underwriters") relating
to the Certificates (the "Underwriting Agreement"), the Depositor has agreed
to sell to the Underwriters, and each Underwriter has agreed to purchase the
principal amount of Class A and Class B Certificates set forth opposite its
name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
UNDERWRITER OF CLASS A CERTIFICATES OF CLASS B CERTIFICATES
----------- ----------------------- -----------------------
<S> <C> <C>
J.P. Morgan Securities Inc. .. $ $
CS First Boston Corporation...
Merrill Lynch, Pierce, Fenner
& Smith
Incorporated.............
----------- -----------
Total....................... $ $
=========== ===========
</TABLE>
The Underwriters propose to offer the Certificates in part directly to
purchasers at the initial public offering price set forth on the cover page of
this Prospectus and in part to certain securities dealers at such prices less
concessions not to exceed, in the case of the Class A Certificates, % of the
principal amount thereof and, in the case of the Class B Certificates, % of
the principal amount thereof. The Underwriters may allow, and such dealers may
reallow, concessions not to exceed, in the case of the Class A Certificates,
% of the principal amount thereof and, in the case of the Class B
Certificates, % of the principal amount thereof, to certain brokers and
dealers. After the Class A and Class B Certificates are released for sale to
the public, the offering price and other selling terms may be varied by the
Underwriters.
The Underwriting Agreement provides that BCI and the Depositor will
indemnify the Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, or contribute to payments the Underwriters
may be required to make in respect thereof. The Underwriters have agreed to
reimburse BCI and the Depositor for certain expenses of the issuance and
distribution of the Certificates.
LEGAL MATTERS
Certain legal matters will be passed upon for the Depositor and the Trust by
Morgan, Lewis & Bockius LLP, New York, New York and for the Underwriters by
Orrick, Herrington & Sutcliffe LLP, Washington, D.C. Certain federal income
tax matters will be passed upon for the Depositor and the Trust by Morgan,
Lewis & Bockius LLP, New York, New York.
95
<PAGE>
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
TERMS PAGE
- ----- ---------
<S> <C>
Accounts.............................................................. 1, 57
Addition Date......................................................... 53
Additional Accounts................................................... 57
Additional Cut-Off Date............................................... 53
Adjusted Invested Amount.............................................. 63
Adjustment Date....................................................... 44
Adjustment Payment.................................................... 74
Amendment Number 1.................................................... 43
Amortization Period................................................... 14
Appointment Date...................................................... 53
Asset-Based Receivables............................................... 5, 29
Automatic Addition Condition.......................................... 57
Available Investor Principal Collections.............................. 72
Available Retained Collections........................................ 65
Available Retained Non-Principal Collections.......................... 65
Available Retained Principal Collections.............................. 66
Available Subordinated Amount......................................... 17, 67
Bankruptcy Code....................................................... 21, 89
BCI................................................................... 1, 3
BCI Domestic Inventory Portfolio...................................... 29
BCRC.................................................................. 1, 3, 27
BCRC Certificate...................................................... 50
Benefit Plans......................................................... 93
Calculation Agent..................................................... 45
Cede.................................................................. 2, 44
Cedel................................................................. 8
Cedel Participants.................................................... 47
Certificate Owners.................................................... 2, 26
Certificate Rate...................................................... 7
certificateholders.................................................... 6
Certificateholders.................................................... 26
Certificates.......................................................... 1, 3
Citibank.............................................................. 8, 48
Class A Amortization Date............................................. 12, 73
Class A Amortization Period Length.................................... 73
Class A Carry-Over Amount............................................. 75
Class A Certificate Rate.............................................. 7, 44
Class A Certificates.................................................. 1, 3
Class A Controlled Amortization Amount................................ 12, 73
Class A Controlled Distribution Amount................................ 73
Class A Expected Final Payment Date................................... 12, 73
Class A Monthly Interest.............................................. 67
Class B Carry-Over Amount............................................. 75
Class B Certificate Rate.............................................. 7, 44
Class B Certificates.................................................. 1, 3
Class B Expected Payment Date......................................... 7, 12, 73
Class B Monthly Interest.............................................. 67
Closing Date.......................................................... 7
Code.................................................................. 93
</TABLE>
96
<PAGE>
<TABLE>
<CAPTION>
TERMS PAGE
- ----- --------
<S> <C>
Collateral Security.................................................... 4
Collection Account..................................................... 60
Collection Period...................................................... 9
Commission............................................................. 2
Cooperative............................................................ 48
Daily Allocation....................................................... 65
Defaulted Agreement.................................................... 76
Defaulted Amount....................................................... 73
Defaulted Receivables.................................................. 73
Deficiency Amount...................................................... 67
Definitive Certificates................................................ 49
Delayed Amendments..................................................... 19, 84
Deposit Date........................................................... 65
Depositaries........................................................... 8, 48
Depositary............................................................. 48
Depositor.............................................................. 1, 3, 27
Depository............................................................. 44
Designated Balance..................................................... 59
Designated Manufacturer Overconcentrations............................. 68
Designated Manufacturer................................................ 68
Determination Date..................................................... 54
Distribution Date...................................................... 9
Distribution Date Statement............................................ 81
DOL.................................................................... 93
Domestic Inventory Receivables......................................... 5, 29
DTC.................................................................... 2
Early Amortization Event............................................... 74
Early Amortization Period.............................................. 14
Eligible Account....................................................... 55
Eligible Deposit Account............................................... 60
Eligible Institution................................................... 61
Eligible Investments................................................... 61
Eligible Obligor....................................................... 55
Eligible Products...................................................... 5
Eligible Receivable.................................................... 55
Enhancement............................................................ 4
Enhancement Provider................................................... 54
ERISA.................................................................. 20
Euroclear.............................................................. 8
Euroclear Operator..................................................... 48
Euroclear Participants................................................. 47
Excess Funded Amount................................................... 13, 61
Excess Funding Account................................................. 13
Excess Principal Collections........................................... 64
Excess Reserve Fund Required Amount.................................... 71
Excess Retained Percentage............................................. 66
Excess Servicing....................................................... 70
Exchange Act........................................................... 2
First Notice........................................................... 76
Floating Allocation Percentage......................................... 63
Holders................................................................ 49
</TABLE>
97
<PAGE>
<TABLE>
<CAPTION>
TERMS PAGE
- ----- ----------
<S> <C>
Incremental Subordinated Amount...................................... 68
Index Maturity....................................................... 44
Indirect Participants................................................ 47
Industry Overconcentrations.......................................... 69
Ineligible Receivable................................................ 57
Initial Amortization Period.......................................... 13, 15
Initial Closing Date................................................. 52
Initial Cut-Off Date................................................. 3
Initial Principal Amount............................................. 6
Initial Principal Payment Date....................................... 13
Insolvency Laws...................................................... 27
Interest Period...................................................... 11, 44
Invested Amount...................................................... 63
Investment Proceeds.................................................. 70
investor certificateholders.......................................... 6
Investor Charge-Off.................................................. 74
Investor Default Amount.............................................. 73
Investor Non-Principal Collections................................... 70
IRS.................................................................. 90
LIBOR................................................................ 44
Liquidation Event.................................................... 25, 76
London Business Day.................................................. 45
Manufacturer Overconcentrations...................................... 68
Miscellaneous Payments............................................... 63
Monthly Interest..................................................... 67
Monthly Payment Rate................................................. 76
Monthly Principal.................................................... 73
Monthly Servicing Fee................................................ 79
Morgan............................................................... 8, 48
Net Receivables Rate................................................. 11, 44
Net Servicing Fee.................................................... 79
Net Servicing Fee Rate............................................... 79
New Issuance......................................................... 8
Non-Principal Collections............................................ 6
non-U.S. Certificateholder........................................... 92
Note................................................................. 85
Obligor Overconcentrations........................................... 68
Obligors............................................................. 5
OID.................................................................. 91
Origination Period................................................... 56
Overconcentration Amount............................................. 69
Participants......................................................... 46
Participation Interest............................................... 3, 35
Plan Asset Regulation................................................ 93
Pool................................................................. 1
Pool Available Subordinated Amount................................... 63
Pool Balance......................................................... 9
Pool Invested Amount................................................. 63
Pooling and Servicing Agreement...................................... 3, 43
Pre-Allocated Invested Amount........................................ 10, 26, 63
Principal Allocation Percentage...................................... 6, 63
</TABLE>
98
<PAGE>
<TABLE>
<CAPTION>
TERMS PAGE
- ----- --------
<S> <C>
Principal Collections.................................................. 6
Principal Shortfalls................................................... 64
Principal Terms........................................................ 51
PTP.................................................................... 90
Rating Agency.......................................................... 26
Rating Agency Condition................................................ 58
Receivables............................................................ 1
Receivables Purchase Agreement......................................... 6, 85
Record Date............................................................ 46
Registration Statement................................................. 2
Removal Commencement Date.............................................. 59
Removal Notice......................................................... 59
Removal Termination Date............................................... 59
Removed Accounts....................................................... 59
Required Investor Percentage........................................... 59
Required Pool Balance.................................................. 58
Required Subordinated Amount........................................... 67
Required Subordination Draw Amount..................................... 67
Reserve Fund........................................................... 17, 71
Reserve Fund Deposit Amount............................................ 71
Reserve Fund Required Amount........................................... 71
Retained Interest...................................................... 50
Retained Participation Amount.......................................... 50
Retained Percentage.................................................... 66
Revolving Period....................................................... 14
RPA Amendment Number 1................................................. 85
SAU.................................................................... 73
Second Notice.......................................................... 76
Securities Act......................................................... 2
Series................................................................. 2
Series Cut-Off Date.................................................... 4
Series 1994-1 Certificates............................................. 8
Series 1994-1 Final Payment Date....................................... 19
Series 1996-1 Certificates............................................. 8
Series 1997-1 Available Retained Collections........................... 66
Series 1997-1 Investor Allocation Percentage........................... 63
Series 1997-1 Required Balance......................................... 58
Series 1997-1 Supplement............................................... 3
Series 1997-1 Termination Date......................................... 13
Series Issuance Date................................................... 51
Service Transfer....................................................... 80
Servicer............................................................... 1, 3, 43
Servicer Default....................................................... 80
Servicing Fee.......................................................... 79
Servicing Fee Rate..................................................... 79
Special U.S. Tax Counsel............................................... 90
Specified Obligors..................................................... 68
Subordinated Percentage................................................ 68
Supplement............................................................. 8, 50
Supplemental Certificate............................................... 52
</TABLE>
99
<PAGE>
<TABLE>
<CAPTION>
TERMS PAGE
- ----- --------
<S> <C>
Tax Opinion........................................................... 51
Telerate Page 3750.................................................... 45
Termination Date...................................................... 77
Terms and Conditions.................................................. 48
Transfer Date......................................................... 53
Transfer Deposit Amount............................................... 54
Trust................................................................. 1, 3
Trustee............................................................... 1, 3, 43
UCC................................................................... 21
Unallocated Principal Collections..................................... 64
Underwriters.......................................................... 95
Underwriting Agreement................................................ 95
Variable Funding Amount............................................... 11
Variable Funding Certificate.......................................... 50
Variable Funding Interest............................................. 50
Variable Funding Percentage........................................... 66
Withholding Agent..................................................... 92
</TABLE>
100
<PAGE>
ANNEX I
PRIOR SERIES
The Certificates will be the third Series to be issued by the Trust. The
table below summarizes certain of the principal characteristics of the Series
1994-1 Certificates and the Series 1996-1 Certificates, the other Series
heretofore issued by the Trust and outstanding. "LIBOR," as used below in
connection with the Series 1994-1 Certificates, shall mean the offered rates
for deposits in United States dollars having a maturity of one-month
determined as set forth in the Supplement relating to the Series 1994-1
Certificates and "Net Receivables Rate," as used below in connection with the
Series 1994-1 Certificates shall have the meaning set forth in the Supplement
relating to the Series 1994-1 Certificates.
SERIES 1994-1
<TABLE>
<S> <C>
Initial Principal Amount................. $400,000,000
Principal Amount as of December 31,
1996.................................... $211,750,000
Controlled Amortization Commencement
Date.................................... September 1996
Class A Interest Rate.................... Lesser of (i) One month LIBOR plus
0.20% and (ii) Net Receivables Rate
Class B Interest Rate.................... 5.20% per annum
Series 1994-1 Termination Date........... April 15, 1999
Series Issuance Date..................... January 24, 1994
Series Servicing Fee Rate................ 2%
Initial Available Subordination Amount... $32,758,621
SERIES 1996-1
Initial Principal Amount................. $100,000,000
Principal Amount as of December 31,
1996.................................... $400,000,000
Controlled Amortization Commencement
Date.................................... June 1997
Class A Certificate Rate................. Commercial Paper Rate
Series 1996-1 Termination Date........... May 17, 1999
Series 1996-1 Issuance Date.............. May 14, 1996
Series Servicing Fee Rate................ 2%
Initial Available Subordinated Amount.... $23,616,900
</TABLE>
I-1
<PAGE>
ANNEX II
RECEIVABLES IN ADDITIONAL ACCOUNTS CONVEYED TO THE TRUST BY BCRC
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
DATE RECEIVABLES RELEVANT NUMBER RECEIVABLES
ASSIGNMENT TRANSFERRED TO CUT OFF OF ADDITIONAL IN ADDITIONAL
NUMBER TRUST DATE ACCOUNTS ACCOUNTS
---------- ------------------ ------------------ ------------- -------------
<S> <C> <C> <C> <C>
1............ September 30, 1994 September 26, 1994 277 $28,569,849
2............ January 30, 1996 January 18, 1996 610 $86,817,128
</TABLE>
II-1
<PAGE>
ANNEX III
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Certificates
(the "Global Securities") will be available only in book-entry form. Investors
in the Global Securities may hold such Global Securities through any of The
Depository Trust Company ("DTC"), Cedel or Euroclear. The Global Securities
will be tradeable as home market instruments in both the European and U.S.
domestic markets. Initial settlements and all secondary trades will settle in
same-day funds.
Secondary market trading between investors holding Global Securities through
Cedel and Euroclear will be conducted in the ordinary way in accordance with
their normal rules and operating procedures and in accordance with
conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities through
DTC will be conducted according to the rules and procedures applicable to U.S.
corporate debt obligations and prior asset-backed certificates issues.
Secondary cross-market trading between Cedel or Euroclear and DTC
Participants holding Certificates will be effected on a delivery-against-
payment basis through the respective Depositaries of Cedel and Euroclear (in
such capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing
organizations or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name of
Cede & Co. as nominee of DTC. Investors' interests in the Global Securities
will be represented through financial institutions acting on their behalf as
direct and indirect Participants in DTC. As a result, Cedel and Euroclear will
hold positions on behalf of their participants through their respective
Depositaries, which in turn will hold such positions in accounts as DTC
Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to prior asset-backed certificates issues.
Investor securities custody accounts will be credited with their holdings
against payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedel or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to
the securities custody accounts on the settlement date against payment in
same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired
value date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to prior asset-
backed certificates issues in same-day funds.
Trading between Cedel and/or Euroclear Participants. Secondary market
trading between Cedel Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
III-1
<PAGE>
Trading between DTC seller and Cedel or Euroclear purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
account of a Cedel Participant or a Euroclear Participant, the purchaser will
send instructions to Cedel or Euroclear through a Cedel Participant or
Euroclear Participant at least one business day prior to settlement. Cedel or
Euroclear will instruct the respective Depositary, as the case may be, to
receive the Global Securities against payment. Payment will include interest
accrued on the Global Securities from and including the last Distribution Date
(or if the transfer is prior to the first Distribution Date, the Closing Date)
to and excluding the settlement date, on the basis of actual days elapsed and
a year of 360 days. Payment will then be made by the respective Depositary of
the DTC Participant's account against delivery of the Global Securities. After
settlement has been completed, the Global Securities will be credited to the
respective clearing system and by the clearing system, in accordance with its
usual procedures, to the Cedel Participant's or Euroclear Participant's
account. The securities credit will appear the next day (European time) and
the cash debt will be back-valued to, and the interest on the Global
Securities will accrue from, the value date (which would be the preceding day
when settlement occurred in New York). If settlement is not completed on the
intended value date (i.e., the trade fails), the Cedel or Euroclear cash debt
will be valued instead as of the actual settlement date.
Cedel Participants and Euroclear Participants will need to make available to
the respective clearing systems the funds necessary to process same-day funds
settlement. The most direct means of doing so is to preposition funds for
settlement, either from cash on hand or existing lines of credit, as they
would for any settlement occurring within Cedel or Euroclear. Under this
approach, they may take on credit exposure to Cedel or Euroclear until the
Global Securities are credited to their accounts one day later.
As an alternative, if Cedel or Euroclear has extended a line of credit to
them, Cedel Participants or Euroclear Participants can elect not to
preposition funds and allow that credit line to be drawn upon the finance
settlement. Under this procedure, Cedel Participants or Euroclear Participants
purchasing Global Securities would incur overdraft charges for one day,
assuming they cleared the overdraft when the Global Securities were credited
to their accounts. However, interest on the Global Securities would accrue
from the value date. Therefore, in many cases the investment income on the
Global Securities earned during that one-day period may substantially reduce
or offset the amount of such overdraft charges, although this result will
depend on each Cedel Participant's or Euroclear Participant's particular cost
of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities
to the respective Depositary for the benefit of Cedel Participants or
Euroclear Participants. The sale proceeds will be available to the DTC seller
on the settlement date. Thus, to the DTC Participant a cross-market
transaction will settle no differently than a trade between two DTC
Participants.
Trading between Cedel or Euroclear seller and DTC purchaser. Due to time
zone differences in their favor, Cedel Participants and Euroclear Participants
may employ their customary procedures for transactions in which Global
Securities are to be transferred by the respective clearing system, through
the respective Depositary, to a DTC Participant. The seller will send
instructions to Cedel or Euroclear through a Cedel Participant or Euroclear
Participant at least one business day prior to settlement. In these cases,
Cedel or Euroclear will instruct the respective Depositary, as appropriate, to
deliver the Global Securities to the DTC Participant's account against
payment. Payment will include interest accrued on the Global Securities from
and including the last Distribution Date (or if the transfer is prior to the
first Distribution Date, the Closing Date) to and excluding the settlement
date on the basis of actual days elapsed and a year of 360 days. The payment
will then be reflected in the account of the Cedel Participant or Euroclear
Participant the following day, and receipt of the cash proceeds in the Cedel
Participant's or Euroclear Participant's account would be back-valued to the
value date (which would be the preceding day, when settlement occurred in New
York). Should the Cedel Participant or Euroclear Participant have a line of
credit with its respective clearing system and elect to be in debt in
anticipation of receipt of the sale proceeds in its account, the back-
valuation will extinguish any overdraft incurred over that one-day period. If
settlement is not completed on the intended value date (i.e., the trade
fails), receipt of the cash proceeds in the Cedel Participant's or Euroclear
Participant's account would instead be valued as of the actual settlement
date.
III-2
<PAGE>
Finally, day traders that use Cedel or Euroclear and that purchase Global
Securities from DTC Participants for delivery to Cedel Participants or
Euroclear Participants should note that these trades would automatically fail
on the sale side unless affirmative action were taken. At least three
techniques should be readily available to eliminate this potential problem:
(a) borrowing through Cedel or Euroclear for one day (until the purchase
side of the day trade is reflected in their Cedel or Euroclear accounts) in
accordance with the clearing system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC Participant no
later than one day prior to settlement, which would give the Global
Securities sufficient time to be reflected in their Cedel or Euroclear
account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade so
that the value date for the purchase from the DTC Participant is at least
one day prior to the value date for the sale to the Cedel Participant or
Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities through Cedel or
Euroclear (or through DTC if the holder has an address outside the U.S.) will
be subject to the 30% U.S. withholding tax that generally applies to payments
of interest (including original interest discount) on registered debt issued
by U.S. Persons, unless (i) each clearing system, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business in the chain of intermediaries between such beneficial owner
and the U.S. entity required to withhold tax complies with applicable
certification requirements and (ii) such beneficial owner takes one of the
following steps to obtain an exemption or reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Beneficial owners of Global
Securities that are non-U.S. Persons generally can obtain a complete exemption
from the withholding tax by filing a signed Form W-8 (Certificate of Foreign
Status). If the information shown on Form W-8 changes, a new Form W-8 must be
filed within 30 days of such change.
Exemption for non-U.S. Persons with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its
conduct of a trade or business in the United States, can obtain an exemption
from the withholding tax by filing Form 4224 (Exemption from Withholding of
Tax on Income Effectively Connected with the Conduct of a Trade or Business in
the United States).
Exemption or reduced rate for non-U.S. Persons resident in treaty countries
(Form 1001). Non-U.S. Persons that are Certificate Owners residing in a
country that has a tax treaty with the United States can obtain an exemption
or reduced tax rate (depending on the treaty terms) by filing Form 1001
(Ownership, Exemption or Reduced Rate Certificate). If the treaty provides
only for a reduced rate, withholding tax will be imposed at that rate unless
the filer alternatively files Form W-8. Form 1001 may be filed by the
Certificate Owner or his agent.
Exemption of U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his
agent, files by submitting the appropriate form to the person through whom it
holds (the clearing agency, in the case of persons holding directly on the
books of the clearing agency). Form W-8 and Form 1001 are effective for three
calendar years and Form 4224 is effective for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United States,
(ii) a corporation or partnership organized in or under the laws of the United
States, any state thereof, or any political subdivision of either
III-3
<PAGE>
(including the District of Columbia), or (iii) an estate or trust the income
of which is includible in gross income for United States tax purposes
regardless of its source. This summary does not deal with all aspects of U.S.
Federal income tax withholding that may be relevant to foreign holders of the
Global Securities. Investors are advised to consult their own tax advisors for
specific tax advice concerning their holding and disposing of the Global
Securities.
The Internal Revenue Service has recently proposed new regulations that
would revise some aspects of the current system for withholding on amounts
paid to foreign persons. Under these proposed regulations, interest or
original issue discount paid or deemed paid to a nonresident alien would
continue to be exempt from United States withholding taxes (including backup
withholding) provided that the holder complies with the new certification
procedures.
III-4
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY BCRC OR THE UNDERWRITER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SE-
CURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAW-
FUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIV-
ERY OF THIS PROSPECTUS, NOR ANY SALE MADE HEREUNDER, SHALL, UNDER ANY CIRCUM-
STANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS COR-
RECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information................................................... 2
Reports to Certificateholders........................................... 2
Prospectus Summary...................................................... 3
Risk Factors............................................................ 21
The Depositor and The Trust............................................. 27
Use of Proceeds......................................................... 28
The Floorplan and Asset-Based Financing Business........................ 28
The Accounts............................................................ 35
Bombardier Capital Inc.................................................. 41
Maturity and Principal Payment Considerations........................... 42
Description of the Certificates......................................... 43
Amendments to Pooling and Servicing Agreement and Receivables Purchase
Agreement.............................................................. 84
Description of the Receivables Purchase Agreement....................... 85
Certain Legal Aspects of the Receivables................................ 87
Certain Federal Income Tax Consequences................................. 90
Employee Benefit Plan Considerations.................................... 93
Underwriting............................................................ 95
Legal Matters........................................................... 95
Index of Defined Terms.................................................. 96
Annex I................................................................. I-1
Annex II................................................................ II-1
Annex III............................................................... III-1
</TABLE>
UNTIL APRIL , 1997 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE CERTIFICATES, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS WHEN ACTING AS UN-
DERWRITERS, AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$400,000,000 FLOATING RATE
CLASS A ASSET BACKED
CERTIFICATES, SERIES 1997-1
$27,125,000 FLOATING RATE
CLASS B ASSET BACKED
CERTIFICATES, SERIES 1997-1
BOMBARDIER RECEIVABLES
MASTER TRUST I
BOMBARDIER CREDIT
RECEIVABLES CORPORATION
DEPOSITOR
BOMBARDIER CAPITAL INC.
SERVICER
---------------------------------------
PROSPECTUS
---------------------------------------
J.P. MORGAN & CO.
CS FIRST BOSTON
MERRILL LYNCH & CO.
JANUARY , 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with the
offering of the Certificates being registered under this Registration
Statement, other than underwriting discounts and commissions:
<TABLE>
<S> <C>
SEC Registration Fee........................................ $129,431.82*
Printing and Engraving...................................... $ 50,000.00
Legal Fees and Expenses..................................... $300,000.00
Trustee Fees and Expenses................................... $ 15,000.00
Blue Sky Fees and Expenses.................................. $ 5,000.00
Rating Agency Fees.......................................... $200,000.00
Miscellaneous............................................... $ 10,000.00
-----------
Total..................................................... $709,431.82
===========
</TABLE>
- --------
* Actual
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article XII of the Registrant's Certificate of Incorporation provides for
indemnification of directors and officers of the Registrant to the full extent
permitted by Delaware law.
Section 145 of the Delaware General Corporation Law provides, in substance,
that Delaware corporations shall have the power, under specified
circumstances, to indemnify their directors, officers, employees and agents in
connection with actions, suits or proceedings brought against them by a third
party or in the right of the corporation, by reason of the fact that they were
or are such directors, officers, employees or agents, against expenses
incurred in any such action, suit or proceeding. The Delaware General
Corporation Law also provides that the Registrant may purchase insurance on
behalf of any such director, officer, employee or agent.
Bombardier Inc. has agreed to guarantee the indemnification obligations of
the Registrant with respect to each of its independent directors, subject,
however, to any conditions, limitations, or defenses which the Registrant
itself might have with respect to such indemnified obligations.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The Trust has issued one Series of asset backed certificates in a
transaction exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) of the Securities Act. On May 14, 1996, BCRC sold by
private placement to an institutional investor $100,000,000 initial principal
amount of Class A Certificates, Series 1996-1.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement
3.1 Certificate of Incorporation of the Registrant
3.2 Bylaws of the Registrant
4.1 Pooling and Servicing Agreement
4.2 Form of Series 1997-1 Supplement
4.3 Variable Funding Supplement
4.4 Receivables Purchase Agreement
4.5 Form of Amendment Number 1 to Pooling and Servicing Agreement
4.6 Form of Amendment Number 1 to Receivables Purchase Agreement
5.1 Opinion of Morgan, Lewis & Bockius LLP as to legality of the
Certificates (including consent of such firm)
8.1 Opinion of Morgan, Lewis & Bockius LLP as to certain U.S. tax matters
(including consent of such firm)
23.1 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.1 hereof)
23.2 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 8.1 hereof)
24.1 Powers of Attorney*
99.1 Form of Inventory Security Agreement
</TABLE>
- --------
* Previously filed.
ITEM 17. UNDERTAKINGS.
A. Insofar as indemnification for liability arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to provisions described under Item 14 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
B. The undersigned registrant hereby undertakes that:
(1) for purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective; and
(2) for the purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 1 TO REGISTRATION STATEMENT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF
BURLINGTON, STATE OF VERMONT, ON THE 9TH DAY OF JANUARY, 1997.
Bombardier Credit Receivables
Corporation
By: /s/ Blaine Filthaut
--------------------------------
NAME:BLAINE FILTHAUT
TITLE:VICE PRESIDENT AND TREASURER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED, ON THE 9TH DAY OF JANUARY, 1997.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<S> <C>
Pierre-Andre Roy* President and Director
- ------------------------------------- (Principal Executive
PIERRE-ANDRE ROY Officer)
/s/ Blaine Filthaut Vice President and
- ------------------------------------- Treasurer (Principal
BLAINE FILTHAUT Financial and
Accounting Officer)
William P. Brady* Vice President and
- ------------------------------------- Director
WILLIAM P. BRADY
Paul H. Larose* Director
- -------------------------------------
PAUL H. LAROSE
Director
- -------------------------------------
DONALD L. RUSHFORD
Director
- -------------------------------------
MARGARET L. MONTGOMERY
Jean Rivard* Director
- -------------------------------------
JEAN RIVARD
*By: /s/ Blaine Filthaut
- -------------------------------------
BLAINE FILTHAUT
ATTORNEY-IN-FACT
</TABLE>
NOTE: Powers of Attorney appointing Blaine Filthaut and Andrew Baranowsky, and
either of them acting singly, to execute the Registration Statement and any
amendments thereto on behalf of the above-named individuals, were previously
filed with the Securities and Exchange Commission.
II-3
<PAGE>
REGISTRATION STATEMENT NO. 333-14431
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
EXHIBITS
TO
FORM S-1
AMENDMENT NO. 1
TO
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
BOMBARDIER CREDIT RECEIVABLES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBITS NUMBERED
NUMBER PAGE
-------- ------------
<C> <S> <C>
1.1 Form of Underwriting Agreement..........................
3.1 Certificate of Incorporation of the Registrant..........
3.2 Bylaws of the Registrant................................
4.1 Pooling and Servicing Agreement.........................
4.2 Form of Series 1997-1 Supplement........................
4.3 Variable Funding Supplement.............................
4.4 Receivables Purchase Agreement..........................
4.5 Form of Amendment Number 1 to Pooling and Servicing
Agreement..............................................
4.6 Form of Amendment Number 1 to Receivables Purchase
Agreement..............................................
5.1 Opinion of Morgan, Lewis & Bockius LLP as to legality of
the Certificates (including consent of such firm)......
8.1 Opinion of Morgan, Lewis & Bockius LLP as to certain
U.S. tax matters (including consent of such firm)......
23.1 Consent of Morgan, Lewis & Bockius LLP (included in
Exhibit 5.1 hereof)....................................
23.2 Consent of Morgan, Lewis & Bockius LLP (included in
Exhibit 8.1 hereof)....................................
24.1 Power of Attorney*......................................
99.1 Form of Inventory Security Agreement....................
</TABLE>
- --------
* Previously Filed.
<PAGE>
OH&S DRAFT
01/08/97
Exhibit 1.1
BOMBARDIER RECEIVABLES MASTER TRUST I
SERIES 1997-1, ASSET BACKED CERTIFICATES
BOMBARDIER CREDIT RECEIVABLES CORPORATION
(Depositor)
BOMBARDIER CAPITAL INC.
(Servicer)
UNDERWRITING AGREEMENT
----------------------
January ___, 1997
J.P. Morgan Securities Inc.
As Representative of the
Several Underwriters Listed
in Schedule I
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
Bombardier Credit Receivables Corporation, a Delaware corporation ("BCRC"),
----
proposes to sell to the several Underwriters listed in Schedule I hereto (the
"Underwriters") for whom you are acting as the representative (the
- -------------
"Representative") $400,000,000 principal amount of its Floating Rate Class A
- ---------------
Asset Backed Certificates, Series 1997-1 (the "Class A Certificates") and
--------------------
$27,125,000 principal amount of its Floating Rate Class B Asset Backed
Certificates, Series 1997-1 (the "Class B Certificates," and together with the
--------------------
Class A Certificates, the "Certificates") of the Bombardier Receivables Master
------------
Trust I (the "Trust"). Each Certificate will represent a fractional undivided
-----
interest in the Trust. The assets of the Trust currently include amounts due on
a pool of revolving financing arragements with certain dealers located in the
United States to finance such dealers' consumer, recreational and commercial
products inventory and may in the future, include, among other things, certain
amounts due on a pool of revolving financing arrangements with certain dealers,
manufacturers or distributors located in the United States to finance the
working capital needs of such parties or the production or manufacture of or the
carrying in inventory of consumer, recreational and commercial product inventory
(collectively, the "Receivables"). The Receivables have been sold by Bombardier
-----------
Capital Inc., a Massachusetts corporation ("BCI"), to BCRC pursuant to a
---
Receivables Purchase Agreement dated as of January 1, 1994 (as supplemented and
amended from time to time, including as amended
<PAGE>
by Amendment Number 1 to the Receivables Purchase Agreement, the "Receivables
-----------
Purchase Agreement"), between BCI and BCRC, and subsequently transferred to the
- ------------------
Trust by BCRC pursuant to a Pooling and Servicing Agreement dated as of January
1, 1994 (as supplemented and amended from time to time, including as amended by
Amendment Number 1 to the Pooling and Servicing Agreement, the "Pooling and
-----------
Servicing Agreement"), among BCRC, BCI, as the Servicer, and Bankers Trust
- -------------------
Company, as Trustee (the "Trustee"). Payments in respect of the Class B
-------
Certificates are, to the extent specified in the Supplement (as defined below),
subordinated to the rights of the holders of the Class A Certificates. The
Certificates will be issued pursuant to the provisions of the Pooling and
Servicing Agreement and the Series 1997-1 Supplement to Pooling and Servicing
Agreement to be dated as of January 1, 1997 (the "Supplement"), between BCRC,
----------
BCI, as the Servicer, and Bankers Trust Company, as Trustee. Concurrently with
the execution and delivery of the Supplement, BCI, BCRC and the Trustee will
enter into the Amendment Number 1 to the Pooling and Servicing Agreement and
Amendment Number 1 to the Receivables Purchase Agreement referred to above.
BCRC has prepared and filed with the Securities and Exchange Commission
(the "Commission") in accordance with the provisions of the Securities Act of
----------
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement on Form S-1,
--------------
including a form of prospectus, relating to the Certificates. The registration
statement as amended at the time when it shall become effective, or if a post-
effective amendment is filed with respect thereto, as amended by such post-
effective amendment at the time of its effectiveness, including in each case
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act, is referred to
in this Underwriting Agreement (the "Agreement") as the "Registration
--------- ------------
Statement", and the prospectus in the form in which it was most recently filed
- ---------
with the Commission pursuant to Rule 424(b) of the rules and regulations of the
Commission is referred to in this Agreement as the "Prospectus."
----------
When used in this Agreement, "Basic Documents" shall mean the Pooling and
---------------
Servicing Agreement, the Certificates, the Supplement and the Receivables
Purchase Agreement. To the extent not defined herein, capitalized terms used
herein have the meanings assigned to such terms in the Pooling and Servicing
Agreement.
Each of BCRC and BCI hereby agrees with the Underwriters as follows:
1. Purchase and Sale. BCRC agrees to sell the Certificates to the several
-----------------
Underwriters as hereinafter provided, and each Underwriter, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not
2
<PAGE>
jointly, from BCRC the respective principal amount of the Certificates set forth
opposite such Underwriter's name in Schedule I hereto at a price equal to
______% of their principal amount.
2. Offering. BCRC understands that the Underwriters intend (i) to make a
--------
public offering of their respective portions of the Certificates in accordance
with the Securities Act as soon after (A) the Registration Statement has become
effective and (B) the parties hereto have executed and delivered this Agreement
as in the judgment of the Representative is advisable and (ii) initially to
offer the Certificates upon the terms set forth in the Prospectus.
3. Delivery and Payment. Payment for the Certificates shall be made by
--------------------
wire transfer in immediately available funds to the account specified by BCRC to
the Representative no later than noon the Business Day (as defined below) prior
to the Closing Date (as defined below), at 10:00 A.M., New York City time on
January ___, 1997, or at such other time on the same or such other date, not
later than the fifth Business Day thereafter, as the Representative and BCRC may
agree upon in writing. The time and date of such payment are referred to herein
as the "Closing Date." As used herein, the term "Business Day" means any day
------------ ------------
other than a day on which banks are permitted or required to be closed in New
York City.
Payment for the Certificates shall be made against delivery to the nominee
of the Depository Trust Company for the account of the Representative for the
respective accounts of the several Underwriters of one or more global notes (the
"Global Note") representing the Certificates, with any transfer taxes payable in
-----------
connection with the transfer to the Underwriters of the Certificates duly paid
by BCRC. The Global Note will be made available for inspection by the
Representative at the office of Morgan, Lewis & Bockius LLP, 101 Park Avenue,
New York, New York 10178 not later than 1:00 P.M., New York City time, on the
Business Day prior to the Closing Date.
4. Representations and Warranties. Each of BCRC and BCI represents and
------------------------------
warrants to each Underwriter that:
(a) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary
prospectus filed as part of the Registration Statement as originally filed
or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Securities Act, complied when so filed in all material respects with
the Securities Act, and when so filed did not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that
this representation and warranty shall not apply to any statements or
omissions made in
3
<PAGE>
reliance upon and in conformity with information relating to any
Underwriter furnished to BCRC in writing by such Underwriter through the
Representative expressly for use therein;
(b) the Registration Statement has been declared effective by the
Commission under the Securities Act on January __, 1997 (the "Effective
---------
Date"); no stop order suspending the effectiveness of the Registration
----
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of BCRC or BCI, threatened by the
Commission; and, on the Effective Date and on the date hereof, the
Registration Statement and Prospectus comply, or, if BCI shall have
furnished any amendments or supplements there to, as amended or
supplemented will comply, as the case may be, in all material respects with
the Securities Act, and do not and as amended or supplemented will not, as
of the applicable effective date as to the Registration Statement and any
amendment thereto and as of the date of the Prospectus and any amendment or
supplement thereto, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus, as amended
or supplemented, if applicable, at the Closing Date will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; except that the foregoing
representations and warranties shall not apply to statements or omissions
in the Registration Statement or the Prospectus made in reliance upon and
in conformity with information relating to any Underwriter furnished to
BCRC in writing by such Underwriter through the Representative expressly
for use therein;
(c) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
adverse change in or affecting the general affairs, business, management,
financial position, stockholders' equity or results of operations of BCRC
or BCI, taken as a whole, otherwise than as set forth or contemplated in
the Prospectus;
(d) each of BCRC and BCI has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state of
its incorporation, with full power and authority (corporate and other) and
legal right to own its properties and conduct its business as described in
the Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the failure
to be so qualified or in good standing would not
4
<PAGE>
have a material adverse effect on it and its subsidiaries, taken as a
whole, or the transactions contemplated herein or in the Basic Documents;
(e) as of the Closing Date the Certificates will be duly and validly
authorized and, when the Certificates are duly and validly executed and
authenticated by the Trustee and delivered in accordance with the Pooling
and Servicing Agreement and delivered and paid for pursuant to this
Agreement, the Certificates will be duly and validly executed,
authenticated, issued and delivered and entitled to the benefits and
security afforded by the Pooling and Servicing Agreement and the
Supplement; each of the Basic Documents has been duly authorized by each of
BCRC and BCI and, when executed and delivered by each of BCRC and BCI, each
of the Basic Documents will constitute a legal, valid and binding
obligation of each of BCRC and BCI, enforceable against each of BCRC and
BCI in accordance with its terms, subject as to enforceability to
applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation or other similar laws affecting the enforcement
of creditors rights generally and to general equitable principles; and the
Certificates and the Basic Documents each will conform to the descriptions
thereof in the Prospectus;
(f) this Agreement has been duly authorized, executed and delivered by
each of BCRC and BCI;
(g) neither BCRC nor BCI is, nor with the giving of notice or lapse of
time or both would be, in violation of or in default under, its Certificate
of Incorporation or By-Laws or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by
which it or any of its properties is bound, except for violations and
defaults which individually and in the aggregate would not have a material
adverse effect on the transactions contemplated herein or in the Basic
Documents; the issue and sale of the Certificates and the performance by
each of BCRC and BCI, as applicable, of all of the provisions of its
obligations under the Certificates, the Basic Documents and this Agreement,
and the consummation of the transactions herein and therein contemplated
will not conflict in any material respect with or result in a material
breach of any of the terms or provisions of, or constitute a material
default under, any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which BCRC or BCI is a party
or by which BCRC or BCI is bound or to which any of the material property
or assets of BCRC or BCI is subject, nor will any such action result in any
material violation of the provisions of the Certificate of Incorporation or
the By-Laws of BCRC or BCI or any applicable law or statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over BCRC or BCI, or any
5
<PAGE>
of their properties; and no consent, approval, authorization, order,
license, registration, filing or qualification of or with any such court or
governmental agency or body is required to be obtained or made by BCRC or
BCI for the issue and sale of the Certificates or the consummation by BCRC
or BCI of the transactions contemplated by this Agreement or the Basic
Documents, except (i) such consents, approvals, authorizations, orders,
licenses, registrations, filings or qualifications (x) as have been or will
have been obtained prior to the Closing Date under the Securities Act, and
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Certificates by the Underwriters
or (y) will not materially adversely affect the ability of BCI or BCRC to
perform its obligations under any Basic Document or under this Agreement
and (ii) the filing of any financial statements required to perfect the
Trust's interest in the Receivables;
(h) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental investigations, actions, suits or proceedings
pending or, to the knowledge of BCRC or BCI, threatened against or
affecting BCRC or BCI or any of their properties or, to which BCRC or BCI
is or may be a party or to which BCRC or BCI or any property of BCRC or BCI
is or may be the subject, (i) asserting the invalidity of this Agreement or
of any of the Basic Documents, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated by
this Agreement or any of the Basic Documents, (iii) that may adversely
affect the federal or state income, excise, franchise or similar tax
attributes of the Certificates, (iv) that could materially and adversely
affect BCRC's or BCI's performance of its obligations under, or the
validity or enforceability of, this Agreement or any of the Basic Documents
or (v) which could individually or in the aggregate reasonably be expected
to have a material adverse effect on the interests of the holders of the
Certificates or the marketability of the Certificates;
(i) the computer tapes with respect to the Receivables sold to the
Trust created as of the Cut-Off Date, each Additional Cut-Off Date, each
Removal Date and each Removal Termination Date, as applicable were complete
and accurate as of the respective dates thereof; immediately prior to
transferring the Receivables to the Trust, BCRC had good and marketable
title to the Receivables free and clear of all liens, encumbrances and
defects, except such as are described or referred to in the Prospectus and
to the extent permitted in the Pooling and Servicing Agreement, and by
assignment and delivery of each of the Receivables to the Trust, BCRC
transferred title in the Receivables to the Trust, subject to no prior
lien, mortgage, security interest, pledge, adverse claim, change or
encumbrance,
6
<PAGE>
except such as are described or referred to in the Prospectus and to the
extent permitted in the Pooling and Serving Agreement;
(j) the representations and warranties of each of BCRC and BCI
contained in the Basic Documents are true and correct in all material
respects as of the dates specified in the Basic Documents;
(k) Ernst & Young are independent public accountants with respect to
BCRC and BCI within the meanings of the Securities Act;
(l) each of BCRC and BCI owns, possesses or has obtained all material
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all material declarations and filings
with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations
and all courts and other tribunals, domestic or foreign, necessary to own
or service, as applicable, the Receivables and to perform its obligations
under this Agreement and the Basic Documents except to the extent that the
failure to have such licenses, certificates, permits, consent, orders,
approvals and other authorizations does not have a material adverse effect
on the ability of BCI or BCRC to comply with its obligations under this
Agreement and the Basic Documents, and neither BCRC nor BCI has received
any actual notice of any proceeding relating to revocation or modification
of any such license, permit, certificate, consent, order, approval or other
authorization; and each of BCRC and BCI is in compliance with all laws and
regulations necessary for the performance of its obligations under this
Agreement and the Basic Documents; and
(m) any taxes, fees and other governmental charges in connection with
the execution, delivery and performance of this Agreement and the Basic
Documents and the Certificates shall have been paid or will be paid by or
on behalf of BCRC and BCI, as applicable, at or prior to the Closing Date
to the extent then due.
5. Covenants and Agreements. Each of BCRC and BCI jointly and
------------------------
severally covenants and agrees with each of the Underwriters as follows:
(a) if required, to file the final Prospectus with the Commission
within the time periods specified by Rule 424(b) and Rule 430A under the
Securities Act, and to furnish copies of the Prospectus to the Underwriters
in New York City prior to 10:00 A.M., New York City time, on the Business
Day next succeeding the date of this Agreement in such quantities as the
Representative may reasonably request;
7
<PAGE>
(b) to deliver, at the expense of BCRC, to the Representative, two
conformed copies of the Registration Statement (as originally filed) and
each amendment thereto, in each case including exhibits, and, during the
period mentioned in paragraph (e) below, as many copies of the Prospectus
(including all amendments and supplements thereto) as the Representative
may reasonably request;
(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the
Registration Statement becomes effective, to furnish to the Representative
a copy of the proposed amendment or supplement for review and not to file
any such proposed amendment or supplement to which the Representative
reasonably objects;
(d) to advise the Representative promptly, and to confirm such advice
in writing, (i) when any amendment to the Registration Statement has been
filed or becomes effective, (ii) when any supplement to the Prospectus or
any amendment to the Prospectus has been filed and to furnish the
Representative with copies thereof, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for any additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of any order preventing or suspending the
use of any preliminary prospectus or the Prospectus or the initiation or
threatening of any proceeding for that purpose, (v) of the occurrence of
any event, within the period referenced in paragraph (e) below, as a result
of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, and (vi) of the receipt by BCRC or BCI of any notification with
respect to any suspension of the qualification of the Certificates for
offer and sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and to use its reasonable best efforts to
prevent the issuance of any such stop order, or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or of
any order suspending any such qualification of the Certificates, or
notification of any such order thereof and, if issued, to obtain as soon as
possible the withdrawal thereof;
(e) If before a period of six months shall have elapsed after the
Effective Date and the delivery of a prospectus shall be at the time
required by law in connection with sales of any such certificates, either
(i) any event shall have occurred as a result of which the Prospectus would
include any untrue statement of a material
8
<PAGE>
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (ii) for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus as amended or
supplemented, to notify you and to prepare and furnish to you an amendment
or a supplement to the Prospectus which will correct such statement or
omission or effect such compliance; and in case any Underwriter is required
by law to deliver a prospectus in connection with sales of any of such
Certificates at any time six months or more after the Closing Date, upon
such Underwriter's request, but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many copies as such Underwriter
may request of an amended or supplemented prospectus complying with (S)
10(a)(3) of the Act.
(f) to endeavor to qualify the Certificates for offer and sale under
the securities or Blue Sky laws of such jurisdictions in the United States
as the Representative shall reasonably request and to continue such
qualification in effect so long as reasonably required under such laws for
distribution of the Certificates; and to pay all fees and expenses
(including reasonable fees and disbursements of counsel to the Underwriter)
reasonably incurred in connection with such qualification and in connection
with the determination of the eligibility of the Certificates for
investment under the laws of such jurisdictions in the United States as the
Underwriter may designate; provided, however, that neither BCRC nor BCI
-------- -------
shall be obligated to qualify to do business in any jurisdiction in which
it is not currently so qualified; and provided further that neither BCRC
-------- -------
nor BCI shall be required to file a general consent to service of process
in any jurisdiction;
(g) to make generally available to the holders of the Certificates and
to the Representative as soon as practicable an earnings statement (which
need not be audited) covering a period of at least twelve months beginning
with the first fiscal quarter of the Trust occurring after the effective
date of the Registration Statement, which shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder;
(h) so long as the Certificates are outstanding, or until such time as
the Underwriters shall cease to maintain a secondary market in the
Certificates, whichever occurs first, to furnish to the Representative (i)
copies of each certificate, the annual statements of compliance and the
annual independent certified public accountant's servicing reports
furnished to the Trustee pursuant to Section 3.05 and Section 3.06,
respectively, of the Pooling and Servicing Agreement by first class mail as
soon as practicable after such statements and reports are furnished to the
Trustee,
9
<PAGE>
(ii) copies of each amendment to any of the Basic Documents, (iii) copies
of all reports or other communications (financial or other) furnished to
holders of the Certificates, and copies of any reports and financial
statements furnished to or filed with the Commission, any governmental or
regulatory authority or any national securities exchange, and (iv) from
time to time such other information as the Representative may reasonably
request concerning the Trust or BCRC or concerning BCI in its capacity as
Seller or Servicer of the Receivables included in the Trust;
(i) to the extent, if any, that the ratings provided with respect to
the Certificates by the rating agency or rating agencies rating the
Certificates (each, a "Rating Agency") are conditional upon the furnishing
-------------
of documents or the taking of any other action by BCRC or BCI, BCRC or BCI,
as applicable, shall furnish such documents and take any other such action;
(j) to use the net proceeds received by BCRC from the sale of the
Certificates pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(k) if required by law, to register the Certificates in a timely
manner pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act);
(l) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
fees, costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing, all
fees, costs and expenses (i) incident to the preparation, issuance,
execution, authentication and delivery of the Certificates, including any
fees, costs and expenses of the Trustee or any transfer agent, (ii)
incident to the preparation, printing and filing under the Securities Act
of the Registration Statement, the Prospectus and any preliminary
prospectus (including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or
qualification and determination of eligibility for investment of the
Certificates under the laws of such jurisdictions as the Underwriter may
reasonably designate (including reasonable fees of counsel for the
Underwriter and their disbursements with respect thereto), (iv) in
connection with the printing (including word processing and duplication
costs) and delivery of this Agreement, the Basic Documents, the Preliminary
and Supplemental Blue Sky Memoranda and any Legal Investment Survey and the
furnishing to Underwriter and dealers of copies of the Registration
Statement and the Prospectus, including mailing and shipping, as herein
provided, (v) of BCRC's and BCI's counsel and accountants,
10
<PAGE>
(vi) incurred by BCRC or BCI in connection with any "roadshow" presentation
to potential investors, and (vii) payable to rating agencies in connection
with the rating of the Certificates; and
(m) from and after the Closing Date, not to take any action which in
the reasonable judgment of BCI or BCRC, as applicable, is inconsistent with
the Trust's ownership of the Receivables other than as permitted by the
Pooling and Servicing Agreement.
6. Conditions to the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the Underwriters hereunder are subject to the performance by each
of BCRC and BCI of its obligations hereunder and to the following additional
conditions:
(a) the Registration Statement shall have become effective, or if a
post-effective amendment is required to be filed under the Securities Act,
such post-effective amendment shall have become effective, not later than
5:00 P.M., New York City time, on the date hereof; and on or prior to the
Closing Date no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment shall be in effect, and no
proceedings for such purpose shall be pending before or to BCRC's or BCI's
knowledge threatened by the Commission; the Prospectus shall have been
filed with the Commission pursuant to Rule 424(b) within the applicable
time period prescribed for such filing by the rules and regulations under
the Securities Act and in accordance with Section 5(a) hereof; and all
requests for additional information shall have been complied with to the
satisfaction of the Representative;
(b) the representations and warranties of each of BCRC and BCI
contained herein are true and correct in all material respects on and as of
the Closing Date as if made on and as of the Closing Date and the
representations and warranties of each of BCRC and BCI in the Basic
Documents will be true and correct in all material respects as of the dates
specified in the Basic Documents; and each of BCRC and BCI shall have
complied with all agreements and all conditions on its part to be performed
or satisfied hereunder and under the Basic Documents at or prior to the
Closing Date;
(c) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any downgrading,
nor shall any notice have been given of (i) any intended or potential
downgrading or (ii) any review or possible change that does not indicate an
improvement, in the rating accorded any securities of or guaranteed by BCRC
or BCI by any "nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the Securities
Act;
11
<PAGE>
(d) since the date hereof there shall not have been any material
adverse change or any development involving a prospective material adverse
change, in or affecting the general affairs, business, management,
financial position, stockholders' equity or results of operations of BCRC
or BCI, otherwise than as set forth or contemplated in the Prospectus, the
effect of which in the reasonable judgment of the Representative makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Certificates on the Closing Date on the terms and in the
manner contemplated in the Prospectus;
(e) the Representative shall have received on and as of the Closing
Date a certificate of an executive officer of each of BCRC and BCI, in
which such officer, to the best of his or her knowledge after reasonable
investigation, shall state that (A) the representations and warranties of
BCRC and BCI, as applicable, in this Agreement are true and correct in all
material respects on and as of the Closing Date, (B) such officer has
specific knowledge about the financial matters of BCRC and BCI, as
applicable, and that each of BCRC and BCI, as applicable, has complied in
all material respects with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing
Date, (C) the representations and warranties of BCRC and BCI, as
applicable, in the Basic Documents are true and correct in all material
respects as of the dates specified in the Basic Documents, (D) the
Registration Statement has become effective, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or to BCRC's or BCI's
knowledge, are threatened by the Commission, (E) the Prospectus does not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
(F) subsequent to the date of the Prospectus, there has been no material
adverse change in the condition (financial or otherwise) of either BCRC or
BCI, as applicable, except as set forth in or contemplated in the
Registration Statement and the Prospectus or as described in such
certificate;
(f) R. William Crowe, Vice President, Legal Affairs and General
Counsel of BCI, shall have furnished to the Underwriters his written
opinion, dated the Closing Date, in form and substance satisfactory to the
Representative, to the effect that:
(i) each of BCRC and BCI has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require
12
<PAGE>
such qualification, other than where the failure to be so qualified or
in good standing would not have a material adverse effect on it or the
transactions contemplated herein or in the Basic Documents;
(ii) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental investigations,
actions, suits or proceedings pending or, to the best of such
counsel's knowledge, threatened against or affecting BCRC or BCI or
any of their properties, or to which BCRC or BCI is or may be a party
or to which any property of BCRC or BCI is or may be the subject (i)
that are required to be disclosed in the Registration Statement or the
Prospectus, (ii) asserting the invalidity of this Agreement or of any
of the Basic Documents, (iii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (iv)
that may adversely affect the federal or state income, excise,
franchise or similar tax attributes of the Certificates as described
in the Prospectus under the headings "Prospectus Summary - Tax Status"
and "Certain Federal Income Tax Consequences," (v) that could
materially and adversely affect BCRC's or BCI's obligations under this
Agreement or any of the Basic Documents or (vi) which, if determined
adversely to BCRC or BCI, could individually or in the aggregate
reasonably be expected to have a material adverse effect on the
general affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of BCRC or BCI, taken as
a whole, or that would reasonably be expected to materially adversely
affect the interests of the holders of the Certificates;
(iii) such counsel does not know of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or required to be filed as an
exhibit to the Registration Statement that are not described or filed
as required;
(iv) neither BCRC nor BCI is, nor with the giving of notice or
lapse of time or both would be, in violation of or in default under,
its Certificate of Incorporation or By-Laws or any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which BCRC or BCI is a party or by
which BCRC or BCI or any of their properties are bound, except for
violations and defaults which individually and in the aggregate are
not material to BCRC and its subsidiaries, taken as a whole, or BCI
and its subsidiaries, taken as a whole, or to the holders of the
Certificates; the issue and sale of the Certificates and the
execution, delivery
13
<PAGE>
and performance by BCRC and BCI, as applicable, of the Certificates,
the Basic Documents and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which BCRC or BCI is a party or by which BCRC or BCI is bound or to
which any of the property or assets of BCRC or BCI is subject, nor
will any such action conflict with or result in any breach or
violation of the provisions of the Certificate of Incorporation, or
the By-Laws of BCRC or BCI or any applicable law or statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over BCRC or BCI, or any of their properties;
(v) no consent, approval, authorization, order, license,
registration, filing or qualification of or with any court or
governmental agency or body is required for the issue and sale of the
Certificates or the consummation of the other transactions
contemplated by this Agreement or the Basic Documents, except such
consents, approvals, authorizations, orders, licenses, registrations,
filings or qualifications as have been obtained under the Securities
Act and as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Certificates by
the Underwriter and any financing statements that have been filed in
connection with the perfection of the Trust's security interest in the
Receivables; and
(vi) each of BCRC and BCI owns, possesses or has obtained all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory
organizations and all courts and other tribunals, domestic or foreign,
necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date
hereof, and neither BCRC nor BCI has received any actual notice of any
proceeding relating to revocation or modification of any such license,
permit, certificate, consent, order, approval or other authorization,
except as described in the Registration Statement and the Prospectus;
and each of BCRC and BCI is in compliance with all laws and
regulations relating to the conduct of its business as conducted as of
the date of the Prospectus.
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(g) Ropes & Gray, special counsel for BCI, shall have furnished to the
Underwriters their written opinion, dated the Closing Date, in form and
substance satisfactory to the Representative, to the effect that:
(i) BCI is a corporation duly incorporated, validly existing
and in good standing under the laws of The Commonwealth of
Massachusetts, and has the corporate power and authority to own its
properties and assets in Massachusetts and to transact the business in
which it is engaged or presently proposes to engage in Massachusetts;
(ii) BCI has the requisite corporate power to execute and
deliver each Basic Document and this Agreement and to perform its
obligations hereunder and thereunder and has taken all necessary
corporate action to authorize the execution, delivery and performance
of each of the Basic Documents and this Agreement, and each of the
Basic Documents and this Agreement have been duly authorized, executed
and delivered by BCI;
(iii) Neither the execution and delivery by BCI of any Basic
Document or this Agreement, nor the consummation by BCI of the
transactions therein contemplated, nor the issuance of the
Certificates by the Trust or the public offering thereof as
contemplated in the Prospectus, will conflict with or result in a
breach of, or constitute a default (with notice or the passage of time
or both) under, or (except as required or permitted pursuant to any
Basic Document or this Agreement) result in the imposition of any
lien, mortgage, pledge, charge, encumbrance, adverse claim or other
security interest of any other person upon any of the property or
assets of BCI pursuant to, (1) any provision of any Massachusetts law,
governmental rule or regulation currently applicable to BCI or (2) the
Articles of Organization or By-Laws of BCI; and
(iv) No consent, approval, authorization or order of, or
registration, filing or declaration with, any Massachusetts court or
governmental agency or governmental body is required (1) for the due
execution, delivery and performance by BCI of any Basic Document or
this Agreement or (2) for the offer, sale or delivery of the
Certificates, except for such consents, approvals, authorizations,
orders, registrations, filings or declarations as may be required
under state securities or Blue Sky laws.
(h) Morgan, Lewis & Bockius LLP, special counsel for BCRC and
BCI, shall have furnished to the Underwriters their written opinion, dated
the Closing Date, in form and
15
<PAGE>
substance satisfactory to the Representative, to the effect that:
(i) BCRC is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware;
(ii) BCRC has the requisite corporate power to execute and
deliver each of the Basic Documents and this Agreement and to perform
its obligations thereunder and hereunder;
(iii) Each of the Basic Documents and this Agreement has been
duly authorized by all necessary corporate action on the part of BCRC
and duly executed and delivered by each of BCI and BCRC, and
constitutes the valid, legal and binding obligation of each of BCI and
BCRC, enforceable against each of BCI and BCRC in accordance with its
terms;
(iv) The direction by BCRC to the Trustee to execute,
authenticate and deliver the Certificates has been duly authorized by
all necessary corporate action on the part of BCRC, and as of the
Closing Date, the Certificates will be duly and validly authorized,
and, when duly and validly executed and authenticated by the Trustee
and delivered to BCRC in accordance with the Pooling and Servicing
Agreement, and following delivery to and payment therefor by the
Underwriters, will be validly issued and outstanding and entitled to
the benefits of the Pooling and Servicing Agreement;
(v) Neither the execution and delivery by BCI or BCRC of the
Basic Documents and this Agreement, nor the consummation by BCI or
BCRC of the transactions therein contemplated nor the issuance of the
Certificates by the Trust, will conflict with or result in a breach
of, or constitute a default (with notice or passage of time or both)
under, or result in the imposition of any lien, mortgage, pledge,
charge, encumbrance, adverse claim or other security interest of any
other person upon any of the property or assets of BCI or BCRC
pursuant to, except as required or permitted pursuant thereto, (1) any
provision of any New York State or federal law, governmental rule or
regulation currently applicable to BCI or BCRC (based upon our review
of those laws, rules and regulations which in our experience are
normally applicable to transactions of this type, but without having
made a special investigation concerning any other law, rule or
regulation and without expressing any opinion as to any federal or
state securities laws, rules or regulations or the polices underlying
such laws), (2) the Certificate of Incorporation or By-Laws of BCRC or
(3) any material indenture, mortgage, contract or other
16
<PAGE>
instrument (A) to which BCI or BCRC is a party or by which either of
them is bound or to which any of their property is subject, (B)
currently in effect and (C) as to which such counsel has represented
either BCI or BCRC;
(vi) No consent, approval, authorization or order of, or
registration, filing or declaration with, any New York State or
federal court, governmental agency or governmental body is required
(1) for the due execution, delivery and performance by BCI or BCRC of
the Basic Documents and this Agreement or (2) for the offer, issuance,
sale or delivery of the Certificates by BCRC in the manner and under
the circumstances contemplated by the Basic Documents and this
Agreement, except such as shall have been obtained or made on or prior
to the Closing Date, unless the failure to obtain or to make such on
or prior to the Closing Date will not materially adversely affect the
ability of BCI or BCRC to perform its obligations under the Basic
Documents and this Agreement and except for such consents, approvals,
authorizations, orders, registrations, filings or declarations
required under the state securities or Blue Sky laws or the Uniform
Commercial Code of the State of Vermont;
(vii) Except as may be separately disclosed to the Underwriters
in writing regarding BCI, such counsel has not been engaged as counsel
for either BCI or BCRC in connection with any pending or overtly
threatened (by written communication) legal or governmental
proceedings to which BCI or BCRC is a party or to which any property
of BCRC is the subject, other than such proceedings which, in their
opinion, if adversely determined, are not reasonably likely to have a
material adverse effect upon (a) the financial condition of BCI or
BCRC or (b) the performance by BCI or BCRC of its obligations under,
or the validity and enforceability of, any of the Basic Documents or
this Agreement;
(viii) The Pooling and Servicing Agreement creates in favor of
the Trustee a security interest in the rights of BCRC in the
Receivables. To the extent that such security interest is not an
interest of a buyer of chattel paper, then the Pooling and Servicing
Agreement creates in favor of the Trustee a security interest in the
rights of BCRC in the proceeds of such Receivables;
(ix) If the chief executive office of BCRC is located in the
State of Vermont, then the laws (including the conflict of laws rules)
of the State of Vermont govern the perfection and effect of perfection
or non-perfection of the security interests described
17
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in paragraph (viii) above which are perfected by filing;
(x) the statements in the Prospectus under "Amendments to
Pooling and Servicing Agreement and Receivables Purchase Agreement,"
"Description of the Certificates" and "Description of the Receivables
Purchase Agreement" insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to therein,
fairly present in all material repects the information called for with
respect to such legal matters, documents or proceedings; the
statements in the Registration Statement and the Prospectus under the
headings "Certain Federal Income Tax Consequences," "Employee Benefit
Plan Considerations" and "Certain Legal Aspects of the Receivables,"
to the extent they constitute descriptions of matters of law or legal
conclusions with respect thereto, have been prepared or reviewed by
such counsel and are correct in all material respects;
(xi) such counsel does not know of any contract or other
document of a character required by the Securities Act to be filed as
an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus or required to be
described in the Registration Statement or the Prospectus which is not
filed or incorporated by reference or described as required.
(xii) the Registration Statement has become effective under the
Securities Act and the Prospectus has been filed with the Commission
pursuant to Rule 424(b) promulgated under the Securities Act; to such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or threatened by the
Commission; such counsel is of the opinion that at the time the
Registration Statement became effective and the Prospectus was filed,
respectively, the Registration Statement and the Prospectus and any
amendments and supplements thereto (other than any accounting,
statistical or financial data included therein, as to which such
counsel need express no opinion) as of their respective effective date
or date of issuance complied as to form in all material respects with
the requirements of the Securities Act; and while not passing upon and
not assuming responsibility for and not to be deemed to have
independently verified the accuracy, completeness or fairness of the
Registration Statement or the Prospectus (except for those statements
made under the headings in the Prospectus identified in paragraph (x)
above insofar as they relate to matters of law or legal
18
<PAGE>
conclusions) nothing has come to such counsel's attention, in the
course of participating with officers of BCI and BCRC and
representatives of BCI's and BCRC's auditors in discussions regarding
the business and affairs of BCI and BCRC at which the contents of the
Registration Statement and Prospectus and related matters were
discussed, which would lead such counsel's to believe that (other than
the accounting, statistical or financial data included therein, as to
which such counsel need express no belief) the Registration Statement
and the prospectus included therein at the time the Registration
Statement became effective contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and that the Prospectus as of its date and as of the
Closing Date, as amended or supplemented, if applicable, contained or
contains any untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(xiii) this Agreement, the Basic Documents and the Certificates
conform in all material respects to the descriptions thereof contained
in the Registration Statement and the Prospectus;
(xiv) the Pooling and Servicing Agreement and the Supplement are
not required to be qualified under the Trust Indenture Act of 1939, as
amended, and the Trust is not now, and immediately following the sale
of the Certificates hereto, will not be required to be registered as
an "investment company" under the Investment Company Act of 1940, as
amended; and
(xv) for federal income tax purposes, the Certificates will
properly be characterized as indebtedness of BCRC that is secured by
the Receivables and pursuant to Section 6.03(b)(vi) of the Pooling and
Servicing Agreement, for federal income tax purposes, the issuance of
the Certificates (x) will not adversely affect the federal income tax
characterization as debt of BCRC of any issued and outstanding Series
of certificates issued by the Trust and will not cause or constitute a
taxable event with respect to any certificateholders or the Trust.
(i) Downs Rachlin & Martin, PC, special counsel to BCI and BCRC,
shall have furnished to the Underwriters their written opinion, dated the
Closing Date, in form and substance satisfactory to the Representative, to
the effect that:
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(i) The Receivables constitute "chattel paper" as defined in
section 9-105(1)(b) of the Uniform Commercial Code;
(ii) The conflict of laws principles contained in Title 9A of
Vermont Statutes Annotated provide that the parties may designate the
law of another state as governing the rights and duties of the parties
if the transaction bears a reasonable relation to the state whose law
is chosen, except that (1) article 9 of the Uniform Commercial Code
governs the perfection and the effect of perfection or nonperfection
of possessory security interests in chattel paper located within the
State of Vermont, and (2) article 9 of the Uniform Commercial Code
governs the perfection and the effect of perfection or nonperfection
of non-possessory security interests in chattel paper if the debtor's
chief executive office is located in the State of Vermont; therefore,
notwithstanding the contractual choice of New York law contained in
the Pooling and Servicing Agreement and the Receivables Purchase
Agreement, the conflict of laws principles contained in Title 9A of
Vermont Statutes Annotated require that the perfection and the effect
of perfection or nonperfection of security interest in the Receivables
and the Collateral Security be determined under the Uniform Commercial
Code. The express choice of law provisions contained in the Pooling
and Servicing Agreement and the Receivables Purchase Agreement,
insofar as such provisions relate to the attachment or creation of
security interest in the Receivables and the Collateral Security, will
be given effect by a federal or state court located in the State of
Vermont unless such a court determines that the application of New
York law would contravene a public policy of the State of Vermont;
(iii) Immediately prior to the transfer of the Receivables to
the Trustee, BCRC's interest in the Receivables, the Collateral
Security, the security interests in the Eligible Products securing the
Receivables and the proceeds of each of the foregoing were perfected
upon the filing of the UCC-1 financing statement the form of which is
attached to such opinion with the Secretary of State of the State of
Vermont and constituted a perfected first priority interest therein.
If a court concludes that the transfer of the Receivables from BCRC to
the Trustee was a sale, the interest of the Trustee in the
Receivables, the Collateral Security, the security interests in the
Eligible Products securing the Receivables and the proceeds of each of
the foregoing was perfected upon the filing of the UCC-1 financing
statement the form of which is attached to such opinion with the
Secretary of State of the State of Vermont and constitutes a first
20
<PAGE>
priority perfected interest therein. If a court concludes that such
transfer was not a sale, the Pooling and Servicing Agreement
constitutes a grant by BCRC to the Trustee of a valid security
interest in the Receivables, the Collateral Security, the security
interests in the Eligible Products securing the Receivables and the
proceeds of each of the foregoing, which security interest was
perfected upon the filing of the UCC-1 financing statement the form of
which is attached to such opinion with the Secretary of State of the
State of Vermont and constitutes a first priority perfected security
interest therein. No filing or other action, other than the filing of
the UCC-1 financing statements with the Secretary of State of the
State of Vermont referred to above, was or is necessary to perfect and
maintain the interest or the security interest of the Trustee in the
Receivables, the Collateral Security, the security interests in the
Eligible Products securing the Receivables and the proceeds of each of
the foregoing against third parties;
(iv) With respect to the income tax consequences of the
issuance of the Certificates addressed in the opinion of Morgan, Lewis
& Bockius LLP, a copy of which is attached to such opinion, Vermont
income tax law conforms to federal income tax law;
(v) Neither the execution and delivery by BCI or BCRC of any
of the Basic Documents or this Agreement, nor the consummation by BCI
or BCRC of the transactions contemplated therein or herein, will
violate any provision of any Vermont law, governmental rule or
regulation currently applicable to the respective businesses of BCI or
BCRC; and
(vi) No consent, approval, authorization or order of, or
registration, filing or declaration with, any Vermont court or
governmental agency or governmental body is required for the due
execution and delivery by BCI or BCRC of any of the Basic Documents or
this Agreement except (1) for such consents, approvals,
authorizations, orders, registrations, filings or declarations
required under state securities or Blue Sky laws, as to which such
counsel expresses no opinion and (2) such consents, approvals,
authorizations, orders, registrations, filings or declarations as have
been obtained.
(j) Morgan, Lewis & Bockius LLP, special counsel for BCI and BCRC,
shall have furnished to the Underwriters their written opinion, dated the
Closing Date, in form and substance satisfactory to the Representative,
relating to certain insolvency and bankruptcy matters.
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<PAGE>
(k) on the date hereof and also on the Closing Date, the Underwriter
shall have received a letter from Ernst & Young, dated the date of delivery
thereof, confirming that they are independent public accountants within the
meaning of the Securities Act and substantially in the form heretofore
agreed and otherwise in form and substance satisfactory to the
Representative and its counsel;
(l) the Underwriters shall have received on and as of the Closing Date
an opinion of Orrick, Herrington & Sutcliffe LLP, counsel to the
Underwriters, with respect to the validity of the Pooling and Servicing
Agreement and the Certificates, the Registration Statement, the Prospectus
and other related matters as the Representative may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(m) The Underwriters shall have received an opinion of White & Case,
counsel to the Trustee, dated the Closing Date, in form and substance
reasonably satisfactory to the Representative and counsel to the
Underwriters, to the effect that:
(i) The Trustee has been duly incorporated and is validly
existing and in good standing under the laws of the State of New York
with full power and authority to transact the business of banking and
has the power and authority to enter into and to perform all actions
required of it under the Pooling and Servicing Agreement and the
Supplement;
(ii) Each of the Pooling and Servicing Agreement and the
Supplement has been duly authorized, executed and delivered by the
Trustee and constitutes a legal, valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its terms,
except as such enforceability may be limited by (A) bankruptcy,
insolvency, liquidation, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereafter in effect relating
to the enforcement of creditors' rights in general, as such laws would
apply in the event of a bankruptcy, insolvency, liquidation,
reorganization, moratorium, conservatorship, receivership or similar
occurrence affecting the Trustee, and (B) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(iii) The Certificates have been duly, executed authenticated
and delivered by the Trustee;
(iv) The execution and delivery of the Pooling and Servicing
Agreement and the Supplement by the
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Trustee and the performance by the Trustee of their respective terms
do not conflict with or result in a violation of (A) any law or
regulation of the United States of America or the State of New York
governing the banking or trust powers of the Trustee, or (B) the
Certificate of Incorporation or By-laws of the Trustee; and
(v) No approval, authorization or other action by, or filing
with, any governmental authority of the United States of America or
the State of New York having jurisdiction over the banking or trust
powers of the Trustee is required in connection with the execution and
delivery by the Trustee of the Pooling and Servicing Agreement and the
Supplement or the performance by the Trustee thereunder.
(n) the Underwriters shall have received an officer's certificate
dated the Closing Date of the chairman of the board, the president, an
executive vice president or the treasurer of the Trustee in which such
officer shall state on behalf of the Trustee that, to the best of such
officer's knowledge after reasonable investigation, the representations and
warranties of the Trustee contained in the Pooling and Servicing Agreement
and the Supplement are true and correct in all material respects, and that
the Trustee has complied in all material respects with all agreements and
satisfied all conditions on its part to be performed or satisfied under the
Pooling and Servicing Agreement and the Supplement at or prior to the
Closing Date;
(o) the Underwriters shall have received a certificate of the Trustee,
signed by one or more duly authorized officers of the Trustee, dated the
Closing Date, as to the due acceptance of the Pooling and Servicing
Agreement and the Supplement by the Trustee and the due execution and
delivery of the Certificates by the Trustee thereunder and such other
matters as the Representative shall reasonably request;
(p) the Underwriters shall have received a letter or letters from each
counsel delivering any written opinion to any Rating Agency in connection
with the transaction described herein which is not otherwise described in
this Agreement allowing the Underwriters to rely on such opinion as if it
were addressed to the Underwriters;
(q) the Representative shall have received copies of letters from
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Ratings
-------
Service ("S&P") stating that the Class A Certificates shall have been rated
---
at least Aaa by Moody's and AAA by S&P and that the Class B Certificates
shall have been rated no lower than A3 by Moody's and no
23
<PAGE>
lower than A by S&P, and such ratings shall not have been rescinded;
(r) the Representative shall have received a copy (including by means
of telecopier) of (i) a file-stamped acknowledgment copy of the UCC-1
financing statements on Form UCC-1 filed with the Secretary of State of the
State of Vermont with respect to the transfer of the Receivables by BCI to
BCRC pursuant to the Receivables Purchase Agreement, identifying the
Receivables as collateral and naming BCI as debtor and BCRC as the secured
party, and (ii) a file-stamped acknowledgment copy of the UCC-1 financing
statements on Form UCC-1 filed with the Secretary of State of the State of
Vermont with respect to the transfer of the Receivables by BCRC to the
Trustee pursuant to the Pooling and Servicing Agreement, identifying the
Receivables as collateral and naming BCRC as debtor and the Trustee as the
secured party; and
(s) on or prior to the Closing Date BCRC shall have furnished to the
Underwriters such further certificates and documents as the Representative
shall reasonably request.
7. (a) Indemnification and Contribution. BCRC and BCI agree to jointly
--------------------------------
and severally indemnify and hold harmless each Underwriter, each affiliate of an
Underwriter which assists such Underwriter in the distribution of the
Certificates and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages, liabilities and
expenses (including, without limitation, the legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if BCRC shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities and expenses are caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Underwriter furnished to
BCRC or BCI in writing by such Underwriter through the Representative expressly
for use therein; provided, further, that neither BCI nor BCRC shall be liable to
-------- -------
any Underwriter, any affiliate of an Underwriter or any person controlling such
Underwriter under the indemnity agreement in this subsection (a) with respect to
any of such documents to the extent that any such loss, claim, damage or
liability of such Underwriter or such affiliate or such controlling person
results from the fact that such Underwriter sold the Certificates to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the Prospectus or of the Prospectus as then amended or
supplemented (excluding
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<PAGE>
documents incorporated by reference), whichever is most recent, if BCI and/or
BCRC has previously furnished copies thereof to the Representative.
(b) Each Underwriter agrees to indemnify and hold harmless BCRC, its
directors, its officers who sign the Registration Statement, BCI and each person
who controls BCRC within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from BCRC and BCI to each Underwriter in Subsection (a) above, but only with
reference to information relating to such Underwriter furnished to BCRC or BCI
in writing by such Underwriter through the Representative expressly for use in
the Registration Statement, the Prospectus, any amendment or supplement thereto,
or any preliminary prospectus.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to Subsections
(a) or (b) above, such person (the "Indemnified Person") shall promptly notify
------------------
the person against whom such indemnity may be sought (the "Indemnifying Person")
-------------------
in writing, and the Indemnifying Person, at its option or upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and to control the defense
and shall pay the fees and expenses of such counsel related to such proceeding.
In any such proceeding, any Indemnified Person shall have the right to retain
its own counsel and to participate in the defense, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed in
writing to the contrary, (ii) the Indemnifying Person has failed within a
reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred to the extent reimbursement is required after
giving consideration to the preceding sentence. Any such separate firm for the
Underwriters, each affiliate of any Underwriter which assists such Underwriter
in the distribution of the Certificates and such control persons of the
Underwriters shall be designated in writing by J.P. Morgan Securities Inc. and
any such separate firm for BCRC, its directors, its officers who sign the
Registration Statement, BCI and such control persons of BCRC shall be designated
in writing by BCRC or BCI. The Indemnifying Person
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<PAGE>
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability for which
indemnification is provided pursuant to subsection (a) or (b) of this Section 7
by reason of such settlement or judgment. No Indemnifying Person shall, without
the prior written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
(d) If the indemnification provided for in subsections (a) or (b) above is
unavailable to an Indemnified Person in respect of any losses, claims, damages,
liabilities or expenses referred to therein and to which such Indemnified Person
is entitled to indemnification in accordance with the preceding terms of this
Section 7, then each Indemnifying Person under such subsection, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by BCRC and BCI on the one hand and the
Underwriter on the other hand from the offering of the Certificates or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of BCRC and BCI on
the one hand and the Underwriter on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by BCRC and BCI on the one hand and the Underwriter on the
other shall be deemed to be in the same respective proportions as the net
proceeds from the offering (before deducting expenses) received by BCRC and the
total underwriting discounts and the commissions received by the Underwriter
bear to the aggregate public offering price of the Certificates. The relative
fault of BCRC and BCI on the one hand and the Underwriter on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by BCRC or BCI or by the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
BCRC, BCI and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
--- ----
allocation (even if BCRC and BCI were treated as one entity for such purpose) or
by any other method of allocation that does not take account of the equitable
26
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considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages, liabilities and expenses referred to in this subsection (d) shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall an Underwriter be required to
contribute any amount in excess of the amount by which the total price at which
the Certificates underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7 are several in proportion to the respective principal
amount of the Certificates set forth opposite their names in Schedule I hereto,
and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any Indemnified
Person referred to above at law or in equity.
(e) The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of each of BCRC and BCI set forth in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or by or on behalf
of BCRC or BCI, its officers or directors or any other person controlling BCRC
or BCI and (iii) acceptance of and payment for any of the Certificates.
8. Termination. Notwithstanding anything herein contained, this
-----------
Agreement may be terminated in the absolute discretion of the Representative, by
notice given to BCRC, if after the execution and delivery of this Agreement and
prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange or the National Association of Securities
Dealers, Inc., (ii) trading of any securities of or guaranteed by BCRC or BCI
shall have been suspended on any exchange or in any over-the-counter market,
(iii) a general moratorium on commercial banking activities in New York shall
have been declared by either Federal or New York State authorities, or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the reasonable
judgment of the Representative, is material and adverse and which, in the
reasonable judgment of the Representative, makes it impracticable
27
<PAGE>
or inadvisable to market the Certificates on the terms and in the manner
contemplated in the Prospectus.
9. Effectiveness of Agreement; Default of Underwriters. This Agreement
---------------------------------------------------
shall become effective upon the later of (x) execution and delivery hereof by
the parties hereto and (y) release of notification of the effectiveness of the
Registration Statement (or, if applicable, any post-effective amendment) by the
Commission.
If on the Closing Date any one or more of the Underwriters shall fail or
refuse to purchase the Certificates which it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of the Certificates
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate principal amount of the
Certificates to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the principal amount of the
Certificates set forth opposite their respective names in Schedule I bears to
the aggregate principal amount of Certificates set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as the
Representative may specify, to purchase the Certificates which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the principal amount of the Certificates
--------
that any Underwriter has agreed to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such principal
amount of the Certificates without the written consent of such Underwriter. If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Certificates which it or they have agreed to purchase hereunder on such
date, and the aggregate principal amount of Certificates with respect to which
such default occurs is more than one-tenth of the aggregate principal amount of
Certificates to be purchased on such date, and arrangements satisfactory to the
Representative, BCI and BCRC for the purchase of such Certificates are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or BCI or BCRC. In any
such case either you or BCI or BCRC shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
10. Expenses Upon Termination. If this Agreement shall be terminated by
-------------------------
the Underwriters, or any of them, because of any failure or refusal on the part
of BCRC or BCI to comply with the terms or to fulfill any of the conditions of
this Agreement, or if for any reason BCRC or BCI shall be unable to perform its
obligations under this Agreement or any condition of the
28
<PAGE>
Underwriters' obligations set forth in Section 6 cannot be fulfilled, BCRC and
BCI agree to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves severally, for all
reasonably out-of-pocket expenses (including the reasonable fees and expenses of
their counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder; provided, that this Section 10
--------
shall not apply to a termination of this Agreement pursuant to Section 8 or 9.
11. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon BCRC, BCI, the Underwriters, each affiliate of any Underwriter
which assists such Underwriter in the distribution of the Certificates, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Certificates from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
12. Action by Representative; Notices. Any action by the Underwriters
---------------------------------
hereunder may be taken by the Representative on behalf of the Underwriters, and
any such action taken by the Representative shall be binding upon the
Underwriters. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when received. Notices to
the Underwriter shall be given to the Representative c/o J.P. Morgan Securities
Inc., 60 Wall Street, New York, New York 10060-0060 (Facsimile No.: (212) 648-
5909); Attention: Syndicate Desk. Notices to BCRC shall be given to it at Post
Office Box 5544, Burlington, Vermont 05402, (Facsimile No.: (802) 654-8432);
Attention: Vice President-Finance, with a copy to Morgan, Lewis & Bockius LLP;
Attention: Christopher Hilbert. Notices to BCI shall be given to it at 1600
Mountain View Drive, Colchester, Vermont 05446, (Facsimile No.: (802) 654-8432);
Attention: Vice President-Finance, with a copy to Morgan, Lewis & Bockius LLP;
Attention: Christopher Hilbert;.
13. Counterparts; Applicable Law. THIS AGREEMENT MAY BE SIGNED IN
----------------------------
COUNTERPARTS, EACH OF WHICH SHALL BE AN ORIGINAL AND ALL OF WHICH TOGETHER SHALL
CONSTITUTE ONE AND THE SAME INSTRUMENT. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAWS PROVISIONS THEREOF.
29
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return the enclosed counterparts hereof, whereupon it will
become a binding agreement among BCRC, BCI and the Underwriter in accordance
with its terms.
Very truly yours,
BOMBARDIER CREDIT RECEIVABLES
CORPORATION
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
BOMBARDIER CAPITAL INC.
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
Accepted: January __, 1997
J.P. MORGAN SECURITIES INC.
Acting on behalf of itself
and the several Underwriters
listed in Schedule I hereto
By:___________________________
Name:
Title:
30
<PAGE>
SCHEDULE I
PRINCIPAL AMOUNT OF
SECURITIES TO BE PURCHASED
--------------------------
Underwriter
- -----------
J.P. Morgan Securities Inc............................
CS First Boston Corporation...........................
Merrill Lynch Pierce Fenner & Smith Incorporated......
Total...............====================
31
<PAGE>
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
BOMBARDIER CREDIT RECEIVABLES CORPORATION
The undersigned, a natural person, for the purpose of organizing a
corporation under the General Corporation Law of the State of Delaware, hereby
certifies that:
FIRST: The name of the corporation (hereinafter, the "Corporation")
is "Bombardier Credit Receivables Corporation."
SECOND: The address of the registered office of the Corporation in
the State of Delaware is 1200 Orange Street, City of Wilmington, County of New
Castle. The name of the registered agent of the Corporation at such address is
The Corporation Trust Company.
THIRD: The nature of business or purposes to be conducted or promoted
by the Corporation is to engage solely in the following activities:
a. To acquire, own, hold, sell, transfer, pledge or otherwise
dispose of:
(1) interests in accounts receivable generated from advances,
extensions of credit, revolving credit arrangements or evidences of
indebtedness (the "Receivables"), including, without limitation,
recreational, consumer and commercial product receivables and other
trade receivables; and
(2) loan agreements, promissory notes or other evidences of
indebtedness secured by Receivables or Participation Interests
(defined below) ("Loans"); and
(3) participation interests and pass through certificates in
pools of Receivables ("Participation Interests"), in each case
together with any related collateral and agreements with dealers (or
other obligors), originators and servicers of such Receivables.
b. To act as settlor or depositor of trusts formed under a trust
agreement, pooling and servicing agreement or other agreement ("Agreements") to
issue series (any of which series may be issued in one or more classes) of trust
certificates ("Certificates") representing undivided interests in Receivables,
Loans, Participation Interests, Subordinated Interests (defined below) and/or
Residual Interests (defined below) and/or to issue series (any of which series
may be issued in one or more classes) of bonds, notes or other evidences of
indebtedness ("Debt Obligations") collateralized by Receivables, Loans,
Participation Interests,
<PAGE>
Subordinated Interests and/or Residual Interests and to enter into any other
agreement in connection with the authorization, issuance, sale and delivery of
such Certificates or Debt Obligations.
c. To use proceeds from the Certificates as provided in the
Agreements.
d. To hold, pledge, transfer or otherwise deal with Certificates and
Debt Obligations, including Certificates or Debt Obligations representing a
subordinated interest in Receivables, Loans and/or Participation Interests
("Subordinated Interests") or a residual interest in Receivables ("Residual
Interests").
e. To loan or invest or otherwise apply proceeds from Receivables,
Loans and/or Participation Interests, funds received in respect to Certificates,
Debt Obligations, Subordinated Interests or Residual Interests and any other
income, as determined by the Corporation's Board of Directors.
f. To purchase, hold, and reissue any of the shares of its capital
stock.
g. To engage in any lawful act or activity to exercise any powers
permitted to corporations organized under the General Corporation Law of the
State of Delaware that are incidental to and necessary or convenient for the
accomplishment of the foregoing purposes.
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is one thousand (1,000) shares, all of which shall
be designated Common Stock, par value one cent ($.01) per share.
FIFTH: The name and the mailing address of the incorporator are as
follows:
Name Mailing Address
---- ---------------
Richard F. Morris c/o Lord Day & Lord, Barrett Smith
1675 Broadway
New York, NY 10019
SIXTH: The Board of Directors is expressly authorized to adopt, amend
or repeal By-Laws, subject to the reserved power of the stockholders to amend
and repeal any By-Laws adopted by the Board of Directors.
SEVENTH: Unless and except to the extent required by the By-Laws, the
election of directors of the Corporation need not be by written ballot.
-2-
<PAGE>
EIGHTH: For so long as the Certificates are outstanding, in order to
preserve and ensure its separate and distinct corporate identity, in addition to
the other provisions set forth in this Certificate of Incorporation, the
Corporation shall conduct its affairs in accordance with the following
provisions:
It shall establish and maintain an office through which its
business shall be conducted separate and apart from those of its
parent.
It shall maintain separate corporate records and books of account
from those of its parent and any affiliate thereof.
At least one director of the Corporation shall not be a director,
officer, or employee of its parent or any affiliate thereof.
Its Board of Directors shall hold appropriate meetings (or act by
unanimous consent) to authorize all appropriate corporate actions.
For purposes of this ARTICLE EIGHTH, the following terms shall
have the following meanings:
"affiliate" means any person controlling or controlled by or
under common control with the parent, but shall not include the
Corporation. For purposes of this definition, "control," when
used with respect to any specified person, means the power to
direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"parent" means, with respect to the Corporation, any other
corporation owning or controlling, directly or indirectly, fifty
percent (50%) or more of the voting stock of the Corporation.
"person" means any individual, corporation, partnership,
joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization, or
government or any agency or political subdivision thereof.
NINTH: The Corporation shall not commence any case, proceeding or
other action relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seek to have an order for relief entered with respect to it, or seek
to adjudicate it a bankrupt or insolvent, or seek reorganization, arrangement,
adjustment, winding up, liquidation, dissolution, composition or other relief
with respect to it or its debts or make a general assignment for the benefit of
creditors without the unanimous vote of the entire Board of Directors.
-3-
<PAGE>
TENTH: Meetings of stockholders may be held within or without the
State of Delaware, as the By-Laws may provide. The books of the Corporation may
be kept (subject to any provision contained in the General Corporation Law of
the State of Delaware) outside the State of Delaware at such place or places as
may be designated from time to time by the Board of Directors or in the By-Laws.
ELEVENTH: No person who is or was a director of the Corporation shall
be personally liable to the Corporation for monetary damages for breach of
fiduciary duty as a director unless, and only to the extent that, such director
is liable (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the General Corporation Law of the State of Delaware or any
amendment thereto or successor provision thereto, or (iv) for any transaction
from which the director derived an improper personal benefit. No amendment to,
repeal or adoption of any provision of this Certificate of Incorporation
inconsistent with this article shall apply to or have any effect on the
liability of any director of the Corporation for or with respect to any acts or
omissions of such director occurring prior to such amendment, repeal or adoption
of an inconsistent provision.
TWELFTH: Each person who at any time is or shall have been a director,
officer, employee or agent of the Corporation and is threatened to be or is made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director, officer, employee or agent of the Corporation or
is or was serving at the request of the Corporation as a director, officer,
employee, trustee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall be indemnified against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with any such action, suit or
proceeding to the fullest extent authorized under Section 145 of the General
Corporation Law of the State of Delaware. The foregoing right of indemnification
shall in no way be exclusive of any other rights of indemnification to which
such director, officer, employee or agent may be entitled under any By-Law,
agreement, vote of stockholders or disinterested directors, or otherwise.
THIRTEENTH: Any and all right, title, interest and claim in or to any
dividends declared by the Corporation, whether in cash, stock or otherwise,
which are unclaimed by the stockholder entitled thereto for a period of six (6)
years after the close of business on the payment date, shall be and be deemed to
be extinguished and abandoned, and such unclaimed dividends in the possession of
the Corporation, its transfer agents or other agents or depositaries, shall at
such time become the absolute property of the Corporation, free and clear of any
and all claims of any persons whatsoever.
FOURTEENTH: The Corporation reserves the right to amend, alter, change
or repeal any provision contained in this Certificate of Incorporation in the
manner now or hereafter prescribed by statute. All rights at any time conferred
upon the stockholders of the Corporation
-4-
<PAGE>
by this Certificate of Incorporation are granted subject to the foregoing
reservation; provided that no such amendment of Articles THIRD, EIGHTH, NINTH or
--------
FOURTEENTH shall be effective without the Corporation having received
confirmation from each rating agency rating any outstanding Certificates or Debt
Obligations that such amendment shall not result in the termination or lowering
of the rating of such Certificates or Debt Obligations.
THE UNDERSIGNED, for the purpose of forming a Corporation under the
laws of the State of Delaware, does hereby make, file and record this
Certificate, and certify that the facts herein stated are true, and I have
accordingly set my hand hereto this 9th day of November, 1993.
/s/ Richard F. Morris
---------------------------
Richard F. Morris
-5-
<PAGE>
CERTIFICATE OF THE AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
BOMBARDIER CREDIT RECEIVABLES CORPORATION
January 14, 1994
BOMBARDIER CREDIT RECEIVABLES CORPORATION (the "Corporation"), a
corporation organized and existing under the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY THAT:
FIRST: By the written consent of the Board of Directors of the
Corporation resolutions were duly adopted setting forth a proposed amendment of
the Corporation's Certificate of Incorporation, declaring such amendment to be
advisable and soliciting the written consent in lieu of a special meeting of the
sole stockholder of the Corporation to effect the amendment, pursuant to Section
228 of the General Corporation Law of Delaware, the resolution setting forth the
proposed amendment is as follows:
EIGHTH: For so long as the Certificates are outstanding, in order to
preserve and ensure its separate and distinct corporate identity, in
addition to the other provisions set forth in this Certificate of
Incorporation, the Corporation shall conduct its affairs in accordance with
the following provisions:
It shall establish and maintain an office through which its business
shall be conducted separate and apart from those of any affiliate. If such
office is leased from an affiliate, such lease shall be on terms no more or
less favorable to the Corporation than could be obtained elsewhere and such
office shall be conspicuously identified as the Corporation's office so it
can be easily located by outsiders.
It shall maintain full and complete corporate books, records and
financial statements separately from those of any affiliate. The
Corporation's financial statements shall comply with generally accepted
accounting principles. To the extent possible, the Corporation shall inform
any affiliate that includes the Corporation within such affiliate's
consolidated financial statements that the existence of the Corporation and
the ownership of its assets shall be disclosed in a footnote to such
financial statements.
From and after the time of the initial issuance of the Certificates
(as defined above in Article Third Section b), at least one-fourth of the
total number of directors of the Corporation, but no less than two
directors, shall be special directors.
<PAGE>
Its Board of Directors shall hold regular meetings (or act by
unanimous consent) to authorize appropriate corporate action. A quorum of
the Board of Directors must be present in person, and not by means of
conference telephone or similar communications equipment at least one
meeting each year. The Corporation shall keep complete minutes of all Board
of Director and stockholder meetings.
It shall independently make decisions with respect to its business and
daily operations without interference by or from any affiliate. The
Corporation shall not enter into any business transactions with any
affiliate except upon terms that are not more or less favorable to the
Corporation than terms and conditions available at the time to the
Corporation for comparable transactions with unaffiliated persons and upon
the approval of a majority of the Board of Directors including each
director who is a special director. The declaration of dividends by the
Corporation shall be approved by a majority of the Board of Directors,
including each director who is a special director.
It shall act solely in its own corporate name and through its own
authorized officers and agents. No affiliate shall be appointed agent of
the Corporation except as agent to invoice and service receivables
purchased by the Corporation under agreements authorized in Article Third
Section b.
It shall directly manage its own liabilities, including paying its own
payroll and operating expenses. In the event that employees of the
Corporation participate in pension, insurance and other benefit plans of an
affiliate, the Corporation shall on a current basis reimburse such
affiliate, as the case may be, for the Corporation's pro rata share of the
costs thereof.
It shall not guarantee the debts of any affiliate. The Corporation's
debts shall not be guaranteed by any affiliate. The Corporation shall not
acquire obligations or securities of, or make loans or advances to, any
affiliate.
It shall not commingle any of its money or other assets with the money
or assets of any affiliate. The Corporation shall maintain bank accounts in
its own name separate from any affiliate.
Investment guidelines and criteria shall be established by a majority
of the Board of Directors including at least one director who is a special
director. Investments shall be made by the Corporation directly or by
brokers engaged and paid by the Corporation. Investments shall be carried
by the Corporation in its own name, except to the extent necessary to
perfect the lien thereof in favor of an entity which purchase receivables
pursuant to agreements authorized in Article Third Section b.
-2-
<PAGE>
For purposes of this ARTICLE EIGHT, the following terms shall have the
following meanings:
"affiliate" means any entity other than the Corporation itself (a)
which owns beneficially, directly or indirectly, 10% or more of the
outstanding shares of the common stock of the Corporation, or which is
otherwise in control of the Corporation, (b) of which 10% or more of the
outstanding voting securities are owned beneficially, directly or
indirectly, by any entity described in clause (a) above or (c) which
otherwise controls or is otherwise controlled by any entity described in
clause (a) above. For purposes of this definition of affiliate, the term
"control," when used with respect to any specified person, means the power
to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise, and the term "controlled by" has meanings correlative to the
foregoing.
"person" means individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization, or government or any agency or
political subdivision thereof.
"special director" mean a person who is not and has not at any time
within five years preceding been an officer, director, 10 percent or more
stockholder or employee of any Affiliate of the Corporation.
SECOND: The sole stockholder of the Corporation consented in writing
to such amendment, in satisfaction of the requirements of Section 228 of the
General Corporation Law of Delaware.
THIRD: Such amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
-3-
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by William P. Brady, its Vice President and Treasurer,
and attested by Andrew Baranowsky, its Assistant Secretary, this 14th day of
January, 1994.
BOMBARDIER CREDIT RECEIVABLES
CORPORATION
By /s/ William P. Brady
-----------------------------
William P. Brady
Vice President and Treasurer
ATTEST:
By /s/ Andrew Baranowsky
-------------------------
Andrew Baranowsky
Assistant Secretary
-4-
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION OF
BOMBARDIER CREDIT RECEIVABLES CORPORATION
November 24, 1993
BOMBARDIER CREDIT RECEIVABLES CORPORATION (the "Corporation"), a
corporation organized and existing under the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY THAT:
FIRST: Article Eighth of the Corporation's Certificate of
Incorporation is hereby amended to read as follows:
EIGHTH: For so long as the Certificates are outstanding, in order
to preserve and ensure its separate and distinct corporate identity,
in addition to the other provisions set forth in this Certificate of
Incorporation, the Corporation shall conduct its affairs in accordance
with the following provisions:
It shall establish and maintain an office through which its
business shall be conducted separate and apart from those of its
parent.
It shall maintain separate corporate records and books of account
from those of its parent and any affiliate thereof.
From and after the time of the initial issuance of the
Certificates (as defined above in Article Third Section b), at least
one director of the Corporation shall not be a director, officer, or
employee of its parent or any affiliate thereof.
Its Board of Directors shall hold appropriate meetings (or act by
unanimous consent) to authorize all appropriate corporate actions.
For purposes of this ARTICLE EIGHTH, the following terms shall
have the following meanings:
"affiliate" means any person controlling or controlled by or
under common control with the parent, but shall not include the
Corporation. For purposes of this definition, "control," when
used with respect to any specified person, means the power to
direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
<PAGE>
"parent" means, with respect to the Corporation, any other
corporation owning or controlling, directly or indirectly, fifty
percent (50%) or more of the voting stock of the Corporation.
"person" means any individual, corporation, partnership,
joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization, or
government or any agency or political subdivision thereof.
SECOND: The Corporation has not received any payment for any of its
stock.
THIRD: This amendment was duly adopted, by written consent of the
sole incorporator, in accordance with the provisions of Section 241 of the
General Corporation Law of the State of Delaware.
The undersigned sole incorporator of the Corporation does hereby make,
file and record this Certificate of Amendment with respect to the Corporation's
Certificate of Incorporation (the initial directors not having been yet elected
or named), and certifies that the facts stated herein are true and I have
accordingly set my hand hereto this 24th day of November, 1993.
/s/ Richard F. Morris
---------------------------------
Richard F. Morris
Sole Incorporator of Bombardier
Credit Receivables Corporation
-2-
<PAGE>
EXHIBIT 3.2
BOMBARDIER CREDIT RECEIVABLES
CORPORATION
BY-LAWS
ARTICLE I - STOCKHOLDERS
1. Annual and Special Meetings. The annual meeting of stockholders
---------------------------
for the election of directors and for the transaction of any other business
which may properly come before the meeting shall be held each year on a business
day and at a time designated by the Board of Directors. Special meetings of
stockholders may be called by resolution of the Board of Directors or by the
Chairman of the Board or the President and shall be called at any time by the
Chairman of the Board or the President or the Secretary at the request in
writing of stockholders owning a majority in amount of the entire capital stock
of the Corporation issued and outstanding and who would be entitled to vote at
such meeting. Such request shall state the purpose or purposes of the proposed
meeting.
2. Place of Meetings. The annual and special meetings of stockholders
-----------------
shall be held at the principal place of business of the Corporation, or at such
other place as shall be determined from time to time by the Board of Directors,
within or without the State of Delaware, except as otherwise specifically
required by statute. The place at which any meeting is to be held shall be
specified in the notice calling such meeting.
3. Notice of Meetings. Except as otherwise expressly provided by
------------------
statute, notice of the place, date, hour and purpose or purposes of the annual
and any special meeting of stockholders shall be in writing and signed by the
Chairman of the Board or the President or any Vice President, or the Secretary
or other person lawfully calling said meeting; a copy thereof shall be served,
either personally or by mail, at least seven days before the meeting, upon each
stockholder of record entitled to vote at such meeting and to any stockholder
who, by reason of any action proposed at such meeting, would be entitled to have
his stock appraised if such action were taken. If mailed, such notice shall be
directed to a stockholder at his address as it appears on the records of the
Corporation. Notice by mail shall be deemed to be given when deposited, with
postage thereon prepaid, in the United States mail. If a meeting is adjourned to
another time, not more than thirty days thereafter, and/or to another place, and
if an announcement of the adjourned time and/or place is made at the meeting, it
shall not be necessary to give notice of the adjourned meeting unless, after
adjournment, a new record date is fixed for the adjourned meeting.
4. Stockholder List. The officer who has charge of the stock ledger
----------------
of the Corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall
<PAGE>
be open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten days prior
to the meeting, either at a place within the city or other municipality or
community where the meeting is to be held, which place shall be specified in the
notice of the meeting, or if not so specified, at the place where the meeting is
to be held. The list shall also be produced and kept at the time and place
where the meeting is to be held and during the whole time of the meeting, and
may be inspected by any stockholder who is present.
5. Quorum; Adjournment. Except as otherwise provided by law, a quorum
-------------------
for the transaction of business at any meeting of stockholders shall consist of
the holders of record of a majority of the issued and outstanding shares of
capital stock of the Corporation entitled to vote at the meeting, in person or
by proxy. In the absence of a quorum at a meeting or any adjournment thereof,
the holders of record of a majority of the shares present in person or by proxy
and entitled to vote at such meeting may adjourn such meeting from time to time,
without notice other than announcement at the meeting, until the requisite
number of shares shall be present or represented. At any such adjourned meeting
at which a quorum is present, any business may be transacted which might have
been transacted at the meeting as originally called.
6. Conduct of Meetings. Meetings of stockholders shall be presided
-------------------
over by the Chairman of the Board, the President, a Vice-President, or, if none
of the foregoing is present, by a chairman chosen by the stockholders entitled
to vote who are present in person or by proxy at the meeting. The Secretary of
the Corporation shall act as secretary of every meeting, but if the Secretary is
not present, the presiding officer of the meeting shall appoint any person
present to act as secretary of the meeting.
7. Voting; Proxy Representation. Unless otherwise provided in the
----------------------------
certificate of incorporation or other certificate filed pursuant to law, every
holder of record of Common Stock shall be entitled at every meeting of the
Corporation to one vote, in person or by proxy, for each share of Common Stock
outstanding in his name on the books of the Corporation. Every proxy must be
executed in writing by the stockholder or by his duly authorized attorney. No
proxy shall be valid after the expiration of eleven months from the date if its
execution unless the person executing it shall have specified therein its
duration for a longer period. Unless otherwise provided by law or by the
certificate of incorporation or other certificate filed pursuant to law or these
by-laws, all questions shall be decided by a majority of a quorum.
8. Stockholder Action Without Meetings. Whenever the vote of
-----------------------------------
stockholders at a meeting thereof is required or permitted to be taken for or in
connection with any corporate action, the meeting, notice thereof and vote of
stockholders may be dispensed with if holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted shall consent in writing to such corporate action being taken.
Prompt notice of
2
<PAGE>
the taking of the corporate action without a meeting by less than unanimous
written consent shall be given to those stockholders who have not consented in
writing.
ARTICLE II - FIXING DATE FOR DETERMINATION
OF STOCKHOLDERS OF RECORD
In order that the Corporation may determine the stockholders entitled
to notice of or to vote at any meeting of Stockholders or any adjournment
thereof, or to express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which shall
not be more than sixty nor less than ten days before the date of such meeting,
nor more than sixty days prior to any other action.
ARTICLE III - BOARD OF DIRECTORS
1. Number. The business and affairs of the Corporation shall be
------
managed by and under the discretion of its Board of Directors. The number of
directors constituting the entire Board shall be five (5) otherwise determined
by the Board of Directors.
2. Election. The members of the Board of Directors shall be elected
--------
at the annual meeting of stockholders by a plurality of the votes cast in such
election except for the initial Board of Directors, which shall be elected by
the Incorporator and which shall hold office until the first annual meeting of
stockholders or until their successors are elected and qualified or until their
earlier resignation or removal. Subject to the provisions of Sections 12 and 13
of this ARTICLE III, each director so elected shall hold office for one year and
until his successor is elected and qualified. A director need not be a
stockholder, a citizen of the United States or a resident of Delaware. If the
members of the Board of Directors are not elected at the annual meeting of
stockholders on the day designated in these by-laws, the incumbent directors
shall continue to hold office and discharge their respective duties until
successors have been elected.
3. Vacancies. All vacancies on the Board of Directors, whether caused
---------
by resignation, death, disqualification, removal, an increase in the authorized
number of directors between annual meetings of stockholders or otherwise, may be
filled by a majority of the directors in office after the vacancy has occurred,
or, if not so elected prior to the next annual meeting of the stockholders, by
vote of the stockholders at any special meeting.
4. Annual Meeting. The annual meeting of the Board of Directors for
--------------
the election of officers and the transaction of such other business as may
properly come before the meeting, may be held each year without notice
immediately after the annual meeting of stockholders at the same place as such
meeting of stockholders, or may be called by any newly-elected director on one
day's notice to each director, either personally or by telegram, telecopier,
letter, radio or cable.
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5. Regular Meetings. Regular meetings of the Board of Directors may
----------------
be held without notice at such time and place, within or without the United
States, as shall from time to time be determined by resolution of the Board. In
case of change in the time, place or date of any such regular meeting, notice of
such change shall be mailed to each director at least three days prior to the
meeting.
6. Special Meetings. Special meetings of the Board of Directors may
----------------
be called at any time by the Chairman of the Board or the President or by a
majority of directors then in office. Notices of special meetings stating the
time, place and purpose of the meeting shall be mailed to each director at least
three days before such meeting. Special meetings may be held within or without
the United States.
7. Board Action Without a Meeting. Any action required or permitted
------------------------------
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting (and any notice of such meeting may be dispensed
with), if all members of the Board or of such committee, as the case may be,
consent thereto in writing and such consent is filed with the minutes of
proceedings of the Board or committee.
8. Quorum. At all meetings of the Board, the presence of a majority
------
of the directors then in office shall be necessary to constitute a quorum and
shall be sufficient for the transaction of business and any act of a majority of
the directors who are present at a meeting at which there is a quorum shall be
the act of the Board of Directors, except as may be otherwise specifically
provided by statute or by the certificate of incorporation or other certificate
filed pursuant to law or by these by-laws. Any business may be transacted by the
Board at a meeting at which every member of the Board is present, though held
without notice.
9. Committees. The Board of Directors may by resolution or
----------
resolutions passed by a majority of the whole Board designate one or more
committees, each committee to consist of two or more of the directors, which, to
the extent provided in said resolution or resolutions, shall have and may
exercise powers of the Board of Directors in the management of the business and
affairs of the Corporation and may have power to authorize the seal of the
Corporation to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors. All committees so appointed
shall keep regular minutes of the business transaction at their meetings.
10. Organization. At all meetings of the Board of Directors, the
------------
Chairman of the Board, or in his absence, the President, or in his absence any
Vice-President who is a member of the Board of Directors, or in their absence, a
chairman chosen by the directors shall preside. The Secretary of the Corporation
shall act as secretary at all meetings of the Board of Directors when present,
and, in his absence, the presiding officer may appoint any person to act as
secretary.
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11. Salaries. The Directors shall receive such compensation for their
--------
services as may be prescribed by the Board of Directors from time to time and
shall be reimbursed by the Corporation for ordinary and reasonable expenses
incurred in the performance of their duties.
12. Resignation. Any director may resign at any time upon written
-----------
notice to the Corporation. Such resignation will take effect upon receipt
thereof by the Corporation unless otherwise stated in the resignation.
13. Removal. Any director may be removed, either with or without
-------
cause, at any special meeting of stockholders by vote of a majority of the
shares of stock outstanding and entitled to vote at an election of directors,
provided that notice of such vote shall have been given in the notice calling
such meeting. If the notice calling such meeting shall so provide, the vacancy
caused by such removal shall be filled at such meeting by the vote of a majority
of the shares of stock outstanding, present and entitled to vote for the
election of directors.
14. Telephone Meetings. Members of the Board of Directors, or any
------------------
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors, or committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation shall constitute
presence in person at such a meeting.
ARTICLE IV - OFFICERS
1. Election. The officers of the Corporation shall be a President and
--------
a Secretary. The Board of Directors may also elect or appoint a Chairman of the
Board, a Treasurer, one or more Vice-Presidents, one or more Assistant
Treasurers, one or more Assistant Secretaries, and such other officers, agents
and employees as, in the opinion of the Board, the business of the Corporation
requires. Each officer, agent or employee elected or appointed by the Board of
Directors shall have such powers and perform such duties as may be prescribed by
these by-laws and as may be assigned from time to time by the Board of
Directors. Unless otherwise provided in the resolution of election, each officer
shall hold office until the next annual election of directors and until his
successor shall have been qualified or until his earlier resignation or removal.
Any number of offices may be held by the same person.
2. Chairman of the Board of Directors. The Chairman of the Board, if
----------------------------------
any, shall have the responsibility of guiding the Board of Directors in
effectively discharging its responsibilities, including, but not limited to,
providing for the execution of the Corporation's objectives; safe-guarding and
furthering shareholders' interests; and appraising the adequacy of overall
results as reported by the President. The Chairman of the Board of Directors
shall preside at all meetings of the Board of Directors and of the stockholders
at which he is present.
5
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3. President. The President shall be the Chief Executive Officer and
---------
the Chief Operating Officer of the Corporation. The President shall be
responsible for the management of the business affairs and operations of the
Corporation. The President shall also perform all duties incident to the office
of President and such other duties as may from time to time be assigned to him
by the Board of Directors.
4. Vice Presidents. The Vice Presidents, if any, in the order
---------------
designated by the Board of Directors, shall, in the absence or disability of the
President, perform the duties and exercise the powers of the President. A Vice
President may execute and deliver contracts and other obligations and
instruments pertaining to the regular course of his duties, and shall perform
such other duties and shall have such other authority as from time to time may
be assigned to him by the Board of Directors or the President.
5. The Secretary. The Secretary shall record all the proceedings of
-------------
all sessions of the Board of Directors and all meetings of stockholders in a
book to be kept for that purpose and shall perform like duties for any committee
of the Board of Directors when required, of which he shall be the custodian. He
shall cause to be given notice of all meetings of stockholders and directors. He
shall keep in safe custody the seal of the Corporation and when authorized by
the Board of Directors affix it to any instrument. He shall have charge of the
stock certificate books of the Corporation and such other books and papers as
the Board of Directors may direct. He shall in general perform all the duties
incident to the office of the Secretary and such other duties as may be assigned
to him by the Board of Directors or the President.
6. The Treasurer. Subject to the direction of the Board of Directors,
-------------
the Treasurer, if any, shall have the custody of all funds and securities of the
Corporation, except as otherwise provided by the Board of Directors or any
committee thereof, and shall keep full and accurate accounts of receipts and
disbursements. He shall deposit all moneys and other valuable effects in the
name and to the credit of the Corporation in such depositaries as may be
designated by the Board of Directors. He shall disburse the funds of the
Corporation as may be ordered by the Board of Directors, taking proper vouchers
for such disbursements, and shall render to the President and Directors at the
regular meetings of the Board of Directors or whenever they may require it, an
account of all his transactions as Treasurer and of the financial condition of
the Corporation. The Treasurer shall in general perform all duties incident to
the office of the Treasurer and such other duties as may be assigned to him by
the Board of Directors or the President.
7. Vacancies. Vacancies in any office occurring by death,
---------
resignation, disqualification, removal or otherwise, may be filled by the Board
of Directors at any regular or special meeting.
8. Resignation. Any officer may resign his Office at any time, such
-----------
resignation to take effect upon receipt thereof by the Corporation, unless
otherwise stated in the resignation.
6
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9. Removal. Any officer may be removed at any time, with or without
-------
cause, by the affirmative vote of a majority of the entire Board of Directors.
The power to remove agents and employees, other than officers or agents elected
or appointed by the Board of Directors, may be delegated as the Board of
Directors shall determine.
10. Salaries. Salaries of all officers and agents of the Corporation
--------
shall be fixed from time to time by or in the manner determined by the Board of
Directors.
11. Duties of Officers may be Delegated. In case of the absence of any
-----------------------------------
officer of the Corporation, or for any other reason that the Board of Directors
may deem sufficient, the Board of Directors may delegate the powers or duties of
such officer to any other officer or to any director for the time being.
12. Powers with Respect to Ownership of Stock. Unless otherwise
-----------------------------------------
ordered by the Board of Directors, each of the President or any Vice President
shall have full power and authority on behalf of the Corporation to attend and
to vote at any meeting of stockholders of any corporation in which the
Corporation may hold stock, and may exercise on behalf of the Corporation any
and all of the rights and powers incident to the ownership of such stock at any
such meeting, and shall have power and authority to execute and deliver proxies
and consents on behalf of the Corporation in connection with the exercise by the
Corporation of the rights and powers incident to the ownership of such stock.
The Board of Directors, from time to time, may confer like powers upon any other
person or persons.
ARTICLE V - STOCK
1. Issuance of Stock Certificates. Stock of the Corporation shall be
------------------------------
represented by certificates in such form as shall be approved by the Board of
Directors. Each such certificate shall be signed by the Chairman of the Board of
Directors or the President or a Vice President and a Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer and sealed with the seal of
the Corporation. Such seal may be a facsimile, engraved or printed. In case any
officer who has signed such certificate shall have ceased to be such officer
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer at the date of its issue.
2. Lost Stock Certificates. The officers of the Corporation may issue
-----------------------
a new certificate of stock in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, if the owner of such
certificate or his legal representative shall execute and deliver to the
Corporation and/or its transfer agent and register a satisfactory bond
sufficient to indemnify the Corporation against any claim that may be made
against it on account of the lost, stolen or destroyed certificate and shall
execute and deliver to the Corporation an affidavit setting forth the facts
regarding such loss, theft or destruction. The
7
<PAGE>
foregoing requirements may be waived in whole or in part by the President or the
Board of Directors when, in his or its judgment, it is proper to do so.
3. Transfer of Stock. Upon compliance with provisions restricting the
-----------------
transfer or registration of transfer of shares of stock, if any, transfers or
registrations of transfers of shares of stock of the Corporation shall be made
only on the stock transfer books of the Corporation by the person named in the
certificate or by his attorney lawfully constituted and, except in the case of
lost, stolen or destoryed certificates, only upon surrender of the certificate
or certificates therefor properly endorsed and the payment of all taxes due
thereon.
4. Regulations. The Board of Directors shall have power to make all
-----------
such regulations as it shall deem expedient concerning the issuance, transfer,
conversion and registration of stock certificates, not inconsistent with
statutory requirements or the certificates of incorporation or other certificate
filed pursuant to law or these by-laws.
ARTICLE VI - SEAL
The seal of the Corporation shall be circular in form and contain the
name of the Corporation, and the words "Corporate Seal, 1993, Delaware." The
seal shall be in the charge of the Secretary to be used as directed by the Board
of Directors.
ARTICLE VII - CHECKS, CONTRACTS, ETC.
All checks, notes, drafts, acceptances, securities, evidences of
indebtedness and contracts of the Corporation shall be signed or endorsed by or
on behalf of the Corporation by such officers, directors, employees or agents of
the Corporation as the Board of Directors from time to time designate. Such
authorization may be general or specific.
ARTICLE VIII - BOOKS OF ACCOUNT AND STOCK BOOK
The Corporation shall keep books of account of all the business and
transactions of the Corporation. A book to be known as the stock register,
containing the names, alphabetically arranged, of all persons who are
stockholders of the Corporation, showing their places of residence, the number
of shares of stock held by them respectively, and the times when they
respectively became the owners thereof, and the amount paid thereon, shall be
kept by the Corporation or its transfer agent.
ARTICLE IX - FISCAL YEAR
The fiscal year of the Corporation shall end on the 31st day of
January, or otherwise as the Board of Directors may determine.
8
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ARTICLE X - OFFICERS
The Corporation may have an office or offices in such place or places
as may be determined from time to time by the Board of Directors.
ARTICLE XI - NOTICES AND WAIVERS
1. Kind of Notice Required. Whenever under the provisions of these
-----------------------
by-laws notice is required to be given to any director, officer or stockholder,
it shall not be construed to mean personal notice, but unless otherwise
expressly stated in these by-laws such notice may be given in writing by
depositing the same in a post-office or letter box in a postpaid sealed wrapper,
addressed to such director, officer or stockholder, at such address as appears
on the books of the Corporation, and such notice shall be deemed to have been
given at the time when the same was mailed.
2. Waiver of Notice. Whenever notice is required to be given under
----------------
any provision of the certificate of incorporation or these by-laws, a written
waiver thereof, signed by the person entitled to notice, whether before or after
the time stated therein shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders,
directors, or members of a committee of directors need be specified in any
written waiver of notice.
ARTICLE XII - INDEMNIFICATION
1. Every person who is or was a director, officer, employee or agent
of the Corporation, or of any other corporation, partnership, joint venture,
trust or other enterprise (hereinafter collectively referred to as an "other
company") which he serves or served as such at the request of the Corporation,
shall, subject to the provisions of Section 2 hereof and except as prohibited by
law, be indemnified by the Corporation against any and all liabilities and
expenses actually and reasonably incurred by him in connection with any
threatened, pending or completed action, suit or proceeding (whether brought by
or in the right of the Corporation or such other company or otherwise), whether
civil, criminal, administrative or investigative, or in connection with an
appeal relating thereto, in which he was or is a party or is threatened to be
made a party by reason of his being or having been a director, officer, employee
or agent of the Corporation or of such other company, or by reason of any action
taken or not taken in his capacity as such director, officer, employee or agent,
whether or not he continues to be such director, officer, employee or agent at
the time such liabilities or expenses are incurred, provided such person acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation or such other company, as case may be,
and, in addition, in
9
<PAGE>
any criminal action or proceeding, had no reasonable cause to believe that his
conduct was unlawful; provided that no indemnification shall be made in respect
of any claim, issue or matter in any action, suit or proceeding by or in the
right of the Corporation or such other company, as the case may be, as to which
such person shall have been adjudged to be liable to the Corporation or such
other company, as the case may be, unless and only to the extent that the Court
of Chancery of the State of Delaware or the court in which such action or suit
was brought shall determine upon application that, despite his adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses as the Court of
Chancery or such other court shall deem proper. As used in this Article, the
term "expenses" shall include, but shall not be limited to, counsel fees and
disbursements and the term "liabilities" shall include, but shall not be limited
to, judgments, fines, penalties and amounts paid in settlement. The termination
of any action, suit or proceeding, civil or criminal, by judgment, order,
settlement (whether with or without court approval) or conviction or upon a plea
of guilty or of nolo contendre, or its equivalent, shall not, of itself, create
a presumption that a director, officer, employee or agent did not meet the
standards of conduct set forth in this Section.
2. Every person referred to in Section 1 hereof who has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Section 1 hereof, or in defense of any claim, issue or
matter therein, shall be deemed to have met the standards of conduct set forth
therein and shall be entitled to indemnification as or right. Except as provided
in the preceding sentence, any indemnification under Section 1 hereof (unless
ordered by a court) shall be made at the discretion of the Corporation, but only
if the determination that the standards of conduct set forth therein have been
met by the person seeking indemnification hereunder is made by either (i) the
Board of Directors, acting by a majority vote of a quorum consisting of
directors who (a) are not parties to such action, suit or proceeding or (b) have
been wholly successful in such respect of such action, suit or proceeding or
(ii) independent legal counsel in a written opinion.
3. Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation, in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of the person to be indemnified to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Corporation.
4. The rights of indemnification and advancement of expenses provided
in this Article shall be in addition to any rights to which any person referred
to in Section 1 hereof may otherwise be entitled by law or under any by-law,
agreement, vote of stockholders or disinterested directors, or otherwise, and
such rights shall inure to the benefit of his heirs, executors and
administrators.
5. To the extent permitted by law, the foregoing provisions of this
Article shall be applicable to every person (and the heirs, executors and
administrators of such person)
10
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who is or was a director, officer, employee or agent of any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger involving the Corporation, as well as the resulting or
surviving corporation therefrom, and in any such case the references to "the
Corporation" in the foregoing provisions of this Article shall include, in
addition to the Corporation, any such constituent corporation or any such
resulting or surviving corporation, as the case may be.
6. The Corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of any other company, against any liability
or expense asserted against or incurred by him in any such capacity, or arising
out of his status as such, whether or not the Corporation would have the power
to indemnify him against such liability or expense under the provisions of this
Article or otherwise.
ARTICLE XIII - AMENDMENT
The by-laws, regardless of whether made by stockholders or by the
Board of Directors, may be amended, added to or repealed, or new by-laws may be
made, at any meeting of the stockholders, or (except such by-laws or such
amendments as shall have been adopted by the stockholders and at the time of
such adoption expressly designated as revocable only by the stockholders) at a
meeting of the Board of Directors, provided that notice of the proposed change
(unless waived as herein provided by a waiver or presence at the meeting) be
given in notice of the meeting.
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Exhibit 4.1
BOMBARDIER CREDIT RECEIVABLES CORPORATION
Depositor
BOMBARDIER CAPITAL INC.
Servicer
and
BANKERS TRUST COMPANY
Trustee
Bombardier Receivables Master Trust I
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 1994
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Definitions............................................. 1
SECTION 1.02. Other Definitional Provisions........................... 24
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables............................... 25
SECTION 2.02. Acceptance by Trustee................................... 27
SECTION 2.03. Representations and Warranties of the Depositor Relating
to the Depositor and this Agreement................... 27
SECTION 2.04. Representations and Warranties of the Depositor Relating
to the Receivables 31
SECTION 2.05. Addition of Accounts.................................... 34
SECTION 2.06. Covenants of the Depositor.............................. 36
SECTION 2.07. Removal of Accounts..................................... 40
SECTION 2.08. Removal of Ineligible Accounts.......................... 42
SECTION 2.09. Sale of Ineligible Receivables.......................... 43
SECTION 2.10. Discount Option......................................... 43
ARTICLE III
Administration and Servicing
of Receivables
SECTION 3.01. Acceptance of Appointment and Other Matters Relating
to the Servicer....................................... 44
SECTION 3.02. Servicing Compensation.................................. 46
SECTION 3.03. Representations, Warranties and Covenants of the
Servicer.............................................. 47
SECTION 3.04. Reports and Records for the Trustee..................... 50
SECTION 3.05. Annual Servicer's Certificate........................... 50
SECTION 3.06. Annual Independent Public Accountants' Servicing
Report................................................ 50
SECTION 3.07. Tax Treatment........................................... 51
SECTION 3.08. Notices to BCI.......................................... 51
SECTION 3.09. Adjustments............................................. 51
i
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ARTICLE IV
Rights of Certificateholders and
Allocation and Application of Collections
SECTION 4.01. Rights of Certificateholders............................ 52
SECTION 4.02. Establishment of the Collection Account................. 53
SECTION 4.03. Allocations and Applications of Collections and Other
Funds................................................. 54
SECTION 4.04. Unallocated Principal Collections....................... 55
ARTICLE V
Distributions and Reports to
Certificateholders
SECTION 5.01. Distributions and Reports to Certificateholders......... 56
ARTICLE VI
The Certificates
SECTION 6.01. The Certificates........................................ 56
SECTION 6.02. Authentication of Certificates.......................... 57
SECTION 6.03. New Issuances........................................... 57
SECTION 6.04. Registration of Transfer and Exchange of Certificates... 60
SECTION 6.05. Mutilated, Destroyed, Lost or Stolen Certificates....... 63
SECTION 6.06. Persons Deemed Owners................................... 63
SECTION 6.07. Access to List of Registered Certificateholders' Names
and Addresses......................................... 64
SECTION 6.08. Book-Entry Certificates................................. 64
SECTION 6.09. Notices to Depository................................... 65
SECTION 6.10. Definitive Certificates................................. 65
SECTION 6.11. Global Certificate; Exchange Date....................... 66
SECTION 6.12. Meetings of Investor Certificateholders................. 67
ARTICLE VII
Other Matters Relating
to the Depositor
SECTION 7.01. Liability of the Depositor.............................. 70
SECTION 7.02. Limitation on Liability of the Depositor................ 70
SECTION 7.03. Depositor Indemnification of the Trust and the Trustee.. 70
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ARTICLE VIII
Other Matters Relating
to the Servicer
SECTION 8.01. Liability of the Servicer............................... 71
SECTION 8.02. Merger or Consolidation of, or Assumption of, the
Obligations of the Servicer........................... 71
SECTION 8.03. Limitation on Liability of the Servicer and Others...... 72
SECTION 8.04. Servicer Indemnification of the Trust and the Trustee... 72
SECTION 8.05. The Servicer Not to Resign.............................. 73
SECTION 8.06. Access to Certain Documentation and Information
Regarding the Receivables............................. 73
SECTION 8.07. Delegation of Duties.................................... 74
SECTION 8.08. Examination of Records.................................. 74
ARTICLE IX
Early Amortization Events
SECTION 9.01. Early Amortization Events............................... 74
SECTION 9.02. Additional Rights Upon the Occurrence of Certain Events. 77
ARTICLE X
Servicer Defaults
SECTION 10.01. Servicer Defaults...................................... 78
SECTION 10.02. Trustee to Act; Appointment of Successor............... 80
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<PAGE>
ARTICLE XI
The Trustee
SECTION 11.01. Duties of Trustee...................................... 82
SECTION 11.02. Certain Matters Affecting the Trustee.................. 84
SECTION 11.03. Trustee Not Liable for Recitals in Certificates;
No Responsibility for Filings, Etc................... 86
SECTION 11.04. Trustee May Own Certificates........................... 86
SECTION 11.05. The Servicer to Pay Trustee's Fees and Expenses........ 86
SECTION 11.06. Eligibility Requirements for Trustee................... 87
SECTION 11.07. Resignation or Removal of Trustee...................... 87
SECTION 11.08. Successor Trustee...................................... 88
SECTION 11.09. Merger or Consolidation of Trustee..................... 89
SECTION 11.10. Appointment of Co-Trustee or Separate Trustee.......... 89
SECTION 11.11. Tax Returns............................................ 90
SECTION 11.12. Trustee May Enforce Claims Without Possession of
Certificates......................................... 91
SECTION 11.13. Suits for Enforcement.................................. 91
SECTION 11.14. Representations and Warranties of Trustee.............. 91
SECTION 11.15. Maintenance of Office or Agency........................ 92
ARTICLE XII
Termination
SECTION 12.01. Termination of Trust................................... 92
SECTION 12.02. Final Distribution..................................... 92
SECTION 12.03. Depositor's Termination Rights......................... 94
iv
<PAGE>
ARTICLE XIII
Miscellaneous Provisions
SECTION 13.01. Amendment.............................................. 94
SECTION 13.02. Protection of Right, Title and Interest to Trust....... 96
SECTION 13.03. Limitation on Rights of Certificateholders............. 97
SECTION 13.04. No Petition............................................ 98
SECTION 13.05. GOVERNING LAW.......................................... 98
SECTION 13.06. Notices................................................ 99
SECTION 13.07. Severability of Provisions............................. 99
SECTION 13.08. Assignment............................................. 99
SECTION 13.09. Certificates Nonassessable and Fully Paid.............. 100
SECTION 13.10. Further Assurances..................................... 100
SECTION 13.11. No Waiver; Cumulative Remedies......................... 100
SECTION 13.12. Counterparts........................................... 100
SECTION 13.13. Third-Party Beneficiaries.............................. 100
SECTION 13.14. Actions by Certificateholders.......................... 100
SECTION 13.15. Rule 144A Information.................................. 101
SECTION 13.16. Merger and Integration................................. 101
SECTION 13.17. Headings............................................... 101
v
<PAGE>
EXHIBITS
--------
Exhibit A Form of BCRC Certificate
Exhibit B Form of Assignment of Receivables in Additional Accounts
Exhibit C Form of Annual Servicer's Certificate
Exhibit D Forms of Legends
Exhibit E Form of Letter of Representations
Exhibit F Forms of Certificates for European Transfer
Exhibit G-1 Form of Opinion of Counsel in Connection with Amendments and
Supplements
Exhibit G-2 Form of Opinion of Counsel in Respect of Additional Accounts
Exhibit H-1 Form of Reassignment of Receivables in Removed Accounts
Pursuant to Section 2.07
Exhibit H-2 Form of Reassignment of Receivables in Ineligible Accounts
Pursuant to Section 2.08
Exhibit I Form of Receivables Purchase Agreement
Exhibit J Form of Report of Independent Accountants on Compliance
SCHEDULES
---------
Schedule 1 List of Accounts
Schedule 2 Collection Account Information
vi
<PAGE>
POOLING AND SERVICING AGREEMENT dated as of January 1, 1994, among
BOMBARDIER CREDIT RECEIVABLES CORPORATION, a Delaware corporation, as Depositor,
BOMBARDIER CAPITAL INC., a Massachusetts corporation, as Servicer, and BANKERS
TRUST COMPANY, a New York banking corporation, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and for the benefit of
the Certificateholders and the other Beneficiaries to the extent provided
herein:
ARTICLE I
Definitions
-----------
SECTION 1.01. Definitions. Whenever used in this Agreement, the
-----------
following words and phrases shall have the following meanings:
"Account" shall mean each Initial Account and, from and after the
-------
related Addition Date, each Additional Account. The term "Account" shall
not apply to any Removed Accounts reassigned or assigned to the Depositor
or the Servicer in accordance with the terms of this Agreement.
"Addition Date" shall mean, with respect to Additional Accounts, the
-------------
date from and after which such Additional Accounts are to be included as
Accounts pursuant to Section 2.05(a) or (b) hereof.
"Addition Notice" shall mean a written notice provided by the
---------------
Depositor (or the Servicer on its behalf) to the Trustee specifying the
Additional Cut-Off Date and Addition Date for Additional Accounts.
"Additional Accounts" shall mean (i) each individual financing account
-------------------
established by BCI with an Obligor pursuant to an Inventory Security
Agreement in the ordinary course of business and (ii) each credit account
established in the ordinary course of business by an Affiliate of BCI with
a customer or distributor of products manufactured or distributed by such
Affiliate, which credit account has been purchased by BCI, and which
account in each case is designated pursuant to Section 2.05(a) or (b)
hereof to be included as an Account and is identified in the computer file
or microfiche or written list delivered to the Trustee by the Depositor
pursuant to Section 2.01 or Section 2.05(d) hereof, as applicable.
"Additional Cut-Off Date" shall mean, with respect to Additional
-----------------------
Accounts, the day specified in the Addition Notice delivered with respect
to such Additional Accounts pursuant to Section 2.05(c) hereof.
<PAGE>
"Adjusted Invested Amount" shall mean, with respect to any Series and
------------------------
for any date, an amount equal to the adjusted invested amount specified in
the related Supplement. The Adjusted Invested Amount for any Series may be
increased or decreased from time to time as specified in the related
Supplement.
"Adjustment Payment" shall have the meaning specified in Section 3.09
------------------
hereof.
"Affiliate" shall mean, with respect to any specified Person, any
---------
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" shall mean, with respect to any Series, the Person, if any, so
-----
designated in the related Supplement.
"Agreement" shall mean this Pooling and Servicing Agreement, as the
---------
same may from time to time be amended, modified or otherwise supplemented,
including, with respect to any Series or Class, the related Supplement.
"Allocable Miscellaneous Payments" shall mean, with respect to any
--------------------------------
Series and for any Collection Period, the product of the amount of
Miscellaneous Payments for such Collection Period and a fraction, the
numerator of which is the Invested Amount for such Series immediately prior
to the following Distribution Date and the denominator of which is the Pool
Invested Amount as of such time.
"Applicants" shall have the meaning specified in Section 6.07 hereof.
----------
"Appointment Date" shall have the meaning specified in Section 9.02
----------------
hereof.
"Assignment" shall have the meaning specified in Section 2.05(d)
----------
hereof.
"Authorized Newspaper" shall mean any newspaper or newspapers of
--------------------
general circulation in New York City customarily published on each Business
Day, whether or not published on Saturdays, Sundays and holidays.
"Available Subordinated Amount" shall mean, with respect to any Series
-----------------------------
at any time of determination, an amount equal to the available subordinated
amount specified in the related Supplement at such time.
<PAGE>
"BCI" shall mean Bombardier Capital Inc., a Massachusetts corporation,
---
and its successors in interest.
"BCRC" shall mean Bombardier Credit Receivables Corporation, a
----
Delaware corporation, and its successors in interest to the extent
permitted hereunder.
"BCRC Certificate" shall mean the certificates executed by the Trustee
----------------
on behalf of the Trust and authenticated by the Trustee substantially in
the form of Exhibit A hereto.
"Bearer Certificates" shall have the meaning specified in Section 6.01
-------------------
hereof.
"Beneficiary" shall mean any of the Holders of the Investor
-----------
Certificates or the Holder of the Variable Funding Certificate or the
Holder of the BCRC Certificate or any Supplemental Certificate and any
Enhancement Provider.
"Benefit Plan" shall have the meaning specified in Section 6.04(d)(ii)
------------
hereof.
"Bombardier Corporation" shall mean Bombardier Corporation, an Idaho
----------------------
corporation, and its successors in interest.
"Book-Entry Certificates" shall mean beneficial interests in the
-----------------------
Investor Certificates, ownership and transfers of which shall be made
through book entries by a Depository as described in Section 6.08 hereof.
"Business Day" shall mean any day other than (a) a Saturday or a
------------
Sunday or (b) another day on which banking institutions or trust companies
in the State of New York are authorized or obligated by law, executive
order or governmental decree to be closed.
"Cedel" shall mean Centrale de Livraison de Valeurs Mobilieres S.A.
-----
"Certificate" shall mean any of the Investor Certificates, the
-----------
Variable Funding Certificate, the BCRC Certificate or any Supplemental
Certificate.
"Certificate Owner" shall mean, with respect to a Book-Entry
-----------------
Certificate, the person who is the beneficial owner of a Book-Entry
Certificate.
"Certificate Rate" shall mean, with respect to any Series or Class,
----------------
the certificate rate specified therefor in the related Supplement.
3
<PAGE>
(S) 1.01
"Certificate Register" shall have the meaning specified in
--------------------
Section 6.04(a) hereof.
"Certificateholder" or "Holder" shall mean (x) a Registered
----------------- ------
Certificateholder or the bearer of any Bearer Certificate (or Global
Certificate, as the case may be) or Coupon or (y) a Person in whose name
the BCRC Certificate or any Supplemental Certificate is registered or
(z) a Person in whose name the Variable Funding Certificate is registered
(including any pledgee of the Variable Funding Certificate).
"Class" shall mean, with respect to any Series, any one of the classes
-----
of Investor Certificates of that Series.
"Closing Date" shall mean, with respect to any Series, the Closing
------------
Date specified in the related Supplement.
"Collateral Security" shall mean, with respect to any Receivable and
-------------------
subject to the terms of the Receivables Purchase Agreement, the security
interest, if any, granted by or on behalf of the related Obligor with
respect thereto, including a first priority perfected security interest in
any related Eligible Products.
"Collection Account" shall have the meaning specified in Section 4.02
------------------
hereof.
"Collection Period" shall mean, with respect to any Distribution Date,
-----------------
the calendar month preceding the month in which such Distribution Date
occurs.
"Collections" shall mean, without duplication, all payments by or on
-----------
behalf of Obligors received by the Servicer in respect of the Receivables,
in the form of cash, checks, wire transfers or any other form of payment as
provided in such Obligors' Inventory Security Agreements or otherwise
agreed upon between the applicable Obligors and BCI or its Affiliates in
connection with the extension of credit in the ordinary course of their
respective businesses. Collections of Non-Principal Receivables shall
include all Recoveries. Collections of Insurance Proceeds with respect to
Receivables which are not Defaulted Receivables shall be deemed to be
Collections of Principal Receivables.
"Common Depositary" shall mean the Person specified in the applicable
-----------------
Supplement, in its capacity as common depositary for the respective
accounts of any Foreign Clearing Agencies.
"Concentration Account" shall have the meaning specified in
---------------------
Section 3.03(a)(x) hereof.
4
<PAGE>
(S) 1.01
"Corporate Trust Office" shall mean the principal office of the
----------------------
Trustee in the City of New York, at which at any particular time its
corporate trust business shall be administered, which office at the date of
the execution of this Agreement is located at Four Albany Street, New York,
New York 10006, Attention: Corporate Trust & Agency Group, Structured
Finance Team.
"Coupon" shall have the meaning specified in Section 6.01 hereof.
------
"Cut-Off Date" shall mean January 1, 1994.
------------
"Defaulted Agreement" shall have the meaning specified in the
-------------------
definition of "Liquidation Event" herein.
"Defaulted Amount" with respect to any Collection Period shall mean an
----------------
amount (which shall not be less than zero) equal to (a) the sum for all the
Accounts included in the Pool of the amount of Principal Receivables which
became Defaulted Receivables during the immediately preceding Collection
Period minus (b) the full amount of any such Defaulted Receivables which
-----
are subject to reassignment or assignment to the Depositor or the Servicer
in accordance with the terms of this Agreement; provided, however, that, if
-------- -------
an Insolvency Event occurs with respect to the Depositor or if a
Liquidation Event has occurred, the amounts of such Defaulted Receivables
which are subject to reassignment or assignment to the Depositor shall not
be included in clause (b) and, if an Insolvency Event occurs with respect
to the Servicer or if a Liquidation Event has occurred, the amount of such
Defaulted Receivables which are subject to assignment to the Servicer shall
not be included in clause (b).
"Defaulted Receivables" on any Determination Date shall mean (a) all
---------------------
Receivables (other than Receivables that were designated as Ineligible
Receivables at the time of transfer to the Trust) in an Account which are
charged off by the Servicer as uncollectible in respect of the immediately
preceding Collection Period in accordance with the provisions of Section
3.01(a) hereof and (b) all Receivables which were Eligible Receivables when
transferred to the Trust on the initial Closing Date or the related
Addition Date or on their respective Transfer Date, which arose in an
Account that thereafter became an Ineligible Account and which were not
Eligible Receivables for any six consecutive Determination Dates (inclusive
of the Determination Date on which such determination is being made) after
such Account became an Ineligible Account. Receivables will not be
Defaulted Receivables merely because they become Ineligible Receivables.
"Definitive Certificates" shall have the meaning specified in Section
-----------------------
6.08 hereof.
5
<PAGE>
(S) 1.01
"Definitive Euro-Certificates" shall have the meaning specified in
----------------------------
Section 6.11(a) hereof.
"Deposit Date" shall mean each day on which the Servicer deposits
------------
Collections in the Collection Account pursuant to Section 4.03 hereof.
"Depositor" shall mean Bombardier Credit Receivables Corporation, a
---------
Delaware corporation, and its successors in interest to the extent
permitted hereunder.
"Depository" shall mean The Depository Trust Company, as initial
----------
Depository, the nominee of which is CEDE & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.
"Depository Agreement" shall mean, with respect to any Series or
--------------------
Class, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the related Closing Date and substantially in the
form of Exhibit E hereto.
"Depository Participant" shall mean a broker, dealer, bank or other
----------------------
financial institution or other Person for whom from time to time a
Depository effects book-entry transfers and pledges of securities deposited
with the Depository.
"Designated Balance" shall have the meaning set forth in
------------------
Section 2.08(b)(iii) hereof.
"Determination Date" with respect to any Distribution Date shall mean
------------------
the day that is two (2) Business Days prior to such Distribution Date.
"Distribution Date" shall mean the 15th day of each month or, if such
-----------------
day is not a Business Day, the next succeeding Business Day.
"Distribution Date Statement" shall mean, with respect to any Series,
---------------------------
a report prepared by the Servicer on each Distribution Date for the
immediately preceding Collection Period in substantially the form set forth
in the related Supplement.
"Domestic Inventory Receivables" shall mean Receivables arising from
------------------------------
extensions of credit and advances made directly or indirectly by BCI to
dealers located in the United States of certain consumer, recreational and
commercial products.
6
<PAGE>
(S) 1.01
"Early Amortization Event" shall have the meaning specified in
------------------------
Section 9.01 hereof and, with respect to any Series, shall also mean any
Early Amortization Event specified in the related Supplement.
"Early Amortization Period" shall mean, with respect to any Series,
-------------------------
the period beginning at the close of business on the day on which an Early
Amortization Event occurs or is deemed to have occurred, and in each case
ending upon the earlier to occur of (a) the payment in full to the
Certificateholders of such Series of the Invested Amount with respect to
such Series, (b) the Termination Date with respect to such Series and
(c) if such Early Amortization Period has resulted from the occurrence of
an Early Amortization Event described in Section 9.01(a) hereof, the end of
the first Collection Period during which an Early Amortization Event would
no longer be deemed to exist pursuant to Section 9.01(a) hereof, so long as
no other Early Amortization Event with respect to such Series shall have
occurred and the scheduled termination of the Revolving Period with respect
to such Series shall not have occurred.
"Eligible Account" shall mean (i) each individual financing account
----------------
established by BCI with an Obligor with respect to Eligible Products
pursuant to an Inventory Security Agreement in the ordinary course of
business, and (ii) each credit account established in the ordinary course
of business by an Affiliate of BCI with a purchaser (including customers or
distributors) of Eligible Products manufactured or distributed by such
Affiliate, which account has been purchased by BCI, which, as of the date
of determination with respect thereto: (a) relates to an Obligor which is
an Eligible Obligor and (b) is in existence and maintained and serviced by
BCI or an Affiliate of BCI, it being understood that an Eligible Account
may at the time of transfer to the Trust and/or from time to time
thereafter contain no Receivables; provided, that any such Account referred
--------
to in clause (i) or clause (ii) above shall not be an Eligible Account if
BCI has assigned (or granted any participation rights in) such Account or
any Receivables therein to any person other than the Depositor or the
Trust; and provided, further, that any Initial Account with respect to
-------- -------
which any required consent to the assignment to BCRC of the related
Repurchase Agreement (as defined in the Receivables Purchase Agreement)
shall not have been obtained on or prior to February 15, 1994 shall as of
such date be deemed an Ineligible Account.
"Eligible Deposit Account" shall mean either (a) a segregated account
------------------------
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution or trust company
organized under the laws of the United States or any one of the states
thereof, including the District of Columbia (or any domestic branch of a
foreign bank) having corporate trust powers and acting as trustee for funds
deposited in such account, so long as any of the securities of such
7
<PAGE>
(S) 1.01
depository institution or trust company shall have a credit rating from
each Rating Agency in one of its generic rating categories which signifies
investment grade.
"Eligible Institution" shall mean (a) the corporate trust department
--------------------
of the Trustee or (b) a depository institution or trust company organized
under the laws of the United States of America or any one of the states
thereof, or the District of Columbia (or any domestic branch of a foreign
bank) which at all times (i) has either (A) a long-term unsecured debt
rating of A2 or better by Moody's and of AAA or better by Standard & Poor's
or such other rating that is acceptable to each Rating Agency, as evidenced
by a letter from such Rating Agency to the Trustee or (B) a certificate of
deposit rating of P-1 by Moody's and A-1+ by Standard & Poor's or such
other rating that is acceptable to each Rating Agency, as evidenced by a
letter from such Rating Agency to the Trustee and (ii) is a member of the
FDIC. If so qualified, the Trustee may be considered an Eligible
Institution for the purposes of clause (b) this definition.
"Eligible Investments" shall mean book-entry securities, negotiable
--------------------
instruments or securities represented by instruments in bearer or
registered form having original or remaining maturities of thirty (30) days
or less, but in no event occurring later than the Distribution Date next
succeeding the Trustee's acquisition thereof, which evidence:
(a) obligations of, or obligations fully guaranteed by, the
United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof (or any
domestic branch of a foreign bank) and subject to supervision and
examination by Federal or state banking or depository institution
authorities; provided, however, that at the time of the Trust's
-------- -------
investment or contractual commitment to invest therein, the commercial
paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a person or
entity other than such depository institution or trust company)
thereof shall have a credit rating from any individual Rating Agency
in the highest investment category granted thereby;
(c) commercial paper having, at the time of the Trust's
investment or contractual commitment to invest therein, a rating from
any individual Rating Agency in the highest investment category
granted thereby;
8
<PAGE>
(S) 1.01
(d) investments in money market funds having a rating from any
individual Rating Agency in the highest investment category granted
thereby or otherwise approved in writing thereby;
(e) demand deposits, time deposits and certificates of deposit
which are fully insured by the FDIC and which are offered or issued by
a financial institution whose long-term debt is rated Baa3 or better
by Moody's;
(f) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(g) repurchase obligations with respect to any security that is
a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with (i) a depository institution
or trust company (acting as principal) described in clause (b) or
(ii) a depository institution or trust company the deposits of which
are insured by FDIC; and
(h) any other investment as may be permitted by any individual
Rating Agency without reducing or withdrawing the rating of the
Certificates of any Series.
"Eligible Obligor" shall mean an Obligor that, as of the date of
----------------
determination thereof, (a) in the case of Domestic Inventory Receivables,
is located in the United States of America (including its territories and
possessions) and (b) in the case of Domestic Inventory Receivables and
Other Account Receivables, has not been identified by the Servicer as being
the subject of any voluntary or involuntary bankruptcy, insolvency,
liquidation or receivership proceedings.
"Eligible Products" shall mean certain consumer, recreational and
-----------------
commercial products, including, but not limited to, marine equipment (boats
and outboard engines), snowmobiles, snow-grooming equipment, personal
watercraft, recreational vehicles, manufactured housing, motorcycles, lawn
and garden equipment, personal computers and consumer electronics and
appliances and spares and parts relating to certain products manufactured
or distributed by BCI's Affiliates.
"Eligible Receivable" shall mean each Receivable:
-------------------
(a) which was (x) originated by BCI or (y) originated by an
Affiliate of BCI and acquired by BCI, in the ordinary course of
business;
9
<PAGE>
(S) 1.01
(b) which arose under an Account that at the time such
Receivable arose was an Eligible Account (whether or not such Account
was part of the Pool at the time the Receivable arose);
(c) which is owned by BCI at the time of sale by BCI to the
Depositor;
(d) which represents the obligation of an Obligor to repay an
advance made to or on behalf of such Obligor (or credit extended to or
on behalf of such Obligor) to finance the acquisition of Eligible
Products;
(e) which, in the case of Domestic Inventory Receivables, at the
time of creation and, except at the Closing Date for the initial
Series in the case of Receivables that are payable in accordance with
a prepayment schedule providing for repayment in full regardless of
whether the related Eligible Products have been sold and with respect
to which the related Eligible Products have been sold, at the time of
transfer to the Trust is secured by, inter alia, a first priority
----- ----
perfected security interest in the Eligible Products relating thereto;
(f) which is not unenforceable as a result of any violation of
Requirements of Law applicable thereto and, in the case of Domestic
Inventory Receivables, the related Inventory Security Agreement is not
unenforceable as a result of any violation of Requirements of Law
applicable to any party thereto;
(g) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained, effected or given by
BCI or the Depositor in connection with the creation of such
Receivable or, if applicable, the transfer thereof to the Depositor
and the Trust or, in the case of Domestic Inventory Receivables, the
performance by BCI of the Inventory Security Agreement pursuant to
which such Receivable was created, have been duly obtained, effected
or given and are in full force and effect;
(h) as to which at all times following the transfer of such
Receivable to the Trust, the Trust will have good and marketable title
thereto free and clear of all Liens arising prior to the transfer or
arising at any time other than (i) Liens permitted by this Agreement
and (ii) tax and certain other statutory liens (including liens in
favor of the Pension Benefit Guaranty Corporation) which may arise
thereafter and which relate to Affiliates of the Depositor;
10
<PAGE>
(S) 1.01
(i) which has been the subject of a valid transfer and
assignment from the Depositor to the Trust of all the Depositor's
right, title and interest therein (including, with certain exceptions,
any proceeds thereof);
(j) which will at all times be the legal, valid, binding and
assignable payment obligation of the Obligor relating thereto,
enforceable against such Obligor in accordance with its terms (as such
terms may be modified or revised from time to time with the consent of
the Servicer), except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit
at law or in equity) or the availability of equitable remedies;
(k) which at the time of transfer to the Trust is enforceable
against the Obligor to the extent of the full principal amount of such
Receivable, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit
at law or in equity) or the availability of equitable remedies;
(l) as to which, at the time of transfer of such Receivable to
the Trust, BCI and the Depositor have satisfied all their respective
obligations under this Agreement with respect to such Receivable
required to be satisfied at such time;
(m) as to which, at the time of transfer of such Receivable to
the Trust, neither BCI nor the Depositor has taken any action (or
failed to take any action required under this Agreement or the
Receivables Purchase Agreement) which would impair the rights of the
Trust or the Certificateholders therein; and
(n) which constitutes "chattel paper" or an "account" as defined
in Article 9 of the UCC as then in effect in the State of Vermont;
provided, however, that "Eligible Receivables" shall not include any
-------- -------
Domestic Inventory Receivables (w) that has not been paid in full within
491 days following the origination thereof, (x) in the case of a Domestic
Inventory Receivable which is due upon sale of the related Eligible Product
and not pursuant to a scheduled payment
11
<PAGE>
(S) 1.01
program, with respect to which the related Eligible Products have been sold
by the related Obligor and the principal outstanding thereunder has not
been paid by the related Obligor within twenty-one (21) days following the
date of sale or (y) in the case of a Domestic Inventory Receivable that is
to be repaid pursuant to a scheduled payment program, with respect to which
any principal payment of such Receivable has not been paid in full within
twenty-one (21) days following its due date or (z) with respect to which
interest payments (aggregating at least $150 with respect to Receivables
under the same Account) are more than one hundred and twenty (120) days
delinquent.
"Eligible Servicer" shall mean the Trustee or an entity which, at the
-----------------
time of its appointment as Servicer, (a) is legally qualified and has the
capacity to service the Accounts, (b) in the sole determination of the
Trustee, which determination shall be conclusive and binding, has
demonstrated the ability to professionally and competently service a
portfolio of similar accounts in accordance with high standards of skill
and care and (c) is qualified to use the software that is then currently
being used to service the Accounts or obtains the right to use or has its
own software which is adequate to perform its duties under this Agreement.
"Enhancement" shall mean the rights and benefits provided to the
-----------
Certificateholders of any Series or Class pursuant to any letter of credit,
surety bond, cash collateral account, spread account, guaranteed rate
agreement, maturity liquidity facility, tax protection agreement, interest
rate swap agreement or other similar arrangement. The subordination of any
Series or Class to any other Series or Class or the Variable Funding
Certificate or of the Retained Interest to any Series or Class or the
Variable Funding Certificate shall be deemed to be an Enhancement.
"Enhancement Agreement" shall mean any agreement, instrument or
---------------------
document governing the terms of any Series Enhancement or pursuant to which
any Series Enhancement is issued or outstanding.
"Enhancement Provider" shall mean the Person providing any
--------------------
Enhancement, other than any Certificateholders (including any Holder of the
BCRC Certificate or any Supplemental Certificate) the Certificates of which
are subordinated to any Series or Class.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended.
"Euroclear Operator" shall mean Morgan Guaranty Trust Company of New
------------------
York, Brussels office, as operator of the Euroclear System.
12
<PAGE>
(S) 1.01
"Exchange Date" shall mean any date that is after the Series Issuance
-------------
Date, in the case of Definitive Euro-Certificates in registered form, or
upon presentation of certification of non-United States beneficial
ownership (as described in Section 6.11) hereof, in the case of Definitive
Euro-Certificates in bearer form.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
----
successor entity thereto.
"Financing Guidelines" shall mean the written policies and procedures
--------------------
of BCI and its Affiliates, as such policies and procedures may be amended
from time to time, (a) relating to the operation of BCI's floorplan
financing business, including the written policies and procedures for
determining the interest rate charged to Obligors, the other terms and
conditions relating to BCI's wholesale financing accounts, the
creditworthiness of Obligors and the extension of credit to Obligors,
(b) relating to the extension of credit by certain Affiliates of BCI to
their customers and distributors in connection with certain products
manufactured or distributed by such Affiliates, and the purchase of such
receivables by BCI, and (c) relating to the maintenance of accounts and
collection of receivables.
"Foreign Clearing Agency" shall mean Cedel and the Euroclear Operator.
-----------------------
"Global Certificate" shall have the meaning specified in
------------------
Section 6.11(a) hereof.
"Governmental Authority" shall mean the United States of America and
----------------------
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Ineligible Account" shall mean an Account that at the time of
------------------
determination is not an Eligible Account.
"Ineligible Receivable" shall mean any Receivable that arises in an
---------------------
Eligible Account, which either on the related Transfer Date does not
qualify or thereafter fails to qualify as an Eligible Receivable.
"Initial Account" shall mean each individual financing account
---------------
established by BCI with an Obligor pursuant to an Inventory Security
Agreement in the ordinary course of business which is identified in the
computer file or microfiche or written list delivered to the Trustee on the
first Closing Date by the Depositor pursuant to Section 2.01 hereof.
13
<PAGE>
(S) 1.01
"Insolvency Event" shall mean any event specified in subsection (b) or
----------------
(c) of Section 9.01 hereof.
"Insurance Proceeds" with respect to an Account shall mean any amounts
------------------
received by the Servicer pursuant to any policy of insurance which is
required to be paid to BCI pursuant to an Inventory Security Agreement.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
---------------------
as amended.
"Inventory Security Agreement" shall mean, collectively, the group of
----------------------------
related agreements between and among BCI, the Obligor with respect thereto
and the related manufacturer or distributor, pursuant to which (a) BCI
agrees to extend credit to such Obligor to finance Eligible Products
manufactured by such manufacturer or distributed by such distributor, (b)
such Obligor grants to BCI a security interest in the specific Eligible
Products financed by BCI, and (c) such Obligor agrees to repay advances
made by BCI either (i) at the time of sale of the related Eligible Products
to which such advance relates or (ii) in accordance with a repayment
schedule providing for repayment in full of the related advance.
"Invested Amount" shall mean, with respect to any Series and for any
---------------
date, an amount equal to the invested amount specified in the related
Supplement.
"Investor Certificateholder" shall mean the Holder of an Investor
--------------------------
Certificate.
"Investor Certificates" shall mean any one of the certificates
---------------------
(including the Bearer Certificates, the Registered Certificates or any
Global Certificate) executed by the Trustee on behalf of the Trust and
authenticated by the Trustee, substantially in the form attached to the
related Supplement, other than the Variable Funding Certificate, the BCRC
Certificate and any Supplemental Certificate.
"Investors' Interest" shall have the meaning specified in Section 4.01
-------------------
hereof.
"Investors' Servicing Fee" shall mean the portion of the Servicing Fee
------------------------
allocable to the Certificateholders pursuant to the terms of the related
Supplement.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, participation interest, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including any
conditional sale or other title retention agreement and any financing lease
having substantially the same economic effect as any of the foregoing.
14
<PAGE>
(S) 1.01
"Liquidation Event" shall mean any of the events specified in clause (i) or
-----------------
(ii) below:
(i) (x) there occurs an Event of Default under (and as defined in) any
credit or loan agreement pursuant to which credit facilities (including
loans, loan commitments and letter of credit facilities) in excess of
$10,000,000 in the aggregate have been established or made available to
BCI, (y) BCI, the Depositor and the Trustee receive written notice (the
"First Notice") from any party to such agreement stating that by reason of
-------------
such Event of Default the loans outstanding to BCI or the Depositor under
such agreement in an aggregate amount in excess of $10,000,000 (the
"Defaulted Agreement") are immediately due and payable and/or any credit
--------------------
commitment established thereunder in an aggregate amount in excess of
$10,000,000 is terminated and (z) the party delivering the First Notice
delivers, within thirty (30) days after delivery of the First Notice, a
second notice (the "Second Notice") to BCI, the Depositor and the Trustee
-------------
stating that (1) the First Notice has not been rescinded, (2) the Event of
Default has not been waived, (3) the acceleration of loans under the
Defaulted Agreement or the termination of any credit commitment established
thereunder has not been rescinded or annulled, and (4) BCI has not paid all
its indebtedness and has not satisfied all its other obligations,
contingent or otherwise, under the Defaulted Agreement (other than
obligations which by the terms of the Defaulted Agreement survive the
termination of the Defaulted Agreement and the repayment of the credit
extended thereunder); or
(ii) any event specified in Section 9.01(b) or Section 9.01(c) of
this Agreement occurs with respect to BCI or the Depositor.
"Manager" shall mean the lead manager, manager or co-manager or person
-------
performing a similar function with respect to an offering of Definitive
Euro-Certificates.
"Miscellaneous Payments" shall mean, with respect to any Collection
----------------------
Period, the sum of (a) Adjustment Payments and Transfer Deposit Amounts on
deposit in the Collection Account on the related Distribution Date received
with respect to such Collection Period and (b) Unallocated Principal
Collections available to be treated as Miscellaneous Payments pursuant to
Section 4.04 hereof on such Distribution Date.
"Monthly Servicing Fee" shall mean, with respect to any Series, the
---------------------
amount specified therefor in the related Supplement.
"Moody's" shall mean Moody's Investors Service, Inc., or its
-------
successor.
15
<PAGE>
(S) 1.01
"Non-Principal Collections" shall mean Collections under the
-------------------------
Receivables other than Principal Collections; provided that all Recoveries
shall be Non-Principal Collections.
"Non-Principal Receivables" with respect to any Account shall mean all
-------------------------
amounts billed to the related Obligor in respect of interest and all other
non-principal charges.
"Notice Date" shall have the meaning specified in Section 2.05(c)
-----------
hereof.
"Obligor" shall mean (i) a Person engaged generally in the business of
-------
purchasing Eligible Products from a manufacturer, importer or distributor
thereof and holding such Eligible Products for sale in the ordinary course
of business or (ii) a Person that is a purchaser (including customers or
distributors) of certain Affiliates of BCI with respect to certain products
manufactured or distributed by such Affiliates.
"Officers' Certificate" with respect to any corporation shall mean,
---------------------
unless otherwise specified in this Agreement, a certificate signed by (a)
the Chairman of the Board, Vice Chairman of the Board, President or any
Vice President and (b) a Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary of such corporation.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
------------------
be in-house counsel of the Depositor or BCI and who shall be reasonably
acceptable to the Trustee.
"Other Account Receivables" shall mean Receivables arising from
-------------------------
extensions of credit made by Affiliates of BCI to customers of such
Affiliates with respect to certain products manufactured or distributed by
such Affiliates, which extensions of credit are used by the related account
debtors to purchase or finance such products and which extensions of credit
have been purchased by BCI from such Affiliates.
"Permitted Transaction" shall have the meaning specified in Section
---------------------
2.06(f) hereof.
"Person" shall mean any legal person, including any individual,
------
corporation, partnership, association, joint-stock company, trust,
unincorporated organization, governmental entity or other entity of similar
nature.
"Pool" shall mean, at any time of determination, all Accounts with
----
respect to which the related Receivables have been transferred to the Trust
pursuant to Section 2.01 hereof and which constitute part of the Trust
Assets.
16
<PAGE>
(S) 1.01
"Pool Available Subordinated Amount" shall mean, at any time of
----------------------------------
determination, the sum of the Available Subordinated Amounts, if any, for
all outstanding Series at such time.
"Pool Balance" shall mean, as of the time of determination thereof,
------------
the aggregate of Principal Receivables constituting Eligible Receivables in
the Pool on such date.
"Pool Invested Amount" shall mean, at any time of determination, the
--------------------
sum of the Invested Amounts for all outstanding Series at such time.
"Principal Collections" shall mean Collections of principal under the
---------------------
Receivables.
"Principal Receivables" with respect to an Account shall mean amounts
---------------------
shown on the Servicer's records as Receivables (other than such amounts
which represent Non-Principal Receivables) payable by the related Obligor.
"Principal Terms" shall mean, with respect to any Series:
---------------
(a) the name or designation;
(b) the initial principal amount (or method for calculating such
amount) and the currency in which it is denominated;
(c) the Certificate Rate (or method for the determination
thereof);
(d) the payment date or dates and the date or dates from which
interest shall accrue;
(e) the method for allocating collections to Certificateholders;
(f) the designation of any Series Accounts and the terms
governing the operation of any such Series Accounts;
(g) the Monthly Servicing Fee and the Investors' Servicing Fee;
(h) the issuer and terms of any form of Enhancement with respect
thereto;
17
<PAGE>
(S) 1.01
(i) the terms on which the Investor Certificates of such Series
may be exchanged for Investor Certificates of another Series,
repurchased by the Depositor or remarketed to other investors;
(j) the Termination Date;
(k) the number of Classes of Investor Certificates of such
Series and, if more than one Class, the rights and priorities of each
such Class;
(l) the extent to which the Investor Certificates of such Series
will be issuable in temporary or permanent global form (and, in such
case, the depositary for such global certificate or certificates, the
terms and conditions, if any, upon which such global certificate may
be exchanged, in whole or in part, for Definitive Certificates, and
the manner in which any interest payable on a temporary or global
certificate will be paid);
(m) whether the Investor Certificates of such Series may be
issued in bearer form and any limitations imposed thereon;
(n) the priority of such Series with respect to any other
Series;
(o) whether such Series will be part of a group; and
(p) any other terms of such Series.
"Purchase Price" shall mean, with respect to any Receivable for any
--------------
date on which such Receivable is to be purchased by the Servicer from the
Trust pursuant to Section 3.03(c) hereof, (a) an amount equal to the amount
payable by the Obligor in respect thereof as reflected in the records of
the Servicer as of the date of purchase plus (b) interest, if any, accrued
----
on such Receivable, at a per annum rate equal to the rate being charged to
the Obligor.
"Rating Agency" shall mean, with respect to any outstanding Series or
-------------
Class, each statistical rating agency selected by the Depositor to rate the
Investor Certificates of such Series or Class.
"Rating Agency Condition" shall mean, with respect to any action,
-----------------------
that, after the required notice has been given to the applicable Rating
Agencies, no such Rating Agency shall have notified the Depositor, the
Servicer or the Trustee in writing that such action will result in a
reduction or withdrawal of the rating of any outstanding Series or Class
with respect to which it is a Rating Agency.
18
<PAGE>
(S) 1.01
"Reassignment" shall have the meaning specified in Section 2.07(c)
------------
hereof.
"Receivables" shall mean, with respect to an Account, all amounts
-----------
shown on the Servicer's records as amounts payable by the related Obligor,
from time to time in respect of advances made by BCI or by a BCI Affiliate
to such Obligor to finance the acquisition of Eligible Products by such
Obligor, together, if applicable, with the rights under the group of
writings evidencing such amounts and the security interest created in
connection therewith. Receivables which become Defaulted Receivables shall
not be shown on the Servicer's records as amounts payable (and will cease
to be included as Receivables) on the day on which they become Defaulted
Receivables. Receivables which BCI is unable to transfer to the Depositor
pursuant to the Receivables Purchase Agreement or which the Depositor is
unable to transfer to the Trust as provided in Section 2.06(b) hereof and
Receivables which arise in Removed Accounts from and after the related
Removal Date shall not be included in calculating the amount of
Receivables.
"Receivables Purchase Agreement" shall mean the agreement between BCI
------------------------------
and the Depositor, in substantially the form attached hereto as Exhibit I,
dated as of the date hereof, governing the terms and conditions upon which
the Depositor is acquiring the initial Receivables transferred to the Trust
on the Closing Date and all Receivables acquired thereafter, as the same
may from time to time be amended, modified or otherwise supplemented.
"Record Date" shall mean, with respect to any Distribution Date, the
-----------
close of business on the day preceding such Distribution Date; provided
that with respect to any Distribution Date for a Series for which
Definitive Certificates have been issued pursuant to Section 6.10 hereof,
subsequent to the issuance of such Definitive Certificates the Record Date
for such Distribution Date shall be the last day of the month preceding the
month in which such Distribution Date occurs.
"Recoveries" on any Determination Date shall mean all amounts
----------
received, including Insurance Proceeds and any proceeds resulting from
repurchase arrangements (or similar arrangements) between BCI and
manufacturers, importers and distributors of Eligible Products or other
parties, by the Servicer during the Collection Period immediately preceding
such Determination Date with respect to Receivables which have previously
become Defaulted Receivables.
"Registered Certificateholder" shall mean the Holder of a Registered
----------------------------
Certificate.
"Registered Certificates" shall have the meaning specified in Section
-----------------------
6.01 hereof.
19
<PAGE>
(S) 1.01
"Related Documents" shall mean, collectively, the Receivables
-----------------
Purchase Agreement and, with respect to any Series, any applicable
Enhancement Agreement.
"Removal Commencement Date" shall have the meaning specified in
-------------------------
Section 2.08(a) hereof.
"Removal Date" shall have the meaning specified in Section 2.07(b)
------------
hereof.
"Removal Termination Date" shall have the meaning specified in Section
------------------------
2.08(b) hereof.
"Removal Notice" shall have the meaning specified in Section 2.07(b)
--------------
hereof.
"Removed Account" shall have the meaning specified in Section 2.07(b)
---------------
hereof.
"Required Investor Percentage" shall mean, with respect to any Series,
----------------------------
the percentage specified therefor in the related Supplement.
"Required Pool Balance" shall mean, at any time of determination, an
---------------------
amount equal to (i) the sum of the amounts for each Series obtained by
multiplying the required investor percentage for such Series by the
adjusted invested amount for such Series at such time, before giving effect
to any withdrawals or additions to any excess funding accounts or similar
arrangements for any Series on the Distribution Date for which the Required
Pool Balance is being calculated plus (ii) the Pool Available Subordinated
----
Amount on the immediately preceding Determination Date (after giving effect
to the allocations, distributions, withdrawals and deposits to be made on
the Distribution Date following such Determination Date) minus (iii) any
-----
amount on deposit in any reserve fund at such time. With respect to any
date through and including the first Determination Date, the amount
referred to in clause (ii) above shall be equal to $32,758,610.
"Requirements of Law" for any Person shall mean the certificate of
-------------------
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or determination of
an arbitrator or Governmental Authority, in each case applicable to or
binding upon such Person or to which such Person is subject, whether
Federal, state or local (including usury laws and the Federal Truth in
Lending Act).
"Responsible Officer" shall mean any Vice President, Assistant Vice
-------------------
President, Assistant Secretary, Assistant Treasurer, and any other officer
of the Trustee customarily performing functions within the corporate trust
department and also, with respect
20
<PAGE>
(S) 1.01
to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with that relevant
subject.
"Retained Interest" shall have the meaning specified in Section 4.01
-----------------
hereof.
"Retained Participation Amount" shall mean, at any time of
-----------------------------
determination, an amount equal to the sum of (i) the Pool Available
Subordinated Amount on the immediately preceding Determination Date (after
giving effect to the allocations, distributions, withdrawals and deposits
to be made on the Distribution Date following such Determination Date) and
(ii) each Series on such date of determination, obtained by multiplying the
excess retained percentage (as defined in the related Supplement) by the
adjusted invested amount for such Series at such time.
"Revolving Period" shall mean with respect to any Series, the period
----------------
specified as such in the related Supplement.
"Series" shall mean any series of Investor Certificates.
------
"Series Account" shall mean any deposit, trust, escrow, reserve or
--------------
similar account maintained for the benefit of the Certificateholders of any
Series or Class, as specified in any Supplement.
"Series Cut-Off Date" shall mean, with respect to any Series, the date
-------------------
specified as such in the related Supplement.
"Series Issuance Date" shall mean, with respect to any Series, the
--------------------
date specified as such in the related Supplement.
"Service Transfer" shall have the meaning specified in Section 10.01
----------------
hereof.
"Servicer" shall initially mean BCI, in its capacity as Servicer under
--------
this Agreement, and after any Service Transfer, the Successor Servicer.
"Servicer Default" shall have the meaning specified in Section 10.01
----------------
hereof.
"Servicing Fee" shall have the meaning specified in Section 3.02
-------------
hereof.
"Servicing Officer" shall mean any officer of the Servicer involved
-----------------
in, or responsible for, the administration and servicing of the Receivables
whose name appears on a list of servicing officers furnished to the Trustee
by the Servicer as such list may from time to time be amended.
21
<PAGE>
(S) 1.01
"Standard & Poor's" shall mean Standard & Poor's Corporation or its
-----------------
successor.
"Successor Servicer" shall have the meaning specified in Section
------------------
10.02(a) hereof.
"Supplement" shall mean, with respect to any Series or the Variable
----------
Funding Certificate, a Supplement to this Agreement, executed and delivered
in connection with the original issuance of the Investor Certificates of
such Series or the Variable Funding Certificate, as applicable, pursuant to
Section 6.03 hereof, and all amendments thereof and supplements thereto.
"Supplemental Certificate" shall have the meaning specified in Section
------------------------
6.03 hereof.
"Tax Opinion" shall mean, with respect to any action, an Opinion of
-----------
Counsel to the effect that, for Federal income and Vermont state income tax
purposes, (a) such action will not adversely affect the characterization of
the Investor Certificates of any outstanding Series or Class as debt of
BCRC, (b) such action will not cause or constitute a taxable event with
respect to any Certificateholders or the Trust, and (c) in the case of
Section 6.03(b) hereof, the Investor Certificates of the new Series will be
characterized as debt of BCRC.
"Termination Date" shall mean, with respect to any Series, the
----------------
termination date specified in the related Supplement.
"Termination Notice" shall have the meaning specified in Section 10.01
------------------
hereof.
"Termination Proceeds" shall have the meaning specified in Section
--------------------
12.02(c) hereof.
"Transfer Agent and Registrar" shall have the meaning specified in
----------------------------
Section 6.04(a) hereof.
"Transfer Date" shall have the meaning specified in Section 2.01
-------------
hereof.
"Transfer Deposit Amount" shall mean, with respect to any Receivable
-----------------------
reassigned or assigned to the Depositor or the Servicer, as applicable,
pursuant to Section 2.04(c) or Section 3.03 hereof, the amounts specified
in such Sections.
22
<PAGE>
(S) 1.01
"Trust" shall mean the Bombardier Receivables Master Trust I created
-----
by this Agreement, the corpus of which shall consist of the Trust Assets.
"Trust Assets" shall have the meaning specified in Section 2.01
------------
hereof.
"Trust Liquidation Proceeds" shall have the meaning specified in
--------------------------
Section 9.02 hereof.
"Trust Termination Date" shall have the meaning specified in Section
----------------------
12.01 hereof.
"Trustee" shall mean Bankers Trust Company, a New York banking
-------
corporation, or its successor in interest, or any successor trustee
appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from time to
---
time, as in effect in any specified jurisdiction.
"Unallocated Principal Collections" shall have the meaning specified
---------------------------------
in Section 4.04 hereof.
"Variable Funding Amount" shall mean the amount specified in the
-----------------------
related Supplement.
"Variable Funding Certificate" shall mean the certificate executed by
----------------------------
the Trustee on behalf of the Trust and authenticated by the Trustee,
substantially in the form attached to the related Supplement.
"Variable Funding Interest" shall have the meaning specified in
-------------------------
Section 4.01 hereof.
"Vice President" when used with respect to the Depositor and Servicer
--------------
shall mean any vice president whether or not designated by a number or word
or words added before or after the title "vice president".
SECTION 1.02. Other Definitional Provisions. (a) All terms defined
-----------------------------
in this Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto unless otherwise defined
therein.
(b) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this
23
<PAGE>
(S) 1.02
Agreement or in any such certificate or other document to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of
accounting terms in this Agreement or in any such certificate or other document
are inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this Agreement or in any
such certificate or other document shall control.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation".
(d) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II
Conveyance of Receivables
-------------------------
SECTION 2.01. Conveyance of Receivables. By execution of this
-------------------------
Agreement, the Depositor does hereby sell, transfer, assign, set over and
otherwise convey, without recourse (except as expressly provided herein), to the
Trust for the benefit of the Certificateholders and the other Beneficiaries on
the first Closing Date, in the case of the Initial Accounts, and on the
applicable Addition Date, in the case of Additional Accounts, (a) all of its
right, title and interest in, to and under the Receivables in each Eligible
Account and all Collateral Security with respect thereto owned by the Depositor
at the close of business on the Cut-Off Date, in the case of the Initial
Accounts, and on the applicable Additional Cut-Off Date, in the case of
Additional Accounts, and all monies due or to become due and all amounts
received with respect thereto and all proceeds thereof (including "proceeds", as
defined in Section 9-306 of the UCC as in effect in the State of Vermont, and
Recoveries) and (b) all of the Depositor's rights, remedies, powers and
privileges with respect to such Receivables under the Receivables Purchase
Agreement, but excluding any repurchase or other agreements with manufacturers,
importers or distributors relating to Obligors which are being financed by
Domestic Inventory Receivables. As of each Business Day prior to the earlier of
(i) an Appointment Date and (ii) the Trust Termination Date, on which
Receivables are created in the Eligible Accounts (a "Transfer Date"), the
-------------
Depositor does hereby sell, transfer, assign, set over and otherwise convey,
without recourse (except as expressly provided herein), to the Trust for the
benefit of the Certificateholders and the other
24
<PAGE>
(S) 2.01
Beneficiaries, all of its right, title and interest in, to and under the
Receivables in each such Eligible Account (other than any Receivables created in
(x) a Removed Account from and after the applicable Removal Date, as provided in
Section 2.07(c) hereof or (y) an Ineligible Account from and after the
applicable Removal Commencement Date, as provided in Section 2.08(c) hereof) and
all Collateral Security with respect thereto owned by the Depositor at the close
of business on such Transfer Date and not theretofore conveyed to the Trust, all
monies due or to become due and all amounts received with respect thereto and
all proceeds thereof (including "proceeds", as defined in Section 9-306 of the
UCC as in effect in the State of Vermont, and Recoveries). Such property,
together with all monies on deposit in, and Eligible Investments credited to,
the Collection Account or any Series Account, any Enhancements and the
Collateral Security with respect to the Receivables shall collectively
constitute the assets of the Trust (the "Trust Assets"). The parties hereto
------------
intend that this Agreement constitute an absolute sale; provided, however, that
-------- -------
to the extent that this Agreement is deemed or recharacterized not to constitute
an absolute sale, the parties intend this transaction to create a security
interest under Article 9 of the UCC. The foregoing sale, transfer, assignment,
set-over and conveyance and any subsequent sales, transfers, assignments, set-
overs and conveyances do not constitute, and are not intended to result in, the
creation or an assumption by the Trust, the Trustee, any Agent or any
Beneficiary of any obligation of the Servicer, BCI, the Depositor, Bombardier
Corporation or any other Person in connection with the Accounts, the Receivables
or under any agreement or instrument relating thereto, including any obligation
to any Obligors.
In connection with such sales, the Depositor agrees to record and
file, at its own expense, a financing statement on form UCC-1 (and continuation
statements when applicable) with respect to the Receivables now existing and
hereafter created for the sale of "chattel paper" and "accounts" (in each case
as defined in Section 9-105 of the UCC as in effect in any state where the
Depositor's or the Servicer's chief executive offices or books and records
relating to the Receivables are located) meeting the requirements of applicable
state law in such manner and in such jurisdictions as are necessary to perfect
the sale and assignment of the Receivables and the Collateral Security to the
Trust, and to deliver a file-stamped copy of such financing statements or other
evidence of such filing to the Trustee on or prior to the first Closing Date, in
the case of the Initial Accounts, and (if any additional filing is so necessary)
the applicable Addition Date, in the case of Additional Accounts and take such
further steps as shall be necessary or desirable to preserve such interest. The
Trustee shall be under no obligation whatsoever to file such financing
statement, or a continuation statement to such financing statement, or to make
any other filing under the UCC in connection with such sales to the Trust.
In connection with such sales, the Depositor further agrees, at its
own expense, on or prior to the first Closing Date, in the case of the Initial
Accounts, and the applicable Addition Date, in the case of Additional Accounts,
(a) to cause BCI to indicate in its computer files as required by the
Receivables Purchase Agreement, that the Receivables
25
<PAGE>
(S) 2.01
created in connection with the Accounts have been sold, and the Collateral
Security assigned, to the Depositor in accordance with the Receivables Purchase
Agreement and sold to the Trust pursuant to this Agreement for the benefit of
the Certificateholders and the other Beneficiaries and (b) to deliver to the
Trustee (or cause BCI to do so) a computer file or microfiche or written list
containing a true and complete list of all such Accounts specifying for each
such Account, as of the Cut-Off Date, in the case of the Initial Accounts, and
the applicable Additional Cut-Off Date, in the case of Additional Accounts,
(i) its account number, (ii) the aggregate amount of Receivables, if any,
outstanding in such Account and (iii) the aggregate amount of Principal
Receivables, if any, in such Account. Such file or list, as supplemented from
time to time to reflect Additional Accounts and Removed Accounts, shall be
marked as Schedule 1 to this Agreement and is hereby incorporated into and made
a part of this Agreement. The Trustee shall be under no obligation whatsoever to
verify the accuracy or completeness of the information contained in Schedule 1
from time to time.
SECTION 2.02. Acceptance by Trustee. (a) The Trustee hereby
---------------------
acknowledges its acceptance, on behalf of the Trust, of all right, title and
interest previously held by the Depositor to the property, now existing and
hereafter created, conveyed to the Trust pursuant to Section 2.01 hereof and
declares that it shall maintain such right, title and interest, upon the trust
herein set forth, for the benefit of the Certificateholders and the other
Beneficiaries. The Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this Agreement, the Depositor
delivered to the Trustee the computer file or microfiche or written list
relating to the Initial Accounts described in the last paragraph of Section 2.01
hereof.
(b) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
SECTION 2.03. Representations and Warranties of the Depositor
-----------------------------------------------
Relating to the Depositor and this Agreement. The Depositor hereby represents
- --------------------------------------------
and warrants to the Trust and to the Trustee as of the first Closing Date and
each Series Issuance Date that:
(a) Organization and Good Standing. The Depositor is a corporation
------------------------------
duly organized and validly existing and in good standing under the law of
the State of Delaware and has, in all material respects, full corporate
power, authority and legal right to own its properties and conduct its
business as such properties are presently owned and such business is
presently conducted, and to execute, deliver and perform its obligations
under this Agreement.
(b) Due Qualification. The Depositor is duly qualified to do
-----------------
business and, where necessary, is in good standing as a foreign corporation
(or is exempt from such requirement) and has obtained all necessary
licenses and approvals in each jurisdiction
26
<PAGE>
(S) 2.03
in which the conduct of its business requires such qualification except
where the failure to so qualify or be in good standing or obtain licenses
or approvals would not have a material adverse effect on its ability to
perform its obligations hereunder.
(c) Due Authorization. The execution and delivery of this Agreement
-----------------
and the applicable Supplement and the Related Documents and the
consummation of the transactions provided for or contemplated by this
Agreement and the applicable Supplement and the Related Documents, have
been duly authorized by the Depositor by all necessary corporate action on
the part of the Depositor.
(d) No Conflict. The execution and delivery of this Agreement, the
-----------
applicable Supplement and the Related Documents, the performance of the
transactions contemplated by this Agreement and the applicable Supplement
and the Related Documents and the fulfillment of the terms hereof and
thereof, will not conflict with, result in any breach of any of the
material terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under, any indenture, contract,
agreement, mortgage, deed of trust, or other instrument to which the
Depositor is a party or by which it or its properties are bound, except to
the extent that such conflict, breach or default will not have a materially
adverse effect on the Depositor's ability to perform its obligations
hereunder and thereunder.
(e) No Violation. The execution and delivery of this Agreement, the
------------
applicable Supplement and the Related Documents, the performance of the
transactions contemplated by this Agreement and the applicable Supplement
and the Related Documents and the fulfillment of the terms hereof and
thereof applicable to the Depositor, will not conflict with or violate any
material Requirements of Law applicable to the Depositor.
(f) No Proceedings. There are no pending proceedings or, to the best
--------------
knowledge of the Depositor, investigations pending or threatened against
the Depositor before any Governmental Authority (i) asserting the
invalidity of this Agreement, the applicable Supplement, any of the Related
Documents or the Certificates, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated by
this Agreement and the applicable Supplement or the Related Documents,
(iii) seeking any determination or ruling that, in the reasonable judgment
of the Depositor, would materially and adversely affect the performance by
the Depositor of its obligations under this Agreement and the applicable
Supplement or the Related Documents, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Agreement and the applicable Supplement, the Related
Documents or the Certificates or (v) seeking to affect adversely the income
tax attributes of the Trust under United States Federal or State income or
franchise tax systems.
27
<PAGE>
(S) 2.03
(g) All Consents Required. All appraisals, authorizations, consents,
---------------------
orders, approvals or other actions of any Person or of any governmental
body or official required for the execution and delivery by the Depositor
of this Agreement, the applicable Supplement and the Related Documents, the
performance by the Depositor of the transactions contemplated by this
Agreement, the applicable Supplement and any of the Related Documents, and
the fulfillment by the Depositor of the terms hereof and thereof, have been
obtained.
(h) Enforceability. This Agreement and the applicable Supplement and
--------------
the Related Documents each constitutes a legal, valid and binding
obligation of the Depositor enforceable against the Depositor in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect affecting the enforcement of creditors' rights
in general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity) and
the availability of equitable remedies.
(i) Record of Accounts. As of the first Closing Date, in the case of
------------------
the Initial Accounts, as of the applicable Addition Date, in the case of
the Additional Accounts, and, as of the applicable Removal Date, in the
case of Removed Accounts, and as of the applicable Removal Termination
Date, in the case of Removed Accounts, Schedule 1 to this Agreement (as
amended from time to time) is an accurate and complete listing in all
material respects of all the Accounts as of the Cut-Off Date, the
applicable Additional Cut-Off Date the applicable Removal Date or the
applicable Removal Termination Date, as the case may be, and the
information contained therein with respect to the identity of such Accounts
and the Receivables existing thereunder is true and correct in all material
respects as of the Cut-Off Date, such applicable Additional Cut-Off Date,
such Removal Date or such Removal Termination Date, as the case may be.
(j) Place of Business. The principal place of business of the
-----------------
Depositor is in Burlington, Vermont, and the offices where the Depositor
keeps its records concerning the Receivables and related contracts are in
Burlington, Vermont.
(k) Use of Proceeds. No proceeds of the issuance of any Certificate
---------------
will be used by the Depositor to purchase or carry any margin security.
(l) Not an Investment Company. The Depositor is not an "investment
-------------------------
company" or "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or is exempt from all
provisions thereof.
28
<PAGE>
(S) 2.03
(m) Valid Transfer. This Agreement or, in the case of Additional
--------------
Accounts, the related Assignment constitutes a valid sale, transfer and
assignment to the Trust of all right, title and interest of the Depositor
in the Receivables and any Collateral Security whether then existing or
thereafter created and the proceeds thereof (other than Insurance Proceeds)
and all of the Depositor's rights, remedies, powers and privileges with
respect to the Receivables under the Receivables Purchase Agreement
(excluding, however, any repurchase or other agreements with manufacturers,
importers or distributors relating to Obligors which are being financed by
Domestic Inventory Receivables) and, upon the filing of the financing
statements described in Section 2.01 hereof with the Secretary of State of
the State of Vermont, and in the case of the Receivables hereafter created
and the proceeds thereof, upon the creation thereof, the Trust shall have a
first priority perfected ownership interest in such property, except for
Liens permitted under Section 2.06(a) hereof and tax and certain other
statutory liens (including liens in favor of the Pension Benefit Guaranty
Corporation); provided, however, that if this Agreement or, in the case of
-------- -------
Additional Accounts, the related Assignment, is deemed to be a grant to the
Trust of a security interest under the UCC as in effect in the State of
Vermont in such property, then upon the filing of the financing statements
described in Section 2.01 hereof with the Secretary of State of the State
of Vermont and in the case of the Receivables hereinafter created and the
proceeds thereof, upon the creation thereof, the Trust shall have a first
priority perfected security interest in such property except for Liens
permitted under Section 2.06(a) hereof and tax and certain other statutory
liens (including liens in favor of the Pension Benefit Guaranty
Corporation). Except as otherwise provided in this Agreement, neither the
Depositor nor any Person claiming through or under the Depositor has any
claim to or interest in the Trust Assets.
The representations and warranties set forth in this Section 2.03
shall survive the transfer and assignment of the Receivables to the Trust and
the issuance of the Certificates. Upon discovery by the Depositor, the
Servicer, any Agent or the Trustee of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other parties, any Agent and to any Enhancement
Providers.
In the event that (i) any of the representations and warranties set
forth subsections (a) through (l) of this Section 2.03 have been breached or
(ii) the representation and warranty set forth in subsection (m) of this Section
2.03 has been breached and this Agreement does not constitute the grant of a
security interest in the Receivables and the Collateral Security (and the
proceeds thereof) under the UCC as then in effect in the State of Vermont and,
in the case of either clause (i) or (ii), such breach has a material adverse
effect on the interests of the Holder of the Variable Funding Certificate or the
Certificateholders, then either the Trustee, the Holder of the Variable Funding
Certificate, or the Holders of Investor Certificates evidencing not less than a
majority in aggregate unpaid principal amount
29
<PAGE>
(S) 2.03
of all outstanding Investor Certificates by notice then given in writing to the
Depositor and the Servicer (and to the Trustee, any Enhancement Providers if
given by the Holder of the Variable Funding Certificate or the
Certificateholders) may, unless a Liquidation Event has occurred, direct the
Depositor to purchase the Variable Funding Interest and/or Investors' Interest
within sixty (60) days of such notice (or within such longer period as may be
specified in such notice), and the Depositor shall be obligated to make such
purchase on a Distribution Date occurring within such 60-day period on the terms
and conditions set forth below; provided, however, that no such purchase shall
-------- -------
be required to be made if, by the end of such 60-day period (or such longer
period as may be specified in such notice), the representations and warranties
set forth in this Section 2.03 shall be satisfied in all material respects or,
in the case of clause (ii) above, this Agreement then constitutes the grant of a
security interest in the Receivables and the Collateral Security (and the
proceeds thereof) under the UCC as then in effect in the State of Vermont, and
any material adverse effect on the Investors' Interest and/or the Variable
Funding Interest, as applicable, caused thereby shall have been cured.
The Depositor shall deposit in the Collection Account in immediately
available funds on the Business Day preceding such Distribution Date, in payment
for such purchase, an amount equal to the sum of the amounts specified therefor
with respect to each outstanding Series and/or the Variable Funding Certificate,
as applicable, in the related Supplement. Notwithstanding anything to the
contrary in this Agreement, such amounts shall be distributed to the
Certificateholders and/or the Holder of the Variable Funding Interest, as
applicable, on such Distribution Date in accordance with Article IV hereof and
the terms of each Supplement. If the Trustee, the Certificateholders or the
Holder of the Variable Funding Certificate give notice directing the Depositor
to purchase the Investors' Interest and/or the Variable Funding Interest as
provided above, the obligation of the Depositor to effect such purchase pursuant
to this Section 2.03 shall constitute the sole remedy respecting an event of the
type specified in the first sentence of this Section 2.03 available to the
Certificateholders and/or the Holder of the Variable Funding Certificate (or the
Trustee on behalf of such Certificateholders).
SECTION 2.04. Representations and Warranties of the Depositor
-----------------------------------------------
Relating to the Receivables. (a) Representations and Warranties. The
- --------------------------- ------------------------------
Depositor hereby represents and warrants to the Trust that:
(i) Each Receivable and all Collateral Security transferred to
the Trust on the first Closing Date or, in the case of Additional Accounts,
on the applicable Addition Date, and on each Transfer Date, has been
conveyed to the Trust free and clear of any Lien, except for Liens
permitted under Section 2.06(a) hereof.
(ii) With respect to each Receivable and all Collateral Security
transferred to the Trust on the first Closing Date or, in the case of
Additional Accounts, on the
30
<PAGE>
(S) 2.04
applicable Addition Date, and on each Transfer Date, all consents,
licenses, approvals or authorizations of or registrations or declarations
with any Governmental Authority required to be obtained, effected or given
by the Depositor in connection with the conveyance of such Receivable or
Collateral Security to the Trust have been duly obtained, effected or given
and are in full force and effect.
(iii) On the Cut-Off Date, the first Closing Date and any Series
Issuance Date, each Account is an Eligible Account and, in the case of
Additional Accounts, on the applicable Additional Cut-Off Date and Addition
Date and on each Transfer Date, each such Additional Account is an Eligible
Account.
(iv) On the first Closing Date, in the case of the Initial
Accounts, and, in the case of the Additional Accounts, on the applicable
Additional Cut-Off Date, and on each Transfer Date, each Receivable
conveyed to the Trust on such date is an Eligible Receivable or, if such
Receivable is not an Eligible Receivable, such Receivable is conveyed to
the Trust in accordance with Section 2.09 hereof.
(v) With respect to each Receivable transferred to the Trust
on the first Closing Date, such Receivable is a Domestic Inventory
Receivable.
(vi) With respect to each Receivable transferred to the Trust on
the first Closing Date or, in the case of Additional Accounts, on the
applicable Addition Date, and on each Transfer Date, such Receivable
constitutes either an "account" or "chattel paper" for purposes of the UCC
as in effect in the State of Vermont from time to time.
(vii) Each Domestic Inventory Receivable included in the Pool
Balance is and will be secured by a first priority perfected security
interest in the related Eligible Product.
(viii) On each Transfer Date, the Depositor is not insolvent.
(ix) The Depositor has caused BCI to clearly and unambiguously
mark all its computer records and all its microfiche storage files
regarding the Receivables conveyed to the Trust under this Agreement as the
property of the Trust.
(x) On the first Closing Date, all Repurchase Agreements (as
defined in the Receivables Purchase Agreement) with respect to the Initial
Accounts shall have been effectively assigned to BCRC (and all required
consents from the related manufacturers, importers and distributors shall
have been obtained) except with respect to Initial Accounts the Receivables
in which aggregate not more than 1% of the Pool Balance as of the Cut-Off
Date.
31
<PAGE>
(S) 2.04
(b) Notice of Breach. The representations and warranties set forth
----------------
in this Section 2.04 shall survive the transfer and assignment of the
Receivables to the Trust and the issuance of the Certificates. Upon discovery by
the Depositor, the Servicer, any Agent or the Trustee of a breach, of any of the
representations and warranties set forth in this Section 2.04, the party
discovering such breach shall give prompt written notice to the other parties
and to any Enhancement Providers.
(c) Reassignment. In the event any representation or warranty under
------------
subsection (a) of this Section 2.04 is not true and correct as of the date
specified therein with respect to any Receivable or Account and such breach
(i) remains uncured for thirty (30) days (or such longer period as may be
approved by the Trustee) of the earlier to occur of the discovery of any such
event by the Depositor or the Servicer, or receipt by the Depositor or the
Servicer of written notice of any such event given by the Trustee, any Agent or
any Enhancement Providers and (ii) has a material adverse effect on the
Investors' Interest or the Variable Funding Interest in any such Receivable or
Account, then the Depositor shall accept a reassignment of such Receivable or,
in the case of such an untrue representation or warranty with respect to an
Account, all Receivables in such Account, on the Determination Date immediately
succeeding the day of such discovery or notice (or such other Determination Date
as may be agreed to by the Trustee) on the terms and conditions set forth in the
next succeeding paragraph; provided, however, that no such reassignment shall
-------- -------
be required to be made with respect to such Receivable if, by the end of such
30-day period (or such longer period as may be agreed to by the Trustee), the
breached representation or warranty shall then be true and correct in all
material respects and any material adverse effect caused thereby shall have been
cured.
The Depositor shall accept a reassignment of each such Receivable, and
shall direct the Servicer to deduct, subject to the next sentence, the principal
amount of such Receivables from the Pool Balance on or prior to the end of the
Collection Period in which such reassignment obligation arises. If, following
such deduction, the Pool Balance would be less than the Required Pool Balance on
the immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date following such Determination Date), then, unless a Liquidation
Event has occurred, not later than 12:00 noon (New York City time) on the day on
which such reassignment occurs, the Depositor shall deposit in the Collection
Account in immediately available funds the amount (the "Transfer Deposit
----------------
Amount") by which the Pool Balance would be less than the Required Pool Balance
- ------
(up to the principal amount of such Receivables); provided, that if the Transfer
--------
Deposit Amount is not deposited as required by this sentence, then the principal
amounts of such Receivables shall only be deducted from the Pool Balance to the
extent that the Pool Balance is not reduced below the Required Pool Balance and
the Receivables the principal amounts of which have not been so deducted shall
not be reassigned to the Depositor and shall remain part of the Trust. Upon
reassignment of any such Receivable, but only after payment by the Depositor of
the Transfer Deposit
32
<PAGE>
(S) 2.04
Amount, if any, the Trust shall automatically and without further action be
deemed to sell, transfer, assign, set over and otherwise convey to the
Depositor, without recourse, representation or warranty, all the right, title
and interest of the Trust in and to such Receivable, all Collateral Security and
all moneys due or to become due with respect thereto and all proceeds thereof.
The Trustee shall execute such documents and instruments of transfer or
assignment and take such other actions as shall reasonably be requested by the
Depositor to effect the conveyance of such Receivables pursuant to this Section
2.04. The obligation of the Depositor to accept a reassignment of any such
Receivable and to pay any related Transfer Deposit Amount shall constitute the
sole remedy respecting the event giving rise to such obligation available to
Certificateholders or the Holder of the Variable Funding Certificate (or the
Trustee on behalf of Certificateholders or the Holder of the Variable Funding
Certificate).
SECTION 2.05. Addition of Accounts. (a) If, as of the close of
--------------------
business on the last day of any Collection Period, (i) the Pool Balance on such
day is less than the Required Pool Balance as of the following Distribution Date
(after giving effect to the allocations, distributions, withdrawals and deposits
to be made on such Distribution Date), or (ii) the aggregate interest in the
Pool Balance represented by the BCRC Certificate and any Variable Funding
Certificate held by BCRC is less than 2% of the aggregate amount of Receivables
included in the Pool on such last day, then, unless a Liquidation Event has
occurred, on or prior to the tenth Business Day following the end of such
Collection Period (the "Addition Date"), the Depositor shall be required to
-------------
purchase from BCI under the Receivables Purchase Agreement (but BCI shall have
no obligation to sell to BCRC), and shall designate (pursuant to an Addition
Notice delivered pursuant to Section 2.05(c) hereof) and transfer to the Trust,
the Receivables (and any related Collateral Security) of additional Eligible
Accounts of the Depositor to be included as Accounts in a sufficient amount such
that, after giving effect to such addition: (x) the Pool Balance as of the close
of business on the Addition Date is at least equal to the Required Pool Balance
and (y) the aggregate amount of Receivables included in the Pool represented by
the BCRC Certificate and any Variable Funding Certificate held by BCRC, is equal
to at least 2% of the aggregate amount of Receivables included in the Pool and
(z) the Pool shall consist of the same type of Receivables as shall have been
included in the Pool prior to such addition (i.e., Domestic Inventory
Receivables, Other Account Receivables or both, as the case may be); provided,
--------
however, that so long as the Trustee shall have received (whether in connection
- -------
with the addition of Accounts at such time or in connection with a previous
addition of Accounts to the Trust) a letter from each Rating Agency confirming
that the inclusion of Accounts relating to Other Account Receivables will not
result in the reduction or withdrawal of the rating of any Series or Class of
Certificates then outstanding, then, at the option of the Depositor and BCI,
Additional Accounts containing Other Account Receivables may be added in
satisfaction of such requirement even if the only Accounts previously included
in the Trust are Accounts containing Domestic Inventory Receivables; and
provided, further, that for purposes of clause (ii) and sub-clause (y) of this
- -------- -------
subsection (a), the Variable Funding
33
<PAGE>
(S)2.05
Certificate shall be deemed to be "held" by BCRC even though the registered
Holder thereof is BCI, as pledgee, so long as BCI has not exercised its remedies
in respect thereof. The Depositor shall satisfy the conditions specified in
subsection (d) of this Section 2.05 in designating such Additional Accounts and
conveying the related Receivables to the Trust. The failure of the Depositor to
transfer Receivables to the Trust as provided in this subsection (a) solely as a
result of the unavailability of a sufficient amount of Eligible Receivables or
subsequent to a Liquidation Event shall not constitute a breach of this
Agreement; provided, however, that any such failure will nevertheless result in
-------- -------
the occurrence of an Early Amortization Event described in Section 9.01(a)
hereof.
(b) The Depositor may from time to time, at its sole discretion,
subject to the conditions specified in subsection (d) below, voluntarily
designate additional Eligible Accounts to be included as Accounts and transfer
to the Trust the Receivables (and the related Collateral Security) of such
Additional Accounts.
(c) Receivables and Collateral Security from Additional Accounts
conveyed to the Trust pursuant to subsection (b) above shall be sold to the
Trust effective on a date (the "Addition Date") specified in an Addition Notice
-------------
on or before the tenth Business Day but not more than the 30th day prior to the
related Addition Date (the "Notice Date"); provided, however, that unless a
----------- -------- -------
Rating Agency Condition shall otherwise have been satisfied, the first Addition
Date following the Cut-Off Date shall occur no earlier than April 1, 1994 and
any Addition Date thereafter shall occur not less than ninety (90) days
following the immediately preceding Addition Date.
(d) The Depositor shall be permitted to convey to the Trust the
Receivables and all Collateral Security related thereto in any Additional
Accounts designated by the Depositor as such pursuant to Section 2.05(a) or (b)
hereof only upon satisfaction of each of the following conditions on or prior to
the related Addition Date:
(i) the Depositor shall have provided the Trustee, any Agent, the
Rating Agencies and any Enhancement Providers with an Addition Notice;
(ii) such Additional Accounts shall all be Eligible Accounts and, with
respect to Additional Accounts designated pursuant to subsection (b) above,
the Rating Agency Condition shall have been satisfied;
(iii) the Depositor shall have delivered to the Trustee a duly executed
written assignment in substantially the form of Exhibit B hereto (the
"Assignment") and the computer file or microfiche or written list required
-----------
to be delivered pursuant to Section 2.01 hereof;
34
<PAGE>
(S) 2.05
(iv) the Depositor shall, to the extent required by Section 4.03 hereof,
have deposited in the Collection Account all Collections with respect to
such Additional Accounts since the Additional Cut-Off Date;
(v)(A) no selection procedures reasonably believed by the Depositor to
be adverse to the interests of the Beneficiaries or any Enhancement
Provider were used in selecting such Additional Accounts; (B) the list of
Additional Accounts delivered pursuant to clause (iii) above is true and
correct in all material respects as of the Additional Cut-Off Date and (3)
as of each of the Notice Date and the Addition Date, neither BCI nor the
Depositor were insolvent nor will any of them have been made insolvent by
such transfer nor are any of them aware of any pending insolvency;
(vi) the addition of the Receivables arising in such Additional Accounts
shall not, in the reasonable belief of the Depositor, result in the
occurrence of an Early Amortization Event;
(vii) in the case of an addition of Receivables pursuant to subsection
(a) above, the additional Receivables are either Domestic Inventory
Receivables, Other Account Receivables or both; and
(viii) the Depositor shall have delivered to the Trustee and any
Enhancement Providers a certificate of a Vice President or more senior
officer confirming the items set forth in sub-clauses (ii) through (vi)
above; and
(e) The Depositor hereby represents and warrants as of the applicable
Addition Date as to the matters set forth in clause (v) of subsection (d) of
this Section 2.05. Upon discovery by the Depositor, the Servicer, any Agent,
the Trustee or any Enhancement Providers of a breach of the foregoing
representations and warranties, the party discovering the breach shall give
prompt written notice to the other parties, to any Agent and to any Enhancement
Providers.
(f) On or before each Addition Date, the Depositor shall have
delivered to the Trustee and any Enhancement Providers, an Opinion of Counsel,
substantially in the form of Exhibit G-2 hereto, with respect to the Receivables
in the Additional Accounts conveyed hereunder on such Addition Date.
SECTION 2.06. Covenants of the Depositor. The Depositor hereby
--------------------------
covenants that:
(a) No Liens. Except for (i) the conveyances hereunder or (ii) as
--------
provided in subsection (c) or (d) of Section 6.03 hereof, the Depositor
will not sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to
35
<PAGE>
(S) 2.06
exist (other than Liens permitted under Section 2.06(a) hereof and tax and
certain other statutory liens (including liens in favor of the Pension
Benefit Guaranty Corporation)) any Lien on, any Receivable or any
Collateral Security, whether now existing or hereafter created, or any
interest therein, or the Depositor's rights, remedies, powers or privileges
with respect to the Receivables under the Receivables Purchase Agreement,
or the Variable Funding Interest, the Variable Funding Certificate, the
Retained Interest, the BCRC Certificate or any Supplemental Certificate and
the Depositor shall defend the right, title and interest of the Trust in,
to and under the Receivables and the Collateral Security, whether now
existing or hereafter created, and such rights, remedies, powers and
privileges, against all claims of third parties claiming through or under
the Depositor. In addition, the Depositor shall maintain such records and
take such other actions as may be necessary or desirable to preserve the
Trust's perfected security interest in the Receivables.
(b) Account Allocations. In the event that the Depositor is unable
-------------------
for any reason to transfer Receivables with respect to an Initial Account
or any Additional Account to the Trust when required in accordance with the
terms of this Agreement, then the Depositor agrees that it shall allocate,
after the occurrence of such event, payments on each such Account with
respect to the principal balance of such Account first to the oldest
principal balance of such Account and to have such payments applied as
Collections in accordance with the terms of this Agreement. The parties
hereto agree that Non-Principal Receivables, whenever created, accrued in
respect of Principal Receivables which have been conveyed to the Trust
shall continue to be a part of the Trust notwithstanding any cessation of
the transfer of additional Principal Receivables to the Trust and
Collections with respect thereto shall continue to be allocated and paid in
accordance with the terms of this Agreement.
(c) Delivery of Collections. In the event that the Depositor, BCI or
-----------------------
any Affiliate thereof receives payments in respect of Receivables included
in any Account, the Depositor and BCI agree to pay or cause to be paid to
the Servicer or any Successor Servicer all payments received thereby in
respect of such Receivables as soon as practicable after receipt thereof,
but in no event later than two (2) Business Days after the receipt by the
Depositor or BCI. Receipt by BCI's Affiliates of payments in respect of
Other Account Receivables will not be deemed to be received by BCI until
received by BCI from such Affiliates.
(d) Notice of Liens. The Depositor shall notify the Trustee promptly
---------------
after becoming aware of any Lien on any Receivable other than the
conveyances hereunder.
(e) Compliance with Law. The Depositor hereby agrees to comply in all
-------------------
material respects with all Requirements of Law applicable to the Depositor
in connection with the performance of its obligations hereunder the failure
to comply
36
<PAGE>
(S) 2.06
with which would have a materially adverse effect on the interests of the
Beneficiaries.
(f) Activities of the Depositor. The Depositor will not engage in any
---------------------------
business or activity of any kind or enter into any transaction other than:
(i) the businesses, activities and transactions contemplated
and authorized by this Agreement or the Related Documents, including
without limitation:
(A) the execution and delivery by the Depositor of, and the
performance by the Depositor of its obligations under, the
BCRC Note and the Pledge Agreement (each as defined in the
Receivables Purchase Agreement));
(B) acquiring, selling, financing, holding, assigning,
pledging and otherwise dealing with wholesale and retail
receivables arising out of the sale of consumer, recreational
and commercial products and related activities and
transactions;
(C) transferring such receivables to trusts pursuant to a
pooling and servicing agreement or similar agreement or
arrangement;
(D) authorizing, selling and delivering any class of
certificates or other securities of any such trust;
(E) acquiring from BCI certificates issued by one or more
grantor trusts to which BCI transferred receivables;
(F) issuing, selling, authorizing and delivering one or more
series and classes of bonds, notes or other evidences of
indebtedness secured or collateralized by one or more pools of
receivables or by certificates of any class issued by one or
more trusts or by certificates of any class issued by a
grantor trust established by BCI (collectively, the "Notes"),
-----
provided that the Depositor shall have no liability under any
Notes (other than the BCRC Note (as defined in the Receivables
Purchase Agreement)) except to the extent of the one or more
pools of receivables or the certificates securing or
collateralizing such Notes;
37
<PAGE>
(S) 2.06
(G) holding and enjoying all of the rights and privileges of
any certificates issued by the trusts to the Depositor under
the related agreements and holding and enjoying all of the
rights and privileges of any class of any series of Notes,
including any class of Notes or certificates which may be
subordinate to any other class of Notes or certificates,
respectively;
(H) performing its obligations under the agreements and any
indenture or other agreement (each, an "Indenture") pursuant
---------
to which any Notes are issued;
(I) engaging in any activity and exercising any powers
permitted to corporations under the laws of the State of
Delaware that are related or incidental to the foregoing and
necessary, convenient or advisable to accomplish the
foregoing; and
(ii) any other activity in connection with which the Depositor
has given the Rating Agencies at least ten (10) days' prior notice and
the Rating Agency Condition has been satisfied
(such businesses, activities and transactions referred to in clauses (i)
and (ii) collectively, "Permitted Transactions"). Notwithstanding the
----------------------
foregoing, the Depositor will not establish or be depositor under any other
trust without prior Rating Agency approval.
(g) Indebtedness. Other than the BCRC Note (as defined in the
------------
Receivables Purchase Agreement) the Depositor will not create, incur or
assume any indebtedness or issue any securities or sell or transfer any
receivables to a trust or other Person which issues securities in respect
of any such receivables, unless (i) any such indebtedness or securities
have no recourse to any assets of the Depositor other than the specified
assets to which such indebtedness or securities relate and (ii) the
Depositor has given the Rating Agencies at least ten (10) days' prior
notice and the Rating Agency Condition shall have been satisfied in
connection therewith prior to the incurrence or issuance thereof.
(h) Guarantees. The Depositor will not become or remain liable,
----------
directly or contingently, in connection with any indebtedness or other
liability of any other Person, whether by guarantee, endorsement (other
than endorsements of negotiable instruments for deposit or collection in
the ordinary course of business), agreement to purchase or purchase,
agreement to supply or advance funds, or otherwise, except in connection
with Permitted Transactions and unless the Depositor has given the Rating
38
<PAGE>
(S) 2.06
Agencies at least ten (10) days' prior notice and the Rating Agency
Condition shall have been satisfied with respect thereto.
(i) Investments. The Depositor will not make or suffer to exist any
-----------
loans or advances to, or extend any credit to, or make any investments (by
way of transfer of property, contributions to capital, purchase of stock or
securities or evidences of indebtedness, acquisition of the business or
assets, or otherwise) in, any Affiliate, unless the Depositor has given the
Rating Agencies at least ten (10) days' prior notice and the Rating Agency
Condition shall have been satisfied with respect thereto; provided,
--------
however, that the Depositor shall not be prohibited under this Section
-------
2.06(i) from declaring or paying any dividends in respect of its common
stock.
(j) Stock; Merger. The Depositor will not (i) sell any shares of any
-------------
class of its capital stock to any Person (other than Bombardier
Corporation) or enter into any transaction of merger or consolidation
unless (A) the surviving Person of such merger or consolidation assumes all
of the Depositor's obligations under this Agreement, (B) the Depositor
shall have given the Rating Agencies and the Trustee at least ten (10)
days' prior notice and the Rating Agency Condition shall have been
satisfied with respect to such transaction and (C) such merger or
consolidation does not conflict with any provisions of the Certificate of
Incorporation of the Depositor, or (ii) terminate, liquidate or dissolve
itself (or suffer any termination, liquidation or dissolution), or (iii)
acquire or be acquired by any Person (other than as permitted pursuant to
clause (i) above), or (iv) otherwise make (or suffer) any material change
in the organization of or method of conducting its business.
(k) Agreements. The Depositor will not become a party to, or permit
----------
any of its properties to be bound by, any indenture, mortgage, instrument,
contract, agreement, lease or other undertaking, except this Agreement, the
Related Documents and any document relating to a Permitted Transaction, or
amend or modify its Certificate of Incorporation or cancel, terminate,
amend, supplement, modify or waive any of the provisions of the Receivables
Purchase Agreement or any of the other Related Documents or request,
consent or agree to or suffer to exist or permit any such cancellation,
termination, amendment, supplement, modification or waiver unless, in any
such case, the Depositor has given the Rating Agencies at least ten (10)
days' prior notice and the Rating Agency Condition shall have been
satisfied with respect thereto.
(l) Repurchase Agreements. The Depositor agrees to use all reasonable
---------------------
efforts to enforce (or cause the enforcement of) any repurchase or other
agreements with manufacturers, importers or distributors relating to
Obligors who are being financed by Domestic Inventory Receivables held in
the Trust.
39
<PAGE>
(S) 2.07
SECTION 2.07. Removal of Accounts. (a) The Depositor shall have the
-------------------
right to remove Accounts, including all amounts then held by the Trust or
thereafter received by the Trust in respect of the Accounts being removed, from
the Trust in the manner prescribed in subsection (b) of this Section 2.07.
(b) To remove Accounts, including all amounts then held by the Trust
or thereafter received by the Trust in respect of the Accounts being removed,
the Depositor (or the Servicer on its behalf) shall take the following actions
and make the following determinations:
(i) not less than five (5) Business Days prior to the Removal Date,
furnish to the Trustee, any Enhancement Providers and the Rating Agencies a
written notice (the "Removal Notice") specifying the date on which removal
--------------
of one or more Accounts (the "Removed Accounts") will occur (a "Removal
---------------- -------
Date");
----
(ii) from and after such Removal Date, cease to transfer to the
Trust any and all Receivables arising in such Removed Accounts;
(iii) represent and warrant that the removal of any such Account
on any Removal Date shall not, in the reasonable belief of the Depositor
(or the Servicer on behalf of the Depositor), cause an Early Amortization
Event to occur or cause the Pool Balance to be less than the Required Pool
Balance;
(iv) represent and warrant that no selection procedures reasonably
believed by the Depositor (or the Servicer on behalf of the Depositor) to
be adverse to the interests of the Beneficiaries were utilized in selecting
the Accounts to be removed;
(v) represent and warrant that such removal will not result in a
reduction or withdrawal of the rating of any outstanding Series or Class by
the applicable Rating Agency;
(vi) on or before the related Removal Date, deliver to the Trustee
and any Enhancement Providers an Officers' Certificate confirming the items
set forth in clauses (iii) through (v) above, the Trustee may conclusively
rely on such Officers' Certificate and shall have no duty to make inquiries
with regard to the matters set forth therein and shall incur no liability
in so relying; and
(vii) on or before the fifth Business Day after the Removal Date,
furnish to the Trustee a computer file, microfiche list or other list of
the Removed Accounts that were removed on the Removal Date, specifying for
each Removed Account (x) its number, (y) as of the date of the Removal
Notice, the aggregate amount outstanding in such Removed Account and (z) as
of the Removal Date, the aggregate amount of
40
<PAGE>
(S) 2.07
Principal Receivables therein and represent that such computer file,
microfiche list or other list of the Removed Accounts is true and complete
in all material respects.
(c) Subject to subsection (b) of this Section 2.07, on the Removal
Date with respect to any such Removed Account, such Removed Account shall be
deemed removed from the Trust for all purposes. After the Removal Date and upon
the written request of the Servicer, the Trustee shall deliver to the Depositor
a reassignment in substantially the form of Exhibit H-1 hereto (the
"Reassignment").
- -------------
SECTION 2.08. Removal of Ineligible Accounts. (a) On or prior to
------------------------------
the fifth Business Day following any date on which an Account becomes an
Ineligible Account (such fifth Business Day, the "Removal Commencement Date"),
-------------------------
the Depositor shall commence removal of the Receivables of such Ineligible
Account in the manner prescribed in subsection (b) of this Section 2.08.
(b) With respect to each Account that becomes an Ineligible Account,
the Depositor (or the Servicer on its behalf) shall take the following actions
and make the following determinations:
(i) furnish to the Trustee, the Rating Agencies and any Enhancement
Providers a Removal Notice specifying the Removal Commencement Date and the
Ineligible Accounts to be removed;
(ii) from and after such Removal Commencement Date, cease to
transfer to the Trust any and all Receivables arising in such Ineligible
Accounts and allocate all Collections with respect to such Receivables as
provided in subsection (c) of this Section 2.08;
(iii) within five (5) Business Days after the Removal Commencement
Date, amend Schedule 1 hereto by delivering to the Trustee a computer file
or microfiche or written list containing a true and complete list of the
Ineligible Accounts to be removed, specifying for each such Account, as of
the date immediately preceding the Removal Commencement Date, its account
number, the aggregate amount of Receivables outstanding in such Account and
the aggregate outstanding principal balance therein (the "Designated
Balance");
(iv) from and after the Removal Commencement Date with respect to
any Ineligible Account to be removed, allocate Principal Collections in
respect of such Ineligible Account first to the oldest outstanding
principal balance of such Ineligible Account, until the Designated Balance
in such Ineligible Account is reduced to zero (the date on which any such
Designated Balance is so reduced to zero, the "Removal Termination Date");
------------------------
and
41
<PAGE>
(S) 2.08
(v) on each Business Day from and after the Removal Commencement Date
with respect to any Ineligible Account to be removed, until the related
Removal Termination Date, allocate Non-Principal Collections in respect of
such Ineligible Account (A) to the Trust, based on the ratio of (1) the
amount of Principal Receivables in such Ineligible Account on such Business
Day that were previously sold to the Trust to (2) the total amount of
Principal Receivables in such Ineligible Account on such Business Day and
(B) to the Depositor, the remainder of Non-Principal Collections in respect
of such Ineligible Account on such Business Day.
(c) Subject to subsection (b) of this Section 2.08, on the Removal
Termination Date with respect to any Ineligible Account, such Account shall be
deemed removed from the Trust for all purposes. After the Removal Termination
Date and upon the written request of the Servicer, the Trustee shall deliver to
the Depositor a Reassignment in substantially the form of Exhibit H-2 hereto.
(d) On the Removal Termination Date with respect to any Ineligible
Account, the Depositor shall cease to allocate any collections therefrom in
accordance herewith and such Account shall be deemed a Removed Account.
SECTION 2.09. Sale of Ineligible Receivables. The Depositor shall
------------------------------
sell to the Trust on each Transfer Date any and all Receivables arising in any
Eligible Accounts that are Ineligible Receivables; provided, that on the Cut-Off
--------
Date or, in the case of Receivables arising in Additional Accounts, on the
related Additional Cut-Off Date, and on the applicable Transfer Date, the
Account in which such Receivables arise is an Eligible Account.
SECTION 2.10. Discount Option. The Depositor may, at any time, upon
---------------
thirty (30) days' prior written notice to the Servicer, the Trustee and each
Rating Agency, designate a fixed percentage of the amount of Collections in
respect of Other Account Receivables arising in the Accounts (to the extent that
such Other Account Receivables are included in the Pool) on and after the date
of such designation that otherwise would be treated as Principal Collections to
be treated as Non-Principal Collections. Such designation will become effective
on the date specified therein only if (i) the Depositor shall have delivered to
the Trustee an Officers' Certificate, dated the date of such designation, to the
effect that the Depositor reasonably believes that such designation will not
result in an Early Amortization Event or have a materially adverse effect on the
Certificateholders and (ii) each Rating Agency shall have notified the
Depositor, the Servicer and the Trustee that such action will not result in a
reduction or withdrawal of the then existing rating of any outstanding Series or
Class.
42
<PAGE>
(S) 3.01
ARTICLE III
Administration and Servicing
----------------------------
of Receivables
--------------
SECTION 3.01. Acceptance of Appointment and Other Matters Relating to
-------------------------------------------------------
the Servicer. (a) The Servicer shall (or, to the extent applicable, shall
- ------------
cause its Affiliates to) service and administer the Receivables, collect
payments due under the Receivables and charge-off as uncollectible Receivables,
all in accordance with the Inventory Security Agreements (as amended from time
to time) relating to the Accounts (if applicable), the Financing Guidelines and
otherwise in accordance with procedures that are customary and usual in the
industry for servicing receivables comparable to the Receivables, except insofar
as any failure to so comply or perform would not materially and adversely affect
the rights of the Trust or any of the Beneficiaries; provided, that unless the
--------
Depositor shall have given the Rating Agencies ten (10) days' prior notice of
its election not to take the following actions with respect to Receivables and
the Rating Agency Condition shall have been satisfied with respect thereto, the
Servicer shall charge-off as uncollectible (x) at least 33% of the principal
amount of each Receivable with respect to which principal payments are
delinquent by thirty (30) days or more, (y) at least 66% of the principal amount
(before giving effect to any reduction therein pursuant to clause (x) hereof) of
each Receivable with respect to which principal payments are delinquent by sixty
(60) days or more, and (z) 100% of the remaining principal amount of each
Receivable with respect to which principal payments are delinquent by ninety
(90) days or more or interest payments (aggregating at least $150 with respect
to Receivables under the same Account) are delinquent by 120 days or more. The
Servicer and its applicable Affiliates shall have full power and authority,
acting alone or through any party properly designated hereunder, to do any and
all things in connection with such servicing and administration which it may
deem necessary or desirable. Without limiting the generality of the foregoing
and subject to Section 10.01 hereof, the Servicer is hereby authorized and
empowered, unless such power and authority is revoked by the Trustee on account
of the occurrence of a Servicer Default pursuant to Section 10.01 hereof:
(i) to instruct the Trustee to make withdrawals and payments from
the Collection Account and any Series Account as set forth in this
Agreement;
(ii) to instruct the Trustee to take any action required or
permitted under any Enhancement;
(iii) to execute and deliver, on behalf of the Trust for the
benefit of the Certificateholders and the other Beneficiaries, any and
all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with
respect to the Receivables and, after the delinquency of any
Receivable and to the extent permitted under and in
43
<PAGE>
(S) 3.01
compliance with applicable Requirements of Law, to commence
enforcement proceedings with respect to such Receivables;
(iv) to make any filings, reports, notices, applications,
registrations with, and seek any consents or authorizations from, the
Securities and Exchange Commission and any State securities authority
on behalf of the Trust as may be necessary or advisable to comply with
any Federal or State securities laws or reporting requirement; and
(v) to delegate certain of its servicing, collection, enforcement
and administrative duties hereunder with respect to the Accounts and
the Receivables to any Person who agrees to conduct such duties in
accordance with the Financing Guidelines and this Agreement;
provided, however, that the Servicer shall notify the Trustee, the Rating
- -------- -------
Agencies, any Agent and any Enhancement Providers in writing of any such
delegation of its duties which is not in the ordinary course of its business,
that no delegation will relieve the Servicer of its liability and responsibility
with respect to such duties and that the Rating Agency Condition shall have been
satisfied with respect to any such delegation. The Trustee shall furnish the
Servicer with any powers of attorney and other documents reasonably necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder;
(b) In the event that the Depositor is unable for any reason to
transfer Receivables with respect to any Initial Account or any Additional
Account to the trust in accordance with the provisions of this Agreement
(including by reason of the application of the provisions of Section 9.02 hereof
or any court of competent jurisdiction ordering that the Depositor not transfer
any additional Principal Receivables to the Trust) then, in any such event, the
Servicer agrees (i) to give prompt written notice thereof to the Trustee, any
Enhancement Providers and each Rating Agency and (ii) that it shall in any such
event allocate after the occurrence of such event, payments on each such Account
with respect to the principal balance of such Account first to the oldest
principal balance of such Account, and to have such payments applied as
Collections in accordance with Section 4.02 hereof. The parties hereto agree
that Non-Principal Receivables, whenever created, accrued in respect of
Principal Receivables which have been conveyed to the Trust shall continue to be
a part of the Trust notwithstanding any cessation of the transfer of additional
Principal Receivables to the Trust and Collections with respect thereto shall
continue to be allocated and paid in accordance with the terms of this
Agreement.
(c) The Servicer and its Affiliates servicing the Receivables
shall not, and any Successor Servicer shall not be obligated to, use separate
servicing procedures, offices, employees or accounts for servicing the
Receivables from the procedures, offices, employees
44
<PAGE>
(S) 3.01
and accounts used by the Servicer and its Affiliates in connection with
servicing other receivables comparable to the Receivables.
(d) The Servicer shall comply with and perform its servicing
obligations with respect to the Accounts and Receivables in accordance with the
Inventory Security Agreements (as amended from time to time) relating to the
Accounts, if applicable, and the Financing Guidelines, except insofar as any
failure to so comply or perform would not materially and adversely affect the
rights of the Trust or any of the Beneficiaries. Subject to compliance with all
Requirements of Law, the Servicer (or BCI) and any Affiliate of BCI may change
the terms and provisions of the Accounts, including, without limitation, the
Inventory Security Agreements and the Financing Guidelines, in any respect
(including the calculation of the amount or the timing of charge-offs and the
rate of the finance charge, if any, assessed thereon), only if as a result of
such change, in the reasonable judgment of the Servicer no Early Amortization
Event will occur.
SECTION 3.02. Servicing Compensation. (a) As full compensation for
----------------------
its servicing activities hereunder and reimbursement for its expenses as set
forth in subsection (b) below, the Servicer shall be entitled to receive the
Servicing Fee on each Distribution Date on or prior to the Trust Termination
Date payable in arrears. The "Servicing Fee" shall be the aggregate of the
-------------
Monthly Servicing Fees specified in the Supplements. The Servicing Fee shall be
payable to the Servicer solely to the extent amounts are available for payment
in accordance with the terms of the Supplements.
(b) The Servicer's expenses include the amounts due to the Trustee
pursuant to Section 11.05 hereof and the reasonable fees and disbursements of
independent accountants and all other expenses incurred by the Servicer in
connection with its activities hereunder, and including all other fees and
expenses of the Trust not expressly stated herein to be for the account of the
Certificateholders but not including any federal, state or local income and
franchise taxes, if any, of the Trust or the Certificateholders. The Servicer
shall be required to pay such expenses for its own account, and shall not be
entitled to any payment therefor other than the Servicing Fee. The Servicer
will be solely responsible for all fees and expenses incurred by or on behalf of
the Servicer in connection herewith and the Servicer will not be entitled to any
fee or other payment from, or claim on, any of the Trust Assets (other than the
Servicing Fee).
SECTION 3.03. Representations, Warranties and Covenants of the
------------------------------------------------
Servicer. (a) BCI, as Servicer, hereby makes on the first Closing Date on each
- --------
Series Issuance Date with respect to which it is the Servicer, and any Successor
Servicer by its appointment hereunder shall make, on each Series Issuance Date
(and on the date of any such appointment) the following representations,
warranties and covenants, on which the Trustee has relied in accepting the
Receivables in trust and in authenticating the Certificates:
45
<PAGE>
(S) 3.03
(i) Organization and Good Standing. Such party is a corporation
------------------------------
duly organized, validly existing and in good standing under the applicable
laws of the state of its incorporation and has, in all material respects,
full corporate power, authority and legal rights to own its properties and
conduct its receivable servicing business as such properties are presently
owned and as such business is presently conducted, and to execute, deliver
and perform its obligations under this Agreement and the applicable
Supplement.
(ii) Due Qualification. Such party is duly qualified to do
-----------------
business and is in good standing as a foreign corporation (or is exempt
from such requirements) and has obtained all necessary licenses and
approvals in each jurisdiction in which the servicing of the Receivables as
required by this Agreement requires such qualification except where the
failure to so qualify or be in good standing or obtain licenses or
approvals would not have a material adverse effect on its ability to
perform its obligations hereunder.
(iii) Due Authorization. The execution, delivery, and performance
-----------------
of this Agreement and the applicable Supplement has been duly authorized by
such party by all necessary corporate action on the part thereof.
(iv) Binding Obligation. This Agreement and the applicable
------------------
Supplement constitutes a legal, valid and binding obligation of such party,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereinafter in effect, affecting the enforcement
of creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a proceeding
at law or in equity) and the availability of equitable remedies.
(v) No Violation. The execution and delivery of this Agreement
------------
and the applicable Supplement by such party, the performance of the
transactions contemplated by this Agreement and the applicable Supplement
and the fulfillment of the terms hereof and thereof applicable to such
party will not conflict with, violate, result in any breach of any of the
material terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under, any Requirement of Law
applicable to such party or any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which such party is a party or by
which it is bound except to the extent that such conflict, breach or
default will not have a materially adverse effect on such party's ability
to perform its obligations hereunder and thereunder.
46
<PAGE>
(S) 3.03
(vi) No Proceedings. There are no pending proceedings or, to the
--------------
best knowledge of such party, investigations, pending or threatened against
such party before any Governmental Authority (i) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by this Agreement and the applicable Supplement, (ii) seeking
any determination or ruling that, in the reasonable judgment of such party,
would materially and adversely affect the performance by such party of its
obligations under this Agreement and the applicable Supplement, or
(iii) seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement and the
applicable Supplement.
(vii) Compliance with Requirements of Law. Such party shall duly
-----------------------------------
satisfy all obligations on its part to be fulfilled under or in connection
with the Receivables and the Accounts, will maintain in effect all
qualifications required under Requirements of Law in order to service
properly the Receivables and the Accounts and will comply in all material
respects with all Requirements of Law in connection with servicing the
Receivables and the Accounts, except where the failure to do any of the
foregoing would not have a materially adverse effect on the interests of
the Beneficiaries.
(viii) No Rescission or Cancellation. Such party shall not
-----------------------------
reschedule, revise, defer, cancel or settle payments due on any Receivable
except in accordance with sound industry practices for servicing
receivables comparable to the Receivables.
(ix) Protection of Beneficiaries' Rights. Such party shall take no
-----------------------------------
action which would impair the rights of Beneficiaries in the Receivables or
in the Certificates.
(x) Servicer Concentration Account. The Servicer maintains
------------------------------
deposit accounts (collectively, the "Concentration Account") into which it
---------------------
shall deposit all amounts paid by the Obligors with respect to the
Receivables. The Servicer agrees (i) that it will not change this method of
collection without the prior written consent of any Enhancement Providers,
if any; (ii) with respect to amounts deposited into the Concentration
Account in respect of a particular day, that it will not transfer such
amounts from the Concentration Account until the Servicer has posted all
Collections in respect of the Receivables for such day; and
(iii) concurrently with the transfer of amounts from the Concentration
Account in respect of a particular day, the Servicer will make the deposits
and transfers required by the terms of this Agreement for such day, if any.
(xi) Negative Pledge. Except for the conveyances under the
---------------
Receivables Purchase Agreement and under this Agreement, the Servicer will
not sell, pledge,
47
<PAGE>
(S) 3.03
assign or transfer to any other Person, or grant, create, incur, assume or
suffer to exist any Lien on, any Receivable sold and assigned to the Trust,
whether now existing or hereafter created, or any interest therein, and the
Servicer shall defend the rights, title and interest of the Trust in, to
and under any Receivable sold and assigned to the Trust, whether now
existing or hereafter created, against all claims of third parties claiming
through or under the Depositor or the Servicer.
(xii) Repurchase Agreements. The Servicer agrees to use
---------------------
reasonable efforts to collect (on behalf of the Depositor) under any
repurchase or other agreements with manufacturers, importers or
distributors relating to Obligors who are being financed by Domestic
Inventory Receivables held in the Trust.
(b) Notice of Breach. The representations and warranties set
----------------
forth in this Section 3.03 shall survive the transfer and assignment of the
Receivables to the Trust and the issuance of the Certificates. Upon discovery by
the Depositor, the Servicer or the Trustee of a breach of any of the
representations and warranties set forth in this Section 3.03, the party
discovering such breach shall give prompt written notice to the other parties
and to any Enhancement Providers.
(c) Purchase. In the event the Depositor or the Servicer receives
--------
written notice from the Trustee or any Enhancement Provider that any covenant
under clause (vii), (viii) or (ix) of subsection (a) above has not been complied
with in all material respects and such noncompliance has not been cured within
thirty (30) days thereafter (or such longer period as the Trustee may permit)
and has a materially adverse effect on the Investors' Interest or the Variable
Funding Interest in any Receivable or Account, then, unless a Liquidation Event
has occurred, the Servicer shall purchase such Receivable or, if such
non-compliance is with respect to any Account, all Receivables in such Account,
on the Determination Date immediately succeeding the expiration of such 30-day
period (or such longer period as may be permitted by the Trustee) on the terms
and conditions set forth in the next succeeding paragraph. The Servicer shall
effect such purchase by depositing in the Collection Account in immediately
available funds an amount equal to the Purchase Price of such Receivable. Any
deposit of such Purchase Price into the Collection Account shall be considered a
Transfer Deposit Amount and shall be applied in accordance with the terms of
this Agreement.
(d) Payment of Purchase Price; Etc. Upon each payment by the
------------------------------
Servicer of the Purchase Price for the Receivables to be purchased by the
Servicer from the Trust pursuant to subsection (c) above, the Trust shall
automatically and without further action be deemed to sell, transfer, assign,
set over and otherwise convey to the Servicer, without recourse, representation
or warranty, all right, title and interest of the Trust in and to such
Receivables, all monies due or to become due with respect thereto and all
proceeds thereof and any related Collateral Security. The Trustee shall execute
such documents and
48
<PAGE>
(S) 3.03
instruments of transfer or assignment and take such other actions as shall be
reasonably requested by the Servicer to effect the conveyance of any such
Receivables pursuant to this Section 3.03. The obligation of the Servicer to
purchase such Receivables, and to make the deposits required to be made to the
Collection Account as provided in subsection (c) above, shall constitute the
sole remedy respecting the event giving rise to such obligation available to the
Certificateholders or the Holder of the Variable Funding Certificate (or the
Trustee on behalf of the Certificateholders and the Holder of the Variable
Funding Certificate).
SECTION 3.04. Reports and Records for the Trustee. On each
-----------------------------------
Distribution Date, with respect to each outstanding Series, the Servicer shall
deliver to any Enhancement Providers, the Rating Agencies, the Trustee, the
Holder of the Variable Funding Certificate and the Holder of the BCRC
Certificate a Distribution Date Statement for the related Distribution Date
substantially in the form set forth in the related Supplement.
SECTION 3.05. Annual Servicer's Certificate. The Servicer will
-----------------------------
deliver to the Rating Agencies, the Trustee, the Holder of the Variable Funding
Certificate, the Holder of the BCRC Certificate and any Enhancement Providers on
or before April 30 of each calendar year, beginning with April 30, 1995, an
Officers' Certificate substantially in the form of Exhibit C hereto stating that
(a) a review of the activities of the Servicer during the preceding calendar
year and of its performance under this Agreement was made under the supervision
of the officer signing such certificate and (b) to the best of such officer's
knowledge, based on such review, the Servicer has performed in all material
respects its obligations under this Agreement throughout such year, or, if there
has been a material default in the performance of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. A copy of such certificate may be obtained by any Certificateholder by
a request in writing to the Trustee addressed to the Corporate Trust Office.
SECTION 3.06. Annual Independent Public Accountants' Servicing Report.
--------------------------------------------------------
On or before April 30 of each calendar year (beginning April 30, 1995), the
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or the
Depositor) to furnish a report (addressed to the Board of Directors of the
Servicer and to the Trustee), substantially in the form of Exhibit J hereto, to
the effect that they have examined certain documents and records relating to the
servicing of Accounts under this Agreement and each Supplement and that, on the
basis of such examination, nothing has come to the attention of such accountants
that caused them to believe that the servicing has not been conducted in
compliance with the terms and conditions set forth in this Agreement and each
Supplement, except for such exceptions as they believe to be immaterial and such
other exceptions as shall be set forth in such report. A copy of such report may
be obtained by any Certificateholder by a request in writing to the Trustee
addressed to the Corporate Trust Office.
49
<PAGE>
(S) 3.07
SECTION 3.07. Tax Treatment. The Depositor has entered into this
-------------
Agreement and the Investor Certificates and the Variable Funding Certificate
have been (or will be) issued with the intention that the Investor Certificates
will qualify under applicable tax law as indebtedness of BCRC secured by the
Receivables. The Depositor, each Beneficiary and each Certificateholder and
Certificate Owner by the acceptance of its Certificate or Book-Entry
Certificate, as applicable, agrees to treat the Investor Certificates as
indebtedness of BCRC secured by the Receivables for United States Federal income
taxes, state and local income and franchise taxes and any other taxes imposed on
or measured by income.
SECTION 3.08. Notices to BCI. In the event BCI is no longer acting
--------------
as Servicer, any Successor Servicer appointed pursuant to Section 10.02 hereof
shall deliver or make available to BCI, as the case may be, each certificate and
report required to be prepared, forwarded or delivered thereafter pursuant to
Section 3.04, Section 3.05 or Section 3.06 hereof.
SECTION 3.09. Adjustments. (a) If the Servicer adjusts downward the
-----------
amount of any Principal Receivable because of a rebate, refund, credit
adjustment or billing error to an Obligor, or because such Receivable was
created in respect of any Eligible Products which were refused or returned by an
Obligor, then, in any such case, the Pool Balance will be automatically reduced
by the amount of the adjustment. Furthermore, if following such a reduction the
Pool Balance would be less than the Required Pool Balance on the immediately
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the Distribution Date
immediately following such Determination Date), then, unless a Liquidation Event
has occurred, the Depositor shall be required to pay in cash an amount equal to
such deficiency (up to the amount of such adjustment) into the Collection
Account in immediately available funds on the Business Day on which such
adjustment or reduction occurs (each such payment an "Adjustment Payment").
------------------
(b) If (i) the Servicer makes a deposit into the Collection
Account in respect of a Collection of a Receivable and such Collection was
received by the Servicer in the form of a check which is not honored for any
reason or (ii) the Servicer makes a mistake with respect to the amount of any
Collection and deposits an amount that is less than or more than the actual
amount of such Collection, the Servicer shall appropriately adjust the amount
subsequently deposited into the Collection Account to reflect such dishonored
check or mistake. Any Receivable in respect of which a dishonored check is
received shall be deemed not to have been paid.
50
<PAGE>
(S) 4.01
ARTICLE IV
Rights of Certificateholders and
--------------------------------
Allocation and Application of Collections
-----------------------------------------
SECTION 4.01. Rights of Certificateholders. The Investor
----------------------------
Certificates shall represent fractional undivided interests in the Trust, which,
with respect to each Series, shall consist of the right to receive, to the
extent necessary to make the required payments with respect to the Investor
Certificates of such Series at the times and in the amounts specified in the
related Supplement, the portion of Collections allocable to Certificateholders
of such Series pursuant to this Agreement and such Supplement, funds on deposit
in the Collection Account allocable to Certificateholders of such Series
pursuant to this Agreement and such Supplement, funds on deposit in any related
Series Account and funds available pursuant to any related Enhancement
(collectively, with respect to all Series, the "Investors' Interest"), it being
-------------------
understood that the Investor Certificates of any Series or Class shall not
represent any interest in any Series Account or Enhancement for the benefit of
any other Series or Class. The Variable Funding Certificate shall represent a
fractional undivided interest in the Trust, which shall consist of the right to
receive, to the extent necessary to make the required payments with respect to
the Variable Funding Certificate, at the times and in the amounts specified in
the related Supplement, the portion of Collections allocable to the Holder of
the Variable Funding Certificate pursuant to this Agreement and such Supplement
and funds on deposit in the Collection Account allocable to the Holder of the
Variable Funding Certificate pursuant to this Agreement and such Supplement
(collectively, the "Variable Funding Interest"), it being understood that the
-------------------------
Variable Funding Certificate shall not represent any interest in any Series
Account or Enhancement except as specifically provided in this Agreement or such
Supplement. The BCRC Certificate and any Supplemental Certificate shall,
collectively, represent the ownership interest in the remainder of the Trust
Assets not allocated pursuant to this Agreement or any Supplement to the
Investors' Interest or the Variable Funding Interest, including the right to
receive the Collections with respect to the Receivables and other amounts at the
times and in the amounts specified in this Agreement or in any Supplement to be
paid to the Depositor on behalf of all Holders of the BCRC Certificate and any
Supplemental Certificates (the "Retained Interest"); provided, however, that
----------------- -------- -------
neither the BCRC Certificate nor any Supplemental Certificate shall represent
any interest in the Collection Account, any Series Account or any Enhancement,
except as specifically provided in this Agreement or any Supplement.
SECTION 4.02. Establishment of the Collection Account. The Servicer,
---------------------------------------
for the benefit of the Certificateholders and the other Beneficiaries, shall
cause to be established and maintained in the name of the Trust an Eligible
Deposit Account bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders and the
other Beneficiaries (the "Collection Account"). The Trustee shall possess all
------------------
right, title and interest in all funds from time to time on deposit in, and all
51
<PAGE>
(S) 4.02
Eligible Investments credited to, the Collection Account and in all proceeds
thereof. The Collection Account shall be under the sole dominion and control of
the Trustee for the benefit of the Certificateholders and the other
Beneficiaries. If, at any time, the Collection Account ceases to be an Eligible
Deposit Account, the Servicer shall establish a substitute Eligible Deposit
Account as the Collection Account, instruct the Trustee to transfer any cash
and/or any Eligible Investments to such new Collection Account and, from the
date any such substitute account is established, such account shall be the
Collection Account. Other than as Holder of the Variable Funding Certificate,
the BCRC Certificate or any Supplemental Certificate, neither the Depositor nor
the Servicer, nor any person or entity claiming by, through or under the
Depositor or Servicer, shall have any right, title or interest in, or any right
to withdraw any amount from, the Collection Account. Pursuant to the authority
granted to the Servicer in Section 3.01 hereof, the Servicer shall have the
power, revocable by the Trustee, to instruct the Trustee to make withdrawals and
payments from the Collection Account for the purposes of carrying out the
Servicer's or Trustee's duties specified in this Agreement.
All Eligible Investments shall be held by the Trustee for the benefit
of the Certificateholders and the other Beneficiaries. Funds on deposit in the
Collection Account shall at the written direction of the Servicer be invested by
the Trustee solely in Eligible Investments that will mature so that such funds
will be available at the close of business on or before the Business Day next
preceding the following Distribution Date (or on or before 10:00 a.m. (New York
City time) on such following Distribution Date in the case of Eligible
Investments in respect of which the Trustee is the obligor). As of each
Determination Date, all interest and other investment earnings (net of losses
and investment expenses) on funds on deposit in the Collection Account received
on such Determination Date shall be credited to the Collection Account.
Schedule 2, which is hereby incorporated into and made part of this Agreement,
identifies the Collection Account by setting forth the account number of such
account, the account designation of such account and the name of the institution
with which such account has been established. If a substitute Collection
Account is established pursuant to this Section 4.02, the Servicer shall provide
to the Trustee an amended Schedule 2, setting forth the relevant information for
such substitute Collection Account.
SECTION 4.03. Allocations and Applications of Collections and Other
-----------------------------------------------------
Funds. (a) Except as otherwise provided in subsections (b) and (c) of this
- -----
Section 4.03, the Servicer shall deposit Collections into the Collection Account
as promptly as possible after receipt of such Collections, but in no event later
than the second Business Day after such receipt. Receipt by BCI's Affiliates of
Collections with respect to Other Account Receivables will not be deemed to be
received by BCI as Servicer until actually received by BCI from such Affiliate.
(b) Notwithstanding anything in this Agreement to the contrary,
for so long as (i) BCI remains the Servicer hereunder, (ii) no Servicer Default
has occurred and is con-
52
<PAGE>
(S) 4.03
tinuing and (iii) (x) BCI is a subsidiary of Bombardier Corporation (which shall
own at least 80% of the voting common stock of BCI) and BCI has and maintains a
short-term rating of at least A-1 by Standard & Poor's and P-1 by Moody's,
(y) BCI arranges for and maintains a letter of credit or other form of
Enhancement in respect of the Servicer's obligations to make deposits of
collections on the Receivables in the Collection Account that is acceptable in
form and substance to each Rating Agency or (z) BCI otherwise obtains the Rating
Agency confirmations described below, then, subject to any limitations in the
confirmations described below, the Servicer need not make the deposits of
Collections into the Collection Account as provided in subsection (a) of this
Section 4.03, but may use for its own benefit all such Collections until the
Business Day immediately preceding the related Distribution Date, at which time
BCI will make a single deposit into the Collection Account in same-day or
next-day funds not later than 12:00 noon (New York City time) in an amount equal
to the net amount of such deposits and withdrawals which would have been made
had the conditions of this sentence not applied; provided, however, that prior
-------- -------
to ceasing daily deposits as described above BCI shall have delivered to the
Trustee written confirmation from each of the Rating Agencies that the failure
by BCI to make daily deposits will not result in a reduction or withdrawal of
the rating of any outstanding Series or Class.
(c) Subject to Section 4.04 hereof, but notwithstanding anything
else in this Agreement to the contrary, with respect to any Collection Period,
whether the Servicer is required to make deposits of Collections pursuant to
subsection (a) or (b) above, (i) the Servicer will only be required to deposit
Collections into the Collection Account up to the aggregate amount of
Collections required to be deposited into all Series Accounts or, without
duplication, distributed on the related Distribution Date to all
Certificateholders or to each Enhancement Provider pursuant to the terms of any
Supplement or Enhancement Agreement and (ii) if at any time prior to such
Distribution Date the amount of Collections deposited in the Collection Account
exceeds the amount required to be deposited pursuant to clause (i) above, the
Servicer will be permitted to withdraw the excess from the Collection Account.
(d) Collections of Non-Principal Receivables and Principal
Receivables, Defaulted Receivables and Miscellaneous Payments will be allocated
to each Series of Certificateholders from and after the Series Cut-Off Date and
to the Holder of the Variable Funding Certificate as specified in the related
Supplement, and amounts so allocated to any Series will not, except as specified
in the related Supplement, be available to the Certificateholders of any other
Series or to the Variable Funding Certificateholder. Similarly, amounts so
allocated to the Variable Funding Certificate will not, except as specified in
the related Supplement, be available to the Certificateholders of any Series.
Allocations thereof among the Investors' Interest, the Variable Funding Interest
and the Retained Interest, between the Investors' Interest and the Variable
Funding Interest, among the Series of Certificateholders and among the Classes
in any Series shall be set forth in this Agreement and in the related Supplement
or Supplements.
53
<PAGE>
(S) 4.04
SECTION 4.04. Unallocated Principal Collections. On each Distribution
---------------------------------
Date, (a) the Servicer shall allocate Excess Principal Collections (as
described below) to each Series as set forth in the related Supplement and
(b) the Servicer shall instruct the Trustee to withdraw from the Collection
Account and pay, or make available, to the Depositor for the benefit of the
Holder(s) of the BCRC Certificate and any Supplemental Certificates (i) an
amount equal to the excess, if any, of (x) the aggregate amount for all
outstanding Series of Principal Collections which the related Supplements
specify are to be treated as "Excess Principal Collections" with respect to such
Distribution Date over (y) the sum of (1) the aggregate amount for all
outstanding Series which the related Supplements specify are "Principal
Shortfalls" with respect to such Distribution Date and, without duplication and
(2) the amount of Principal Collections distributable to the Holder of the
Variable Funding Certificate pursuant to the related Supplement and (ii) the
aggregate amount for all outstanding Series of that portion of Principal
Collections which the related Supplements specify are to be allocated and paid
to the Depositor for the benefit of the Holder(s) of the BCRC Certificate and
any Supplemental Certificates with respect to such Distribution Date; provided,
--------
however, that, in the case of clauses (i) and (ii), such amounts shall be paid
- -------
to the Depositor only if the Pool Balance for such Distribution Date (determined
after giving effect to any Principal Receivables transferred to the Trust on
such date) exceeds the Required Pool Balance for the immediately preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the Distribution Date immediately
following such Determination Date). The amount held in the Collection Account
and not paid to the Depositor as a result of the proviso in the preceding
sentence ("Unallocated Principal Collections") shall be paid to the Depositor at
---------------------------------
the time the Pool Balance exceeds the Required Pool Balance for the immediately
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the Distribution Date
immediately following such Determination Date); provided, however, that any
-------- -------
Unallocated Principal Collections on deposit in the Collection Account at any
time during which any Series is in its amortization period, accumulation period
or Early Amortization Period shall be deemed to be "Miscellaneous Payments" and
shall be allocated and distributed in accordance with Section 4.03 hereof and
the terms of each Supplement.
ARTICLE V
Distributions and Reports to
----------------------------
Certificateholders
------------------
SECTION 5.01. Distributions and Reports to Certificateholders.
-----------------------------------------------
Distributions shall be made to, and reports shall be provided to,
Certificateholders as set forth in the applicable Supplement.
54
<PAGE>
(S) 6.01
ARTICLE VI
The Certificates
----------------
SECTION 6.01. The Certificates. The Investor Certificates of any
----------------
Series or Class may be issued in bearer form ("Bearer Certificates") with
-------------------
attached interest coupons and one or more special coupons (collectively, the
"Coupons") pursuant to Section 6.11 hereof, or in fully registered form
- --------
("Registered Certificates") and shall be substantially in the form of the
- -------------------------
exhibits with respect thereto attached to the applicable Supplement. The
Variable Funding Certificate shall be issued in registered form and shall be
substantially in the form of the related exhibit attached to the related
Supplement, and shall upon issue, be executed, authenticated and delivered as
provided in Section 6.02 hereof. The BCRC Certificate will be issued in
registered form, substantially in the form of Exhibit A hereto, and shall upon
issue, be executed, authenticated and delivered by the Trustee as provided in
Section 6.02 hereof. Except as otherwise provided in any Supplement, Bearer
Certificates shall be issued in minimum denominations of $5,000, $50,000 and
$100,000 and Registered Certificates shall be issued in minimum denominations of
$1,000 and in integral multiples of $1,000 in excess thereof. If specified in
any Supplement, the Investor Certificates of any Series or Class shall be issued
upon initial issuance as a single certificate evidencing the aggregate original
principal amount of such Series or Class as described in Section 6.11 hereof.
The Variable Funding Certificate shall be a single certificate and shall
represent the entire Variable Funding Interest. The BCRC Certificate shall be a
single certificate and, together with any Supplemental Certificate, shall
represent the entire Retained Interest. Each Certificate shall be executed by
manual or facsimile signature by a Responsible Officer of the Trustee on behalf
of the Trust. Certificates bearing the manual or facsimile signature of the
individual who was, at the time when such signature was affixed, authorized to
sign on behalf of the Trustee shall not be rendered invalid, notwithstanding
that such individual ceased to be so authorized prior to the authentication and
delivery of such Certificates or does not hold such office at the date of such
Certificates. No Certificates shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by or on behalf of the Trustee by the manual signature of a duly
authorized signatory, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. Bearer Certificates shall be dated the
Series Issuance Date. All Registered Certificates, all Variable Funding
Certificates, the BCRC Certificate and all Supplemental Certificates shall be
dated the date of their authentication.
SECTION 6.02. Authentication of Certificates. The Trustee shall
------------------------------
authenticate and deliver (x) the Investor Certificates of each Series and Class
that are issued upon original issuance and (y) the Variable Funding Certificate
to or upon the written order of the Depositor. The Trustee shall authenticate
and deliver on behalf of the Trust the Variable
55
<PAGE>
(S) 6.02
Funding Certificate and the BCRC Certificate to the Depositor simultaneously
with its delivery of the Investor Certificates of the first Series to be issued
hereunder. If specified in the related Supplement for any Series or Class, the
Trustee shall authenticate and deliver outside the United States the Global
Certificate that is issued upon original issuance thereof.
SECTION 6.03. New Issuances. (a) The Depositor may from time to
-------------
time direct the Trustee, on behalf of the Trust, to issue (i) one or more new
Series of Investor Certificates and/or (ii) to issue the Variable Funding
Certificate, in each case pursuant to a Supplement. The Investor Certificates
of all outstanding Series and the Variable Funding Certificate shall be equally
and ratably entitled as provided herein to the benefits of this Agreement
without preference, priority or distinction, all in accordance with the terms
and provisions of this Agreement and the applicable Supplement except, with
respect to any Series or Class or the Variable Funding Certificate, as provided
in the related Supplement.
(b) On or before the Series Issuance Date relating to any new Series,
the parties hereto will execute and deliver a Supplement which will specify the
Principal Terms of such new Series. The terms of such Supplement may modify or
amend the terms of this Agreement solely as applied to such new Series. The
obligation of the Trustee to issue the Investor Certificates of such new Series
and to execute and deliver the related Supplement is subject to the satisfaction
of the following conditions:
(i) on or before the fifth Business Day immediately preceding the
related Series Issuance Date, the Depositor shall have given the Trustee,
the Servicer, each Rating Agency, any Agent and any Enhancement Provider
written notice of such issuance (which notice shall specify the designation
of such Series, its applicable initial principal amount, currency and
interest rates and the issuer of any Enhancement) and the related Series
Issuance Date;
(ii) the Depositor shall have delivered to the Trustee the related
Supplement, in form satisfactory to the Trustee, executed by each party
hereto other than the Trustee and specifying the Principal Terms of such
Series;
(iii) the Depositor shall have delivered to the Trustee any
related Enhancement Agreement executed by each of the parties thereto,
other than the Trustee;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such issuance;
(v) the Depositor shall have delivered to the Trustee and any
Enhancement Provider a certificate of a Vice President or more senior
officer, dated the related
56
<PAGE>
(S) 6.03
Series Issuance Date, to the effect that the Depositor reasonably believes
that such issuance will not result in the occurrence of an Early
Amortization Event;
(vi) the Depositor shall have delivered to the Trustee and any
Enhancement Provider a Tax Opinion, dated the related Series Issuance Date,
with respect to such issuance; and
(vii) BCRC shall have an interest in the Pool represented by the
BCRC Certificate and the Variable Funding Certificate equal in the
aggregate to at least 2% of the aggregate amount of Receivables included in
the Pool, in each case as of the Series Issuance Date, and after giving
effect to such issuance; for purposes of this clause (vii), BCRC shall be
deemed to have an interest in the Pool represented by the Variable Funding
Certificate even though BCI, as pledgee, is the registered holder thereof
so long as BCI has not exercised its remedies in respect thereof.
Upon satisfaction of the above conditions, the Trustee shall execute the
Supplement and the Depositor shall deliver to the Trustee the Investor
Certificates of such Series or Variable Funding Certificate, as applicable, for
execution by the Trustee on behalf of the Trust and authentication by the
Trustee.
(c) On or before the date of issuance for the Variable Funding
Certificate, the parties hereto will execute and deliver a Supplement specifying
the terms of the Variable Funding Certificate (which Supplement shall be subject
to Section 13.01 hereof to the extent it amends any of the terms of this
Agreement), upon satisfaction of the following conditions:
(i) BCRC shall have an interest in the Pool represented by the BCRC
Certificate and the Variable Funding Certificate equal in the aggregate to
at least 2% of the aggregate amount of Receivables included in the Pool, in
each case as of the date of, and after giving effect to, such issuance (or
transfer or exchange as provided below); for purposes of this clause (i),
BCRC shall be deemed to have an interest in the Pool represented by the
Variable Funding Certificate even though BCI, as pledgee, is the registered
holder thereof so long as BCI has not exercised its remedies in respect
thereof;
(ii) the Depositor shall have given the Rating Agencies ten (10) days'
prior notice and the Rating Agency Condition shall have been satisfied with
respect to such exchange (or transfer or exchange as provided below); and
(iii) the Depositor shall have delivered to the Trustee, and any
Enhancement Provider a Tax Opinion, dated the date of such exchange (or
transfer or exchange as provided below), with respect thereto.
57
<PAGE>
(S) 6.03
Upon satisfaction of the above conditions, the Trustee shall execute the related
Supplement and the Depositor shall deliver to the Trustee the Variable Funding
Certificate for execution by the Trustee on behalf of the Trust and
authentication by the Trustee. It is hereby agreed by the parties hereto that
the foregoing conditions are deemed to have been satisfied with respect to the
initial issuance of the Variable Funding Certificate on the first Closing Date.
Notwithstanding anything herein to the contrary, (i) except for a
pledge of the Variable Funding Certificate by BCRC to BCI (which pledge, or the
exercise by BCI, as pledgee, of its remedies pursuant thereto, shall not be
required to meet the conditions set forth in clauses (ii) and (iii) set forth
above), the Variable Funding Certificate may not be transferred, assigned,
exchanged, pledged or otherwise conveyed unless the conditions set forth in
clauses (ii) and (iii) above have been satisfied and (ii) the Trustee shall not
register the transfer of the Variable Funding Certificate except upon receipt of
written instructions of the Depositor to effect such transfer upon receipt by
the Depositor of reasonable assurances that such transfer complies with the
provisions of the Securities Act of 1933, as amended.
(d) The Depositor may surrender the BCRC Certificate to the Trustee
in exchange for a newly issued BCRC Certificate and a second certificate (a
Supplemental Certificate"), the terms of which shall be defined in a supplement
- -------------------------
to this Agreement (which Supplement shall be subject to Section 13.01 hereof to
the extent that it amends any of the terms of this Agreement), to be delivered
to or upon the order of the Depositor (or the Holder of a Supplemental
Certificate, in the case of the transfer or exchange thereof, as provided
below), upon satisfaction of the conditions set forth in clauses (i), (ii) and
(iii) of subsection (c) of this Section 6.03.
The BCRC Certificate will at all times be beneficially owned by the Depositor.
Any Supplemental Certificate may be transferred or exchanged only upon
satisfaction of the conditions set forth in clauses (ii) and (iii) of subsection
(c) of this Section 6.03.
SECTION 6.04. Registration of Transfer and Exchange of Certificates.
-----------------------------------------------------
(a) The Trustee shall cause to be kept at the office or agency to be maintained
in accordance with the provisions of Section 11.16 hereof a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
- ---------------------
may prescribe, a transfer agent and registrar (which shall initially be the
Trustee) (the "Transfer Agent and Registrar") shall provide for the registration
----------------------------
of the Registered Certificates and the Variable Funding Certificate and of
transfers, pledges and exchanges of such Certificates as herein provided. The
Transfer Agent and Registrar shall initially be the Trustee and any co-transfer
agent and co-registrar chosen by the Depositor and acceptable to the Trustee.
So long as (x) the Trustee does not have an office in New York City and (y) any
Investor Certificates or the Variable Funding Certificate is outstanding, the
Depositor shall maintain a co-transfer agent and co-registrar in New York City.
Any reference in this Agreement to the Transfer Agent and Registrar shall
include any co-transfer agent and co-registrar unless the context requires
otherwise.
58
<PAGE>
(S) 6.04
Subject to subsection (c) below, upon surrender for registration of
transfer of any Registered Certificate at any office or agency of the Transfer
Agent and Registrar maintained for such purpose, one or more new Registered
Certificates (of the same Series and Class) in authorized denominations of like
aggregate fractional undivided interests in the Investors' Interest shall be
executed, authenticated and delivered, in the name of the designated transferee
or transferees.
At the option of a Registered Certificateholder, Registered
Certificates (of the same Series and Class) may be exchanged for other
Registered Certificates of authorized denominations of like aggregate fractional
undivided interests in the Investors' Interest, upon surrender of the Registered
Certificates to be exchanged at any such office or agency. Registered
Certificates, including Registered Certificates received in exchange for Bearer
Certificates, may not be exchanged for Bearer Certificates. At the option of
the Holder of a Bearer Certificate, subject to applicable laws and regulations,
Bearer Certificates may be exchanged for other Bearer Certificates or Registered
Certificates (of the same Series and Class) of authorized denominations of like
aggregate fractional undivided interests in the Investors' Interest, upon
surrender of the Bearer Certificates to be exchanged at an office or agency of
the Transfer Agent and Registrar located outside the United States. Each Bearer
Certificate surrendered pursuant to this Section 6.04 shall have attached
thereto all unmatured Coupons; provided, that any Bearer Certificate, so
--------
surrendered after the close of business on the Record Date preceding the
relevant payment date or distribution date after the expected final payment date
need not have attached the Coupon relating to such payment date or distribution
date (in each case, as specified in the applicable Supplement).
The preceding provisions of this Section 6.04 notwithstanding, the
Trustee or the Transfer Agent and Registrar, as the case may be, shall not be
required to register the transfer of or exchange any Certificate for a period of
fifteen (15) days preceding the due date for any payment with respect to the
Certificate.
Whenever any Investor Certificates are so surrendered for exchange,
the Trustee shall execute, on behalf of the Trust, and authenticate and the
Transfer Agent and Registrar shall deliver (in the case of Bearer Certificates,
outside the United States) the Investor Certificates which the Certificateholder
making the exchange is entitled to receive. Every Investor Certificate
presented or surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in a form satisfactory to the
Trustee or the Transfer Agent and Registrar duly executed by the
Certificateholder or the attorney-in-fact thereof duly authorized in writing.
Unless otherwise provided in the related Supplement, no service charge
shall be made for any registration of transfer or exchange of Investor
Certificates, but the Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any such transfer or exchange.
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(S) 6.04
All Investor Certificates (together with any Coupons) surrendered for
registration of transfer and exchange or for payment shall be canceled and
disposed of in a manner satisfactory to the Trustee. The Trustee shall cancel
and destroy any Global Certificate upon its exchange in full for Definitive
Euro-Certificates and shall deliver a certificate of destruction to the
Depositor. Such certificate shall also state that a certificate or certificates
of a Foreign Clearing Agency to the effect referred to in Section 6.11 hereof
was received with respect to each portion of the Global Certificate exchanged
for Definitive Euro-Certificates.
The Depositor shall deliver to the Trustee Bearer Certificates and
Registered Certificates in such amounts and at such times as are necessary to
enable the Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) The Transfer Agent and Registrar will maintain at its expense in
each of the Borough of Manhattan, The City of New York, an office or agency
where Investor Certificates may be surrendered for registration of transfer or
exchange (except that Bearer Certificates may not be surrendered for exchange at
any such office or agency in the United States).
(c) Notwithstanding anything herein to the contrary, the Trustee shall
not exchange the Variable Funding Certificate for other Variable Funding
Certificates of like aggregate undivided interests in the Trust or register any
transfer of the Variable Funding Certificate except upon receipt of written
instructions from the Depositor to effect such exchange or registration of
transfer upon receipt by the Depositor of reasonable assurances that such
proposed exchange or transfer complies with the provisions of the Securities Act
of 1933, as amended.
(d)(i) Registration of transfer of Investor Certificates containing a
legend to the effect set forth on Exhibit D-1 hereto shall be effected only if
such transfer is made pursuant to an effective registration statement under the
Act, or is exempt from the registration requirements under the Act. In the
event that registration of a transfer is to be made in reliance upon an
exemption from the registration requirements under the Act, the transferor or
the transferee shall deliver, at its expense, to the Depositor, the Servicer and
the Trustee, an investment letter from the transferee, substantially in the form
attached to the applicable Supplement, and no registration of transfer shall be
made until such letter is so delivered.
Investor Certificates issued upon registration or transfer of, or
Investor Certificates issued in exchange for, Investor Certificates bearing the
legend referred to above shall also bear such legend unless the Depositor, the
Servicer, the Trustee and the Transfer Agent and Registrar receive an opinion of
counsel, satisfactory to each of them, to the effect that such legend may be
removed.
60
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(S) 6.04
Whenever an Investor Certificate containing the legend referred to
above is presented to the Transfer Agent and Registrar for registration of
transfer, the Transfer Agent and Registrar shall promptly seek written
instructions from the Servicer regarding such transfer and shall be entitled to
receive and conclusively rely upon instructions signed by a Servicing Officer
prior to registering any such transfer. The Depositor hereby agrees to
indemnify the Transfer Agent and Registrar and the Trustee and to hold each of
them harmless against any loss, liability or expense incurred without negligence
or bad faith on their part arising out of or in connection with actions taken or
omitted by them in relation to any such instructions furnished pursuant to this
clause (i).
(ii) Registration of transfer of Investor Certificates containing a
legend to the effect set forth on Exhibit D-2 hereto shall be effected only if
such transfer is made to a Person which is not an employee benefit plan, trust
or account, including an individual retirement account, that is subject to ERISA
or that is described in Section 4975(e)(1) of the Code or an entity whose
underlying assets include plan assets by reason of a plan's investment in such
entity (a "Benefit Plan"). By accepting and holding any such Investor
------------
Certificate, a Certificateholder shall be deemed to have represented and
warranted that it is not a Benefit Plan. By acquiring any interest in a Book-
Entry Certificate, a Certificate Owner shall be deemed to have represented and
warranted that it is not a Benefit Plan.
SECTION 6.05. Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
(a) any mutilated Certificate (together, in the case of Bearer Certificates,
with all unmatured Coupons (if any) appertaining thereto) is surrendered to the
Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar and
the Trustee and BCRC such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Trustee that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
---- ----
execute, on behalf of the Trust, and authenticate, and the Transfer Agent and
Registrar shall deliver (in the case of Bearer Certificates, outside the United
States), in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor and aggregate fractional
undivided interest. In connection with the issuance of any new Certificate
under this Section 6.05, the Trustee or the Transfer Agent and Registrar may
require the payment by the Certificateholder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee and Transfer
Agent and Registrar) connected therewith. Any duplicate Certificate issued
pursuant to this Section 6.05 shall constitute complete and indefeasible
evidence of ownership in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
SECTION 6.06. Persons Deemed Owners. The Trustee, the Transfer Agent
---------------------
and Registrar and any agent of any of them may (a) prior to due presentation of
a Certificate
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(S) 6.06
for registration of transfer, treat the Person or Persons in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to the terms of the applicable Supplement and
for all other purposes whatsoever and (b) treat the bearer of a Bearer
Certificate or Coupon as the owner of such Bearer Certificate or Coupon for the
purpose of receiving distributions pursuant to the terms of the applicable
Supplement and for all other purposes whatsoever; and, in any such case, neither
the Trustee, the Transfer Agent and Registrar nor any agent of any of them shall
be affected by any notice to the contrary. Notwithstanding the foregoing, in
determining whether the Holders of the requisite Investor Certificates have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Investor Certificates owned by the Depositor, the Servicer, any other
Holder of the BCRC Certificate or a Supplemental Certificate or any Affiliate
thereof, shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Investor Certificates which a Responsible Officer of the Trustee knows to be so
owned shall be so disregarded. Investor Certificates so owned which have been
pledged in good faith shall not be disregarded and may be regarded as
outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Investor Certificates and that
the pledgee is not the Depositor, the Servicer, any other Holder of the BCRC
Certificate or a Supplemental Certificate or any Affiliate thereof.
SECTION 6.07. Access to List of Registered Certificateholders' Names
------------------------------------------------------
and Addresses. The Trustee will furnish or cause to be furnished by the
- -------------
Transfer Agent and Registrar to the Servicer, within five (5) Business Days
after receipt by the Trustee of a request therefor, a list in such form as the
Servicer may reasonably require, of the names and addresses of the Registered
Certificateholders. If three or more Holders of Investor Certificates (the
"Applicants") apply to the Trustee, and such application states that the
- -----------
Applicants desire to communicate with other Certificateholders with respect to
their rights under this Agreement or any Supplement or under the Investor
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Trustee, after having been indemnified
to its reasonable satisfaction by such Applicants for its costs and expenses,
shall afford or shall cause the Transfer Agent and Registrar to afford such
Applicants access during normal business hours to the most recent list of
Registered Certificateholders of such Series or all outstanding Series, as
applicable, held by the Trustee, within five (5) Business Days after the receipt
of such application. Such list shall be as of a date no more than forty-five
(45) days prior to the date of receipt of such Applicants' request.
Every Registered Certificateholder, by receiving and holding a
Registered Certificate, agrees with the Trustee that neither the Trustee, the
Transfer Agent and Registrar, nor any of their respective agents, shall be held
accountable by reason of the
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(S) 6.07
disclosure of any such information as to the names and addresses of the
Registered Certificateholders hereunder, regardless of the sources from which
such information was derived.
SECTION 6.08. Book-Entry Certificates. Unless otherwise specified in
-----------------------
the related Supplement for any Series or Class, the Investor Certificates, upon
original issuance, shall be issued in the form of one or more typewritten
Investor Certificates representing the Book-Entry Certificates, to be delivered
to the Depository, by, or on behalf of, the Depositor. The Investor
Certificates shall initially be registered on the Certificate Register in the
name of the Depository or its nominee, and no Certificate Owner will receive a
definitive certificate representing such Certificate Owner's interest in the
Investor Certificates, except as provided in Section 6.10 hereof. Unless and
until definitive, fully registered Investor Certificates ("Definitive
----------
Certificates") have been issued to the applicable Certificate Owners pursuant to
- ------------
Section 6.10 hereof or as otherwise specified in any such Supplement:
(a) the provisions of this Section 6.08 shall be in full force and
effect;
(b) the Depositor, the Servicer and the Trustee may deal with the
Depository and the Depository Participants for all purposes (including the
making of distributions) as the authorized representatives of the
respective Certificate Owners;
(c) to the extent that the provisions of this Section 6.08 conflict
with any other provisions of this Agreement, the provisions of this Section
6.08 shall control; and
(d) the rights of the respective Certificate Owners shall be exercised
only through the Depository and the Depository Participants and shall be
limited to those established by law and agreements between such Certificate
Owners and the Depository and/or the Depository Participants. Pursuant to
the Depository Agreement, unless and until Definitive Certificates are
issued pursuant to Section 6.10 hereof, the Depository will make book-entry
transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Investor
Certificates to such Depository Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of Investor Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Investor Certificates evidencing the requisite percentage
of principal amount of Investor Certificates.
SECTION 6.09. Notices to Depository. Whenever any notice or other
---------------------
communication is required to be given to Certificateholders of any Series or
Class with
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(S) 6.09
respect to which Book-Entry Certificates have been issued, unless and until
Definitive Certificates shall have been issued to the related Certificate
Owners, the Trustee shall give all such notices and communications to the
applicable Depository.
SECTION 6.10. Definitive Certificates. If Book-Entry Certificates
-----------------------
have been issued with respect to any Series or Class and (a) the Depositor
advises the Trustee that the Depository is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement with
respect to such Series or Class and the Depositor is unable to locate a
qualified successor, (b) the Depositor, at its option, advises the Trustee that
it elects to terminate the book-entry system with respect to such Series or
Class through the Depository or (c) after the occurrence of a Servicer Default,
Certificate Owners of such Series or Class evidencing not less than 50% of the
aggregate unpaid principal amount of such Series or Class advise the Trustee and
the Depository through the Depository Participants that the continuation of a
book-entry system with respect to the Investor Certificates of such Series or
Class through the Depository is no longer in the best interests of the
Certificate Owners with respect to such Certificates, then the Trustee shall
notify all Certificate Owners of such Certificates, through the Depository, of
the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Trustee of any such Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall execute, on
behalf of the Trust, and authenticate and deliver such Definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of such Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of such Definitive
Certificates as Certificateholders hereunder.
SECTION 6.11. Global Certificate; Exchange Date. (a) If specified
---------------------------------
in the related Supplement for any Series or Class, the Investor Certificates
will initially be issued in the form of a single temporary global Certificate
(the "Global Certificate") in bearer form, without interest coupons, in the
------------------
denomination of the entire aggregate principal amount of such Series or Class
and substantially in the form set forth in the exhibit with respect thereto
attached to the related Supplement. The Global Certificate will be executed by
the Trustee, on behalf of the Trust, and authenticated by the Trustee upon the
same conditions, in substantially the same manner and with the same effect as
the Definitive Certificates. The Global Certificate may be exchanged as
described below for Bearer or Registered Certificates in definitive form (the
"Definitive Euro-Certificates").
----------------------------
(b) The Manager shall, upon its determination of the date of
completion of the distribution of the Investor Certificates of such Series or
Class, so advise the Trustee, the
64
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(S) 6.11
Depositor, the Common Depositary, and each Foreign Clearing Agency forthwith.
Without unnecessary delay, but in any event not prior to the Exchange Date, the
Depositor will deliver to the Trustee at its London office or its designated
agent outside the United States definitive Bearer Certificates in an aggregate
principal amount equal to the entire aggregate principal amount of such Series
or Class. All Bearer Certificates so issued and delivered will have Coupons
attached. The Global Certificate may be exchanged for an equal aggregate
principal amount of Definitive Euro-Certificates only on or after the Exchange
Date. A United States institutional investor may exchange the portion of the
Global Certificate beneficially owned by it only for an equal aggregate
principal amount of Registered Certificates bearing the applicable legend set
forth in the form of Registered Certificate attached to the related Supplement
and having a minimum denomination of $500,000, which may be in temporary form if
the Depositor so elects. The Depositor may waive the $500,000 minimum
denomination requirement if it so elects. Upon any demand for exchange for
Definitive Euro-Certificates in accordance with this subsection (b), the
Depositor shall cause the Trustee to authenticate and deliver the Definitive
Euro-Certificates to the Holder (x) outside the United States, in the case of
Bearer Certificates, and (y) according to the instructions of the Holder, in the
case of Registered Certificates, but in either case only upon presentation to
the Trustee of a written statement substantially in the form of Exhibit F-1
hereto with respect to the Global Certificate or portion thereof being
exchanged, signed by a Foreign Clearing Agency and dated on the Exchange Date or
a subsequent date, to the effect that it has received in writing or by tested
telex a certification substantially in the form of (i) in the case of beneficial
ownership of the Global Certificate or a portion thereof being exchanged by a
United States institutional investor pursuant to the second preceding sentence,
the certificate in the form of Exhibit F-2 hereof signed by the Manager which
sold the relevant Certificates or (ii) in all other cases, the certificate in
the form of Exhibit F-3 hereto, the certificate referred to in this clause
(ii) being dated on the earlier of the first actual payment of interest in
respect of such Certificates and the date of the delivery of such Certificate in
definitive form. Upon receipt of such certification, the Trustee shall cause the
Global Certificate to be endorsed in accordance with subsection (d) below. Any
exchange as provided in this Section 6.11 shall be made free of charge to the
Holders and the beneficial owners of the Global Certificate and to the
beneficial owners of the Definitive Euro-Certificates issued in exchange, except
that a person receiving Definitive Euro-Certificates must bear the cost of
insurance, postage, transportation and the like in the event that such person
does not receive such Definitive Euro-Certificates in person at the offices of a
Foreign Clearing Agency.
(c) The delivery to the Trustee by a Foreign Clearing Agency of any
written statement referred to above may be relied upon by the Depositor and the
Trustee as conclusive evidence that a corresponding certification or
certifications has or have been delivered to such Foreign Clearing Agency
pursuant to the terms of this Agreement.
65
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(S) 6.11
(d) Upon any such exchange of all or a portion of the Global
Certificate for a Definitive Euro-Certificate or Certificates, such Global
Certificate shall be endorsed by or on behalf of the Trustee to reflect the
reduction of its principal amount by an amount equal to the aggregate principal
amount of such Definitive Euro-Certificate or Certificates. Until so exchanged
in full, such Global Certificate shall in all respects be entitled to the same
benefits under this Agreement as Definitive Euro-Certificates authenticated and
delivered hereunder except that the beneficial owners of such Global Certificate
shall not be entitled to receive payments of interest on the Certificates until
they have exchanged their beneficial interests in such Global Certificate for
Definitive Euro-Certificates.
SECTION 6.12. Meetings of Investor Certificateholders. (a) If at
---------------------------------------
the time any Bearer Certificates are issued and outstanding with respect to any
Series or Class to which any meeting described below relates, the Servicer or
the Trustee may at any time call a meeting of Investor Certificateholders of any
Series or Class or of all Series, to be held at such time and at such place as
the Servicer or the Trustee, as the case may be, shall determine, for the
purpose of approving a modification of or amendment to, or obtaining a waiver of
any covenant or condition set forth in, this Agreement, any Supplement or the
Investor Certificates or of taking any other action permitted to be taken by
Investor Certificateholders hereunder or under any Supplement. Notice of any
meeting of Investor Certificateholders, setting forth the time and place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be given in accordance with Section 13.06 hereof, the first mailing and
publication to be not less than twenty (20) nor more than one hundred and eighty
(180) days prior to the date fixed for the meeting. To be entitled to vote at
any meeting of Investor Certificateholders a person shall be (i) a Holder of one
or more Investor Certificates of the applicable Series or Class or (ii) a person
appointed by an instrument in writing as proxy by the Holder of one or more such
Investor Certificates. The only persons who shall be entitled to be present or
to speak at any meeting of Investor Certificateholders shall be the persons
entitled to vote at such meeting and their counsel and any representatives of
the Depositor, the Servicer and the Trustee and their respective counsel.
(b) At a meeting of Investor Certificateholders, persons entitled to
vote Investor Certificates evidencing a majority of the aggregate unpaid
principal amount of the applicable Series or Class or all outstanding Series, as
the case may be, shall constitute a quorum. No business shall be transacted in
the absence of a quorum, unless a quorum is present when the meeting is called
to order. In the absence of a quorum at any such meeting, the meeting may be
adjourned for a period of not less than ten (10) days; in the absence of a
quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than ten (10) days; at the reconvening of any
meeting further adjourned for lack of a quorum, the persons entitled to vote
Investor Certificates evidencing at least 25% of the aggregate unpaid principal
amount of the applicable Series or Class or all outstanding Series, as the case
may be, shall constitute a quorum for the taking
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(S) 6.12
of any action set forth in the notice of the original meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided above except
that such notice must be given not less than five (5) days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of
any adjourned meeting shall state expressly the percentage of the aggregate
principal amount of the outstanding applicable Investor Certificates which shall
constitute a quorum.
(c) Any Investor Certificateholder who has executed an instrument in
writing appointing a person as proxy shall be deemed to be present for the
purposes of determining a quorum and be deemed to have voted; provided, that
--------
such Investor Certificateholder shall be considered as present or voting only
with respect to the matters covered by such instrument in writing. Subject to
the provisions of Section 13.01 hereof, any resolution passed or decision taken
at any meeting of Investor Certificateholders duly held in accordance with this
Section 6.12 shall be binding on all Investor Certificateholders whether or not
present or represented at the meeting.
(d) The holding of Bearer Certificates shall be proved by the
production of such Bearer Certificates or by a certificate, satisfactory to the
Servicer, executed by any bank, trust company or recognized securities dealer,
wherever situated, satisfactory to the Servicer. Each such certificate shall be
dated and shall state that on the date thereof a Bearer Certificate bearing a
specified serial number was deposited with or exhibited to such bank, trust
company or recognized securities dealer by the person named in such certificate.
Any such certificate may be issued in respect of one or more Bearer Certificates
specified therein. The holding by the person named in any such certificate of
any Bearer Certificate specified therein shall be presumed to continue for a
period of one year from the date of such certificate unless at the time of any
determination of such holding (i) another certificate bearing a later date
issued in respect of the same Bearer Certificate shall be produced, (ii) the
Bearer Certificate specified in such certificate shall be produced by some other
person or (iii) the Bearer Certificate specified in such certificate shall have
ceased to be outstanding. The appointment of any proxy shall be proved by
having the signature of the person executing the proxy guaranteed by any bank,
trust company or recognized securities dealer satisfactory to the Trustee.
(e) The Trustee shall appoint a temporary chairman of the meeting. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Holders of Investor Certificates evidencing a majority of the
aggregate unpaid principal amount of Investor Certificates of the applicable
Series or Class or all outstanding Series, as the case may be, represented at
the meeting. No vote shall be cast or counted at any meeting in respect of any
Investors Certificate challenged as not outstanding and ruled by the chairman of
the meeting to be not outstanding. The chairman of the meeting shall have no
right to vote except as an Investor Certificateholder or proxy. Any meeting of
Investor
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(S) 6.12
Certificateholders duly called at which a quorum is present may be adjourned
from time to time, and the meeting may be held as so adjourned without further
notice.
(f) The vote upon any resolution submitted to any meeting of Investor
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of Investor Certificateholders or proxies and on which shall be
inscribed the serial number or numbers of the Investor Certificates held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Investor
Certificateholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was published as provided above. The record shall be
signed and verified by the permanent chairman and secretary of the meeting and
one of the duplicates shall be delivered to the Servicer and the other to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
ARTICLE VII
Other Matters Relating
----------------------
to the Depositor
----------------
SECTION 7.01. Liability of the Depositor. The Depositor shall be
--------------------------
liable for all obligations, covenants, representations and warranties of the
Depositor arising under or related to this Agreement. Except as provided in the
preceding sentence, the Depositor shall be liable only to the extent of the
obligations specifically undertaken by it in its capacity as Depositor
hereunder.
SECTION 7.02. Limitation on Liability of the Depositor. Subject to
----------------------------------------
Section 7.01 and Section 7.03 hereof, neither the Depositor nor any of the
directors, officers, employees, affiliates, stockholders, agents,
representatives or advisors of the Depositor shall be under any liability to the
Trust, the Trustee, the Certificateholders or any other Person for any action
taken or for refraining from the taking of any action in the capacity as
Depositor pursuant to this Agreement whether arising from express or implied
duties under this Agreement; provided, however, that this provision shall not
-------- -------
protect the Depositor or any such person against any liability which would
otherwise be imposed by reason of wilful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor and any director,
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(S) 7.02
officer, employee affiliate, stockholder, agent, representative or advisor of
the Depositor may rely in good faith on any document of any kind prima facie
----- -----
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action which in its reasonable opinion may involve
it in any expense or liability.
SECTION 7.03. Depositor Indemnification of the Trust and the Trustee.
------------------------------------------------------
The Depositor shall indemnify and hold harmless the Trust, for the benefit of
the Certificateholders and the other Beneficiaries, and the Trustee, from and
against any loss, liability, reasonable expense, damage or injury suffered or
sustained by reason of any acts, omissions or alleged acts or omissions arising
out of or based upon the arrangement created by this Agreement, including any
judgment, general settlement, reasonable attorneys' fees and other costs and
expenses incurred by the Trustee in connection with the defense of any actual or
threatened action, proceeding or claim (but excluding losses on Receivables and
amounts due with respect thereto); provided, however, that the Depositor shall
-------- -------
not indemnify the Trust or the Trustee or any officer, director, employee or
agent of the Trustee if such acts or omissions constitute, or such actual or
threatened action, proceeding or claim arose out of, or such loss, liability,
expense, damage or injury was caused by, fraud, gross negligence, breach of
fiduciary duty or wilful misconduct by the Trustee; and provided, further, that
-------- -------
the Depositor shall not be liable, directly or indirectly, for or in respect of
any indebtedness or obligation evidenced or created by any Certificate, recourse
as to which is limited solely to the assets of the Trust allocated for payment
thereof as provided in this Agreement and any applicable Supplement; and
provided, further, that the Depositor shall not indemnify the Trust, Trustee or
- -------- -------
the Certificateholders or any other Beneficiaries for any liabilities, cost or
expense of the Trust with respect to any action taken by the Trustee at the
request of any such Certificateholders or other Beneficiaries or with respect to
any Federal, state or local income or franchise taxes (or any interest or
penalties with respect thereto) required to be paid by the Trust or any
Certificateholder or other Beneficiary in connection herewith to any taxing
authority. Subject to Section 7.01 hereof, any indemnification pursuant to this
Section 7.03 shall only be from assets of the Depositor not pledged to third
parties or otherwise encumbered in a manner permitted by the Certificate of
Incorporation of the Depositor and shall only be made after payment in full of
any amounts that the Depositor is obligated to deposit in the Collection Account
pursuant to this Agreement. Any indemnification under this Article VII shall
survive the termination of this Agreement.
ARTICLE VIII
Other Matters Relating
----------------------
to the Servicer
---------------
69
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(S) 8.01
SECTION 8.01. Liability of the Servicer. The Servicer shall be
-------------------------
liable under this Article VIII only to the extent of the obligations
specifically undertaken by the Servicer in its capacity as Servicer.
SECTION 8.02. Merger or Consolidation of, or Assumption of, the
-------------------------------------------------
Obligations of the Servicer. The Servicer shall not consolidate with or merge
- ---------------------------
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(a) the corporation formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Servicer substantially as an entirety
shall be a corporation organized and existing under the laws of the United
States of America or any State or the District of Columbia and, if the
Servicer is not the surviving entity, such corporation shall assume,
without the execution or filing of any paper or any further act on the part
of any of the parties hereto, the performance of every covenant and
obligation of the Servicer hereunder; and
(b) the Servicer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, conveyance or transfer comply with this Section 8.02 and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 8.03. Limitation on Liability of the Servicer and Others.
--------------------------------------------------
Except as provided in Section 8.04 hereof, neither the Servicer nor any of the
directors, officers, employees, affiliates, stockholders, agents,
representatives or advisors of the Servicer, shall be under any liability to the
Trust, the Trustee, the Certificateholders or any other Person for any action
taken or for refraining from the taking of any action in its capacity as
Servicer pursuant to this Agreement; provided, however, that this provision
-------- -------
shall not protect the Servicer or any such person against any liability which
would otherwise be imposed by reason of wilful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Servicer and any director, officer,
employee, affiliates, stockholders, agent, representatives or advisors of the
Servicer may rely in good faith on any document of any kind prima facie properly
----- -----
executed and submitted by any Person respecting any matters arising hereunder.
The Servicer shall not be under any obligation to appear in, prosecute or defend
any legal action other than as part of the good faith performance of its
servicing obligations hereunder.
SECTION 8.04. Servicer Indemnification of the Trust and the Trustee.
-----------------------------------------------------
The Servicer shall indemnify and hold harmless the Trust (for the benefit of the
Certificateholders and the other Beneficiaries) and the Trustee from and against
any loss, liability, reasonable expense, damage or injury suffered or sustained
by reason of any acts, omissions or alleged
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(S) 8.04
acts or omissions arising out of or based upon the arrangement created by this
Agreement, including but not limited to any judgment, general settlement,
reasonable attorneys' fees and other costs and expenses incurred by the Trustee
in connection with the defense of any actual or threatened action, proceeding or
claim (but excluding losses on Receivables and amounts due with respect
thereto); provided, however, that the Servicer shall not indemnify or hold
-------- -------
harmless any such indemnified party if such acts or omissions constitute, or
such actual or threatened action, proceeding or claim arose out of, or such
liability, expense, damage or injury was caused by, fraud, gross negligence,
breach of fiduciary duty or wilful misconduct by such indemnified party; and
provided, further, that the Servicer shall not be liable, directly or
- -------- -------
indirectly, for or in respect of any indebtedness or obligation evidenced or
created by any Certificate, recourse as to which is limited solely to the assets
of the Trust allocated for payment thereof as provided in this Agreement and any
applicable Supplement; and provided, further, that the Servicer shall not
-------- -------
indemnify the Trust, the Trustee or the Certificateholders or the other
Beneficiaries for any liabilities, cost or expense of the Trust with respect to
any action taken by the Trustee at the request of the Certificateholders or any
other Beneficiaries to the extent the Trustee is fully indemnified by such
Certificateholders or other Beneficiaries with respect to such action or with
respect to any Federal, state or local income or franchise taxes (or any
interest or penalties with respect thereto) required to be paid by the Trust or
the Certificateholders or the other Beneficiaries in connection herewith to any
taxing authority. The Servicer shall indemnify and hold harmless the Trustee
and its officers, directors, employees or agents from and against any loss,
liability, reasonable expense, damage or injury suffered or sustained by reason
of the acceptance of the Trust by the Trustee, the issuance by the Trust of the
Certificates or any of the other matters contemplated herein or in any
Supplement (but excluding losses on Receivables and amounts due with respect
thereto); provided, however, that the Servicer shall not indemnify the Trustee
-------- -------
or its officers, directors, employees or agents for any loss, liability,
expense, damage or injury caused by the fraud, gross negligence, breach of
fiduciary duty or wilful misconduct of any of them. Any indemnification under
this Article VIII shall run directly to and be enforceable by an injured party
subject to the limitations hereof and shall survive the resignation or removal
of the Servicer, the resignation or removal of the Trustee and/or the
termination of the Trust and shall survive the termination of this Agreement.
Any such indemnification shall not be payable from the assets of the Trust.
SECTION 8.05. The Servicer Not to Resign. The Servicer shall not
--------------------------
resign from the obligations and duties hereby imposed on it except upon its
determination that the performance of its duties hereunder is no longer
permissible under applicable law. No such resignation shall become effective
until the Trustee or a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
10.02 hereof. If the Trustee is unable within sixty (60) days of the date of
such determination to appoint a Successor Servicer, the Trustee shall serve as
Successor Servicer hereunder.
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(S) 8.06
SECTION 8.06. Access to Certain Documentation and Information
-----------------------------------------------
Regarding the Receivables. The Servicer shall provide to the Trustee access to
- -------------------------
the documentation regarding the Accounts and the Receivables in such cases where
the Trustee is required in connection with the enforcement of the rights of the
Certificateholders, or by applicable statutes or regulations to review such
documentation, such access being afforded without charge but only (a) upon
reasonable request, (b) during normal business hours, (c) subject to the
Servicer's normal security and confidentiality procedures and (d) at offices
designated by the Servicer. Nothing in this Section 8.06 shall derogate from
the obligation of the Depositor, the Trustee or the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Servicer to provide access as provided in this Section 8.06
as a result of such obligation shall not constitute a breach of this
Section 8.06.
SECTION 8.07. Delegation of Duties. Subject to Section 3.01 hereof,
--------------------
in the ordinary course of business, the Servicer or any Affiliate of BCI
servicing Receivables may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Financing
Guidelines and this Agreement. The Servicer shall give prompt written notice of
any such delegation of a material function to the Rating Agencies, any Agent and
any Enhancement Providers. Such delegation shall not relieve the Servicer of
its liability and responsibility with respect to such duties, and shall not
constitute a resignation within the meaning of Section 8.05 hereof and the
Rating Agency Condition shall have been satisfied with respect to such
delegation prior to such delegation. It is understood that Affiliates of BCI
perform servicing activities on behalf of BCI with respect to certain
Receivables and that no action on the part of the Servicer under this Section
8.07 is required and the Rating Agency Condition is deemed to have been
satisfied in connection with such servicing activities.
SECTION 8.08. Examination of Records. The Depositor and the Servicer
----------------------
shall indicate generally in its computer files or other records that the
Receivables arising in the Accounts have been conveyed to the Trust pursuant to
this Agreement for the benefit of the Certificateholders and the other
Beneficiaries. The Depositor and the Servicer shall, prior to the sale or
transfer to a third party of any receivable held in its custody, examine its
computer and other records to determine that such receivable is not a
Receivable.
ARTICLE IX
Early Amortization Events
-------------------------
SECTION 9.01. Early Amortization Events. If any one of the following
-------------------------
events shall occur:
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(S) 9.01
(a) a failure by the Depositor to convey Receivables in Additional
Accounts to the Trust within five (5) Business Days after the day on which
it is required to convey such Receivables pursuant to this Agreement;
(b) Bombardier Corporation, the Depositor or the Servicer (or BCI, if
it is not the Servicer) shall file a petition commencing a voluntary case
under any chapter of the Federal bankruptcy laws; or Bombardier
Corporation, the Depositor or the Servicer (or BCI, as aforesaid) shall
file a petition or answer or consent seeking reorganization, arrangement,
adjustment, or composition under any other similar applicable Federal law,
or shall consent to the filing of any such petition, answer, or consent; or
Bombardier Corporation, the Depositor or the Servicer (or BCI, as
aforesaid) shall appoint, or consent to the appointment of, a custodian,
receiver, liquidator, trustee, assignee, sequestrator or other similar
official in bankruptcy or insolvency of it or of any substantial part of
its property; or Bombardier Corporation, the Depositor or the Servicer (or
BCI, as aforesaid) shall make an assignment for the benefit of creditors,
or shall admit in writing its inability to pay its debts generally as they
become due;
(c) any order for relief against Bombardier Corporation, the
Depositor or the Servicer (or BCI, if it is not the Servicer) shall have
been entered by a court having jurisdiction in the premises under any
chapter of the Federal bankruptcy laws, and such order shall have continued
undischarged or unstayed for a period of sixty (60) days; or a decree or
order by a court having jurisdiction in the premises shall have been
entered approving as properly filed a petition seeking reorganization,
arrangement, adjustment, or composition of Bombardier Corporation, the
Depositor or the Servicer (or BCI, as aforesaid) under any other similar
applicable Federal law, and such decree or order shall have continued
undischarged or unstayed for a period of one hundred and twenty (120) days;
or a decree or order of a court having jurisdiction in the premises for the
appointment of a custodian, receiver, liquidator, trustee, assignee,
sequestrator, or other similar official in bankruptcy or insolvency of
Bombardier Corporation, the Depositor or the Servicer (or BCI, as
aforesaid) or of any substantial part of its property or for the winding up
or liquidation of its affairs, shall have been entered, and such decree or
order shall have remained in force undischarged or unstayed for a period of
one hundred and twenty (120) days;
(d) failure on the part of the Depositor, the Servicer or BCI, as
applicable, to:
(i) make any payment or deposit (including but not limited to
any Transfer Deposit Amount or Adjustment Payment) required by the
terms of this Agreement on or before the date occurring five (5)
Business Days after the date such payment or deposit is required to be
made herein, which failure is
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(S) 9.01
not cured within five (5) Business Days after notice from the Trustee
of such failure; or
(ii) with respect to any Series, deliver a Distribution Date
Statement within ten (10) Business Days after notice from the Trustee
of such failure to deliver such Distribution Date Statement; or
(iii) duly comply with, observe or perform in any material respect
the covenant of the Depositor set forth in Section 2.06(a) hereof with
respect to any Receivable, which failure, in the case of this clause
(iii), has a material adverse effect on the interests of the Holders
of the Investor Certificates or the Holder of the Variable Funding
Certificate and continues unremedied for a period of sixty (60) days
after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Depositor by the
Trustee or any Enhancement Provider; provided, however, than an Early
-------- -------
Amortization Event shall not be deemed to have occurred if the
Depositor shall have repurchased the related Receivables or, if
applicable, all of the Receivables during such period in accordance
with the provisions of this Agreement; or
(iv) duly observe or perform in any material respect any other
covenants or agreements of the Depositor or the Servicer, as the case
may be, set forth in this Agreement which failure, in the case of this
clause (iv), has a material adverse effect on the interests of the
Holders of the Investor Certificates or the Holder of the Variable
Funding Certificate and continues unremedied for a period of forty-
five (45) days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the
Depositor by the Trustee or any Enhancement Provider;
(e) any representation or warranty made by the Depositor in this
Agreement or any information contained in a computer file or microfiche or
written list required to be delivered by the Depositor pursuant to Section
2.01, Section 2.05, Section 2.07 or Section 2.08 hereof, (i) shall prove to
have been incorrect in any material respect when made or when delivered,
and shall continue to be incorrect in any material respect for a period of
sixty (60) days (or such longer period as may be specified in such notice)
after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Depositor by the Trustee and
(ii) as a result of such incorrectness the interests of the Holders of the
Investor Certificates or the Holder of the Variable Funding Certificate are
materially and adversely affected (excluding, however, the representation
---------
and warranty made by the Depositor pursuant to Section 2.03(m) hereof if
this Agreement constitutes the grant of a perfected security interest in
the Receivables and Collateral Security (and
74
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(S) 9.01
the proceeds thereof) under the UCC as then in effect in the State of
Vermont transferred to the Trust hereunder); provided, however, that an
-------- -------
Early Amortization Event shall not be deemed to have occurred under this
subsection (e) if the Depositor has repurchased the related Receivable or
all such Receivables, if applicable, during such period in accordance with
the provisions of this Agreement;
(f) the Trust or the Depositor shall become an "investment company"
within the meaning of the Investment Company Act of 1940, as amended; or
(g) the occurrence of a Liquidation Event;
then, subject to applicable law, and after the applicable grace period, if any,
an amortization event (an "Early Amortization Event") shall occur without any
------------------------
notice or other action on the part of the Trustee, any Agent, the
Certificateholders or any other Beneficiary, immediately upon the occurrence of
such event.
SECTION 9.02. Additional Rights Upon the Occurrence of Certain
------------------------------------------------
Events. (a) If a Liquidation Event occurs or the Depositor violates Section
- ------
2.06(a) hereof for any reason (and such violation becomes an "Early Amortization
Event" under subclause (iii) of Section 9.01(d) hereof), BCRC shall on the day
such Liquidation Event or Early Amortization Event occurs because of such
violation (the "Appointment Date") immediately cease to transfer Receivables to
----------------
the Trust and shall promptly give notice to the Trustee of such Liquidation
Event or Early Amortization Event occurring because of such violation.
Notwithstanding any cessation of the transfer to the Trust of additional
Receivables, Receivables transferred to the Trust prior to the occurrence of
such Liquidation Event or Early Amortization Event occurring because of such
violation and Collections in respect of such Receivables whenever created or
accrued in respect of such Receivables, shall continue to be a part of the
Trust. Furthermore, within fifteen (15) days of the date of an event specified
in Section 9.01(b) or Section 9.01(c) hereof with respect to the Depositor or an
Early Amortization Event occurring due to the Depositor violating Section
2.06(a) hereof for any reason, the Trustee shall (i) publish a notice in an
Authorized Newspaper that such event or Early Amortization Event has occurred
and that the Trustee intends to sell, dispose of or otherwise liquidate the
Receivables on commercially reasonable terms and in a commercially reasonable
manner and (ii) give notice to Registered Certificateholders and the Holder of
the Variable Funding Certificate describing the provisions of this Section 9.02
and requesting instructions from such Holders. Unless the Trustee shall have
received instructions within ninety (90) days from the date notice pursuant to
clause (ii) above is first given from (x) Holders of Investor Certificates
evidencing more than 50% of the aggregate unpaid principal amount of each Series
or, with respect to any Series with two or more Classes, of each Class, to the
effect that such Certificateholders disapprove of the liquidation of the
Receivables, and (y) the Holder of the Variable Funding Certificate to such
effect, then the Trustee shall promptly sell, dispose of or otherwise liquidate
the Receivables, or cause to be
75
<PAGE>
(S) 9.02
sold, disposed of or otherwise liquidated, in a commercially reasonable manner
and on commercially reasonable terms, which shall include the solicitation of
competitive bids; provided that if such sale, disposition or liquidation is
--------
being made solely on account of the Depositor's violation of Section 2.06(a)
hereof, then the Trustee shall effect such sale, disposition or liquidation, to
be effected only if the net proceeds of such sale, disposition or liquidation,
applied in accordance with subsection (b) of this Section 9.02, will be
sufficient to pay accrued interest on each Series of Certificates plus the
outstanding principal balance of each Series of Certificates. The Trustee may
obtain and conclusively rely upon a prior determination from any applicable
conservator, receiver or liquidator that the terms and manner of any proposed
sale, disposition or liquidation are commercially reasonable. The provisions of
Section 9.01 hereof and this Section 9.02 shall not be deemed to be mutually
exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to subsection (a) above ("Trust Liquidation Proceeds")
--------------------------
shall be immediately deposited in the Collection Account. The Trustee shall
determine conclusively the amount of the Trust Liquidation Proceeds which are
deemed to be Non-Principal Receivables and Principal Receivables. The Trust
Liquidation Proceeds shall be allocated and distributed to Certificateholders
and the Holder of the Variable Funding Certificate in accordance with Article IV
hereof and the terms of each Supplement and the Trust shall terminate
immediately thereafter.
ARTICLE X
Servicer Defaults
-----------------
SECTION 10.01. Servicer Defaults. If any one of the following events
-----------------
(a "Servicer Default") shall occur and be continuing with respect to the
----------------
Servicer:
(a) the failure by the Servicer to make any payment, transfer or
deposit into the Trust (or into any Series Account) on or before the date
such payment, transfer or deposit is required to be made under the terms of
this Agreement, which failure is not cured within five (5) Business Days
following notice thereof from the Trustee;
(b) failure on the part of the Servicer duly to observe or perform
its covenant not to create any lien on any Receivable which failure has a
material adverse effect on the Certificateholders and which continues
unremedied for a period of sixty (60) days after written notice to it of
such failure; provided, however, that a "Servicer Default" shall not be
-------- -------
deemed to have occurred if BCRC or the Servicer shall have repurchased the
related Receivables or, if applicable, all of the Receivables during such
period in accordance with the provisions of this Agreement;
76
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(S) 10.01
(c) failure on the part of the Servicer duly to observe or perform any
covenants or agreements of the Servicer set forth in this Agreement (other
than with respect to those specified in clause (b) above and with respect
to clauses (vii), (viii) and (ix) under Section 3.03(a) hereof, to the
extent the terms of Section 3.03(c) hereof have been complied with) which
failure has a material adverse effect on the Certificateholders or the
Variable Funding Certificateholder and which continues unremedied for a
period of thirty (30) days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee;
(d) any representation, warranty or certification made by the
Servicer in this Agreement or in any certificate delivered pursuant to this
Agreement shall prove to have been incorrect when made and which continues
to be incorrect in any material respect for a period of sixty (60) days
after the date on which written notice thereof, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee and as a
result of which the interests of the Certificateholders or the Variable
Funding Certificateholder are materially and adversely affected; provided,
--------
however, that a "Servicer Default" shall not be deemed to have occurred if
-------
BCRC shall have repurchased the related Receivables or, if applicable, all
of the Receivables during such period in accordance with the provisions of
this Agreement; or
(e) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator or other similar official in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Servicer or of or relating to all
or substantially all of its property, or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a conservator or receiver or liquidator or other similar
official in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against the Servicer and such decree
or order shall have remained in force undischarged or unstayed for a period
of sixty (60) days; or the Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable bankruptcy, insolvency or reorganization
statute, make any assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations.
In the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied, the Trustee, by notice then given in writing to
the Servicer (a "Termination Notice"), may terminate all but not less than all
------------------
of the rights and obligations (other than its obligations that have accrued up
to the time of such termination) of the Servicer as Servicer under this
Agreement and in and to the Receivables and the proceeds thereof. After receipt
by the Servicer of a Termination Notice, and on the date that a
77
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(S) 10.01
Successor Servicer shall have been appointed by the Trustee pursuant to Section
10.02 hereof, all authority and power of the Servicer under this Agreement shall
pass to and be vested in a Successor Servicer (a "Service Transfer") and,
----------------
without limitation, the Trustee is hereby authorized and empowered (upon the
failure of the Servicer to cooperate) to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, all documents and other instruments
upon the failure of the Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such Service Transfer; provided, however,
-------- -------
that in no event shall the Servicer incur any liability for any such action
taken by the Trustee. The Servicer agrees to cooperate with the Trustee and
such Successor Servicer in effecting the termination of the responsibilities and
rights of the Servicer to conduct servicing hereunder, including the transfer to
such Successor Servicer of all authority of the Servicer to service the
Receivables provided for under this Agreement, including all authority over all
Collections which shall on the date of transfer be held by the Servicer for
deposit, or which have been deposited by the Servicer, in the Collection
Account, or which shall thereafter be received with respect to the Receivables,
and in assisting the Successor Servicer. The Servicer shall promptly transfer
its electronic records relating to the Receivables to the Successor Servicer in
such electronic form as the Successor Servicer may reasonably request and shall
promptly transfer to the Successor Servicer all other records, correspondence
and documents necessary for the continued servicing of the Receivables in the
manner and at such times as the Successor Servicer shall reasonably request. To
the extent that compliance with this Section 10.01 shall require the Servicer to
disclose to the Successor Servicer information of any kind which the Servicer
reasonably deems to be confidential, the Successor Servicer shall be required to
enter into such customary licensing and confidentiality agreements as the
Servicer shall deem necessary to protect its interest.
Notwithstanding the foregoing, a delay in or failure of performance
under subsection (a) of this Section 10.01 for a period of up to ten (10)
Business Days after the applicable grace period or a delay in or failure of
performance (or the continuance of any such delay or failure) under subsection
(b), (c) or (d) of this Section 10.01 for a period of up to sixty (60) Business
Days, shall not constitute a Servicer Default if such delay or failure or
continuance was caused by an act of God or the public enemy, acts of declared or
undeclared war, public disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar causes. The
preceding sentence shall not relieve the Servicer from using its best efforts to
perform its respective obligations in a timely manner in accordance with the
terms of this Agreement and the Servicer shall provide the Trustee, any
Enhancement Providers and the Depositor with an Officers' Certificate giving
prompt notice of such failure or delay by it, together with a description of its
efforts so to perform its obligations. The Servicer shall immediately notify
the Trustee in writing of any Servicer Default.
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(S) 10.02
SECTION 10.02. Trustee to Act; Appointment of Successor. (a) On and
----------------------------------------
after the receipt by the Servicer of a Termination Notice pursuant to Section
10.01 hereof, the Servicer shall continue to perform all servicing functions
under this Agreement until the date specified in the Termination Notice or
otherwise specified by the Trustee in writing or, if no such date is specified
in such Termination Notice, or otherwise specified by the Trustee, until a date
mutually agreed upon by the Servicer and Trustee. The Trustee shall as promptly
as possible after the giving of a Termination Notice appoint an Eligible
Servicer as a successor servicer (the "Successor Servicer"), subject to the
------------------
consent of any Enhancement Providers and any Agents, which consent shall not be
unreasonably withheld, and such Successor Servicer shall accept its appointment
by a written assumption in a form acceptable to the Trustee. In the event that
a Successor Servicer has not been appointed or has not accepted its appointment
at the time when the Servicer ceases to act as Servicer, the Trustee without
further action shall automatically be appointed the Successor Servicer. The
Trustee may delegate any of its servicing obligations to an Affiliate or agent
in accordance with Section 3.01 and Section 8.07 hereof. Notwithstanding the
above, the Trustee shall, if it is legally unable so to act, petition a court of
competent jurisdiction to appoint any established institution having a net worth
of not less than $100,000,000 and whose regular business includes the servicing
of wholesale receivables as the Successor Servicer hereunder. The Trustee shall
immediately give notice to the Rating Agencies, any Enhancement Providers, any
Agents and the Certificateholders upon the appointment of a Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof (except that the Successor Servicer shall not be liable for
any liabilities incurred by the predecessor Servicer), and all references in
this Agreement to the Servicer shall be deemed to refer to the Successor
Servicer. Any Successor Servicer, by its acceptance of its appointment, will
automatically agree to be bound by the terms and provisions of any Enhancement
Agreement.
(c) In connection with any Termination Notice, the Trustee will review
any bids which it obtains from Eligible Servicers and shall be permitted to
appoint any Eligible Servicer submitting such a bid as a Successor Servicer for
servicing compensation not in excess of the Servicing Fee (provided that if all
such bids exceed the Servicing Fee the Depositor at its own expense shall pay
when due the amount of any compensation in excess of the Servicing Fee);
provided, however, that the Depositor shall be responsible for payment of the
- -------- -------
Depositor's portion of the Servicing Fee as determined pursuant to this
Agreement and all other amounts in excess of the aggregate of the Monthly
Servicing Fees specified in the Supplements, and that no such monthly
compensation paid out of Collections shall be in excess of such aggregate of the
Monthly Servicing Fees. The Holder of the BCRC Certificate and the Holder of
any Supplemental Certificate each agrees that if BCI (or any Successor Servicer)
is terminated as Servicer hereunder, the portion of Collections to be paid
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(S) 10.02
to the Depositor shall be reduced by an amount sufficient to pay Depositor's
share of the compensation of the Successor Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of the
Trust pursuant to Section 12.01 hereof, and shall pass to and be vested in the
Depositor and, without limitation, the Depositor is hereby authorized and
empowered to execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights. The Successor Servicer agrees to
cooperate with the Depositor in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct servicing on
the Receivables. The Successor Servicer shall transfer its electronic records
relating to the Receivables to the Depositor in such electronic form as the
Depositor may reasonably request and shall transfer all other records,
correspondence and documents to the Depositor in the manner and at such times as
the Depositor shall reasonably request. To the extent that compliance with this
Section 10.02 shall require the Successor Servicer to disclose to the Depositor
information of any kind which the Successor Servicer deems to be confidential,
the Depositor shall be required to enter into such customary licensing and
confidentiality agreements as the Successor Servicer shall deem necessary to
protect its interests.
ARTICLE XI
The Trustee
-----------
SECTION 11.01. Duties of Trustee. (a) The Trustee, prior to the
-----------------
occurrence of any Servicer Default of which a Responsible Officer of the Trustee
has knowledge and after the curing of all Servicer Defaults which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement, and no implied covenants or duties
shall be read into this Agreement against the Trustee. If, to the knowledge of
a Responsible Officer of the Trustee, a Servicer Default has occurred (and such
Servicer Default has not been cured or waived), the Trustee shall exercise such
of the rights and powers vested in it by this Agreement, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs; provided, however,
-------- -------
that if the Trustee shall assume the duties of the Servicer pursuant to Section
8.05 or Section 10.02 hereof, the Trustee, in performing such duties, shall use
the degree of skill and attention customarily exercised by a servicer with
respect to comparable receivables that it services for itself or others.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are
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(S) 11.01
specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they substantially conform to
the requirements of this Agreement.
(c) Subject to subsection (a) above, no provision of this Agreement
shall be construed to relieve the Trustee from liability for its own grossly
negligent action, its own grossly negligent failure to act or its own wilful
misconduct; provided, however, that:
-------- -------
(i) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
grossly negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be charged with knowledge of any Servicer
Default or the failure by the Servicer to comply with the obligations of
the Servicer referred to in subsections (a), (b) and (c) of Section 10.01
hereof unless a Responsible Officer of the Trustee obtains actual knowledge
of such failure;
(iii) the Trustee shall not be charged with knowledge of an Early
Amortization Event unless a Responsible Officer of the Trustee obtains
actual knowledge thereof; and
(iv) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Investor Certificates
aggregating more than 66-2/3% of the Invested Amount of any Series relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee with respect to such Series, or exercising any
trust or power conferred upon the Trustee with respect to such Series,
under this Agreement.
(d) The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
obligations of the Servicer under this Agreement except during such time, if
any, as the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the terms of
this Agreement. Notwithstanding the prior sentence, the Trustee when acting as
successor Servicer, is still entitled to indemnification under Section 7.03 and
Section 8.04 hereof.
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(e) Except as expressly provided in this Agreement, the Trustee shall
have no power to vary the corpus of the Trust including the power to (i) accept
any substitute obligation for a Receivable initially assigned to the Trust under
Section 2.01 or Section 2.05 hereof, (ii) add any other investment, obligation
or security to the Trust or (iii) withdraw from the Trust any Receivables.
(f) If, to the actual knowledge of a Responsible Officer of the
Trustee, the Transfer Agent and Registrar shall fail to perform any obligation,
duty or agreement in the manner or on the day required to be performed by the
Transfer Agent and Registrar, as the case may be, under this Agreement, the
Trustee shall be obligated promptly upon the actual knowledge of a Responsible
Officer of the Trustee to perform such obligation, duty or agreement in the
manner so required.
(g) If the Depositor has agreed to transfer any of its receivables
(other than the Receivables) to another Person, then upon the written request of
the Depositor, the Trustee, on behalf of the Trust, will enter into such
intercreditor agreements with the transferee of such receivables as are
customary and necessary to identify separately the rights, if any, of the Trust
and such other Person in the Depositor's receivables; provided, however, that
-------- -------
the Trustee shall not be required to enter into any intercreditor agreement
which could, in the sole opinion of the Trustee, adversely affect the interests
of the Certificateholders, the Holder of the Variable Funding Certificate or the
Trustee and, upon the request of the Trustee, the Depositor will deliver an
Opinion of Counsel on any matters relating to such intercreditor agreement,
reasonably requested by the Trustee.
(h) Notwithstanding any other provision contained herein, the Trustee
is not acting as, and shall not be deemed to be, a fiduciary for any Enhancement
Provider in its capacity as such or as a Beneficiary, and the Trustee's sole
responsibility with respect to said parties shall be to perform those duties
with respect to said parties as are specifically set forth herein and no implied
duties or obligations shall be read into this Agreement against the Trustee with
respect to any such party.
SECTION 11.02. Certain Matters Affecting the Trustee. Except as
-------------------------------------
otherwise provided in Section 11.01 hereof:
(a) the Trustee may rely on and shall be protected in acting on, or in
refraining from acting in accordance with, any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented to it pursuant to this Agreement by the proper
party or parties;
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(b) the Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Enhancement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the Certificateholders
or any Enhancement Provider, pursuant to the provisions of this Agreement,
unless such Certificateholders or Enhancement Providers shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby;
(d) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement or any Enhancement;
(e) the Trustee shall not be bound to make any investigation into the
facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document;
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or
custodian appointed with due care by it hereunder;
(g) except as may be required by Section 11.01(a) hereof, the Trustee
shall not be required to make any initial or periodic examination of any
documents or records related to the Receivables or the Accounts for the
purpose of establishing the presence or absence of defects, the compliance
by the Depositor with its representations and warranties or for any other
purpose;
(h) whenever in the administration of this Agreement the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate; and
(i) the right of the Trustee to perform any discretionary act
enumerated in this Agreement or any Supplement not otherwise required in
the performance of its
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(S) 11.02
obligations hereunder shall not be construed as a duty, and the Trustee
shall not be answerable for performance of any such act.
SECTION 11.03. Trustee Not Liable for Recitals in Certificates; No
---------------------------------------------------
Responsibility for Filings, Etc. (a) The Trustee assumes no responsibility for
- -------------------------------
the correctness of the recitals contained herein and in the Certificates (other
than the certificate of authentication on the Certificates). Except as set
forth in Section 11.14 hereof, the Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
certificate of authentication on the Certificates) or of any Receivable or
related document or any security interest of the Trust therein. The Trustee
shall not be accountable for the use or application by the Depositor of any of
the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor in respect of the Receivables or
deposited in or withdrawn from the Collection Account or any Series Account.
(b) The Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or Lien granted to
it hereunder (unless the Trustee shall have become the Successor Servicer) or to
prepare or file any Securities and Exchange Commission filing for the Trust or
to record this Agreement or any Supplement. The Trustee agrees to cooperate
with the Depositor and the Servicer in connection with the preparation and
filing of any such Securities and Exchange Commission filings and the Trustee
hereby authorizes the Depositor and/or the Servicer to make any such filing for
and on behalf of the Trust.
SECTION 11.04. Trustee May Own Certificates. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Investor
Certificates and may deal with the Depositor, the Servicer and any Enhancement
Provider with the same rights as it would have if it were not the Trustee. The
Trustee in its capacity as Trustee shall exercise its duties and
responsibilities hereunder independent of and without reference to its
investment, if any, in Certificates.
SECTION 11.05. The Servicer to Pay Trustee's Fees and Expenses. The
-----------------------------------------------
Servicer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) for all services rendered by the Trustee in the execution of
the trust hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and, subject to Section 8.04 hereof,
the Servicer will pay or reimburse the Trustee (without reimbursement from any
Collection Account or any Series Account) upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement (including the
reasonable fees and expenses of its
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agents, any co-trustee and counsel) except any such expense, disbursement or
advance as may arise from its gross negligence, wilful misconduct, breach of
fiduciary duty or bad faith and except as provided in the second following
sentence. The Servicer's covenants to pay the expenses, disbursements and
advances provided for in the preceding sentence shall survive the termination of
this Agreement. If the Trustee is appointed Successor Servicer pursuant to
Section 10.02 hereof, the provisions of this Section 11.05 shall not apply to
expenses, disbursements and advances made or incurred by the Trustee in its
capacity as Successor Servicer, which shall be covered out of the Servicing Fee;
provided, however, if such expenses, disbursements and advances incurred by the
- -------- -------
Trustee are in amount in excess of the Servicing Fee, such excess amount shall
be paid in full to the Trustee by BCI. To the extent, if any, that any federal,
state or local taxes (including income and franchise taxes) are payable by the
Trust, such taxes shall be payable solely out of Trust Assets and not out of the
personal assets of the Trustee and the Servicer shall not be obligated to pay
the amount of any such tax.
SECTION 11.06. Eligibility Requirements for Trustee. The Trustee
------------------------------------
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States of America or any state thereof authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
Federal or state authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then, for the purpose of this Section 11.06,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 11.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 11.07 hereof.
SECTION 11.07. Resignation or Removal of Trustee. (a) The Trustee
---------------------------------
may at any time resign and be discharged from the trust hereby created by giving
written notice thereof to the Depositor and the Servicer. Upon receiving such
notice of resignation, the Depositor shall promptly appoint a successor trustee
by written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted appointment
within thirty (30) days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.06 hereof and shall fail to resign
after written request therefor by the Servicer, or if at any time the Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
if a receiver of the Trustee or of its property shall be
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(S) 11.07
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Servicer may, but shall not be required to, remove the
Trustee and promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment of
successor trustee pursuant to any of the provisions of this Section 11.07 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.08 hereof.
SECTION 11.08. Successor Trustee. (a) Any successor trustee
-----------------
appointed as provided in Section 11.07 hereof shall execute, acknowledge and
deliver to the Depositor and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Trustee herein. The predecessor Trustee shall
deliver to the successor trustee all documents or copies thereof, at the expense
of the Servicer, and statements held by it hereunder; and the Depositor and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor trustee all such rights, power, duties and
obligations. The Servicer shall immediately give notice to each Rating Agency
and the Certificateholders upon the appointment of a successor trustee.
(b) No successor trustee shall accept appointment as provided in
this Section 11.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 11.06 hereof.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.08, such successor trustee shall mail notice of such
succession hereunder to all Certificateholders at their addresses as shown in
the Certificate Register.
SECTION 11.09. Merger or Consolidation of Trustee. Any Person into
----------------------------------
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
all or substantially all of the corporate trust business of the Trustee, shall
be the successor of the Trustee hereunder, provided such corporation shall be
eligible under the provisions of Section 11.06 hereof, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
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(S) 11.10
SECTION 11.10. Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
(a) Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust may at the time be located, the Trustee shall have the power and
may execute and deliver all instruments to appoint one or more Persons to act as
a co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Certificateholders, such title to the Trust, or any
part thereof, and, subject to the other provisions of this Section 11.10, such
powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.06 hereof and no notice to Certificateholders of the appointment of any co-
trustee or separate trustee shall be required under Section 11.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and co-
trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article XI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement,
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(S) 11.10
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
(d) Any separate trustee or co-trustee may at any time constitute
the Trustee, its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or co-
trustee shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
SECTION 11.11. Tax Returns. In the event the Trust shall be required
-----------
to file tax returns, (i) the Trustee shall advise the Servicer of such
requirement as soon as practicable after a Responsible Officer of the Trustee
becomes aware of such requirement (whether by written notice from any applicable
tax authority or other person) and (ii) the Servicer shall, at its expense,
prepare, or shall cause to be prepared, and shall deliver, or shall cause to be
delivered, to the Trustee no later than five (5) days immediately preceding any
applicable due date and the Trustee shall execute, to the extent it is the
appropriate person to so execute, and file any such tax returns to be filed by
the Trust. The Servicer shall also, in accordance with the terms of the
Supplements, prepare, or cause to be prepared, all tax information required by
law to be distributed to the Certificateholders and the Holder of the Variable
Funding Certificate. The Trustee will distribute, or cause to be distributed,
such information to the Certificateholders and the Holder of the Variable
Funding Certificate. The Trustee, upon request, will furnish the Servicer with
all such information known to the Trustee as may be reasonably required in
connection with the preparation of all tax returns of the Trust or in connection
with the distribution of tax information to the Certificateholders and the
Holder of the Variable Funding Certificate. The Servicer shall prepare or shall
cause to be prepared all tax information required by law to be distributed to
Certificateholders and shall deliver such information to the Trustee at least
five (5) days prior to the date it is required by law to be distributed to
Investor Certificateholders. In no event shall the Trustee be liable for any
liabilities, costs or expenses of the Trust, the Certificateholders or the
Certificate Owners arising under any tax law, including without limitation
federal, state, local or foreign income or excise taxes or any other tax imposed
on or measured by income (or any interest or penalty or addition with respect
thereto or arising from a failure to comply therewith).
SECTION 11.12. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Certificates. All rights of action and claims under this Agreement or the
- ------------
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee. Any recovery of judgment shall,
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(S) 11.12
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of any Series of Certificateholders in respect of which such
judgment has been obtained.
SECTION 11.13. Suits for Enforcement. If a Servicer Default of which
---------------------
a Responsible Officer of the Trustee has actual knowledge shall occur and be
continuing, the Trustee, in its discretion may, subject to the provisions of
Section 10.01 hereof, proceed to protect and enforce its rights and the rights
of any affected Series of Certificateholders under this Agreement by suit,
action or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy as the Trustee, being advised by
counsel, shall deem most effectual to protect and enforce any of the rights of
the Trustee or any affected Series of Investor Certificateholders. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Certificateholder any plan of
reorganization, arrangement, adjustment or composition affecting the
Certificates or the rights of any Holder thereof, or authorize the Trustee to
vote in respect of the claim of any Certificateholder in any such proceeding.
SECTION 11.14. Representations and Warranties of Trustee. The
-----------------------------------------
Trustee represents and warrants that:
(i) the Trustee is a banking corporation organized, existing and in
good standing under the laws of the State of New York;
(ii) the Trustee has full power, authority and right to execute, deliver
and perform this Agreement and each Supplement, and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Agreement and each Supplement; and
(iii) this Agreement and each Supplement has been, or will be, as
applicable, duly executed and delivered by the Trustee.
SECTION 11.15. Maintenance of Office or Agency. The Trustee will
-------------------------------
maintain at its expense in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where notices and demands to or upon the
Trustee in respect of the Certificates and this Agreement may be served. The
Trustee initially designates its Corporate Trust Office as its office for such
purposes in New York. The Trustee will give prompt written notice to the
Servicer and to Holders of the Certificates of any change in the location of the
Certificate Register or any such office or agency.
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(S) 12.01
ARTICLE XII
Termination
-----------
SECTION 12.01. Termination of Trust. The Trust and the respective
--------------------
obligations and responsibilities of the Depositor, the Servicer and the Trustee
created hereby (other than the obligation of the Trustee to make payments to
Certificateholders and the Holder of the Variable Funding Certificate as
hereafter set forth) shall terminate, except with respect to the duties
described in Section 7.03, Section 8.04 and Section 12.02(b) hereof, upon the
earlier of (i) the day following the Distribution Date on which the Invested
Amount for all Series is zero and (ii) January 1, 2014, (the "Trust Termination
-----------------
Date"). The Servicer will give the Rating Agencies prompt notice of the
- ----
termination of the Trust.
SECTION 12.02. Final Distribution. (a) The Servicer shall give the
------------------
Trustee at least thirty (30) days prior notice of the Distribution Date on which
the respective Certificateholders of any Series or Class or the Holder of the
Variable Funding Certificate may surrender their respective Certificates for
payment of the final distribution on and cancellation of such Certificates (or,
in the event of a final distribution resulting from the application of Section
2.03 or Section 9.01 hereof, notice of such Distribution Date promptly after the
Servicer has determined that a final distribution will occur, if such
determination is made less than thirty (30) days prior to such Distribution
Date). Such notice shall be accompanied by an Officers' Certificate setting
forth the information specified in Section 3.05 hereof covering the period
during the then-current calendar year through the date of such notice. Not
later than the fifth day of the month in which the final distribution in respect
of such Series or Class or Variable Funding Certificate is payable to
Certificateholders or the Holder of the Variable Funding Certificate, as
applicable, the Trustee shall provide notice to the related Certificateholders
specifying (i) the date upon which final payment thereof will be made upon
presentation and surrender of the related Certificates at the office or offices
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such payment date is not applicable,
payments being made only upon presentation and surrender of the related
Certificates at the office or offices therein specified (which, in the case of
Bearer Certificate, shall be outside the United States). The Trustee shall give
such notice to the Transfer Agent and Registrar and the Rating Agencies at the
time such notice is given to the related Certificateholders.
(b) Notwithstanding a final distribution to the Certificateholders
of any Series or Class or the Holder of the Variable Funding Certificate (or the
termination of the Trust), except as otherwise provided in this subsection (b),
all funds then on deposit in the Collection Account and any Series Account
allocated to such Certificateholders or the Holder of the Variable Funding
Certificate shall continue to be held in trust for the benefit of such
Certificateholders or the Holder of the Variable Funding Certificate, as
applicable, and the
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(S) 12.02
Trustee shall pay such funds to such Certificateholders upon surrender of the
related Certificates (and any excess shall be paid in accordance with the terms
of any Enhancement Agreement). In the event that all such Certificateholders
shall not surrender their Certificates for cancellation within six months after
the date specified in the notice from the Trustee described in subsection (a)
above, the Trustee shall give a second notice to the remaining such
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto (which surrender and payment, in the
case of Bearer Certificates, shall be outside the United States). If within one
year after the second notice all such Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining such
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds in the Collection Account or, if
applicable, any Series Account held for the benefit of such Certificateholders.
The Trustee shall pay to the Depositor any monies held by it for the payment of
principal or interest that remain unclaimed for two years. After payment to the
Depositor, Certificateholders entitled to the money must look to the Depositor
for payment as general creditors unless an applicable abandoned property law
designates another Person.
(c) In the event that (x) the Invested Amount with respect to any
Series is greater than zero on its Termination Date or (y) the Variable Funding
Amount is greater than zero on the Termination Date with respect to the Variable
Funding Certificate, in each case after giving effect to deposits and
distributions otherwise to be made on such Termination Date, the Trustee will
use its best efforts to sell or cause to be sold on such Termination Date
Receivables (or interests therein) in an amount equal to the interest in the
Pool Balance represented by the Certificates; provided, however, that in no
-------- -------
event shall such amount exceed (i) such Series' Allocation Percentage (as
defined in the related Supplements and for the Collection Period in which such
Termination Date occurs) of Receivables on such Termination Date, in the case of
a Series of Investor Certificates, and (ii) the Variable Funding Percentage (as
defined in the related Supplement and for the Collection Period in which such
Termination Date occurs) of Receivables on such Termination Date, in the case of
the Variable Funding Certificate. The proceeds (the "Termination Proceeds")
--------------------
from such sale shall be immediately deposited into the Collection Account for
the benefit of the Certificateholders of such Series and the Holder of the
Variable Funding Certificate, as applicable. The Termination Proceeds shall be
allocated and distributed to the Certificateholders of such Series and the
Holder of the Variable Funding Certificate, as applicable, in accordance with
the terms of the applicable Supplement.
SECTION 12.03. Depositor's Termination Rights. Upon the termination
------------------------------
of the Trust pursuant to Section 12.01 hereof and the surrender of the BCRC
Certificate and any Supplemental Certificates, the Trustee shall sell, assign
and convey to the Depositor or its designee, without recourse, representation or
warranty, all right, title and interest of the Trust in the Receivables, whether
then existing or thereafter created, all Collateral Security
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(S) 12.03
with respect thereto, all monies due or to become due and all amounts received
with respect thereto and all proceeds thereof (including without limitation any
investment proceeds on account of the Trust's assets), except for amounts held
by the Trustee pursuant to Section 12.02(b) hereof, and all of the Depositor's
rights, remedies, powers and privileges with respect to such Receivables under
the Receivables Purchase Agreement. The Trustee shall execute and deliver such
instruments of transfer and assignment, in each case without recourse, as shall
be reasonably requested by the Depositor to vest in the Depositor or its
designee all right, title and interest which the Trust had in all such property.
ARTICLE XIII
Miscellaneous Provisions
------------------------
SECTION 13.01. Amendment. (a) This Agreement or any Supplement may
---------
be amended from time to time (including in connection with the issuance of a
Supplemental Certificate) by the Servicer, the Depositor, the Trustee and BCI
(if BCI is not the Servicer) without the consent of any of the
Certificateholders, provided that such action shall not, as evidenced by an
Opinion of Counsel for the Depositor, addressed and delivered to the Trustee,
adversely affect in any material respect the interests of any Certificateholder
or the Holder of the Variable Funding Certificate. Notwithstanding anything
contained herein to the contrary, (i) the Trustee, with the consent of any
Enhancement Providers, may at any time and from time to time amend, modify or
supplement the form of Distribution Date Statement and (ii) the Servicer, the
Depositor, the Trustee and BCI (if not then the Servicer) may, with the consent
of the Rating Agencies but without the consent of any of the Certificateholders,
any Enhancement Provider or any other person, amend from time to time (including
in connection with the issuance of a Supplemental Certificate) this Agreement or
any Supplement in order to conform such documents to the description of the
Certificates and the Receivables and the other matters set forth in the
Registration Statement filed by the Depositor with the Securities and Exchange
Commission relating to the initial Investor Certificates, as such Registration
Statement is in effect on the first Closing Date.
(b) This Agreement or any Supplement may also be amended from time
to time (including in connection with the issuance of a Supplemental
Certificate) by the Servicer, the Depositor, the Trustee and BCI (if not then
the Servicer), with the consent of (x) the Holder of the Variable Funding
Certificate, if it would be adversely affected by such amendment, and (y) the
Holders of Investor Certificates evidencing not less than a majority of the
aggregate unpaid principal amount of the Investor Certificates of all adversely
affected Series, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or any Supplement
or of modifying in any manner the rights of the Certificateholders; provided,
--------
however, that no such amendment shall:
- -------
92
<PAGE>
(S) 13.01
(i) reduce in any manner the amount of or delay the timing of any
distributions to be made to Certificateholders or the Holder of the
Variable Funding Certificate or deposits of amounts to be so distributed or
the amount available under any Enhancement without the consent of each
affected Certificateholder or the Holder of the Variable Funding
Certificate, as applicable;
(ii) change the definition of or the manner of calculating the interest
of any Certificateholder without the consent of each affected
Certificateholder or the Holder of the Variable Funding Certificate, as
applicable;
(iii) reduce the amount available under any Enhancement without the
consent of each affected Certificateholder or the Holder of the Variable
Funding Certificate, as applicable;
(v) adversely affect the rating of any Series or Class by any Rating
Agency without the consent of the Holders of Investor Certificates of such
Series or Class evidencing not less than 66-2/3% of the aggregate unpaid
principal amount of the Investor Certificates of such Series or Class; or
(iv) reduce the aforesaid percentage required to consent to any such
amendment without the consent of each affected Certificateholder or the
Holder of the Variable Funding Certificate, as applicable.
Any amendment to be effected pursuant to this subsection (b) shall be deemed to
adversely affect all outstanding Series, other than any Series with respect to
which such action shall not, as evidenced by an Opinion of Counsel for the
Depositor, addressed and delivered to the Trustee, adversely affect in any
material respect the interests of any Certificateholder of such Series. The
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Trustee's rights, duties or immunities under this Agreement or
otherwise.
(c) Promptly after the execution of any such amendment or consent
(other than an amendment pursuant to subsection (a) above), the Trustee shall
furnish notification of the substance of such amendment to each Certificate-
holder and the Holder of the Variable Funding Certificate and the Servicer shall
furnish notification of the substance of such amendment to each Rating Agency,
each Agent and each Enhancement Provider.
(d) It shall not be necessary for the consent of Certificateholders
or the Holder of the Variable Funding Certificate under this Section 13.01 to
approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders and the Holder of the Variable
93
<PAGE>
(S) 13.01
Funding Certificate shall be subject to such reasonable requirements as the
Trustee may prescribe.
(e) Notwithstanding anything in this Section 13.01 to the contrary,
no amendment may be made to this Agreement or any Supplement which would
adversely affect in any material respect the interests of any Enhancement
Provider without the consent of such Enhancement Provider.
(f) Any Supplement executed in accordance with the provisions of
Section 6.03 hereof shall not be considered an amendment to this Agreement for
the purposes of this Section 13.01.
SECTION 13.02. Protection of Right, Title and Interest to Trust.
------------------------------------------------
(a) The Servicer shall cause this Agreement, all amendments hereto and/or all
financing statements and continuation statements and any other necessary
documents covering the Certificateholders' and the Trustee's right, title, and
interest in and to the Trust to be promptly recorded, registered and filed, and
at all times to be kept recorded, registered and filed, all in such manner and
in such places as may be required by law fully to preserve and protect the
right, title and interest of the Certificateholders and the Trustee hereunder to
all property comprising the Trust. The Servicer shall deliver to the Trustee
file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. The Depositor shall cooperate fully with the
Servicer in connection with the obligations set forth above and will execute any
and all documents reasonably required to fulfill the intent of this Section
13.02(a).
(b) Prior to the Depositor or the Servicer making any change in its
name, identity or corporate structure which would make any financing statement
or continuation statement filed in accordance with subsection (a) of this
Section 13.02 seriously misleading within the meaning of Section 9-402(7) of the
UCC as in effect in Vermont, the Depositor shall give the Trustee and any Agent
notice of any such change and shall, prior to the effect of any such change,
file such financing statements or amendments as may be necessary to continue the
perfection of the Trust's security interest in the Receivables and the proceeds
thereof.
(c) The Depositor and the Servicer will give the Trustee and any
Agent prompt written notice of any relocation of any office from which it
services Receivables or keeps records concerning the Receivables or of its
principal executive office and whether, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new financing
statement and shall file such financing statements or amendments as may be
necessary to perfect or to continue the perfection of the Trust's ownership
interest or security
94
<PAGE>
(S) 13.02
interest in the Receivables and the proceeds thereof. The Depositor and the
Servicer shall at all times maintain each office from which it services Domestic
Inventory Receivables and its principal executive office within the United
States of America.
(d) The Servicer will deliver to the Trustee and any Enhancement
Provider, upon the execution and delivery of each amendment of this Agreement or
any Supplement, an Opinion of Counsel to the effect specified in Exhibit G-1
hereto.
SECTION 13.03. Limitation on Rights of Certificateholders. (a) The
------------------------------------------
death or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor shall such death or incapacity entitle such
Certificateholders' legal representatives or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a partition or
winding-up of the Trust, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except as
expressly provided in this Agreement) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association, nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder (other than the Holder of the Variable
Funding Certificate) shall have any right by virtue of any provisions of this
Agreement to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Agreement, unless the Holders of Investor
Certificates evidencing more than 50% of the aggregate unpaid principal amount
of all Investor Certificates (or, with respect to any such action, suit or
proceeding that does not relate to all Series, 50% of the aggregate unpaid
principal amount of the Investor Certificates of all Series to which such
action, suit or proceeding relates) shall have made a request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as the Trustee
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for sixty (60) days after such request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding.
It is understood and intended, and expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Certificateholders shall have any right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this Agreement
to affect, disturb or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or
95
<PAGE>
(S) 13.03
preference to any other such Certificateholder, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders except as otherwise expressly
provided in this Agreement. For the protection and enforcement of the
provisions of this Section 13.03, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 13.04. No Petition. The Servicer, BCI (if it is no longer
-----------
the Servicer) and the Trustee, by entering into this Agreement, each
Certificateholder, by accepting an Investor Certificate, the Holder of the
Variable Funding Certificate, by accepting the Variable Funding Certificate or
the pledge of the Variable Funding Certificate, as the case may be, each Holder
of a Supplemental Certificate by accepting a Supplemental Certificate and any
Successor Servicer and each other Beneficiary, by accepting the benefits of this
Agreement, hereby covenants and agrees that they will not at any time institute
against BCRC any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law.
SECTION 13.05. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 13.06. Notices. (a) All demands, notices, instructions,
-------
directions and communications (collectively, "Notices") under this Agreement
-------
shall be in writing (including telegraphic, telecopy, telex or cable
communication) and shall be deemed to have been duly given if personally
delivered or telegraphed, telecopied, telexed, cabled or delivered, to:
(i) in the case of BCRC, P.O. Box 5544, Burlington, Vermont 05401,
Attention: Vice President and Treasurer;
(ii) in the case of BCI, 7 Burlington Square, Burlington, Vermont
05401, Attention: Vice President-Finance; and
(iii) in the case of the Trustee, Bankers Trust Company, Four
Albany Street, New York, New York 10006, Attention: Corporate Trust &
Agency Group, Structured Finance Team, facsimile: (212) 250-6439;
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party.
96
<PAGE>
(S) 13.06
(b) Any Notice required or permitted to be given to a Holder of
Registered Certificates shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. No Notice
shall be required to be mailed to a Holder of Bearer Certificates or Coupons but
shall be given as provided below. Any Notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Investor Certificateholder receives such Notice. In
addition, in the case of any Series or Class with respect to which any Bearer
Certificates are outstanding, any Notice required or permitted to be given to
Certificateholders of such Series or Class shall be published in an Authorized
Newspaper within the time period prescribed in this Agreement.
SECTION 13.07. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders.
SECTION 13.08. Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Section 8.02 hereof, this Agreement may
not be assigned by the Servicer.
SECTION 13.09. Certificates Nonassessable and Fully Paid. It is the
-----------------------------------------
intention of the parties to this Agreement that neither the Certificateholders
nor the Holder of the Variable Funding Certificate shall be personally liable
for obligations of the Trust, that the interests in the Trust represented by the
Investor Certificates and the Variable Funding Certificate shall be
nonassessable for any losses or expenses of the Trust or for any reason
whatsoever and that Investor Certificates and the Variable Funding Certificate
upon authentication thereof by the Trustee are and shall be deemed fully paid.
SECTION 13.10. Further Assurances. Each of the Depositor, the
------------------
Servicer and the Trustee agrees to do and perform, from time to time, any and
all acts and to execute any and all further instruments required or reasonably
requested by one or more of the other parties hereto more fully to effect the
purposes of this Agreement, including the execution of any financing statements
or continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.
SECTION 13.11. No Waiver; Cumulative Remedies. No failure to
------------------------------
exercise and no delay in exercising, on the part of the Trustee, the
Certificateholders, the Depositor or the Servicer, as the case may be, any
right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege under this Agreement preclude any other or further
97
<PAGE>
(S) 13.11
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges provided under this Agreement are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
SECTION 13.12. Counterparts. This Agreement may be executed in two
------------
or more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
SECTION 13.13. Third-Party Beneficiaries. This Agreement will inure
-------------------------
to the benefit of and be binding upon the parties hereto, the Certificateholders
and the other Beneficiaries and their respective successors and permitted
assigns. Except as otherwise expressly provided in this Agreement, no other
Person will have any right or obligation hereunder.
SECTION 13.14. Actions by Certificateholders. Any request, demand,
-----------------------------
authorization, direction, notice, consent, waiver or other act by a
Certificateholder shall bind such Certificateholder and every subsequent Holder
of any Certificate issued upon the registration of transfer of the Certificates
of such Certificateholder or in exchange therefor or in lieu thereof in respect
of anything done or omitted to be done by the Trustee or the Servicer in
reliance thereon, whether or not notation of such action is made upon any such
Certificate.
SECTION 13.15. Rule 144A Information. For so long as any of the
---------------------
Investor Certificates of any Series or Class are "restricted securities" within
the meaning of Rule 144(a)(3) under the Act, each of the Depositor, the Trustee,
the Servicer and any Enhancement Providers agree to cooperate with each other to
provide to any Certificateholders of such Series or Class and to any prospective
purchaser of Investor Certificates designated by such Certificateholder, upon
the request of such Certificateholder or prospective purchaser, any information
required to be provided to such Holder or prospective purchaser to satisfy the
condition set forth in Rule 144A(d))4) under the Act.
SECTION 13.16. Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
SECTION 13.17. Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation or
any provision hereof.
98
<PAGE>
(S) 13.11
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused this Pooling and Servicing Agreement to be duly executed by their
respective officers as of the day and year first above written.
BOMBARDIER CREDIT RECEIVABLES CORPORATION,
Depositor
By: /s/ William P. Brady
---------------------------
Name: William P. Brady
------------------------------
Title: Vice President
--------------------------
By: /s/ Andrew Baranowsky
---------------------------
Name: Andrew Baranowsky
------------------------------
Title: Assistant Secretary
--------------------------
BOMBARDIER CAPITAL INC., Servicer
By: /s/ William P. Brady
--------------------------
Name: William P. Brady
------------------------------
Title: Vice President
--------------------------
By: /s/ Andrew Baranowsky
--------------------------
Name: Andrew Baranowsky
------------------------------
Title: Assistant Treasurer
---------------------------
BANKERS TRUST COMPANY, Trustee
By: /s/ Marie C. Rasch
--------------------------
Name: Marie C. Rasch
-----------------------------
Title: Vice President
--------------------------
99
<PAGE>
EXHIBIT A
TO POOLING AND SERVICING AGREEMENT
FORM OF FACE OF BCRC CERTIFICATE
THIS BCRC CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. NEITHER THIS BCRC CERTIFICATE NOR ANY PORTION HEREOF MAY
BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS.
THIS BCRC CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED, ASSIGNED,
EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE WITH THE TERMS
OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
No. R-__________ One Unit
BOMBARDIER RECEIVABLES MASTER TRUST I
BCRC CERTIFICATE
THIS CERTIFICATE REPRESENTS AN INTEREST IN CERTAIN
ASSETS OF THE BOMBARDIER RECEIVABLES MASTER TRUST I
Evidencing an interest in a trust, the corpus of which consists primarily of (i)
extensions of credit and advances (referred to as inventory, wholesale or floor
plan financing) by Bombardier Capital Inc. ("BCI") generated from time to time
and (ii) extensions of credit made by Affiliates of BCI and purchased by BCI in
the ordinary course of business (collectively, the "Receivables") and maintained
by BCI in a portfolio of financing arrangements (the "Accounts") meeting certain
eligibility criteria. This certificate (the "BCRC Certificate") does not
represent an interest in or obligation of Bombardier Credit Receivables
Corporation (the "Depositor" or "BCRC"), BCI or any Affiliate thereof.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this BCRC Certificate shall
not be entitled to any benefit under the Pooling and Servicing Agreement
referred to on the reverse side hereof, or be valid for any purpose.
A-1
<PAGE>
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS
PROVISIONS.
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, has caused
this BCRC Certificate to be duly executed.
BOMBARDIER RECEIVABLES MASTER TRUST I
By: BANKERS TRUST COMPANY, not in its
individual capacity but solely as
Trustee on behalf of the Trust
By:______________________________
Authorized Officer
Dated:
______________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the BCRC Certificate described in the within-mentioned Pooling
and Servicing Agreement.
BANKERS TRUST COMPANY,
as Trustee
By:__________________________
Authorized Officer
A-2
<PAGE>
FORM OF REVERSE OF BCRC CERTIFICATE
This certifies that BOMBARDIER CREDIT RECEIVABLES CORPORATION ("BCRC")
is the registered owner of a fractional interest in the assets of the BOMBARDIER
RECEIVABLES MASTER TRUST I (the "Trust") not allocated to the Investors'
Interest, the Variable Funding Interest or the interest of any Holder of a
Supplemental Certificate, pursuant to the Pooling and Servicing Agreement dated
as of January 1, 1994 (as amended and supplemented, the "Agreement"), by and
among BCRC, as depositor, Bombardier Capital Inc., as servicer ("BCI"), and
Bankers Trust Company, as trustee (the "Trustee"). The corpus of the Trust will
include (a) all of the Depositor's right, title and interest in, to and under
the Receivables in each Eligible Account (other than any Receivables created in
(x) a Removed Account from and after the applicable Removal Date, as provided in
Section 2.07(c) of the Agreement or (y) an Ineligible Account from and after the
applicable Removal Commencement Date, as provided in Section 2.08(c) of the
Agreement) and all Collateral Security with respect thereto owned by the
Depositor at the close of business on the Cut-Off Date, in the case of the
Initial Accounts, and on the applicable Additional Cut-Off Date, in the case of
Additional Accounts, and all monies due or to become due and all amounts
received with respect thereto and all proceeds thereof (including "proceeds", as
defined in Section 9-306 of the UCC as in effect in the State of Vermont, and
Recoveries, (b) all of the Depositor's rights, remedies, powers and privileges
with respect to such Receivables under the Receivables Purchase Agreement
(excluding, however, any repurchase or other agreements with manufacturers,
importers or distributors relating to Obligors which are being financed by
Domestic Inventory Receivables), (c) all of the Depositor's right, title and
interest in, to and under the Receivables in each Eligible Account (other than
any Receivables created in (x) a Removed Account from and after the applicable
Removal Date, as provided in Section 2.07(c) of the Agreement or (y) an
Ineligible Account from and after the applicable Removal Commencement Date, as
provided in Section 2.08(c) of the Agreement) and all Collateral Security with
respect thereto owned by the Depositor at the close of business of each Transfer
Date and not theretofore conveyed to the Trust, all monies due or to become due
and all amounts received with respect thereto and all proceeds thereof
(including "proceeds" as defined in Section 9-306 of the UCC as in effect in the
State of Vermont, and Recoveries), (d) all monies on deposit in, and Eligible
Investments credited to, the Collection Account or any Series Account, (e) any
Enhancements and (f) all other assets and interests constituting the Trust.
Although a summary of certain provisions of the Agreement is set forth below,
this Certificate does not purport to summarize the Agreement and reference is
made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Trustee. A copy of the Agreement may be requested
from the Trustee by writing to the Trustee at Bankers Trust Company, Four Albany
Street, New York, New York 10006, Attention: Corporate Trust & Agency Group,
Structured Finance Team. To the extent not defined herein, the capitalized
terms used herein have the meanings ascribed to them in the Agreement.
Subject to the terms and conditions of the Pooling and Servicing
Agreement, the Depositor may from time to time direct the Trustee, on behalf of
the Trust, to issue one
A-3
<PAGE>
or more new Series, which will represent fractional undivided interests in
certain of the Trust Assets.
This BCRC Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as amended and
supplemented from time to time, the Depositor by virtue of the acceptance hereof
assents and is bound. Although a summary of certain provisions of the Pooling
and Servicing Agreement is set forth below, this Certificate does not purport to
summarize the Pooling and Servicing Agreement and reference is made to the
Pooling and Servicing Agreement for information with respect to the interests,
rights, benefits, obligations, proceeds and duties evidenced hereby and the
rights, duties and obligations of the Trustee. A copy of the Pooling and
Servicing Agreement (without schedules) may be requested from the Trustee by
writing to the Trustee at Four Albany Street, New York, New York 10006,
Attention: Corporate Trust & Agency Group, Structured Finance Team. To the
extent not defined herein, the capitalized terms used herein have the meanings
ascribed to them in the Pooling and Servicing Agreement.
On the Distribution Date occurring after the Invested Amount is
reduced to 10% or less of the aggregate original principal amount of the
Certificates, the Depositor has the option, subject to the condition set forth
in Section 7.01(c) of the Series Supplement, to purchase the entire interest in
the Trust represented by any Class or Classes of Investor Certificates relating
to one or more Series. The purchase price will be equal to the Reassignment
Amount (as defined in the related Series Supplement).
The Receivables consist of (i) advances made directly or indirectly by
Bombardier Capital Inc. to domestic dealers of certain consumer, recreational
and commercial products and (ii) extensions of credit made by affiliates of BCI
to their customers with respect to certain products manufactured or distributed
by such affiliates.
This Certificate is not permitted to be transferred, assigned,
exchanged or otherwise pledged or conveyed except in accordance with the
Agreement, including Section 6.03(d) of the Agreement.
This Certificate does not represent an obligation of, or an interest
in BCI, BCRC or any affiliate of any of them and is not insured or guaranteed by
any governmental agency or instrumentality. This Certificate is limited in
right of payment to certain Collections with respect to the Receivables (and
certain other amounts), all as more specifically set forth herein and in the
Pooling and Servicing Agreement.
The Pooling and Servicing Agreement may be amended from time to time
in accordance with Section 13.01 thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register of the Trustee upon surrender of this
Certificate for registration of transfer at the office or agency of the Transfer
Agent and Registrar in New York City, accompanied by a
A-4
<PAGE>
written instrument of transfer in form satisfactory to the Trustee or the
Transfer Agent and Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized, and thereupon one or more new Certificates of
authorized denominations evidencing the same aggregate fractional undivided
interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement.
This Certificate is the BCRC Certificate, which represents the
Depositor's interest in certain assets of the Trust, including the right to
receive a portion of the Collections and other amounts at the times and in the
amounts specified in the Agreement. The aggregate interest represented by this
BCRC Certificate at any time in the Receivables in the Trust shall not exceed
the Retained Interest at such time. In addition to this BCRC Certificate, (i)
Investor Certificates will be issued pursuant to the Agreement, which will
represent the Investors' Interest, (ii) a Variable Funding Certificate will be
issued pursuant to the Agreement, which will represent the Variable Funding
Interest, and (iii) Supplemental Certificates may be issued pursuant to the
Agreement, which will represent that portion of the Retained Interest not
allocated to the Depositor. This BCRC Certificate shall not represent any
interest in the Collection Account, the Series Accounts or any Enhancements,
except as expressly provided in the Agreement.
Subject to the following paragraph, the obligations created by the
Agreement and the Trust created thereby shall terminate upon the Trust
Termination Date.
Upon the termination of the Trust pursuant to Section 12.01 of the
Agreement and the surrender of the BCRC Certificate, the Trustee shall sell,
assign and convey to the Depositor or its designee, without recourse,
representation or warranty, all right, title and interest of the Trust in the
Receivables, whether then existing or thereafter created, all Collateral
Security with respect thereto, all monies due or to become due and all amounts
received with respect thereto and all proceeds thereof, except for amounts held
by the Trustee pursuant to Section 12.02(b) of the Agreement, and all of the
Depositor's rights, remedies, powers and privileges with respect to such
Receivables under the Receivables Purchase Agreement. The Trustee shall execute
and deliver such instruments of transfer and assignment, in each case without
recourse, as shall be reasonably requested by the Depositor to vest in the
Depositor or its designee all right, title and interest which the Trust had in
all such property.
The Depositor, the Servicer, the Trustee, the Transfer Agent and
Registrar and any agent of any of them, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Servicer nor the Trustee, the Transfer Agent and Registrar, nor
any agent of any of them, shall be affected by notice to the contrary except in
certain circumstances described in the Pooling and Servicing Agreement.
A-5
<PAGE>
EXHIBIT B TO
TO POOLING AND SERVICING AGREEMENT
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
(As required by Section 2.05(d)
------------------------------
of the Pooling and Servicing Agreement)
--------------------------------------
ASSIGNMENT NO. _____ OF __________ RECEIVABLES
IN ADDITIONAL ACCOUNTS
dated as of __________, ____,
among Bombardier Credit Receivables Corporation,
as depositor (the "Depositor"),
Bombardier Capital Inc., as servicer (the "Servicer")
and Bankers Trust Company, as trustee (the "Trustee"),
pursuant to the Pooling and Servicing Agreement
referred to below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS the Depositor, the Servicer and the Trustee are parties to a
Pooling and Servicing Agreement dated as of January 1, 1994 (as amended or
supplemented, the "Agreement");
WHEREAS, pursuant to the Agreement, the Depositor wishes to designate
Additional Accounts to be included as Accounts and to convey the Receivables and
any related Collateral Security of such Additional Accounts, whether now
existing or hereafter created, to the Trust as part of the corpus of the Trust
(as each such term is defined in the Agreement); and
WHEREAS the Trustee is willing, on behalf of the Trust, to accept such
designation and conveyance subject to the terms and conditions hereof;
NOW, THEREFORE, the Depositor, the Servicer and the Trustee, on behalf
of the Trust, hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have the
-------------
meanings ascribed to them in the Agreement unless otherwise defined herein.
"Addition Date" shall mean, with respect to the Additional Accounts
-------------
designated hereby, ________________, ____.
B-1
<PAGE>
2. Designation of Additional Accounts. The Depositor hereby delivers
----------------------------------
herewith a computer file or microfiche or written list containing a true and
complete list of all such Additional Accounts specifying for each such Account,
as of the Additional Cut-Off Date, its account number, the aggregate amount of
Receivables, if any, outstanding in such Account and the aggregate amount of
Principal Receivables, if any, in such Account. Such file or list shall, as of
the date of this Assignment, supplement Schedule 1 to the Agreement.
3. Conveyance of Receivables. (a) The Depositor does hereby sell,
-------------------------
transfer, assign, set over and otherwise convey, without recourse (except as
expressly provided in the Agreement), to the Trust for the benefit of the
Certificateholders and the other Beneficiaries, all its right, title and
interest in, to and under the Receivables in such Additional Accounts and all
Collateral Security with respect thereto, owned by the Depositor and existing at
the close of business on the Additional Cut-Off Date and thereafter created from
time to time until the termination of the Trust, all monies due or to become due
and all amounts received with respect thereto and all proceeds thereof
(including "proceeds" as defined in Section 9-306 of the UCC as in effect in the
State of Vermont, and Recoveries). The parties hereto intend that this
Assignment constitute an absolute sale; provided, however, that to the extent
-------- -------
that this Assignment is deemed or recharacterized not to constitute an absolute
sale, the parties intend this transaction to create a security interest under
Article 9 of the UCC. The foregoing sale, transfer, assignment, set-over and
conveyance does not constitute and is not intended to result in the creation or
an assumption by the Trust, the Trustee or any Beneficiary of any obligation of
the Servicer, BCI, the Depositor, Bombardier Corporation or any other Person in
connection with the Accounts, the Receivables or under any agreement or
instrument relating thereto, including any obligation to any Obligors.
(b) In connection with such sale, the Depositor agrees, if necessary,
to record and file, at its own expense, a financing statement on form UCC-l (and
continuation statements when applicable) with respect to the Receivables now
existing and hereafter created for the sale of "chattel paper" and "accounts"
(as defined in Sections 9-105 and 9-106 of the UCC as in effect in any state
where the Depositor's or the Servicer's chief executive offices or books and
records relating to the Receivables are located) meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect the sale and assignment of the Receivables and the Collateral
Security to the Trust, and to deliver a file-stamped copy of such financing
statements or other evidence of such filing to the Trustee on or prior to the
Addition Date. In addition, the Depositor shall cause to be timely filed in
the appropriate filing office any UCC-1 financing statement and continuation
statement necessary to perfect any sale of Receivables to the Trust. The
Trustee shall be under no obligation whatsoever to file such financing
statement, or a continuation statement to such financing statement, or to make
any other filing under the UCC in connection with such sales.
(c) In connection with such sale, the Depositor further agrees, at
its own expense, on or prior to the Addition Date, to cause BCI to indicate in
its computer files as required by the Receivables Purchase Agreement that the
Receivables created in connection with the Additional Accounts designated hereby
have been sold and the Collateral Security
B-2
<PAGE>
assigned to the Trust pursuant to this Assignment for the benefit of the
Certificateholders and the other Beneficiaries.
4. Acceptance by Trustee. Subject to the satisfaction of the
---------------------
conditions set forth in Section 6 of this Assignment, the Trustee hereby
acknowledges its acceptance, on behalf of the Trust, of all right, title and
interest previously held by the Depositor to the property, now existing and
hereafter created, conveyed to the Trust pursuant to Section 3(a) of this
Assignment, and declares that it shall maintain such right, title and interest,
upon the trust set forth in the Agreement for the benefit of the
Certificateholders and other Beneficiaries. The Trustee further acknowledges
that, prior to or simultaneously with the execution and delivery of this
Assignment, the Depositor delivered to the Trustee the computer file or
microfiche or written list relating to the Additional Accounts described in
Section 2 of this Assignment. The Trustee shall be under no obligation
whatsoever to verify the accuracy or completeness of the information contained
in such file or list.
5. Representations and Warranties of the Depositor. The Depositor
-----------------------------------------------
hereby represents and warrants to the Trustee, on behalf of the Trust, as of the
date of this Assignment and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Assignment constitutes
-----------------------------------
a legal, valid and binding obligation of the Depositor, enforceable against
the Depositor in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity) and the availability of equitable remedies;
(b) Organization and Good Standing. The Depositor is a corporation
------------------------------
duly organized and validly existing and in good standing under the law of
the State of Delaware and has, in all material respects, full corporate
power, authority and legal right to own its properties and conduct its
business as such properties are presently owned and such business is
presently conducted, and to execute, deliver and perform its obligations
under this Assignment;
(c) Due Qualification. The Depositor is duly qualified to do
-----------------
business and, where necessary, is in good standing as a foreign corporation
(or is exempt from such requirement) and has obtained all necessary
licenses and approvals in each jurisdiction in which the conduct of its
business requires such qualification except where the failure to so qualify
or be in good standing or obtain licenses or approvals would not have a
material adverse effect on its ability to perform its obligations
hereunder;
(d) Eligible Accounts. Each Additional Account designated hereby is
-----------------
an Eligible Account;
B-3
<PAGE>
(e) Selection Procedures. No selection procedures reasonably
--------------------
believed by the Depositor to be adverse to the interests of the
Beneficiaries were utilized in selecting the Additional Accounts designated
hereby;
(f) Insolvency. As of the Notice Date and the Addition Date, neither
----------
BCI nor the Depositor are insolvent nor, after giving effect to the
conveyance set forth in Section 3 of this Assignment, will any of them have
been made insolvent, nor are any of them aware of any pending insolvency;
(g) Valid Transfer. This Assignment constitutes a valid sale,
--------------
transfer and assignment to the Trust of all right, title and interest of
the Depositor in the receivables and any Collateral Security, whether then
existing or thereafter created, and the proceeds thereof (other than
Insurance Proceeds) and upon the filing of the financing statements
described in Section 3 of this Assignment with the Secretary of State of
the State of Vermont grants to the Trust under the UCC as in effect in
Vermont a first priority perfected ownership interest in such property,
except for Liens permitted under Section 2.06(a) of the Agreement and tax
and certain other statutory liens (including liens in favor of the Pension
Benefit Guaranty Corporation); provided, however, that if this Assignment
-------- -------
is deemed to be a grant to the Trust of a security interest under the UCC
as in effect in the State of Vermont in such property, then upon the filing
of the financing statements described in Section 2.01 of the Agreement with
the Secretary of State of the State of Vermont and in the case of the
Receivables hereinafter created and the proceeds thereof, upon the creation
thereof, the Trust shall have a first priority perfected security interest
in such property except for Liens permitted under Section 2.06(a) of the
Agreement and tax and certain other statutory liens (including liens in
favor of the Pension Benefit Guaranty Corporation). Except as otherwise
provided in the Agreement, neither the Depositor nor any Person claiming
through or under the Depositor has any claim to or interest in the Trust
Assets;
(h) Due Authorization. The execution and delivery of this Assignment
-----------------
and the consummation of the transactions provided for or contemplated by
this Assignment have been duly authorized by the Depositor by all necessary
corporate action on the part of the Depositor;
(i) No Conflict. The execution and delivery of this Assignment, the
-----------
performance of the transactions contemplated by this Assignment and the
fulfillment of the terms hereof, will not conflict with, result in any
breach of any of the material terms and provisions of, or constitute (with
or without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust, or other
instrument to which the Depositor is a party or by which it or its
properties are bound, except to the extent that such conflict breach or
default will not have a material adverse effect on the Depositor's ability
to perform its obligations hereunder and thereunder;
B-4
<PAGE>
(j) No Violation. The execution and delivery of this Assignment by
------------
the Depositor, the performance of the transactions contemplated by this
Assignment and the fulfillment of the terms hereof applicable to the
Depositor will not conflict with or violate any material Requirements of
Law applicable to the Depositor;
(k) No Proceedings. There are no pending proceedings or, to the best
--------------
knowledge of the Depositor, investigations pending or threatened against
the Depositor before any Governmental Authority (i) asserting the
invalidity of this Assignment, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Assignment, (iii) seeking any
determination or ruling that, in the reasonable judgment of the Depositor,
would materially and adversely affect the performance by the Depositor of
its obligations under this Assignment, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Assignment or (v) seeking to affect adversely the
income tax attributes of the Trust under the United States Federal or any
State income or franchise tax systems;
(l) Record of Accounts. As of the Addition Date, Schedule 1 to this
------------------
Assignment is an accurate and complete listing in all material respects of
all the Additional Accounts as of the Additional Cut-Off Date being
conveyed pursuant to this Assignment and the information contained therein
with respect to the identity of such Accounts and the Receivables existing
thereunder is true and correct in all material respects as of the
Additional Cut-Off Date;
(m) No Liens. Each Receivable and all Collateral Security existing
--------
on the Addition Date has been conveyed to the Trust free and clear of any
Lien, except for Liens permitted under Section 2.06(a) of the Agreement and
tax and certain other statutory liens (including liens in favor of the
Pension Benefit Guaranty Corporation);
(n) All Consents Required. With respect to each Receivable and all
---------------------
Collateral Security existing on the Addition Date, all consents, licenses,
approvals or authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by the
Depositor for the conveyance of such Receivable or Collateral Security to
the Trust, the execution and delivery of this Assignment by the Depositor
and the performance by the Depositor of the transactions contemplated
hereby have been duly obtained, effected or given and are in full force and
effect; and
(o) Eligible Receivables. On the Additional Cut-Off Date each
--------------------
Receivable conveyed to the Trust as of such date is an Eligible Receivable
or, if such Receivable is not an Eligible Receivable, such Receivable is
conveyed to the Trust in accordance with Section 2.09 of the Agreement.
(p) (1) The Depositor has complied with the requirements of Section
2.05(d) of the Pooling and Servicing Agreement.
B-5
<PAGE>
6. Conditions Precedent. The acceptance of the Trustee set forth in
--------------------
Section 4 of this Assignment is subject to the satisfaction, on or prior to the
Addition Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Depositor in Section 5 of this Assignment shall be
true and correct as of the date of this Assignment and as of the Addition
Date;
(b) Agreement. Each of the conditions set forth in Section 2.05(d)
---------
of the Agreement applicable to the designation of the Additional Accounts
to be designated hereby shall have been satisfied; and
(c) Officers' Certificate. The Depositor shall have delivered to the
---------------------
Trustee an Officers' Certificate, dated the date of this Assignment, in
which an officer of the Depositor shall state that the representations and
warranties of the Depositor under Section 5 hereof are true and correct.
The Trustee may conclusively rely on such Officers' Certificate, shall have
no duty to make inquiries with regard to the matters set forth therein and
shall incur no liability in so relying.
7. Ratification of Agreement. As supplemented by this Assignment,
-------------------------
the Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Assignment shall be read, taken and construed as one and
the same instrument.
8. Counterparts. This Assignment may be executed in two or more
------------
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.
B-6
<PAGE>
9. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE
-------------
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF
LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee, on
behalf of the Trust, have caused this Assignment to be duly executed and
delivered by their respective duly authorized officers as of the day and the
year first above written.
BOMBARDIER CREDIT RECEIVABLES CORPORATION, as Depositor
By:
_________________________
Name:
____________________
Title:
____________________
By:
_________________________
Name:
____________________
Title:
____________________
B-7
<PAGE>
BOMBARDIER CAPITAL INC., as Servicer
By:
_________________________
Name:
___________________
Title: ___________________
By:
_________________________
Name:
___________________
Title:
___________________
BOMBARDIER RECEIVABLES MASTER TRUST I
By: BANKERS TRUST COMPANY, as Trustee
By:
__________________________
Name:
______________________
Title:
______________________
B-8
<PAGE>
EXHIBIT C
TO POOLING AND SERVICING AGREEMENT
FORM OF ANNUAL SERVICER'S CERTIFICATE
(As required to be delivered on or before April 30 of each
calendar year beginning with April 30, 1995, pursuant to
Section 3.05 of the Pooling and Servicing Agreement)
BOMBARDIER CAPITAL INC.
_______________________________________________
BOMBARDIER RECEIVABLES MASTER TRUST I
_______________________________________________
The undersigned, duly authorized representatives of Bombardier Capital Inc.
("BCI"), as Servicer, pursuant to the Pooling and Servicing Agreement dated as
of January 1, 1994 (as amended and supplemented, the "Agreement"), by and among
Bombardier Credit Receivables Corporation, as Depositor, BCI, as servicer, and
Bankers Trust Company, as trustee, do hereby certify, on behalf of BCI, that:
1. BCI is, as of the date hereof, the Servicer under the Agreement.
2. The undersigned are Servicing Officers and are duly authorized
pursuant to the Agreement to execute and deliver this Certificate to the
Trustee and any Enhancement Providers.
3. A review of the activities of the Servicer during the calendar
year ended December 31, ______, and of its performance under the Agreement,
was conducted under our supervision.
4. Based on such review, the Servicer has, to the best of our
knowledge, performed in all material respects all of its obligations under
the Agreement throughout such year and no default in the performance of
such obligations has occurred or is continuing except as set forth in
paragraph 5 below.
5. The following is a description of each default in the performance
of the Servicer's obligations under the provisions of the Agreement known
to us to have been made by the Servicer during the year ended December 31,
____, which sets forth in detail the (a) nature of each such default, (b)
the action taken by the Servicer,
C-1
<PAGE>
if any, to remedy each such default and (c) the current status of each such
default: [If applicable, insert "None."]
Capitalized terms used but not defined herein are used as defined in
the Agreement.
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Certificate this ____ day of _______________, ___.
BOMBARDIER CAPITAL INC.
--------------------------------
Name:
--------------------------
Title:
-------------------------
--------------------------------
Name:
--------------------------
Title:
-------------------------
C-2
<PAGE>
EXHIBIT D-l
TO POOLING AND SERVICING AGREEMENT
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY
OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION
PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
D-1-1
<PAGE>
EXHIBIT D-2
TO POOLING AND SERVICING AGREEMENT
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT
OF A BENEFIT PLAN (AS DEFINED BELOW). */
-
_________________________________
*/ The following should be inserted in any Certificate bearing such legend:
- -
The Certificates may not be acquired by or for the account of any employee
benefit plan, trust or account, including an individual retirement account, that
is subject to the Employee Retirement Income Security Act of 1974, as amended,
or that is described in Section 4975(e)(1) of the Internal Revenue Code of 1986,
as amended, or an entity whose underlying assets include plan assets by reason
of a plan's investment in such entity (a "Benefit Plan"). By accepting and
holding this Certificate, the Holder hereof shall be deemed to have represented
and warranted that it is not a Benefit Plan. By acquiring any interest in this
Certificate, the applicable Certificate Owner or Owners shall be deemed to have
represented and warranted that it or they are not Benefit Plans.
D-2-1
<PAGE>
EXHIBIT E
TO POOLING AND SERVICING AGREEMENT
FORM OF LETTER OF REPRESENTATIONS
[Insert form from DTC]
E-1
<PAGE>
EXHIBIT F-1
TO POOLING AND SERVICING AGREEMENT
[FORM OF CLEARANCE SYSTEM CERTIFICATE
TO BE GIVEN TO THE TRUSTEE BY
EUROCLEAR OR CEDEL FOR
DELIVERY OF DEFINITIVE CERTIFICATES
IN EXCHANGE FOR A PORTION OF A
TEMPORARY GLOBAL CERTIFICATE]
BOMBARDIER RECEIVABLES MASTER TRUST I
[__________] Asset Backed Certificates, Series 1994-1
-----------------------------------------------------
[Insert title or sufficient description
of Certificates to be delivered]
We refer to that portion of the temporary Global Certificate in
respect of the above-captioned issue which is herewith submitted to be exchanged
for definitive Certificates (the "Submitted Portion") as provided in the Pooling
-----------------
and Servicing Agreement dated as of January 1, 1994 (as amended and
supplemented, the "Agreement") in respect of such issue. This is to certify
---------
that (i) we have received a certificate or certificates, in writing or by tested
telex, with respect to each of the persons appearing in our records as being
entitled to a beneficial interest in the Submitted Portion and with respect to
such persons' beneficial interest either (a) from such person, substantially in
the form of Exhibit F-2 to the Agreement, or (b) from _______________,
substantially in the form of Exhibit F-3 to the Agreement, and (ii) the
Submitted Portion includes no part of the temporary Global Certificate excepted
in such certificates.
We further certify that as of the date hereof we have not received any
notification from any of the persons giving such certificates to the effect that
the statements made by them with respect to any part of the Submitted Portion
are no longer true and cannot be relied on as of the date hereof.
F-1-1
<PAGE>
We understand that this certificate is required in connection with
certain securities and tax laws in the United States of America. If admini-
strative or legal proceedings are commenced or threatened in connection with
which this certificate would be relevant, we irrevocably authorize you to
produce this certificate or a copy thereof to any interested party in such
proceedings.
Dated: [Morgan Guaranty Trust Company of
--------------------/1/ New York, Brussels office, as operator
of the Euroclear System]/2/
[Centrale de Livraison de Valeurs
Mobiliere S.A.]/2/
By: ______________________________
/1/ To be dated on the Exchange Date.
/2/ Delete the inappropriate reference.
F-1-2
<PAGE>
EXHIBIT F-2
TO POOLING AND SERVICING AGREEMENT
[FORM OF CERTIFICATE TO BE DELIVERED
TO EUROCLEAR OR CEDEL
BY _______________
WITH RESPECT TO REGISTERED CERTIFICATES SOLD TO
QUALIFIED INSTITUTIONAL BUYERS]
BOMBARDIER RECEIVABLES MASTER TRUST I
[__________] Asset Backed Certificates, Series 1994-1
-----------------------------------------------------
In consideration of the initial issuance and placement of the above
referenced Asset Backed Certificates (the "Certificates"), an institutional
------------
investor in the United States ("institutional investor") is purchasing U.S.
----------------------
$_______________ aggregate principal amount of the Certificates held in our
account at [Morgan Guaranty Trust Company of New York, Brussels office, as
operator of the Euroclear System][Cedel S.A.] on behalf of such investor.
We reasonably believe that such institutional investor is a qualified
institutional buyer as such term is defined under Rule 144A of the Securities
and Exchange Commission under the Securities Act of 1933, as amended.
[We understand that this certificate is required in connection with
United States laws. We irrevocably authorize you to produce this certificate or
a copy thereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered by this
certificate.]
The Definitive Certificates in respect of this certificate are to be
issued in registered form in the minimum denomination of U.S. $__00,000 and such
Definitive Certificates (and, unless the Pooling and Servicing Agreement or
Supplement relating to the Certificates otherwise provides, any Certificates
issued in exchange or substitution for or on registration of transfer of
Certificates) shall bear the following legend:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933. NEITHER THIS CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES OR TO U.S. PERSONS (EACH AS DEFINED HEREIN), EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
F-2-1
<PAGE>
HEREIN. THIS CERTIFICATE CANNOT BE EXCHANGED FOR A BEARER
CERTIFICATE."
Dated: [__________________________]
---------------
By:
------------------------
Authorized Officer
F-2-2
<PAGE>
EXHIBIT F-3
TO POOLING AND SERVICING AGREEMENT
[FORM OF CERTIFICATE TO BE DELIVERED
TO EUROCLEAR OR CEDEL BY A BENEFICIAL OWNER
OF CERTIFICATES, OTHER THAN A QUALIFIED INSTITUTIONAL BUYER]
BOMBARDIER RECEIVABLES MASTER TRUST I
[__________] Asset Backed Certificates, Series 1994-1
-----------------------------------------------------
This is to certify that as of the date hereof and except as provided
in the third paragraph hereof, the above-captioned Certificates held by you for
our account (i) are not owned by a person that is a United States person, (ii)
are owned by a United States person that is (A) the foreign branch of a United
States financial institution (as defined in U.S. Treasury Regulations Section
1.165-12(c)(1)(v)) (a "financial institution") purchasing for its own account or
---------------------
for resale, or (B) a United States person who acquired the Certificates through
the foreign branch of a financial institution and who holds the Certificates
through the financial institution on the date hereof (and in either case (A) or
(B), the financial institution hereby agrees to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) are owned by a financial
institution for purposes of resale during the Restricted Period (as defined in
U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)). In addition,
financial institutions described in clause (iii) of the preceding sentence
(whether or not also described in clause (i) or (ii)) certify that they have not
acquired the Certificates for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its possessions.
We undertake to advise you by tested telex if the above statement as
to a beneficial ownership is not correct on the date of delivery of the above-
captioned Certificates in bearer form with respect to such of said Certificates
as then appear in your books as being held for our account.
This certificate excepts and does not relate to U.S. $_______________
principal amount of Certificates held by you for our account, as to which we are
not yet able to certify beneficial ownership. We understand that delivery of
Definitive Certificates in such principal amount cannot be made until we are
able to so certify.
We understand that this certificate is required in connection with
certain securities and tax laws in the United States of America. If
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate or a copy thereof to any interested party in
such proceedings. As used herein, "United States" means the United States of
America (including the States and the District of Columbia), its territories,
F-3-1
<PAGE>
its possessions and other areas subject to its jurisdiction; and "United States
Person" means a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States, or any political subdivision thereof, or an estate or trust the
income of which is subject to United States federal income taxation regardless
of its source.
Dated: By:
---------------/1/ --------------------------------------
As, or as agent for, the beneficial
owner(s) of the interest in the
Certificates to which this certifi-
cate relates.
- --------------------------
/1/ This certificate must be dated on the earlier of the date of the first
actual payment of interest in respect of the Certificates and the date of
the delivery of the Certificates in definitive form.
F-3-2
<PAGE>
EXHIBIT G-1
TO POOLING AND SERVICING AGREEMENT
FORM OF OPINION OF COUNSEL
IN CONNECTION WITH AMENDMENTS AND SUPPLEMENTS
Provisions to be Included in
----------------------------
Opinion of Counsel Delivered Pursuant
-------------------------------------
to Section 13.02(d)
-------------------
(a) The Amendment to the [Pooling and Servicing Agreement]
[Supplement], attached hereto as Schedule 1 (the "Amendment"), has been duly
authorized, executed and delivered by the Depositor and constitutes the legal,
valid and binding agreement of the Depositor, enforceable in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganizations, moratorium or similar laws affecting creditors'
rights generally from time to time in effect. The enforceability of the
Depositor's obligations is also subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and the availability of equitable remedies.
(b) The Amendment has been entered into in accordance with the terms
and provisions of Section 13.01 of the Pooling and Servicing Agreement.
G-1-1
<PAGE>
EXHIBIT G-2
TO POOLING AND SERVICING AGREEMENT
FORM OF OPINION OF COUNSEL
IN CONNECTION WITH AMENDMENTS AND SUPPLEMENTS
Provisions to be Included in
----------------------------
Opinion of Counsel Delivered Pursuant
-------------------------------------
to Section 2.05(d)(ix)
----------------------
(a) The Assignment has been duly authorized, executed and delivered
by the Depositor, and constitutes the valid and legally binding obligation of
the Depositor, enforceable against the Depositor in accordance with its terms.
(b) Based on the opinion of general counsel to BCI and BCRC/2/,
without any independent investigation, the Transferred Property constitutes
"chattel paper" as defined under Section 9-105(1)(b) of the UCC.
(c) If the transfer of the Transferred Property from BCI to BCRC is
not treated as a true sale, the conveyance language in Section 2.01 of the
Receivables Purchase Agreement is sufficient to create a valid security interest
in favor of BCRC in the Transferred Property. The UCC-1 financing statements
attached hereto as Schedule C are sufficient to perfect the security interest in
Transferred Property created under the Receivables Purchase Agreement. The
proper offices for the filing of such financing statements are the office of the
Secretary of State of the State of Vermont and the office of the City Clerk of
the City of Burlington. Other than the filing of the financing statements
attached hereto as Exhibit C in such offices, and the filing of continuation
statements, no filing or other action is necessary to perfect the security
interest of BCRC in the Transferred Property against third parties under the
UCC.
(d) If the transfer of the Transferred Property from BCRC to the
Trust is not treated as a true sale, the conveyance language in Section 2.01 of
the Pooling and Servicing Agreement is sufficient to create a valid security
interest in favor of the trustee in the Transferred Property. The UCC-1
financing statements attached hereto as Exhibit D are sufficient to perfect the
security interest Transferred Property created under the Pooling and Servicing
Agreement. The proper offices for the filing of such financing statements are
the office of the Secretary of State of the State of Vermont and the office of
the City Clerk of the City of Burlington. Other than the filing of the financing
statements attached hereto as
- ---------------
/2/ This opinion of general counsel must be attached to this opinion and must
be the same, in form of substance, as the opinion of general counsel that was
delivered at the closing.
G-2-1
<PAGE>
schedule D in such offices, and the filing of continuation statements, no filing
or other action is necessary to perfect the security interest of the Trustee in
the Transferred Property against third parties under the UCC.
G-2-2
<PAGE>
EXHIBIT H-1
TO POOLING AND SERVICING AGREEMENT
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(As required by Section 2.07(c) of the
Pooling and Servicing Agreement referred to below)
REASSIGNMENT NO. _______ OF RECEIVABLES,
dated as of _______________, ____
by and between BANKERS TRUST COMPANY,
as trustee (the "Trustee") and
BOMBARDIER CREDIT RECEIVABLES CORPORATION,
as depositor (the "Depositor"),
pursuant to the Pooling and Servicing Agreement
referred to below.
WITNESSETH
WHEREAS the Depositor and the Trustee are parties to the Pooling and
Servicing Agreement dated as of January 1, 1994 (as amended or supplemented, the
"Agreement");
WHEREAS, pursuant to Section 2.07 of the Agreement, the Depositor
wishes to remove all Receivables from certain Accounts and the Collateral
Security in respect thereof (the "Removed Accounts") and to cause the Trustee,
on behalf of the Trust, to reconvey the Receivables of such Removed Accounts and
such Collateral Security, whether now existing or hereafter created, and all
amounts currently held by the Trustee or thereafter received by the Trust in
respect of such Removed Accounts, from the Trustee to the Depositor (as each
such term is defined in the Agreement); and
WHEREAS the Trustee, on behalf of the Trust, is willing to accept such
removal and to reconvey the Receivables in the Removed Accounts, such Collateral
Security and any related amounts held or received by the Trust subject to the
terms and conditions hereof.
NOW, THEREFORE, the Depositor and the Trustee, on behalf of the Trust,
hereby agree as follows:
1. Defined Terms. All terms defined in the Agreement and used herein
-------------
shall have such defined meanings when used herein, unless otherwise defined
herein.
2. Notice of Removed Accounts. (a) Not less than five Business Days
--------------------------
prior to the Removal Date, the Depositor shall furnish to the Trustee, any
Enhancement Providers
H-1-1
<PAGE>
and the Rating Agencies a written notice specifying the date on which removal of
the Receivables of one or more Accounts will occur, such date being a Removal
Date.
(b) On or before the fifth business day after the Removal Date, the
Depositor shall furnish to the Trustee a computer file, microfiche list or other
list of the Removed Accounts that were removed on the Removal Date, specifying
for each Removed Account (i) its number, (ii) as of the date of the Removal
Notice, the aggregate amount outstanding in such Removed Account and (iii) as of
the Removal Date, the aggregate amount of Principal Receivables therein and
represent that such computer file, microfiche list or other list of the Removed
Accounts is true and complete in all material respects. Such file or list shall
be marked as Schedule 1 to this Reassignment and shall be incorporated into and
made a part of this Reassignment as of the Removal Date and shall amend Schedule
1 to the Agreement.
3. Conveyance of Receivables and Accounts. (a) The Trustee does
--------------------------------------
hereby, on behalf of the Trust, transfer, assign, set over and otherwise convey
to the Depositor, without recourse, representation or warranty on and after the
Removal Date, all right, title and interest of the Trust in, to and under all
Receivables now existing at the close of business on the Removal Date and
thereafter created from time to time until the termination of the Trust in
Removed Accounts designated hereby, all Collateral Security in respect thereof,
all monies due or to become due and all amounts received with respect thereto
(including all Non-Principal Receivables) and all proceeds thereof (as defined
in Section 9-306 of the UCC as in effect in the State of Vermont) and Recoveries
relating thereto.
(b) If requested by the Depositor, in connection with such transfer,
the Trustee agrees to execute and deliver to the Depositor on or prior to the
date of this Reassignment, a termination statement with respect to the
Receivables existing at the close of business on the Removal Date and thereafter
created from time to time and Collateral Security in respect thereof in the
Removed Accounts reassigned hereby (which may be a single termination statement
with respect to all such Receivables and Collateral Security) evidencing the
release by the Trust of its lien on the Receivables in the Removed Accounts and
the Collateral Security with respect thereto, and meeting the requirements of
applicable state law, in such manner and such jurisdictions as are necessary to
remove such lien.
4. Acceptance by Trustee. The Trustee hereby acknowledges that,
---------------------
prior to or simultaneously with the execution and delivery of this Reassignment,
the Depositor delivered to the Trustee the computer file or such microfiche or
written list described in Section 2(b) of this Reassignment.
5. Representations and Warranties of the Depositor. The Depositor
-----------------------------------------------
hereby represents and warrants to the Trustee as of the date of this
Reassignment and as of the Removal Date:
(a) Legal Valid and Binding Obligation. This Reassignment
----------------------------------
constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws
H-1-2
<PAGE>
now or hereafter in effect affecting the enforcement of creditors' rights
generally and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity) and
the availability of equitable remedies;
(b) No Early Amortization Event. The removal of the Accounts hereby
---------------------------
removed shall not, in the reasonable belief of the Depositor, cause an
Early Amortization Event to occur or cause the Pool Balance to be less than
the Required Pool Balance;
(c) Selection Procedures. No selection procedures reasonably
--------------------
believed by the Depositor to be adverse to the interests of the
Beneficiaries were utilized in selecting the Accounts to be removed;
(d) True and Complete List. The list of Removed Accounts described
----------------------
in Section 2(b) of this Assignment is, as of the Removal Date, true and
complete in all material respects; and
6. Condition Precedent. In addition to the conditions precedent
-------------------
set forth in Section 2.07 of the Agreement, the obligation of the Trustee to
execute and deliver this Reassignment is subject to the Depositor having
delivered on or prior to the Removal Date to the Trustee and any Enhancement
Providers an Officers' Certificate certifying that (i) as of the Removal Date,
all requirements set forth in Section 2.07 of the Agreement for removing such
Accounts and reconveying the Receivables of such Removed Accounts and the
Collateral Security with respect thereto, whether existing at the close of
business on the Removal Date or thereafter created from time to time until the
termination of the Trust, have been satisfied, and (ii) each of the
representations and warranties made by the Depositor in Section 5 hereof is true
and correct as of the date of this Reassignment and as of the Removal Date. The
Trustee may conclusively rely on such Officers' Certificate, shall have no duty
to make inquiries with regard to the matters set forth therein and shall incur
no liability in so relying.
7. Ratification of Agreement. As supplemented by this
-------------------------
Reassignment, the Agreement is in all respects ratified and confirmed and the
Receivables Purchase Agreement as so supplemented by this Reassignment shall be
read, taken and construed as one and the same instrument.
8. Counterparts. This Reassignment may be executed in two or more
------------
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
9. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
H-1-3
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Reassignment to
be duly executed and delivered by their respective duly authorized officers on
the day and year first above written.
BOMBARDIER RECEIVABLES MASTER TRUST I
By: BANKERS TRUST COMPANY, Trustee
By:
__________________________
Name:
____________________
Title:
____________________
BOMBARDIER CREDIT RECEIVABLES CORPORATION,
Depositor
By:
__________________________
Name:
____________________
Title:
____________________
By:
__________________________
Name:
____________________
Title:
____________________
H-1-4
<PAGE>
EXHIBIT H-2
TO POOLING AND SERVICING AGREEMENT
FORM OF REASSIGNMENT OF RECEIVABLES IN INELIGIBLE ACCOUNTS
(As required by Section 2.08(c) of the
Pooling and Servicing Agreement referred to below)
REASSIGNMENT NO. _______ OF RECEIVABLES,
dated as of _______________, ____
by and between BANKERS TRUST COMPANY,
as trustee (the "Trustee") and
BOMBARDIER CREDIT RECEIVABLES CORPORATION,
as depositor (the "Depositor"),
pursuant to the Pooling and Servicing Agreement
referred to below.
WITNESSETH
WHEREAS the Depositor and the Trustee are parties to the Pooling and
Servicing Agreement dated as of January 1, 1994 (as amended or supplemented, the
"Agreement");
WHEREAS, pursuant to Section 2.08 of the Agreement, the Depositor is
required to remove all Receivables from Ineligible Accounts and the Collateral
Security in respect thereof and to cause the Trustee, on behalf of the Trust, to
reconvey the Receivables of such Ineligible Accounts and such Collateral
Security, whether now existing or hereafter created, and all amounts currently
held by the Trustee or thereafter received by the Trust in respect of such
Ineligible Accounts, from the Trustee to the Depositor (as each such term is
defined in the Agreement); and
WHEREAS the Trustee is willing, on behalf of the Trust, to accept such
removal and to reconvey the Receivables in the Ineligible Accounts, such
Collateral Security and any related amounts held or received by the Trust
subject to the terms and conditions hereof.
NOW, THEREFORE, the Depositor and the Trustee, on behalf of the Trust,
hereby agree as follows:
1. Defined Terms. All terms defined in the Agreement and used
-------------
herein shall have such defined meanings when used herein, unless otherwise
defined herein.
2. Notice of Ineligible Accounts. (a) Not less than two (2)
-----------------------------
Business Days prior to the Removal Commencement Date, the Depositor shall
furnish to the Trustee, any Enhancement Providers and the Rating Agencies a
written notice specifying the date on
H-2-1
<PAGE>
which removal of the Receivables of one or more Accounts will commence, such
date being a Removal Commencement Date.
(b) On or before the fifth business day after the Removal
Commencement Date, the Depositor shall furnish to the Trustee a computer file,
microfiche list or other list of the Ineligible Accounts the removal of which
commenced on the Removal Commencement Date, specifying for each Ineligible
Account as of the date immediately preceding the Removal Commencement Date its
number, the aggregate amount outstanding in such Ineligible Account and the
aggregate amount of Principal Receivables therein and represent that such
computer file, microfiche list or other list of the Ineligible Accounts is true
and complete in all material respects. Such file or list shall be marked as
Schedule 1 to this Reassignment and shall be incorporated into and made a part
of this Reassignment as of the Removal Commencement Date and shall amend
Schedule 1 to the Agreement.
3. Conveyance of Receivables and Accounts. (a) The Trustee does
--------------------------------------
hereby, on behalf of the Trust, transfer, assign, set over and otherwise convey
to the Depositor, without recourse, representation or warranty on and after the
Removal Commencement Date, all right, title and interest of the Trust in, to and
under (x) all Receivables created from time to time on and after the Removal
Commencement Date until the Removal Termination Date in the Ineligible Accounts
designated hereby and all monies due or to become due and all amounts received
with respect thereto (including all Non-Principal Receivables) and all proceeds
thereof (as defined in Section 9-306 of the UCC as in effect in the State of
Vermont) and Recoveries relating thereto and (y) on the Removal Termination
Date, all Collateral Security in connection with such Ineligible Accounts and
all proceeds thereof (as defined in Section 9-306 of the UCC as in effect in the
State of Vermont and Recoveries) relating thereto.
(b) If requested by the Depositor, in connection with such transfer,
the Trustee agrees to execute and deliver to the Depositor on or prior to the
date of this Reassignment, a termination statement with respect to the
Receivables created from time to time on and after the Removal Commencement Date
in the Ineligible Accounts reassigned hereby (which may be a single termination
statement with respect to all such Receivables and Collateral Security)
evidencing the release by the Trust of its lien on such Receivables in the
Ineligible Accounts, and meeting the requirements of applicable state law, in
such manner and such jurisdictions as are necessary to remove such lien.
4. Acceptance by Trustee. The Trustee hereby acknowledges that,
---------------------
prior to or simultaneously with the execution and delivery of this Reassignment,
the Depositor delivered to the Trustee the computer file or such microfiche or
written list described in Section 2(b) of this Reassignment.
5. Representations and Warranties of the Depositor. The Depositor
-----------------------------------------------
hereby represents and warrants to the Trustee as of the date of this
Reassignment and as of the Removal Commencement Date, this Reassignment
constitutes a legal, valid and binding obligation of the Depositor, enforceable
against the Depositor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
H-2-2
<PAGE>
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights generally and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity) and the availability of equitable
remedies.
6. Condition Precedent. In addition to the conditions precedent
-------------------
set forth in Section 2.08 of the Agreement, the obligation of the Trustee to
execute and deliver this Reassignment is subject to the Depositor having
delivered on or prior to the Removal Commencement Date to the Trustee and any
Enhancement Providers an Officers' Certificate certifying that (i) as of the
Removal Commencement Date, all requirements set forth in Section 2.08 of the
Agreement for removing such Ineligible Accounts and reconveying the Receivables
of such Ineligible Accounts and the Collateral Security, whether existing at the
close of business on the Removal Commencement Date or thereafter created from
time to time until the Removal Termination Date, have been satisfied, and (ii)
each of the representations and warranties made by the Depositor in Section 5
hereof is true and correct as of the date of this Reassignment and as of the
Removal Commencement Date. The Trustee may conclusively rely on such Officers'
Certificate, shall have no duty to make inquiries with regard to the matters set
forth therein and shall incur no liability in so relying.
7. Ratification of Agreement. As supplemented by this Reassignment,
-------------------------
the Agreement is in all respects ratified and confirmed and the Receivables
Purchase Agreement as so supplemented by this Reassignment shall be read, taken
and construed as one and the same instrument.
8. Counterparts. This Reassignment may be executed in two or more
------------
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
9. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
H-2-3
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Reassignment to
be duly executed and delivered by their respective duly authorized officers on
the day and year first above written.
BOMBARDIER RECEIVABLES MASTER TRUST I
By: BANKERS TRUST COMPANY, Trustee
By:
__________________________
Name:
____________________
Title:
____________________
BOMBARDIER CREDIT RECEIVABLES CORPORATION,
Depositor
By:
__________________________
Name:
____________________
Title:
____________________
By:
_________________________
Name:
____________________
Title:
____________________
H-2-4
<PAGE>
EXHIBIT I
TO POOLING AND SERVICING AGREEMENT
FORM OF RECEIVABLES PURCHASE AGREEMENT
I-1
<PAGE>
EXHIBIT J
TO POOLING AND SERVICING AGREEMENT
FORM OF REPORT OF
INDEPENDENT ACCOUNTANTS ON COMPLIANCE
Board of Directors
Bombardier Capital Inc.,
as Servicer
7 Burlington Square
Burlington, Vermont 05401
and
Bankers Trust Company,
as Trustee
Four Albany Street
New York, New York 10006
Attention: Corporate Trust
& Agency Group, Structured
Finance Team
Bombardier Receivables Master Trust I
-------------------------------------
We have examined matters relating to compliance by Bombardier Capital
Inc. with the covenants and conditions of Section 3.01(d), Section 3.02, Section
3.04, Section 3.05, Section 3.09, Section 4.02, Section 4.03, Section 4.04,
Section 10.01(a), Section 10.01(b) and Section 10.01(c) of the Pooling and
Servicing Agreement dated as of January 1, 1994 (as amended, modified or
supplemented from time to time, the "Agreement") among Bombardier Credit
---------
Receivables Corporation, as the Depositor, Bombardier Capital Inc., as the
Servicer, and Bankers Trust Company, as the Trustee, as of January 31, 199__ and
for the period _______________ through January 31, 199__. Our examination was
made in accordance with standards established by the American Institute of
Certified Public Accountants and, accordingly, included such procedures as we
considered necessary in the circumstances.
In our opinion, Bombardier Capital Inc. was in compliance with the
covenants and conditions of the Sections of the Agreement referred to above at
January 31, 199__ and for the period from _______________ through January 31,
199__.
This report is intended solely for your information and is not to be
referred to or distributed for any purpose to anyone who is not authorized to
receive such information as specified in the Agreement or in the Exhibits
attached thereto or in any Supplement thereto.
Very truly yours,
J-1
<PAGE>
SCHEDULE 1
List of Accounts
<PAGE>
SCHEDULE 2
Collection Account Information
Account Number: 11501
Account Designation: Bombardier Receivable Master Trust I
Name of Institution: Bankers Trust Company
2-1
<PAGE>
Exhibit 4.2
OH&S DRAFT
1/8/97
================================================================================
BOMBARDIER CREDIT RECEIVABLES CORPORATION,
Depositor,
BOMBARDIER CAPITAL INC.,
Servicer,
and
BANKERS TRUST COMPANY,
Trustee
________________________________________
SERIES 1997-1 SUPPLEMENT
Dated as of January 1, 1997
to
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 1994
________________________________________
BOMBARDIER RECEIVABLES MASTER TRUST I
SERIES 1997-1
$400,000,000 Class A Certificates
$27,125,000 Class B Certificates
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
Creation of the Series 1997-1 Certificates
------------------------------------------
SECTION 1.01. Designation.................................................. 1
ARTICLE II
Definitions and Interpretive Provisions
---------------------------------------
SECTION 2.01. Definitions.................................................. 1
SECTION 2.02. Interpretive Provisions...................................... 16
SECTION 2.03. Transitional Provisions Relating to Series 1994-1
Final Payment Date........................................... 16
ARTICLE III
Servicing Fee
-------------
SECTION 3.01. Servicing Compensation....................................... 16
ARTICLE IV
Rights of Certificateholders and
--------------------------------
Allocation and Application of Collections
-----------------------------------------
SECTION 4.01A. Allocations; Payments to Holder(s) of the BCRC
Certificate and any Supplemental Certificate(s).............. 17
SECTION 4.01B. Collections and Allocations for Series 1997-1................ 19
SECTION 4.02. Monthly Interest............................................. 21
SECTION 4.03. Determination of Monthly Principal........................... 22
SECTION 4.04. Establishment of Reserve Fund and Excess Funding
Account...................................................... 23
SECTION 4.05. Deficiency Amount............................................ 24
SECTION 4.06. Application of Investor Non-Principal Collections,
Investment Proceeds and Available Investor
Principal Collections........................................ 25
i
<PAGE>
Page
----
SECTION 4.07. Application of Reserve Fund and Available
Subordinated Amount.......................................... 28
SECTION 4.08. Investor Charge-Offs......................................... 29
SECTION 4.09. Excess Servicing............................................. 30
SECTION 4.10. Principal Collections........................................ 30
SECTION 4.11. Excess Funding Account....................................... 31
SECTION 4.12. Initial Principal Payment Date............................... 33
ARTICLE V
Distributions and Reports to
----------------------------
Series 1997-1 Certificateholders
--------------------------------
SECTION 5.01. Distributions................................................ 33
SECTION 5.02. Reports and Statements to Certificateholders................. 34
ARTICLE VI
Early Amortization Events
-------------------------
SECTION 6.01. Additional Early Amortization Events......................... 34
ARTICLE VII
Optional Repurchase
-------------------
SECTION 7.01. Optional Repurchase.......................................... 36
ARTICLE VIII
Final Distributions
-------------------
SECTION 8.01. Sale of Certificates Pursuant to Section 2.03 of the
Agreement; Distributions Pursuant to Section 7.01 of
this Series Supplement or Section 2.03 or 12.02(c)
of the Agreement............................................. 36
SECTION 8.02. Distribution of Proceeds of Sale, Disposition or
Liquidation of the Receivables Pursuant to
Section 9.02 of the Agreement................................ 37
ii
<PAGE>
Page
----
ARTICLE IX
Miscellaneous Provisions
------------------------
SECTION 9.01. Ratification of Agreement.....................................38
SECTION 9.02. Counterparts..................................................38
SECTION 9.03. GOVERNING LAW.................................................38
EXHIBITS AND SCHEDULES
Exhibit A Form of Class A Certificates
Exhibit B Form of Class B Certificates
Exhibit C Form of Distribution Date Statement
Schedule 1 List of Series 1997-1 Accounts
iii
<PAGE>
SERIES 1997-1 SUPPLEMENT dated as of January 1, 1997 (the "Series
------
Supplement"), among BOMBARDIER CREDIT RECEIVABLES CORPORATION, a Delaware
- ----------
corporation, as Depositor, BOMBARDIER CAPITAL INC., a Massachusetts corporation,
as Servicer, and BANKERS TRUST COMPANY, a New York banking corporation, as
Trustee.
Pursuant to Section 6.03 of the Pooling and Servicing Agreement dated
as of January 1, 1994 (as amended and supplemented, the "Agreement"), among the
---------
Depositor, the Servicer and the Trustee, the Depositor may from time to time
direct the Trustee to issue, on behalf of the Trust, one or more new Series of
Investor Certificates representing fractional undivided interests in the Trust.
The Principal Terms of any new Series are to be set forth in a Supplement to the
Agreement.
Pursuant to this Series Supplement, the Depositor and the Trustee
shall create a new Series of Investor Certificates and specify the Principal
Terms thereof.
ARTICLE I
Creation of the Series 1997-1 Certificates
------------------------------------------
SECTION 1.01. Designation. (a) There is hereby created a Series of
-----------
Investor Certificates to be issued pursuant to the Agreement and this Series
Supplement to be known as the "Series 1997-1 Certificates." The Series 1997-1
--------------------------
Certificates will consist of two classes of beneficial ownership interests
entitled "Class A Certificates" and "Class B Certificates." The Class A
-------------------- --------------------
Certificates shall be substantially in the form of Exhibit A and the Class B
Certificates shall be substantially in the form of Exhibit B.
(b) In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Agreement, the terms and provisions of this Series Supplement shall govern.
ARTICLE II
Definitions and Interpretive Provisions
---------------------------------------
SECTION 2.01. Definitions. Whenever used in this Series Supplement,
-----------
the following words and phrases shall have the following meanings.
"Additional Interest" shall mean with respect to any Distribution
-------------------
Date, the sum of Class A Additional Interest, if any, or Class B Additional
Interest, if any.
"Adjusted Invested Amount" shall mean on any date of determination an
------------------------
amount equal to (a) the Initial Principal Amount plus (b) the amount of any
----
withdrawals from the Excess Funding Account pursuant to Section 4.11(b) or (c)
hereof in connection with an
<PAGE>
increase in the Pool Balance, and less (c) the amount of any additions to the
----
Excess Funding Account pursuant to Section 4.01(B)(b)(i), 4.01(B)(b)(ii),
4.06(b)(i), 4.06(b)(ii) or 4.06(d)(iii) hereof in connection with a reduction in
the Pool Balance.
"Adjustment Date" shall mean the second London Business Day preceding
---------------
the first day of the related Interest Period.
"Allocable Miscellaneous Payments" shall mean, with respect to any
--------------------------------
Distribution Date, the product of (a) the Series 1997-1 Investor Allocation
Percentage for the related Collection Period and (b) Miscellaneous Payments with
respect to the related Collection Period.
"Amortization Period" shall mean, unless an Early Amortization Period
-------------------
or an Initial Amortization Period shall have commenced prior thereto (other than
an Early Amortization Period which has ended as described in clause (c) of the
definition thereof), the period commencing on October 1, 2001, and ending upon
the first to occur of (a) the commencement of an Early Amortization Period or an
Initial Amortization Period, (b) the payment in full to Series 1997-1
Certificateholders of the principal balance of the Series 1997-1 Certificates
and (c) the Series 1997-1 Termination Date.
"Available Investor Principal Collections" shall mean, with respect to
----------------------------------------
any Distribution Date, the sum of:
(a) the product of (i) the Floating Allocation Percentage, with
respect to the Revolving Period, or the Principal Allocation Percentage,
with respect to the Amortization Period, any Early Amortization Period or
any Initial Amortization Period, for the related Collection Period and (ii)
Principal Collections received by the Servicer during the related
Collection Period; plus
----
(b) the amount, if any, of Investor Non-Principal Collections, funds
in the Reserve Fund and Series 1997-1 Available Retained Collections
applied in respect of the Investor Default Amount, any unpaid Adjustment
Payments allocated to the Certificates or previously unreimbursed Investor
Charge-Offs; plus
----
(c) Allocable Miscellaneous Payments with respect to such
Distribution Date; plus
----
(d) Series 1997-1 Excess Principal Collections on deposit in the
Collection Account for such Distribution Date; plus
----
(e) if an Early Amortization Period or an Initial Amortization Period
began during the related Collection Period, all funds on deposit in the
Excess Funding Account; plus
----
(f) on the Series 1997-1 Termination Date, any funds in the Reserve
Fund after giving effect to Section 4.07 hereof.
2
<PAGE>
provided, however, that in the case of clause (a), if for any date the sum
-------- -------
of the Floating Allocation Percentage (if the Revolving Period is in
effect), the Principal Allocation Percentage (if the Early Amortization
Period, Initial Amortization Period or the Amortization Period is in
effect), the floating allocation percentages for all other outstanding
Series of Investor Certificates in their revolving periods and the
principal allocation percentages for all other outstanding Series of
Certificates in their early amortization or amortization periods exceeds
100%, then Principal Collections shall be allocated among such Series
(including the Certificates) pro rata on the basis of such floating
--- ----
allocation percentagesand principal allocation percentages.
"Available Retained Collections" shall mean, with respect to any
------------------------------
Deposit Date, the sum of (a) the Available Retained Non-Principal Collections
for such Deposit Date and (b) the Available Retained Principal Collections for
such Deposit Date; provided, however, that the Available Retained Collections
-------- -------
shall be zero for any Collection Period with respect to which the Available
Subordinated Amount is zero for the Distribution Date occurring in such
Collection Period.
"Available Retained Non-Principal Collections" shall mean, with
--------------------------------------------
respect to any Deposit Date, an amount equal to the product of (a) the excess of
(i) the Retained Percentage for the related Collection Period (or, after the
Series 1994-1 Final Payment Date, for such Deposit Date) over (ii) the Excess
Retained Percentage for such Collection Period (or, after the Series 1994-1
Final Payment Date, for such Deposit Date) multiplied by (b) Non-Principal
Collections for such Deposit Date.
"Available Retained Principal Collections" shall mean, with respect to
----------------------------------------
any Deposit Date, an amount equal to the result obtained by multiplying (a) the
excess of (i) the Retained Percentage for the related Collection Period (or,
after the Series 1994-1 Final Payment Date, for such Deposit Date) over (ii) the
Excess Retained Percentage for such Collection Period (or, after the Series
1994-1 Final Payment Date, for such Deposit Date) by (b) Principal Collections
for such Deposit Date.
"Available Subordinated Amount" for any date of determination during
-----------------------------
the period from the Closing Date through the first Distribution Date shall mean
an amount equal to the Required Subordinated Amount on such date of
determination. The Available Subordinated Amount for any subsequent date of
determination shall mean an amount equal to the sum of:
(i) the lesser of:
(x) the Available Subordinated Amount for the preceding
Distribution Date, minus
-----
(A) the Required Subordination Draw Amount with respect
to such preceding Distribution Date to the extent
provided in Section 4.07(b) hereof, minus
-----
3
<PAGE>
(B) the amount of any deposits in the Reserve Fund, from
Series 1997-1 Available Retained Collections pursuant
to Section 4.07 hereof for the purpose of reimbursing
any withdrawals from the Reserve Fund applied to
cover any portion of the Investor Default Amount on
such preceding Distribution Date (but excluding any
other withdrawals from the Reserve Fund), minus
-----
(C) an amount equal to the Defaulted Amount for the
immediately preceding Collection Period multiplied by
a fraction, the numerator of which is the Available
Subordinated Amount as of the close of business on
the last day of the preceding Collection Period (or
in the case of the first Distribution Date, the
Required Subordinated Amount as of the Closing Date)
and the denominator of which is the Pool Balance as
of the close of business on the last day of the
preceding Collection Period (or in the period from
the Closing Date through the first Distribution Date,
the Pool Balance as of the Closing Date), plus
----
(D) the aggregate amount of Excess Servicing paid to the
Holder of the BCRC Certificate or to the Holder of
any Supplemental Certificate(s) pursuant to Section
4.09(c) hereof on the preceding Distribution Date,
minus
-----
(E) the Incremental Subordinated Amount for the second
preceding Distribution Date, or if such date of
determination is a Distribution Date, the preceding
Distribution Date, plus
----
(F) the Incremental Subordinated Amount for the
immediately preceding Distribution Date, or if such
date of determination is a Distribution Date, such
Distribution Date, plus
----
(G) the Subordinated Percentage multiplied by the
aggregate amount of any increases in the Invested
Amount resulting from any withdrawals from the Excess
Funding Account since the preceding Distribution
Date; and
(y) the Required Subordinated Amount for such date of
determination; plus
----
4
<PAGE>
(ii) the amount of any optional increase in the Available Subordinated
Amount exercised by the Holder of the BCRC Certificate pursuant
to Section 4.07(b) hereof;
provided, however, that if the Required Subordination Draw Amount exceeds
-------- -------
Available Retained Collections for any Distribution Date, the Available
Subordinated Amount shall be further reduced by an amount equal to the sum
of (A) the amount of such excess (but not by more than the Investor Default
Amount for such Distribution Date) and (B) the amount of unpaid Adjustment
Payments allocated to the Certificates as described in Section 4.05(a)(vi)
hereof.
"Calculation Agent" shall mean the Trustee or any other Calculation
-----------------
Agent selected by the Depositor which is reasonably acceptable to the Trustee.
"Certificateholders" shall mean the Holders of the Certificates.
------------------
"Certificates" shall mean, collectively, Class A Certificates and
------------
Class B Certificates.
"Class A Additional Interest" shall have the meaning specified in
---------------------------
Section 4.02(a) hereof.
"Class A Amortization Date" shall mean each Distribution Date with
-------------------------
respect to the Amortization Period.
"Class A Amortization Period Length" means six months.
----------------------------------
"Class A Carry-Over Amount" shall mean, with respect to Class A
-------------------------
Certificates and for any Distribution Date with respect to which the Class A
Certificate Rate is calculated on the basis of the Net Receivables Rate, the
excess of (a) the Class A Monthly Interest for such Distribution Date determined
as if such Class A Certificate Rate were calculated on the basis of the LIBOR
formula set forth in clause (a) of the definition of Class A Certificate Rate
over (b) the actual Class A Monthly Interest for such Distribution Date.
"Class A Certificate" shall mean any one of the certificates executed
-------------------
and authenticated by the Trustee, substantially in the form of Exhibit A hereto.
"Class A Certificate Rate" shall mean, with respect to any Interest
------------------------
Period, the lesser of (a) the sum of (i) LIBOR and (ii) ___% per annum and (b)
the Net Receivables Rate for the Adjustment Date immediately preceding such
Interest Period.
"Class A Controlled Amortization Amount" shall mean, with respect to
--------------------------------------
any Class A Amortization Date, an amount equal to the principal balance of the
Class A Certificates as of the October 2001 Distribution Date divided by the
number of months comprising the Class A Amortization Period Length.
5
<PAGE>
"Class A Controlled Distribution Amount" shall mean, with respect to
--------------------------------------
any Class A Amortization Date, the Class A Controlled Amortization Amount plus
any Class A Controlled Amortization Amounts that were not paid on any previous
Class A Amortization Date.
"Class A Expected Final Payment Date" shall mean the April 2002
-----------------------------------
Distribution Date.
"Class A Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.02(a) hereof.
"Class A Monthly Interest" shall have the meaning specified in Section
------------------------
4.02(a) hereof.
"Class B Additional Interest" shall have the meaning specified in
---------------------------
Section 4.02(b) hereof.
"Class B Carry-Over Amount" shall mean, with respect to Class B
-------------------------
Certificates and for any Distribution Date with respect to which Class B
Certificate Rate is calculated on the basis of the Net Receivables Rate, the
excess of (a) the Class B Monthly Interest for such Distribution Date determined
as if such Class B Certificate Rate were calculated on the basis of the LIBOR
formula set forth in clause (a) of the definition of Class B Certificate Rate
over (b) the actual Class B Monthly Interest for such Distribution Date.
"Class B Certificate" shall mean any one of the certificates executed
-------------------
and authenticated by the Trustee, substantially in the form of Exhibit B hereto.
"Class B Certificate Rate" shall mean, with respect to any Interest
------------------------
Period, the lesser of (a) the sum of (i) LIBOR and (ii) ___% per annum and (b)
the Net Receivables Rate for the Adjustment Date immediately preceding such
Interest Period.
"Class B Expected Payment Date" shall mean the April 2002 Distribution
-----------------------------
Date.
"Class B Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.02(b) hereof.
"Class B Monthly Interest" shall have the meaning specified in Section
------------------------
4.02(b) hereof.
"Closing Date" shall mean January __, 1997.
------------
"Daily Allocation" shall have the meaning specified in Section
----------------
4.01B(a)(i).
"Daily Principal Allocation" shall have the meaning specified in
--------------------------
Section 4.01B(b)(i), (ii) and (iii).
6
<PAGE>
"Deficiency Amount" shall have the meaning specified in Section 4.05
-----------------
hereof.
"Designated Manufacturer Overconcentrations," on any Distribution Date
------------------------------------------
means the excess of (x) the aggregate amount of Eligible Receivables created in
connection with the financing of products manufactured by the Designated
Manufacturer which Eligible Receivables are included in the Pool on the last day
of the Collection Period immediately preceding such Distribution Date over (y)
50% of the Pool Balance on the last day of such immediately preceding Collection
Period, where the "Designated Manufacturer" is, collectively, Bombardier Inc.
-----------------------
and its subsidiaries; provided, however, that the percentage specified in clause
-------- -------
(y) of this definition and the entities included as Designated Manufacturer may
be adjusted from time to time and no such adjustment shall be deemed an
amendment of the terms hereof, but shall be an adjustment made in accordance
with the terms hereof if, prior to each adjustment, the Rating Agency Condition
is satisfied for such adjustment.
"Distribution Date Statement" shall have the meaning specified in
---------------------------
Section 5.02(a) hereof.
"Early Amortization Event" shall mean any Early Amortization Event
------------------------
specified in Section 9.01 of the Agreement, together with any additional Early
Amortization Event specified in Section 6.01 hereof.
"Effective Distribution Date" shall have the meaning specified in
---------------------------
Section 4.12 hereof.
"Excess Funded Amount," for any Distribution Date prior to and
--------------------
including the Series 1994-1 Final Payment Date, shall mean an amount equal to
the product of (a) the excess, if any, of (i) the Required Pool Balance on the
day immediately prior to such Distribution Date over (ii) the Pool Balance at
the end of the preceding Collection Period and (b) a fraction the numerator of
which is the Series 1997-1 Required Balance and the denominator of which is the
aggregate of the required balances (including the Series 1997-1 Required
Balance) for all Series providing for excess funding accounts or similar
arrangements that are in their revolving periods.
"Excess Funded Amount," for any date after the Series 1994-1 Final
--------------------
Payment Date, shall mean an amount equal to the product of (a) the excess, if
any, of (i) the Required Pool Balance as of the end of the immediately preceding
day over (ii) the Pool Balance as of the end of such immediately preceding day
and (b) a fraction the numerator of which is the Series 1997-1 Required Balance
and the denominator of which is the aggregate of the required balances
(including the Series 1997-1 Required Balance) for all Series providing for
excess funding amounts or similar arrangements that are in their revolving
periods or, if applicable their amortization periods, all calculated as of the
end of the immediately preceding day.
"Excess Funding Account" shall have the meaning specified in Section
----------------------
4.04(b)(i) hereof.
7
<PAGE>
"Excess Principal Collections" shall have the meaning specified in
----------------------------
Section 4.06(b)(i) or (ii) hereof.
"Excess Reserve Fund Required Amount" shall mean, for any Distribution
-----------------------------------
Date with respect to an Early Amortization Period, an amount equal to the
greater of (a) 5% of the Initial Principal Amount of the Certificates and (b)
the excess of (i) the Required Pool Balance (after giving effect to any changes
thereto on such Distribution Date) over (ii) the Pool Balance (after giving
effect to changes thereto on such Distribution Date); provided, however, that
-------- -------
the Excess Reserve Fund Required Amount shall in no event exceed the Available
Subordinated Amount for such Distribution Date.
"Excess Retained Percentage" prior to and including the Series 1994-1
--------------------------
Final Payment Date shall mean for any Collection Period, (x) the Retained
Percentage for such Collection Period minus (y) the percentage equivalent of a
fraction the numerator of which is equal to the Pool Available Subordinated
Amount for the Distribution Date preceding such Collection Period (or the Pool
Available Subordinated Amount as of the Closing Date with respect to the first
two Collection Periods) and the denominator of which is the Pool Balance at the
end of the preceding Collection Period (or as of the Series Cut-Off Date with
respect to the first Collection Period) and, after the Series 1994-1 Final
Payment Date, Excess Retained Percentage shall have the meaning assigned in the
Agreement.
"Excess Servicing" for any Distribution Date shall mean the amount, if
----------------
any, specified pursuant to Section 4.06(a)(ix) hereof.
"Floating Allocation Percentage," prior to and including the Series
------------------------------
1994-1 Final Payment Date, shall mean, with respect to any Collection Period,
the percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Invested Amount as of the last day of
the immediately preceding Collection Period and the denominator of which is the
Pool Balance as of such last day; provided, however, that, with respect to the
-------- -------
first Collection Period, the Floating Allocation Percentage shall mean the
percentage equivalent of a fraction, the numerator of which is the Invested
Amount and the denominator of which is the Pool Balance on the Series Cut-Off
Date giving pro forma effect as of the Series Cut-Off Date to the issuance of
the Certificates; provided further, that for purposes of allocating Principal
-------- -------
Collections, when calculating the Floating Allocation Percentage, the Invested
Amount shall be reduced by the Pre-Allocated Investment Amount.
"Floating Allocation Percentage," after the Series 1994-1 Final
------------------------------
Payment Date, shall mean, as of any day, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Invested Amount as of the close of business on the immediately preceding day and
the denominator of which is the Pool Balance as of the close of business on such
immediately preceding day.
"Incremental Subordinated Amount" shall mean, with respect to any
-------------------------------
Distribution Date, the result obtained by multiplying (a) a fraction, the
numerator of which is the sum of the Invested Amount on the last day of the
immediately preceding Collection Period (or with respect to the first
Distribution Date, the Invested Amount on the Closing
8
<PAGE>
Date) and the Available Subordinated Amount for such Distribution Date
(calculated without subtracting or adding the Incremental Subordinated Amount
for such Distribution Date as described in clause (x) of the definition of
Available Subordinated Amount or clause (b) of the definition of Required
Subordinated Amount), and the denominator of which is the Pool Balance on such
last day by (b) the Overconcentration Amount on such Distribution Date.
"Industry Overconcentrations" shall mean on any Distribution Date the
---------------------------
excess of (x) the aggregate amount of Eligible Receivables created in connection
with the financing of products manufactured by manufacturing entities that are
part of the same industry (i.e., producing the same principal product, provided
--------
that products manufactured by Bombardier Inc. and its Affiliates shall not be
included in the calculation of Industry Overconcentration), which Eligible
Receivables are in the Pool on the last day of the Collection Period immediately
preceding such Distribution Date over (y) an amount equal to 35% of the Pool
Balance on the last day of such immediately preceding Collection Period;
provided, however, that with respect to each industry specified below, the
- -------- -------
percentage in clause (y) of this definition shall be deemed to equal the
percentage set forth opposite such industry:
<TABLE>
<CAPTION>
Industry Percentage
------------ ------------
<S> <C>
Marine Products 45%
Recreational Vehicles 15%
Lawn and Garden 10%
Consumer Electronics and Appliances 10%
</TABLE>
provided further, that some or all of the percentages specified in this
- -------- -------
definition of Industry Overconcentrations may be adjusted from time to time
without the consent of the Certificateholders and no such adjustment shall be
deemed an amendment of the terms hereof, but shall be an adjustment in
accordance with the terms hereof if prior to each adjustment the Rating Agency
Condition has been satisfied.
"Initial Amortization Period" shall mean, if BCI elects not to extend
---------------------------
the Initial Principal Payment Date, the period from the date the notice that the
Initial Principal Payment Date will not be extended is mailed by the Trustee to
the holders of the Certificates (which date shall also be the end of the
Revolving Period or, if the Amortization Period is then in effect, the end of
the Amortization Period) until the Certificates have been paid in full.
"Initial Principal Amount" shall mean $427,125,000.
------------------------
"Initial Principal Payment Date" shall mean the February 2000
------------------------------
Distribution Date; provided, that unless BCI elects not to extend the Initial
--------
Principal Payment Date in accordance with the terms of Section 4.12, the Initial
Principal Payment Date shall be extended successively and automatically from one
Distribution Date to the next to, but not later than, the Class A Expected Final
Payment Date.
"Interest Period" shall mean, with respect to any Distribution Date,
---------------
the period from and including the Distribution Date immediately preceding such
Distribution Date (or,
9
<PAGE>
in the case of the first Distribution Date, from and including the Closing Date)
to but excluding such Distribution Date.
"Invested Amount" shall mean, on any date of determination, an amount
---------------
equal to (a) the Adjusted Invested Amount, minus (b) the amount, without
duplication, of principal payments (except (i) principal payments made from the
Excess Funding Account and (ii) any transfers from the Excess Funding Account to
the Collection Account) made on the Certificates prior to such date, minus (c)
the excess, if any, of the aggregate amount of Investor Charge-Offs over
Investor Charge-Offs reimbursed pursuant to Section 4.08 hereof prior to such
date.
"Investment Proceeds" shall mean, with respect to any Distribution
-------------------
Date, all interest and other investment earnings (net of losses and investment
expenses) on funds on deposit in the Series 1997-1 Accounts, together with an
amount equal to the Series 1997-1 Investor Allocation Percentage of the interest
and other investment earnings on funds held in the Collection Account credited
as of such date to the Collection Account pursuant to Section 4.02 of the
Agreement.
"Investor Charge-Offs" shall have the meaning specified in Section
--------------------
4.08 hereof.
"Investor Default Amount" shall mean, with respect to any Distribution
-----------------------
Date, an amount equal to the sum of the product of (a) the Defaulted Amount for
each day of the related Collection Period and (b) the Floating Allocation
Percentage for each such day.
"Investor Non-Principal Collections" shall mean, with respect to any
----------------------------------
Distribution Date, the sum for each Deposit Date in the related Collection
Period of an amount equal to the product of (i) the Floating Allocation
Percentage for each such Deposit Date and (ii) Non-Principal Collections
received by the Servicer on each such Deposit Date.
"LIBOR" shall mean, with respect to any Interest Period, the offered
-----
rates for deposits in United States dollars having a maturity of one month (the
"Index Maturity") commencing on the related Adjustment Date which appears on
--------------
Telerate Page 3750 as of 11:00 A.M., London time, on such date of calculation.
If such rate does not appear on Telerate Page 3750, LIBOR with respect to such
Interest Period will be determined at approximately 11:00 A.M., London time, on
such Adjustment Date on the basis of the rates at which deposits in United
States dollars are offered by four major banks in the London interbank market
(selected by the Calculation Agent) to prime banks in the London interbank
market for a period equal to the Index Maturity and in a principal amount equal
to an amount of not less than U.S. $1,000,000 and that is representative for a
single transaction in such market at such time. The Calculation Agent will
request the principal London office of each such bank to provide a quotation of
its rate. If at least two such quotations are provided, LIBOR will be the
arithmetic mean (rounded upwards or downwards, as the case may be, to the
nearest whole multiple of 0.0625% per annum; provided, however, that any amount
-------- -------
falling in the middle shall be rounded up to the nearest whole multiple of
0.0625%) of such quotations. If fewer than two quotations are provided, LIBOR
with respect to such Interest
10
<PAGE>
Period will be the arithmetic mean (rounded upwards or downwards as aforesaid)
of the rates quoted at approximately 11:00 A.M., New York City time, on such
Adjustment Date by three major banks in New York, New York selected by the
Calculation Agent for loans in United States dollars to leading European banks
having the Index Maturity and in a principal amount equal to an amount of not
less than U.S. $1,000,000 and that is representative for a single transaction in
such market at such time; provided, however, that if the banks selected as
-------- -------
aforesaid are not quoting as mentioned in this sentence, LIBOR in effect for the
applicable period will be LIBOR in effect for the previous period.
"London Business Day" shall mean any day on which dealings in deposits
-------------------
in United States dollars are transacted in the London interbank market.
"Manufacturer Overconcentrations," on any Distribution Date means the
-------------------------------
excess of (x) the aggregate amount of Eligible Receivables created in connection
with the financing of products manufactured by any single manufacturing entity
(other than the Designated Manufacturer described in the definition of
"Designated Manufacturer Overconcentrations"), which Eligible Receivables are
included in the Pool on the last day of the Collection Period immediately
preceding such Distribution Date over (y) 15% of the Pool Balance on the last
day of such immediately preceding Collection Period; provided, that the
--------
percentage specified in clause (y) may be adjusted from time to time without the
consent of the Certificateholders and no such adjustment shall be deemed an
amendment of the terms hereof, but shall be an adjustment in accordance with the
terms hereof if, prior to each adjustment, the Rating Agency Condition is
satisfied for such adjustment.
"Monthly Interest" shall mean with respect to any Distribution Date,
----------------
the sum of Class A Monthly Interest and Class B Monthly Interest.
"Monthly Payment Rate" shall mean, for any Collection Period, the
--------------------
percentage obtained by dividing the aggregate Principal Collections for such
Collection Period by the average daily Pool Balance for such Collection Period.
"Monthly Principal" shall mean, with respect to any Distribution Date,
-----------------
the amount specified in Section 4.03 hereof.
"Monthly Servicing Fee" shall have the meaning specified in Section
---------------------
3.01 hereof.
"Net Receivables Rate" shall mean, for any Adjustment Date, (a) the
--------------------
weighted average interest rates borne by the Receivables included in the Pool
for the preceding Collection Period minus (b) 20%, if BCI is the Servicer or, if
BCI is not the Servicer, 3%.
"Net Servicing Fee" shall have the meaning specified in Section 3.01
-----------------
hereof.
"Net Servicing Fee Rate" shall mean 1%, if BCI is the Servicer, 2%, if
----------------------
BCI is not the Servicer, or for any Distribution Date in respect of which the
Monthly Servicing Fee has been waived, 0%.
11
<PAGE>
"Notice Not to Extend" shall have the meaning specified in Section
--------------------
4.12 hereof.
"Obligor Overconcentrations" shall mean, on any Distribution Date and
--------------------------
with respect to any Account, the excess of (a) the aggregate principal amount of
Eligible Receivables in such Account on the last day of the Collection Period
immediately preceding such Distribution Date over (b) 2% of the Pool Balance
with respect to Specified Obligors and 1.5% of the Pool Balance with respect to
all other Obligors, in each case such concentrations calculated with respect to
the Pool Balance on the last day of such immediately preceding Collection
Period. As used in this definition, "Specified Obligors" shall mean any Obligor
with respect to one of the six largest Accounts in the Trust calculated on the
basis of the amount of Principal Receivables in such Account. The percentages
specified in this definition and the manner of determining the Specified
Obligors may be adjusted from time to time without the consent of the
Certificateholders and no such adjustment shall be deemed an amendment of the
terms hereof, but shall be an adjustment in accordance with the terms hereof if,
prior to each adjustment, the Rating Agency Condition is satisfied for such
adjustment.
"Overconcentration Amount," on any Distribution Date, shall mean the
------------------------
sum of (without duplication) the Obligor Overconcentrations, the Manufacturer
Overconcentrations, the Designated Manufacturer Overconcentrations and the
Industry Overconcentrations for such Distribution Date.
"Pool Factor" shall mean, with respect to any Distribution Date, a
-----------
number carried out to eleven decimals representing the ratio of the Invested
Amount as of such Distribution Date (determined after taking into account any
increases or decreases in the Invested Amount which will occur on such
Distribution Date) to the Adjusted Invested Amount.
"Pre-Allocated Invested Amount" prior to and including the Series
-----------------------------
1994-1 Final Payment Date, shall mean the sum of $251,000,000 plus the aggregate
amount of all principal payments made with respect to the Series 1994-1
Certificates since the Closing Date, and, after the Series 1994-1 Final Payment
Date, shall mean zero.
"Principal Allocation Percentage," prior to and including the Series
-------------------------------
1994-1 Final Payment Date, shall mean, with respect to any Collection Period,
the percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Invested Amount as of the last day of
the Revolving Period minus the Pre-Allocated Invested Amount and the denominator
of which is the Pool Balance as of the last day of the immediately preceding
Collection Period.
"Principal Allocation Percentage," after the Series 1994-1 Final
-------------------------------
Payment Date, shall mean, with respect to any date, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of which
is the Invested Amount as of the last day of the Revolving Period and the
denominator is the Pool Balance as of the close of business the day immediately
preceding the day of calculation.
12
<PAGE>
"Reassignment Amount" shall mean, with respect to any Distribution
-------------------
Date, after giving effect to any deposits and distributions otherwise to be made
on such Distribution Date, the sum of (i) the principal balance of the
Certificates on such Distribution Date, (ii) accrued and unpaid interest on the
unpaid principal balances of the Certificates (calculated on the basis of the
outstanding principal balance of the Class A Certificates and Class B
Certificates at the Class A Certificate Rate and Class B Certificate Rate,
respectively, through the day preceding such Distribution Date), (iii) the
amount of Additional Interest, if any, for such Distribution Date and any
Additional Interest previously due but not distributed on the Certificates on a
prior Distribution Date, and (iv) the Class A Carry-Over Amount and Class B
Carry-Over Amount, if any, for such Distribution Date and any Class A Carry-Over
Amount and Class B Carry-Over Amount previously due but not distributed on the
Certificates on a prior Distribution Date.
"Required Investor Percentage" shall mean, with respect to the
----------------------------
Certificates, 104%; provided, however, that the Depositor may adjust the
-------- -------
Required Investor Percentage without the consent of the Certificateholders and
such adjustment shall not be deemed an amendment of the terms hereof, but shall
be an adjustment in accordance with the terms hereof if, prior to each
adjustment, the Rating Agency Condition is satisfied.
"Required Subordinated Amount" shall mean, as of any date of
----------------------------
determination, the sum of (a) the product of (i) the Subordinated Percentage and
(ii) the Invested Amount on such date and (b) the Incremental Subordinated
Amount for the immediately preceding Distribution Date or, if such date of
determination is a Distribution Date, for such date; provided, however, that for
-------- -------
any date following the end of the Revolving Period, the Required Subordinated
Amount shall in no event be less than an amount equal to the sum of (x) the
lesser of (i) the outstanding principal balance of the Class A Certificates and
the Class B Certificates and (ii) __% of the Initial Principal Amount of the
Certificates and (y) the Incremental Subordinated Amount for the immediately
preceding Distribution Date or, if such date of determination is a Distribution
Date, for such date; provided further, that if an Early Amortization Event
-------- -------
occurs, the Required Subordinated Amount for each date of determination
thereafter shall equal the Required Subordinated Amount for the date on which
such Early Amortization Event occurs. On the Closing Date, the Required
Subordinated Amount shall be $__________.
"Required Subordination Draw Amount" shall have the meaning specified
----------------------------------
in Section 4.05 hereof.
"Reserve Fund" shall have the meaning specified in Section 4.04(a)(i)
------------
hereof.
"Reserve Fund Deposit Amount" shall mean, with respect to any
---------------------------
Distribution Date, the amount, if any, by which (i) the Reserve Fund Required
Amount for such Distribution Date exceeds (ii) the amount of funds on deposit in
the Reserve Fund after giving effect to any withdrawals therefrom on such
Distribution Date.
"Reserve Fund Required Amount" shall mean, with respect to any
----------------------------
Distribution Date, an amount equal to the product of (a) 0.50% and (b) the
outstanding principal balance
13
<PAGE>
of the Certificates for such Distribution Date (after giving effect to any
reduction thereof on such Distribution Date).
"Retained Percentage," prior to and including the Series 1994-1 Final
-------------------
Payment Date, for any Collection Period shall mean (i) with respect to Non-
Principal Collections, 100% minus the sum of (a) the aggregate of the floating
allocation percentages for each outstanding Series of Certificates and (b) the
Variable Funding Percentage for such Collection Period and (ii) with respect to
Principal Collections, 100% minus the sum of (a) the aggregate of the floating
allocation percentages for each outstanding Series of Certificates in their
revolving periods, (b) the aggregate of the principal allocation percentages for
all Series that are not in their revolving periods and (c) the Variable Funding
Percentage for such Collection Period, but in any case the Retained Percentage
shall not be less than 0%, and, after the Series 1994-1 Final Payment Date,
Retained Percentage shall have the meaning assigned in the Agreement.
"Revolving Period" shall mean the period beginning at the opening of
----------------
business on the Series Cut-Off Date and ending on the earliest of (a) the last
day of the Collection Period ending on September 30, 2001, (b) the day on which
the Trustee mails notice to the Certificationholders that BCI has elected not to
extend the Initial Principal Payment Date, and (c) the close of business on the
Business Day immediately preceding the day on which an Early Amortization Period
commences; provided, however, that if any Early Amortization Period ends as
-------- -------
described in clause (c) of the definition thereof, the Revolving Period will
recommence as of the close of business on the day such Early Amortization Period
ends.
"Series Cut-Off Date" shall mean January 1, 1997.
-------------------
"Series 1994-1 Final Payment Date" shall mean the date on which the
--------------------------------
full amount of the principal amount of the Series 1994-1 Certificates and all
interest accrued thereon has been paid in full and the Series 1994-1
Certificates have been fully discharged and have no further interest in the
Trust.
"Series 1997-1 Accounts" shall have the meaning specified in Section
----------------------
4.04(c)(i) hereof.
"Series 1997-1 Available Retained Collections" shall mean, with
--------------------------------------------
respect to any Deposit Date, an amount equal to the product of (a) the Available
Retained Collections for such Deposit Date and (b) a fraction, the numerator of
which is the Available Subordinated Amount and the denominator of which is the
Pool Available Subordinated Amount, in each case on such Deposit Date.
"Series 1997-1 Excess Principal Collections" shall mean that portion
------------------------------------------
of Excess Principal Collections allocated to Series 1997-1 pursuant to Section
4.10 hereof.
"Series 1997-1 Investor Allocation Percentage" for any Collection
--------------------------------------------
Period shall mean the percentage derived from the fraction the numerator of
which is the Invested Amount as of the last Business Day preceding such
Collection Period and the denominator of
14
<PAGE>
which is the Pool Invested Amount on the last Business Day preceding such
Collection Period.
"Series 1997-1 Principal Shortfall" shall have the meaning specified
---------------------------------
in Section 4.10 hereof.
"Series 1997-1 Required Balance," prior to and including the Series
------------------------------
1994-1 Final Payment Date, shall mean, for any Distribution Date, the sum of (i)
(x) the Required Investor Percentage multiplied by the Adjusted Invested Amount
immediately prior to such date minus (y) the Pre-Allocated Invested Amount and
(ii) the Available Subordinated Amount for the immediately preceding
Distribution Date.
"Series 1997-1 Required Balance," after the Series 1994-1 Final
------------------------------
Payment Date, shall mean, as of any date of determination, the sum of (i) the
Required Investor Percentage multiplied by the Adjusted Invested Amount as of
the close of business on the immediately preceding day and (ii) the Available
Subordinated Amount as of the close of business on such immediately preceding
day.
"Series 1997-1 Termination Date" shall mean the April 2004
------------------------------
Distribution Date.
"Servicing Fee Rate" shall mean, with respect to the Certificates, 2%
------------------
or, for any Distribution Date in respect of which the Monthly Servicing Fee has
been waived, 0%.
"Subordinated Percentage" shall equal the percentage equivalent of a
-----------------------
fraction, the numerator of which is 5.5% and the denominator will be the excess
of 100% over 5.5%.
"Telerate Page 3750" shall mean the display page currently so
------------------
designated on the Dow Jones Telerate Service (or such other page as may replace
that page on that service for the purpose of displaying comparable rates or
prices).
"Termination Proceeds" shall mean any Termination Proceeds arising out
--------------------
of a sale of Receivables (or interests therein) pursuant to Section 12.02(c) of
the Agreement with respect to Series 1997-1.
"Variable Funding Percentage," prior to and including the Series 1994-
---------------------------
1 Final Payment Date, shall mean for any Collection Period, a percentage (which
percentage shall never be less than 0% nor more than 100%) equal to the Variable
Funding Amount as of the last day of the immediately preceding Collection Period
divided by the Pool Balance as of such last day (or as of the Series Cut-Off
Date with respect to the first Collection Period); provided, however, that for
-------- -------
purposes of allocating Principal Collections following the occurrence of a
Liquidation Event, the Variable Funding Percentage will be calculated on the
basis of the Variable Funding Amount as of the last day immediately preceding
the date of such Liquidation Event; and provided further, that following a
-------- -------
Liquidation Event, the relative interest of the Variable Funding Certificate in
further allocations of Non-Principal Collections will not be less than the
relative interest thereof as of the Liquidation Event, and, after the
15
<PAGE>
Series 1994-1 Final Payment Date, Variable Funding Percentage shall have the
meaning assigned in the Agreement.
SECTION 2.02. Interpretive Provisions.
-----------------------
(a) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, the term "Rating Agency" shall mean, whenever used
-------------
in this Series Supplement or the Agreement with respect to the Certificates,
Standard & Poor's and Moody's. As used in this Series Supplement and in the
Agreement with respect to the Certificates, "highest investment category" shall
mean (i) in the case of Standard & Poor's, AAA and A-1+, as applicable, and (ii)
in the case of Moody's, Aaa and P-1, as applicable.
(b) All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Agreement. The definitions in
Section 2.01 of this Series Supplement are applicable to the singular as well as
the plural forms of such terms and to the masculine as well as to the feminine
and neuter genders of such terms.
(c) For purposes of calculating the Required Pool Balance under the
Agreement, the amount for Series 1997-1 to be used in clause (i) of the
definition of Required Pool Balance contained in Section 1.01 of the Agreement
shall be calculated as follows: (A) the product of (x) the Required Investor
Percentage and (y) the Adjusted Invested Amount minus (B) the Pre-Allocated
-----
Invested Amount.
(d) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Series Supplement shall refer to this Series Supplement
as a whole and not to any particular provision of this Series Supplement;
references to any Article, Section or Exhibit are references to Articles,
Sections and Exhibits in or to this Series Supplement unless otherwise
specified; and the term "including" means "including without limitation."
SECTION 2.03. Transitional Provisions Relating to Series 1994-1 Final
-------------------------------------------------------
Payment Date. Whenever in this Series Supplement calculations are required to
- ------------
be made for a Collection Period during which the Series 1994-1 Final Payment
Date occurred, allocations with respect to Collections received from the first
day of such Collection Period through the Series 1994-1 Final Payment Date shall
be deemed to have been deposited and the Deposit Date with respect thereto shall
be the first Business Day following the Series 1994-1 Final Payment Date.
ARTICLE III
Servicing Fee
-------------
SECTION 3.01. Servicing Compensation. The monthly servicing fee
----------------------
hereunder shall be payable to the Servicer, in arrears, on each Distribution
Date in respect of any Collection Period (or portion thereof) occurring prior to
the earlier of the Series 1997-1
16
<PAGE>
Termination Date and the first Distribution Date on which the Invested Amount is
zero. An amount equal to one-twelfth of the product of (a) the Servicing Fee
Rate and (b) the Invested Amount as of the last day of the Collection Period
second preceding such Distribution Date (the "Monthly Servicing Fee") shall be
---------------------
paid on behalf of the Certificateholders pursuant to Sections 4.06(a)(iii) and
(vi); provided, however, that with respect to the first Distribution Date, the
-------- -------
Monthly Servicing Fee shall be equal to $__________. A portion of the Monthly
Servicing Fee (the "Net Servicing Fee") will be payable in the priority set
-----------------
forth in Section 4.06(a) and, on each such Distribution Date shall be an amount
equal to one-twelfth of the product of (a) the Net Servicing Fee Rate and (b)
the Invested Amount as of the last day of the Collection Period second preceding
such Distribution Date; provided, however, that with respect to the first
-------- -------
Distribution Date the Net Servicing Fee shall be $__________. The remaining
portion of the Servicing Fee not allocable to the Certificates shall be paid by
the Holder of the BCRC Certificate, the Holder(s) of any Supplemental
Certificates(s), the Holder of the Variable Funding Certificate and the Holders
of other outstanding Series of Investor Certificates, and in no event shall the
Trust, the Trustee or the Holders of the Certificates be liable for any such
remaining portion. The Monthly Servicing Fee shall be payable to the Servicer
solely to the extent amounts are available for distribution in accordance with
the terms of this Series Supplement.
The Servicer will be permitted, in its sole discretion, to waive the
Monthly Servicing Fee for any Distribution Date by written notice given to the
Trustee at least two Business Days prior to such Distribution Date; provided,
--------
however, that the Servicer believes that sufficient Non-Principal Collections
- -------
will be available on any future Distribution Date to pay the Monthly Servicing
Fee relating to the amount thereof so waived. If the Servicer so waives the
Monthly Servicing Fee for any Distribution Date, the Monthly Servicing Fee
(including the Net Servicing Fee) for such Distribution Date shall be deemed to
be zero for all purposes of this Series Supplement and the Agreement; and
provided further, that such Monthly Servicing Fee shall be paid on a future
- -------- -------
Distribution Date solely to the extent amounts are available therefor pursuant
to Section 4.09(b) hereof.
ARTICLE IV
Rights of Certificateholders and
--------------------------------
Allocation and Application of Collections
-----------------------------------------
SECTION 4.01A. Allocations; Payments to Holder(s) of the BCRC
----------------------------------------------
Certificate and any Supplemental Certificate(s). The provisions of this Section
- ----------------------------------------------- ------------------------------
4.01A shall apply only prior to and including the Series 1994-1 Final Payment
- -----------------------------------------------------------------------------
Date.
- ----
(a) Except as otherwise provided by the terms of the Agreement, the
Servicer, as promptly as possible following receipt, but in no event later than
two (2) Business Days following such receipt, shall deposit all Collections
(which may be deposited net of the sum of (i) the Variable Funding Percentage of
such Collections and (ii) the Excess Retained Percentage of such Collections)
into the Collection Account; provided, however, that if Collections are not
-------- -------
deposited net of the foregoing amounts, the withdrawals to be made from
17
<PAGE>
the Collection Account pursuant to this Article IV do not apply to funds on
deposit in the Collection Account with respect to such net amounts. Except as
otherwise provided in Article VII or Article VIII hereof, Non-Principal
Collections and Principal Collections, Miscellaneous Payments and Defaulted
Amounts, as they relate to the Certificates, shall be allocated and distributed
as set forth in this Article IV.
(b) On each Deposit Date with respect to any Collection Period, the
Servicer may instruct the Trustee in writing to withdraw from the Collection
Account (or, to the extent not required to be deposited therein pursuant to
Section 4.03 of the Agreement, to otherwise make available) and pay to the
Holder(s) of the BCRC Certificate and any Supplemental Certificate(s), pro rata
--- ----
in accordance with the respective percentage interests thereof, an amount equal
to (i) the Excess Retained Percentage of all Collections deposited in the
Collection Account for such Deposit Date plus (ii) the Available Retained
Collections deposited in the Collection Account for such Deposit Date, if the
Pool Balance (determined after giving effect to any Principal Receivables
transferred to the Trust on any such Deposit Date) exceeds the Required Pool
Balance for the immediately preceding Distribution Date (after giving effect to
the allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date); provided,
--------
however, that Available Retained Collections shall be paid to the Holder(s) of
- -------
the BCRC Certificate and any Supplemental Certificate(s) with respect to any
Collection Period only after an amount equal to the sum of (x) the Deficiency
Amount, if any, relating to the immediately preceding Distribution Date and (y)
the excess, if any, of the Reserve Fund Required Amount over the amount in the
Reserve Fund on the immediately preceding Distribution Date (after giving effect
to the allocations of, distributions from, and deposits in, the Reserve Fund on
the following Distribution Date), has been deposited in the Collection Account
from such Available Retained Collections.
The withdrawals to be made from the Collection Account pursuant to
this Section 4.01A(b) do not apply to deposits into the Collection Account that
do not represent Collections, including Miscellaneous Payments, payment of the
purchase price for the Certificates pursuant to Section 2.03 of the Agreement,
payment of the purchase price for the Certificates pursuant to Section 7.01
hereof and proceeds from the sale, disposition or liquidation of Receivables
pursuant to Section 9.02 or Section 12.02 of the Agreement.
(c) The Servicer shall, no later than four (4) Business Days prior to
each Distribution Date, instruct the Trustee in writing to withdraw from the
Collection Account and deposit into the Reserve Fund on such Distribution Date,
with respect to the Revolving Period, the Available Retained Collections on
deposit in the Collection Account, up to the amount of the excess, if any,
determined pursuant to Section 4.01A(b)(y) hereof.
18
<PAGE>
SECTION 4.01B. Collections and Allocations for Series 1997-1. The
--------------------------------------------- ---
provisions of this Section 4.01B shall apply only after the Series 1994-1 Final
- -------------------------------------------------------------------------------
Payment Date.
- ------------
(a) Allocations of Non-Principal Collections and Series 1997-1
----------------------------------------------------------
Available Retained Collections. The Servicer shall, on or prior to the close of
- ------------------------------
business on each Deposit Date, allocate the following amounts as set forth
below:
(i) During the Revolving Period, the Amortization Period and any
Initial Amortization Period, the Servicer shall allocate to Series 1997-1
an amount equal to the sum of (1) the product of (x) the Floating
Allocation Percentage for such Deposit Date and (y) the aggregate amount of
Non-Principal Collections on such Deposit Date and (2) the Series 1997-1
Available Retained Collections for such Deposit Date (such amount for any
Deposit Date, the "Daily Allocation"), and of that allocation, deposit and
----------------
retain in the Collection Account an amount not less than the lesser of (I)
the Daily Allocation on such Deposit Date and (II) the difference between
(q) the sum of (1) Monthly Interest, any Class A Carry-Over Amount and any
Class B Carry-Over Amount for the related Distribution (provided that prior
to the Adjustment Date, the Servicer shall calculate such Monthly Interest
in good faith assuming that the Class A Certificate Rate and the Class B
Certificate Rate for the Interest Period commencing during such Collection
Period are the same as the corresponding rates for the Interest Period
ending during such Collection Period), (2) if BCI is not the Servicer, the
Monthly Servicing Fee for the current Collection Period, (3) the sum for
each day through such Deposit Date of the Floating Allocation Percentage of
the Defaulted Amount, and (4) the Reserve Fund Deposit Amount, if any, for
the immediately preceding Distribution Date (after giving effect to any
withdrawals from or deposits to the Reserve Fund on such Deposit Date and
(r) the amounts previously deposited in the Collection Account for the
current Collection Period pursuant to this Section 4.01B(a)(i) and the
remainder of such Daily Allocation shall be retained by the Servicer for
allocation pursuant to Sections 4.01B(c), 4.06(a) and 4.07 hereof.
(ii) During the Amortization Period, allocate to Series 1997-1 and
deposit and retain in the Collection Account an amount equal to the Daily
Allocation for such Deposit Date.
(b) Allocations of Principal Collections. The Servicer shall, on or
------------------------------------
prior to the close of business on each Deposit Date, allocate the following
amounts, as set forth below:
(i) During the Revolving Period, allocate to Series 1997-1 an amount
equal to the product of (x) the Floating Allocation Percentage for such
Deposit Date and (y) the aggregate amount of Principal Collections on such
Deposit Date (such product for any Deposit Date, the "Daily Principal
---------------
Allocation"), which amount shall be retained by the Servicer for
----------
application in accordance with Section 4.06(b); provided, however, that
-------- -------
the Daily Principal Allocation for any Deposit Date shall be retained by
the Servicer only if the Pool Balance for the immediately preceding
Business Day (determined after giving effect to any Principal Receivables
transferred to the Trust
19
<PAGE>
through the close of business on such Business Day) exceeds the Required
Pool Balance for such Business Day (calculated before giving effect to any
deposits to the Excess Funding Account and any excess funding account for
any other Series in their revolving period or, if applicable, their
amortization period through the close of business on such Business Day) and
otherwise shall be deposited in the Excess Funding Account in an amount up
to the Excess Funded Amount for such Deposit Date minus the amount then on
deposit in the Excess Funding Account and the remainder shall be retained
by the Servicer for application in accordance with Section 4.06(b) hereof.
(ii) During the Amortization Period, allocate to Series 1997-1 and
deposit and retain in the Collection Account an amount equal to the Daily
Principal Allocation (which, during the Amortization Period, shall be an
amount equal to the product of (x) the Principal Allocation Percentage for
such Deposit Date and (y) the aggregate amount of Principal Collections on
such Deposit Date); provided, however, that if the sum of the Daily
-------- -------
Principal Allocations for the same Collection Period exceeds the Class A
Controlled Distribution Amount for the related Class A Amortization Date
plus, for the Collection Period immediately preceding the Class B Expected
Payment Date, the outstanding principal balance of the Class B
Certificates, then such excess shall not be deposited in the Collection
Account but shall be retained by the Servicer for application in accordance
with Section 4.06(d) hereof; provided further, however, that such excess
-------- ------- -------
for any Deposit Date shall be retained by the Servicer only if the Pool
Balance for the immediately preceding Business Day (determined after giving
effect to any Principal Receivables transferred to the Trust through the
close of business on such Business Day) exceeds the Required Pool Balance
for such Business Day (calculated before giving effect to any deposits to
the Excess Funding Account and any excess funding account for any other
Series in their revolving period or, if applicable, their amortization
period through the close of business on such Business Day) and otherwise
shall be deposited in the Excess Funding Account in an amount up to the
Excess Funded Amount for such Deposit Date minus the amount then on deposit
in the Excess Funding Account and the remainder shall be retained by the
Servicer for application in accordance with Section 4.06(c) hereof.
(iii) During any Initial Amortization Period or Early Amortization
Period, allocate to Series 1997-1 and deposit and retain in the Collection
Account an amount equal to the Daily Principal Allocation (which, during
any Initial Amortization Period or Early Amortization Period shall be an
amount equal to the product of (x) the Principal Allocation Percentage for
such Deposit Date and (y) the aggregate amount of Principal Collections on
such Deposit Date); provided, however, that after the date on which an
-------- -------
amount of such Daily Principal Allocations equal to the outstanding
principal balance of the Class A Certificates and the Class B Certificates
has been deposited into the Collection Account and allocated to Series
1997-1, the amount determined in accordance with this subparagraph (iii) in
excess thereof shall be retained by the Servicer for application in
accordance with Section 4.06(c) hereof.
20
<PAGE>
(c) On the second Business Day preceding each Distribution Date with
respect to the Revolving Period, the Initial Amortization Period or the
Amortization Period, the Servicer shall deposit in the Collection Account an
amount equal (1) to the excess, if any, of any Daily Allocation (or portion
thereof) consisting of the Floating Allocation Percentage of Non-Principal
Collections retained by the Servicer and not deposited in the Collection Account
during the related Collection Period over the amounts required to be distributed
on the related Distribution Date pursuant to clauses (i) through (viii) of
Section 4.06(a), provided that if BCI is the Servicer, BCI may make such deposit
net of the Monthly Servicing Fee and (2) the excess, if any, of any Daily
Allocation (or portion thereof) consisting of the sum of the Series 1997-1
Available Retained Collections for the related Collection Period retained by the
Servicer and not deposited in the Collection Account over the amounts required
to be distributed on the related Distribution Date out of Series 1997-1
Available Retained Collections pursuant to Section 4.07.
The withdrawals to be made from the Collection Account pursuant to
this Section 4.01B do not apply to deposits into the Collection Account that do
not represent Collections,including Miscellaneous Payments, payment of the
purchase price for the Certificates pursuant to Section 2.03 of the Agreement,
payment of the purchase price for the Certificates pursuant to Section 7.01
hereof and proceeds from the sale, disposition or liquidation of Receivables
pursuant to Section 9.02 or 12.02 of the Agreement.
SECTION 4.02. Monthly Interest.
----------------
(a) The amount of monthly interest with respect to the Class A
Certificates ("Class A Monthly Interest") on any Distribution Date shall be an
------------------------
amount equal to (x) the actual number of days elapsed in the related Interest
Period divided by 360 days, multiplied by (y) the product of (i) the Class A
Certificate Rate and (ii) the outstanding principal balance of the Class A
Certificates as of the close of business on the preceding Distribution Date
(after giving effect to all repayments of principal allocated to the Class A
Certificates on such preceding Distribution Date, if any); provided, however,
-------- -------
with respect to the first Distribution Date, Class A Monthly Interest shall be
equal to $__________.
Two Business Days prior to each Distribution Date, the Servicer shall
determine and notify the Trustee in the Distribution Date Statement of the
excess, if any, of (x) the sum of Class A Monthly Interest for the Interest
Period applicable to such Distribution Date plus the amount, if any, of the
Class A Interest Shortfall which was due but not paid on the prior Distribution
Date over (y) the amount which will be available to be distributed with respect
to the Class A Certificates on such Distribution Date in respect thereof
pursuant to this Series Supplement (such excess, the "Class A Interest
----------------
Shortfall"). If, on any Distribution Date, the Class A Interest Shortfall is
greater than zero, then an additional amount ("Class A Additional Interest")
---------------------------
equal to (x) the actual number of days in the Interest Period commencing on such
Distribution Date divided by 360 days multiplied by (y) the product of (i) the
Class A Certificate Rate for such Interest Period and (ii) such Class A Interest
Shortfall shall be payable as provided herein with respect to the Class A
Certificates on the Distribution Date following such Distribution Date.
Notwithstanding
21
<PAGE>
anything to the contrary herein, Class A Additional Interest shall be
distributed with respect to the Class A Certificates only to the extent
permitted by applicable law.
(b) The amount of monthly interest with respect to the Class B
Certificates ("Class B Monthly Interest") on any Distribution Date shall be an
------------------------
amount equal to (x) the actual number of days elapsed in the related Interest
Period divided by 360 days multiplied by (y) the product of (i) the Class B
Certificate Rate and (ii) the outstanding principal balance of the Class B
Certificates as of the close of business on the preceding Distribution Date
(after giving effect to all repayments of principal allocated to the Class B
Certificates on such preceding Distribution Date, if any); provided, however,
-------- -------
with respect to the first Distribution Date, Class B Monthly Interest shall be
equal to $__________.
Two Business Days prior to each Distribution Date, the Servicer shall
determine and notify the Trustee in the Distribution Date Statement of the
excess, if any, of (x) the sum of the Class B Monthly Interest for the Interest
Period applicable to such Distribution Date plus the amount, if any, of the
Class B Interest Shortfall which was due but not paid on the prior Distribution
Date over (y) the amount which will be available to be distributed with respect
to the Class B Certificates on such Distribution Date in respect thereof
pursuant to this Series Supplement (such excess, the "Class B Interest
----------------
Shortfall"). If, on any Distribution Date, the Class B Interest Shortfall is
greater than zero, then an additional amount ("Class B Additional Interest")
---------------------------
equal to (x) the actual number of days in the Interest Period commencing on such
Distribution Date divided by 360 days multiplied by (y) the product of (i) the
Class B Certificate Rate for such Interest Period and (ii) such Class B Interest
Shortfall shall be payable as provided herein with respect to the Class B
Certificates on the Distribution Date following such Distribution Date.
Notwithstanding anything to the contrary herein, Class B Additional Interest
shall be distributed only to the extent permitted by applicable law.
(c) Any and all determinations made by the Servicer pursuant to this
Section 4.02 shall be communicated in writing and delivered to the Trustee no
later than the Business Day preceding the relevant Distribution Date.
SECTION 4.03. Determination of Monthly Principal. The amount of
----------------------------------
Monthly Principal distributable with respect to the Certificates on each
Distribution Date with respect to an Early Amortization Period or an Initial
Amortization Period shall be equal to the Available Investor Principal
Collections with respect to such Distribution Date; provided, however, that
-------- -------
Monthly Principal shall in no event exceed the outstanding principal balance of
the applicable Class of Certificates. The amount of Monthly Principal
distributable with respect to the Certificates on each Distribution Date with
respect to the Amortization Period shall be equal to the Available Investor
Principal Collections with respect to such Distribution Date; provided, however,
-------- -------
that Monthly Principal distributable to the Holders of the Class A Certificates
on any Class A Amortization Date shall in no event exceed the Class A Controlled
Distribution Amount; and provided further, that Monthly Principal distributable
-------- -------
to the Holders of the Class A Certificates and the Class B Certificates shall in
no event exceed in the aggregate the outstanding principal balances of the Class
A Certificates and the Class B Certificates, respectively.
22
<PAGE>
SECTION 4.04. Establishment of Reserve Fund and Excess Funding
------------------------------------------------
Account.
- -------
(a)(i) The Servicer, for the benefit of the Certificateholders, shall
cause the Trustee to establish and maintain with an Eligible Institution,
to be held on behalf of the Trust, an Eligible Deposit Account (the
"Reserve Fund") which shall be identified as the "Reserve Fund for the
-------------
Bombardier Receivables Master Trust, Series 1997-1" and shall bear a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Certificateholders.
(ii) At the written direction of the Servicer, funds on deposit in
the Reserve Fund shall be invested by the Trustee in Eligible Investments
selected by the Servicer that will mature so that such funds will be
available at the close of business on or before the Business Day next
preceding the following Distribution Date. All Eligible Investments shall
be held in the Reserve Fund for the benefit of the Certificateholders. On
each Distribution Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Reserve Fund
received prior to such Distribution Date shall be applied as set forth in
Section 4.06(a) hereof. Funds deposited in the Reserve Fund on a Business
Day (which immediately precedes a Distribution Date) upon the maturity of
any Eligible Investments are not required to be invested overnight.
(b)(i) The Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee with an Eligible
Institution, on behalf of the Trust, an Eligible Deposit Account (the
"Excess Funding Account"), which shall be identified as the "Excess Funding
-----------------------
Account for Bombardier Receivables Master Trust, Series 1997-1" and shall
bear a designation clearly indicating that the funds deposited therein are
held for the benefit of the Certificateholders.
(ii) At the written direction of the Servicer, funds on deposit in
the Excess Funding Account shall be invested by the Trustee in Eligible
Investments selected by the Servicer. All such Eligible Investments shall
be held by the Trustee for the benefit of the Certificateholders. On each
Distribution Date, all interest and other investment earnings (net of
losses and investment expenses) of funds on deposit in the Excess Funding
Account shall be applied as set forth in Section 4.06(a) hereof.
(c)(i) The Trustee shall possess all right, title and interest in and
to all funds on deposit from time to time in, and all Eligible Investments
credited to, the Reserve Fund and the Excess Funding Account (collectively
the "Series 1997-1 Accounts") and in all proceeds thereof. The Trustee
shall possess all right, title and interest in and to all funds on deposit
from time to time in, and all Eligible Investments credited to, the Series
1997-1 Accounts and in all proceeds thereof. The Series 1997-1 Accounts
shall be under the sole dominion and control of the Trustee for the benefit
of the Certificateholders. If, at any time, any of the Series 1997-1
Accounts ceases to be an Eligible Deposit Account, the Trustee (or the
Servicer on its behalf) shall within ten (10) Business Days (or such longer
period, not to exceed thirty (30) calendar
23
<PAGE>
days, as to which each Rating Agency may consent) establish a new Series
1997-1 Account meeting the conditions specified in subsection (a)(i) or
(b)(i), as applicable, as an Eligible Deposit Account and shall transfer
any cash and/or any investments to such new Series 1997-1 Account. Neither
the Depositor, the Servicer nor any person or entity claiming by, through
or under the Depositor, the Servicer or any such person or entity shall
have any right, title or interest in, or any right to withdraw any amount
from, any Series 1997-1 Account, except as expressly provided herein.
Schedule I hereto, which is hereby incorporated into and made part of this
Series Supplement, identifies each Series 1997-1 Account by setting forth
the Eligible Institution with which the Series 1997-1 Account is
established, the account number of each such account and the account
designation of each such account. If a substitute Series 1997-1 Account is
established pursuant to this Section 4.04, the Servicer shall provide to
the Trustee an amended Schedule I, setting forth the relevant information
for such substitute Series 1997-1 Account.
(ii) Pursuant to the authority granted to the Servicer in Section
3.01(a) of the Agreement, the Servicer shall have the power, revocable by
the Trustee, to make withdrawals and payments or to instruct the Trustee to
take withdrawals and payments from the Series 1997-1 Accounts for the
purposes of carrying out the Servicer's or Trustee's duties hereunder.
SECTION 4.05. Deficiency Amount. With respect to each Distribution
-----------------
Date, on the related Determination Date, the Servicer shall determine the amount
(the "Deficiency Amount"), if any, by which:
-----------------
(a) the sum of:
(i) Monthly Interest for such Distribution Date,
(ii) any Monthly Interest previously due but not distributed with
respect to the Certificates on a prior Distribution Date,
(iii) Additional Interest, if any, for such Distribution Date and any
Additional Interest previously due (to the extent permitted under
applicable law) but not distributed on the Certificates on a prior
Distribution Date,
(iv) the Net Servicing Fee for such Distribution Date,
(v) the Investor Default Amount, if any, for such Distribution Date,
and
(vi) the Series 1997-1 Investor Allocation Percentage of the amount
of any Adjustment Payment required to be deposited in the Collection
Account pursuant to Section 3.09(a) of the Agreement with respect to the
related Collection Period that has not been so deposited as of such
Determination Date,
exceeds, (b) the sum of:
-------
24
<PAGE>
(i) Investor Non-Principal Collections plus any Investment Proceeds
----
with respect to such Distribution Date, and
(ii) the amount of funds in the Reserve Fund which are available
pursuant to Section 4.07(a) hereof to cover any portion of the amount, if
any, by which the amount of clause (a) exceeds the amount of clause (b)(i).
The "Required Subordination Draw Amount" shall be the lesser of (x) the
----------------------------------
Deficiency Amount and (y) the Available Subordinated Amount on the related
Determination Date.
SECTION 4.06. Application of Investor Non-Principal Collections,
--------------------------------------------------
Investment Proceeds and Available Investor Principal Collections. The Servicer
- ----------------------------------------------------------------
shall cause the Trustee to make the following distributions on each Distribution
Date based on the information contained in the Distribution Date Statement.
(a) On each Distribution Date, an amount equal to the sum of Investor
Non-Principal Collections and any Investment Proceeds with respect to such
Distribution Date shall be distributed in the following priority:
(i) first, an amount equal to Class A Monthly Interest for such
-----
Distribution Date, plus the amount of any Class A Monthly Interest
----
previously due but not distributed to the Class A Certificateholders on a
prior Distribution Date, plus, but only to the extent permitted under
----
applicable law, the amount of any Class A Additional Interest for such
Distribution Date and any Class A Additional Interest previously due but
not distributed to the Class A Certificateholders on a prior Distribution
Date, shall be distributed to the Class A Certificateholders;
(ii) second, an amount equal to Class B Monthly Interest for such
------
Distribution Date, plus the amount of any Class B Monthly Interest
----
previously due but not distributed to the Class B Certificateholders on a
prior Distribution Date, plus, but only to the extent permitted under
----
applicable law, the amount of any Class B Additional Interest for such
Distribution Date and any Class B Additional Interest previously due but
not distributed to the Class B Certificateholders on a prior Distribution
Date, shall be distributed to the Class B Certificateholders;
(iii) third, an amount equal to the Net Servicing Fee for such
-----
Distribution Date shall be distributed to the Servicer (unless such amount
has been netted against deposits to the Collection Account or waived);
(iv) fourth, an amount equal to the Reserve Fund Deposit Amount, if
------
any, for such Distribution Date shall be deposited in the Reserve Fund;
(v) fifth, an amount equal to the Investor Default Amount, if any,
-----
for such Distribution Date shall be treated as a portion of Available
Investor Principal Collections for such Distribution Date and distributed
as provided in Section 4.06(b), 4.06(c), or 4.06(d) below, as applicable;
25
<PAGE>
(vi) sixth, an amount equal to the remainder of the Monthly
-----
Servicing Fee for such Distribution Date, if any, due but not paid the
Servicer shall be paid to the Servicer (unless such amount has been netted
against deposits to the Collection Account or waived);
(vii) seventh, an amount equal to the Class A Carry-Over Amount, if
-------
any, for such Distribution Date, plus the amount of any Class A Carry-Over
----
Amount previously due but not distributed with respect to the Class A
Certificates on a prior Distribution Date, shall be distributed to the
Class A Certificateholders;
(viii) eighth, an amount equal to the Class B Carry-Over Amount, if
------
any, for such Distribution Date, plus the amount of any Class B Carry-Over
----
Amount previously due but not distributed on Class B Certificates on a
prior Distribution Date, shall be distributed to the Class B
Certificateholders; and
(ix) ninth, the balance, if any, shall constitute Excess Servicing
-----
and shall be allocated and distributed as set forth in Section 4.09 hereof.
(b) On each Distribution Date with respect to the Revolving Period,
an amount equal to the Available Investor Principal Collections for such
Distribution Date shall be distributed as follows:
(i) prior to and including the Series 1994-1 Final Payment Date,
the Trustee shall apply such Available Investor Principal Collections
first, if the Pool Balance at the end of the preceding Collection Period is
-----
less than the Required Pool Balance for such Distribution Date (calculated
before giving effect to any deposits to the Excess Funding Account and any
excess funding account for any other Series in their revolving periods to
be made on such Distribution Date), to make a deposit into the Excess
Funding Account in an amount equal to the Excess Funded Amount as of such
Distribution Date minus the amount then on deposit in the Excess Funding
Account (after taking into account any amounts deposited into the Excess
Funding Account pursuant to Section 4.12 of this Supplement), and second,
------
an amount equal to the balance (such balance being part of "Excess
------
Principal Collections"), if any, of such Available Investor Principal
---------------------
Collections shall be applied in accordance with Section 4.04 of the
Agreement.
(ii) after the Series 1994-1 Final Payment Date, the Trustee shall
apply such Available Investor Principal Collections, in accordance with the
written directions of the Servicer, first, to make a deposit into the
-----
Excess Funding Account in an amount equal to the Excess Funded Amount as of
the close of business on the preceding Business Day minus the amount then
on deposit in the Excess Funding Account, and second, an amount equal to
------
the balance (such balance being part of "Excess Principal Collections"), if
----------------------------
any, of such Available Investor Principal Collections shall be applied in
accordance with Section 4.04 of the Agreement.
26
<PAGE>
(c) On each Distribution Date with respect to an Early Amortization
Period or an Initial Amortization Period, an amount equal to Available Investor
Principal Collections for such Distribution Date shall be distributed in the
following order of priority:
(i) first, an amount equal to the Monthly Principal for such
-----
Distribution Date will be distributed first to the holders of the Class A
Certificates until the principal amount thereof is reduced to zero, and
then to the holders of the Class B Certificates until the principal amount
thereof is reduced to zero; and
(ii) second, an amount equal to the balance (such balance being
------
part of "Excess Principal Collections"), if any, of such Available Investor
----------------------------
Principal Collections shall be applied in accordance with Section 4.04 of
the Agreement.
(d) On each Distribution Date with respect to the Amortization
Period, an amount equal to Available Investor Principal Collections for such
Distribution Date shall be distributed in the following order of priority:
(i) on each Class A Amortization Date, to the Class A
Certificates, an amount equal to the lesser of (x) the Class A Controlled
Distribution Amount for such date and (y) the Available Investor Principal
Collections for such date until the principal balance of the Class A
Certificates has been reduced to zero;
(ii) on each Distribution Date commencing on the Distribution Date
on which the principal balance of the Class A Certificates has been reduced
to zero, to the Class B Certificates, an amount equal to the lesser of (x)
the outstanding principal balance of the Class B Certificates and (y) the
Available Investor Principal Collections for such date (after giving effect
to any portion thereof distributable to the Class A Certificates pursuant
to clause (i) above);
(iii) an amount equal to the lesser of (x) the Excess Funded Amount
as of the close of business on the preceding Business Day minus the amount
then on deposit in the Excess Funding Account and (y) the Available
Investor Principal Collections for such date (after giving effect to any
portion thereof distributable to the Class A Certificates or the Class B
Certificates pursuant to clauses (i) and (ii) above); and
(iv) an amount equal to the balance including, on each Class A
Amortization Date, Available Investor Principal Collections not used to
make principal distributions on the Class A Certificates pursuant to clause
(i) above (such balance being part of "Excess Principal Collections"), if
----------------------------
any, of such Available Investor Principal Collections shall be applied in
accordance with Section 4.04 of the Agreement.
(e) The distributions to be made pursuant to this Section 4.06 are
subject to the provisions of Section 2.03, Section 9.02, Section 10.01 and
Section 12.02 of the Agreement and Section 8.01 and Section 8.02 of this Series
Supplement.
27
<PAGE>
SECTION 4.07. Application of Reserve Fund and Available Subordinated
------------------------------------------------------
Amount.
- ------
(a) If the Investor Non-Principal Collections and Investment Proceeds
on any Distribution Date are not sufficient to make the entire distributions
required on such Distribution Date by clauses (i), (ii), (iii) and (v) of
Section 4.06(a) hereof, the Servicer shall by written instruction cause the
Trustee to withdraw funds from the Reserve Fund to the extent available therein,
and apply such funds to complete the distributions pursuant to clauses (i),
(ii), (iii) and (v) of Section 4.06(a) hereof.
(b) If there is a Deficiency Amount for such Distribution Date, the
Servicer shall, subject to the following paragraph, apply or cause the Trustee
to apply the aggregate amount of Series 1997-1 Available Retained Collections
for the related Collection Period, but only up to the amount of the Required
Subordination Draw Amount, to make up the shortfall in the distributions
required by clauses (i), (ii), (iii) and (v) of Section 4.06(a) hereof that have
not been made through the application of funds from the Reserve Fund in
accordance with subsection (a) of this Section 4.07. Any such Series 1997-1
Available Retained Collections remaining after the application thereof pursuant
to the preceding sentence shall be treated as a portion of Available Investor
Principal Collections for such Distribution Date, but only up to the amount of
unpaid Adjustment Payments allocated to the Certificates as described in Section
4.05(a)(vi) hereof. The Holder of the BCRC Certificate may elect to increase
the Available Subordinated Amount, up to a maximum aggregate increase equal to
1% of the Initial Principal Amount in order to avoid the occurrence of an Early
Amortization Event pursuant to Section 6.01(a) hereof.
Prior to the Series 1994-1 Final Payment Date, if for such
Distribution Date the sum of the Required Subordination Draw Amount and the
aggregate of the required subordination draw amounts for all other Series
outstanding exceeds the Available Retained Collections on deposit in the
Collection Account on such Distribution Date, then such Available Retained
Collections shall be allocated to such Series (including the Certificates) pro
---
rata on the basis of such required subordination draw amounts (including the
- ----
Required Subordination Draw Amount).
(c) After giving effect to the allocations of, distributions from,
and deposits to, the Reserve Fund made pursuant to Section 4.01A(c), Section
4.04 and Section 4.06(a) hereof and subsections (a) and (d) of this Section
4.07, (i) if the amount in the Reserve Fund is greater than the Reserve Fund
Required Amount (or, for any Distribution Date with respect to an Early
Amortization Period, the Excess Reserve Fund Required Amount) for such
Distribution Date, then the Servicer shall direct the Trustee in writing to
withdraw and distribute such excess amount (or otherwise make such amount
available) to the Holder of the BCRC Certificate and (ii) if the amount in the
Reserve Fund is less than such Reserve Fund Required Amount, then the Trustee
shall, subject to the following paragraph, transfer to the Eligible Institution
holding the Reserve Fund any remaining Series 1997-1 Available Retained
Collections (to the extent of the Available Subordinated Amount) for the related
Collection Period for deposit into the Reserve Fund until the amount in the
Reserve Fund is equal to such Reserve Fund Required Amount. If the outstanding
principal balance of the Certificates
28
<PAGE>
is greater than zero on the Series 1997-1 Termination Date, any funds in the
Reserve Fund will be treated as Available Investor Principal Collections for the
Distribution Date occurring on the Series 1997-1 Termination Date. Upon payment
in full of the outstanding principal balance of the Certificates, any funds
remaining on deposit in the Reserve Fund shall be paid (or made available) to
the Holder(s) of the BCRC Certificate and any Supplemental Certificate(s), pro
---
rata in accordance with the respective percentage interests thereof.
- ----
Prior to the Series 1994-1 Final Payment Date, if for such
Distribution Date the sum of the amount required to be deposited into the
Reserve Fund and the aggregate of the amounts required to be deposited into the
reserve funds for all other Series outstanding exceeds the Available Retained
Collections that remain available to make such deposits on such Distribution
Date, then such remaining Available Retained Collections shall be allocated to
such Series (including the Certificates) pro rata on the basis of the amounts
--- ----
required to be deposited in each such reserve fund (including the Reserve Fund).
(d) If, for any Distribution Date with respect to an Early
Amortization Period, after giving effect to the allocations of, distributions
from, and deposits in, the Reserve Fund made pursuant to Section 4.01A(c),
Section 4.04 and Section 4.06(a) hereof and subsection (a) of this Section 4.07,
the amount in the Reserve Fund is less than the Excess Reserve Fund Required
Amount for such Distribution Date, the Trustee shall, subject to the following
paragraph, deposit any remaining Series 1997-1 Available Retained Collections
(to the extent of the Available Subordinated Amount) for the related Collection
Period into the Reserve Fund until the amount in the Reserve Fund is equal to
such Excess Reserve Fund Required Amount.
Prior to the Series 1994-1 Final Payment Date, if for any Distribution
Date the sum of the amount required to be deposited into the Reserve Fund to
fund the Excess Reserve Fund Required Amount and the aggregate of the amounts
required to be deposited into the reserve funds for all other Series outstanding
to fund the excess reserve fund required amounts for such Series exceeds the
remaining Available Retained Collections available to make such deposits for
such Distribution Date, then such remaining Available Retained Collections shall
be allocated to such Series (including the Certificates) pro rata on the basis
--- ----
of such amounts required to be deposited in each such reserve fund (including
the Reserve Fund) to fund the excess reserve fund required amount.
(e) The balance of the Series 1997-1 Available Retained Collections
for the related Collection Period on any Distribution Date, after giving effect
to any distributions thereof pursuant to subsections (b), (c) and (d) of this
Section 4.07 and the distributions in respect of other Series referred to in
subsections (b), (c) and (d) of this Section 4.07, shall be distributed to the
Holder(s) of the BCRC and any Supplemental Certificate(s), pro rata in
--- ----
accordance with the respective percentage interests thereof, on such
Distribution Date.
SECTION 4.08. Investor Charge-Offs. If, on any Distribution Date on
--------------------
which the Available Subordinated Amount (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such Distribution Date) is
zero and the Deficiency Amount for such Distribution Date is greater than zero,
the Invested Amount shall be
29
<PAGE>
reduced by the excess of such Deficiency Amount over any remaining Available
Subordinated Amount on the related Determination Date, but not by more than the
Investor Default Amount for such Distribution Date (an "Investor Charge-Off").
-------------------
Investor Charge-Offs shall thereafter be reimbursed (but not by an amount in
excess of the aggregate unreimbursed Investor Charge-Offs) on any Distribution
Date by the sum of (a) Allocable Miscellaneous Payments with respect to such
Distribution Date and (b) the amount of Excess Servicing allocated and available
for that purpose pursuant to Section 4.09(a) hereof.
SECTION 4.09. Excess Servicing. The Servicer shall by written
----------------
instruction cause the Trustee to apply to the extent not already so distributed,
on each Distribution Date, Excess Servicing with respect to the Collection
Period immediately preceding such Distribution Date, to make the following
distributions in the following priority:
(a) an amount equal to the aggregate amount of Investor Charge-Offs
which have not been previously reimbursed as provided in Section 4.08 hereof
(after giving effect to the allocation on such Distribution Date of any amount
for that purpose pursuant to Section 4.08(a) hereof) shall be treated as a
portion of Available Investor Principal Collections with respect to such
Distribution Date;
(b) an amount equal to the aggregate outstanding amounts of any
Monthly Servicing Fees which have been previously waived pursuant to Section
3.01 hereof and which have not been previously paid pursuant to this Section
4.09(b) shall be distributed to the Servicer; and
(c) the balance, if any, shall be distributed (or otherwise made
available) to the Holder(s) of the BCRC Certificate and any Supplemental
Certificate(s), pro rata in accordance with the respective percentage interests
--- ----
thereof.
SECTION 4.10. Principal Collections.
---------------------
(a) The "Series 1997-1 Excess Principal Collections," with respect to
------------------------------------------
any Distribution Date, shall mean Excess Principal Collections for such
Distribution Date in an amount equal to the lesser of (a) the Series 1997-1
Principal Shortfall, if any, for such Distribution Date and (b) an amount equal
to the product of (x) Excess Principal Collections for all Series for such
Distribution Date and (y) a fraction, the numerator of which is the Series 1997-
1 Principal Shortfall for such Distribution Date and the denominator of which is
the aggregate amount of Principal Shortfalls for all Series for such
Distribution Date.
(b) The "Series 1997-1 Principal Shortfall" for:
---------------------------------
(x) any Class A Amortization Date (except as provided under
clause (z) of this Section 4.10(b)) shall equal the excess of (i) the
Class A Controlled Distribution Amount over (ii) Available Investor
Principal Collections for such Class A Amortization Date);
30
<PAGE>
(y) any Distribution Date with respect to an Early
Amortization Period or an Initial Amortization Period (except as
provided under clause (z) of this Section 4.10(b)) shall equal the
excess, if any, of (i) the Invested Amount (plus, in the case of the
first Distribution Date following the end of the Collection Period in
which an Early Amortization Period or an Initial Amortization Period
shall have commenced, any amounts on deposit in the Excess Funding
Account at the end of the Revolving Period) over (ii) Available
Investor Principal Collections for such Distribution Date; and
(z) any Distribution Date commencing on the Distribution Date
on which the principal balance of the Class A Certificates shall have
been reduced to zero, the excess of (i) the outstanding principal
balance of the Class B Certificates on such date over (ii) Available
Investor Principal Collections for such date (excluding any portion
thereof distributable in respect of the Class A Certificates).
SECTION 4.11. Excess Funding Account.
----------------------
(a) Any funds on deposit in the Excess Funding Account upon the
occurrence of an Early Amortization Event or the giving of notice that BCI has
elected not to extend the Initial Principal Payment Date will be deposited in
the Collection Account for application as Available Investor Principal
Collections. In addition, no funds will be deposited in the Excess Funding
Account during any Early Amortization Period or any Initial Amortization Period.
(b) The provisions of this Section 4.11(b) shall apply only prior to
----------------------------------------------------------------
and including the Series 1994-1 Final Payment Date. If (i) on any Determination
- --------------------------------------------------
Date during the Revolving Period there are any funds in the Excess Funding
Account, (ii) the Pool Balance at the end of the preceding Collection Period is
greater than the Pool Balance at the end of the second preceding Collection
Period and (iii) the Pool Balance at the end of the preceding Collection Period
is greater than the Required Pool Balance as of such Determination Date, then,
subject to the other provisions of this Section 4.11(b) and to subsections (d)
and (e) of this Section 4.11, the Adjusted Invested Amount and the adjusted
invested amounts (but, in each case, not in excess of the initial principal
amount of such Series) for all other outstanding Series that provide for an
excess funding account or similar arrangement and are in their revolving periods
shall be increased such that, after giving effect to such increases, the
Required Pool Balance is equal to the Pool Balance. On such Determination Date
the Servicer shall notify the Trustee in writing of the amount, if any, of such
increase in the Adjusted Invested Amount and the Trustee shall withdraw from the
Excess Funding Account and pay (or otherwise make available) to the Holder(s) of
the BCRC Certificate and any Supplemental Certificate(s), pro rata in accordance
--- ----
with the respective percentage interests thereof, or allocate to one or more
other Series which are in amortization, early amortization or accumulation
periods, on the immediately succeeding Distribution Date, an amount equal to the
amount of such increase in the Adjusted Invested Amount. Such payment to the
Holder(s) of the BCRC Certificate and any Supplemental Certificate(s) shall be
in payment or partial payment pursuant to the Receivables Purchase Agreement for
additional Principal
31
<PAGE>
Receivables transferred to the Trust or allocated to the Certificates. To the
extent that the Adjusted Invested Amount is increased by any payment to the
Holder(s) of the BCRC Certificate and any Supplemental Certificate(s) or any
allocation to one or more other Series which are in amortization, early
amortization or accumulation periods, the Retained Participation Amount or such
other Series' invested amount, as applicable, shall be reduced by the amount of
such payment.
(c) The provisions of this Section 4.11 (c) shall apply only after
--------------------------------------------------------------
the Series 1994-1 Final Payment Date. If (i) on any Business Day during the
- ------------------------------------
Revolving Period or the Amortization Period there are any funds in the Excess
Funding Account and (ii) the Pool Balance at the end of the preceding Business
Day was greater than the Required Pool Balance at the end of such Business Day,
then, subject to the other provisions of this Section 4.11(c) and to subsections
(d) and (e) of this Section 4.11, the Adjusted Invested Amount and the adjusted
invested amounts (but, in each case, not in excess of the initial principal
amount of such Series) for all other outstanding Series that provide for an
excess funding account or similar arrangement and are in their revolving periods
or, if applicable, their amortization periods shall be increased such that,
after giving effect to such increases, the Required Pool Balance is equal to the
Pool Balance. On each such Business Day the Servicer shall notify the Trustee
in writing of the amount, if any, of such increase in the Adjusted Invested
Amount and the Trustee shall withdraw from the Excess Funding Account and pay
(or otherwise make available) to the Holder(s) of the BCRC Certificate and any
Supplemental Certificate(s), pro rata in accordance with the respective
--- ----
percentage interests thereof, or allocate to one or more other Series which are
in amortization, early amortization or accumulation periods, on such Business
Day, an amount equal to the amount of such increase in the Adjusted Invested
Amount. Such payment to the Holder(s) of the BCRC Certificate and any
Supplemental Certificate(s) shall be in payment or partial payment pursuant to
the Receivables Purchase Agreement for additional Principal Receivables
transferred to the Trust or allocated to the Certificates. To the extent that
the Adjusted Invested Amount is increased by any payment to the Holder(s) of the
BCRC Certificate and any Supplemental Certificate(s) or any allocation to one or
more other Series which are in amortization, early amortization or accumulation
periods, the Retained Participation Amount or such other Series' adjusted
invested amount, as applicable, shall be reduced by the amount of such payment.
(d) In the event that other Series issued by the Trust provide for
excess funding accounts or other arrangements similar to the Excess Funding
Account involving fluctuating levels of investments in Principal Receivables,
the allocation of additional Principal Receivables to increase the Adjusted
Invested Amount and the adjusted invested amounts of such other Series (and the
related withdrawals from the Excess Funding Account and the other excess funding
accounts or similar accounts) will be based on the proportion that the amount on
deposit in the Excess Funding Account bears to amounts on deposit in the excess
funding accounts (including the Excess Funding Account) of all Series providing
for excess funding accounts or such similar arrangements or to amounts otherwise
similarly available.
(e) In the event that any other Series is in an amortization period,
early amortization period or accumulation period, the amounts of any withdrawals
from the Excess
32
<PAGE>
Funding Account shall be applied first to satisfy in full any then applicable
-----
funding or payment requirements of such Series and second to make a payment to
------
the Holder(s) of the BCRC Certificate and any Supplemental Certificate(s). In
the event that more than one other Series is in an amortization period, early
amortization period or accumulation period, the amounts of any withdrawals from
the Excess Funding Account shall be allocated (and, if necessary, reallocated)
among such Series as specified in the related Series Supplement, to meet the
funding or payment requirements of each such Series first to satisfy in full all
then applicable funding or payment requirements of each such Series and second
to make a payment to the Holder(s) of the BCRC Certificate and any Supplemental
Certificate(s).
SECTION 4.12. Initial Principal Payment Date. The Initial Principal
------------------------------
Payment Date will be successively and automatically extended to the next
Distribution Date unless the Servicer elects not to so extend the Initial
Payment Date and provided that the Initial Principal Payment Date shall not be
extended beyond the Class A Expected Final Payment Date. The Servicer shall
effect an election not to extend the Initial Principal Payment Date by
delivering a written notice (the "Notice Not to Extend") to the Trustee stating
that BCI elects, effective as of a Distribution Date stated in the notice (the
"Effective Distribution Date"), that the Initial Principal Payment Date not be
extended beyond such Effective Distribution Date. To be effective, the Notice
Not to Extend shall be delivered to the Trustee not later than the Distribution
Date immediately preceding the Effective Distribution Date.
Upon receipt by the Trustee of the Notice Not to Extend, the Trustee shall
give notice of such election by mailing a copy of such Notice Not to Extend to
each Certificateholder, BCRC and the Rating Agencies. If the Trustee receives
the Notice of Election Not to Extend on or before the Distribution Date in the
calendar month prior to the Effective Distribution Date, the Trustee shall mail
copies of such notice as described in the preceding sentence not earlier than
the first day of the Collection Period preceding the Collection Period in which
the Effective Distribution Date will occur and not later than the fifth Business
Day following the Distribution Date immediately preceding the Effective
Distribution Date.
ARTICLE V
Distributions and Reports to
----------------------------
Series 1997-1 Certificateholders
--------------------------------
SECTION 5.01. Distributions. On each Distribution Date, the Trustee
-------------
shall distribute to the Certificateholders of record on the preceding Record
Date (other than as provided in Section 12.02 of the Agreement respecting a
final distribution) the amounts required to be distributed thereon pursuant to
Article IV hereof. Except as provided in Section 12.02 of the Agreement with
respect to a final distribution, distributions to Certificateholders hereunder
shall be made by wire transfer in immediately available funds.
33
<PAGE>
SECTION 5.02. Reports and Statements to Certificateholders.
--------------------------------------------
(a) At least four (4) Business Days prior to each Distribution Date,
the Servicer will provide to the Trustee statements, substantially in the form
of Exhibit C hereto (each, a "Distribution Date Statement"), and on each
---------------------------
Distribution Date, the Trustee shall forward to the Certificateholders such
Distribution Date Statement setting forth certain information relating to the
Trust and the Certificates.
(b) On each Distribution Date, a copy of each Distribution Date
Statement provided pursuant to subsection (a) of this Section 5.02 will be
forwarded (or caused to be forwarded) by the Trustee to each Certificateholder.
(c) On or before January 31 of each calendar year, beginning with
January 31, 1998, the Trustee shall furnish or cause to be furnished to each
Person who at any time during the preceding calendar year was a
Certificateholder, a statement prepared by the Servicer containing the
information which is required to be contained in the statement to
Certificateholders as set forth in paragraph (a) above, aggregated for such
calendar year or the applicable portion thereof during which such Person was a
Certificateholder, together with other information as is required to be provided
by an issuer of indebtedness under the Internal Revenue Code and such other
customary information as is necessary to enable the Certificateholders to
prepare their tax returns. Such obligation of the Trustee shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to any requirements of the Internal
Revenue Code as from time to time in effect. In addition, the Trustee shall
from time to time furnish to each Certificateholder information furnished by the
Servicer regarding material changes in the servicing or crediting procedures
required under this Agreement.
ARTICLE VI
Early Amortization Events
-------------------------
SECTION 6.01. Additional Early Amortization Events. The occurrence
------------------------------------
of any of the following events shall, immediately upon the occurrence thereof
without notice or other action on the part of the Trustee or the Holders of the
Certificates, be deemed to be an "Early Amortization Event" solely with respect
------------------------
to the Certificates:
(a) on any Distribution Date, the Available Subordinated Amount shall
be less than the Required Subordinated Amount (after giving effect to the
distributions to be made on such Distribution Date); or
(b) on any Distribution Date, the balance of the Reserve Fund is less
than the Reserve Fund Required Amount, in each case after giving effect to all
deposits and distributions on such Distribution Date; or
(c) any Servicer Default occurs; or
34
<PAGE>
(d) any Class A Carry-Over Amount or Class B Carry-Over Amount is
outstanding on six consecutive Distribution Dates; or
(e) the ratio (expressed as a percentage) of (x) the average for each
month of the net losses on the Receivables in the Pool (i.e., gross losses less
Recoveries on any Receivables (including, without limitation, recoveries from
Collateral Security in addition to the products financed by the Receivables,
recoveries from manufacturers, distributors or importers and Insurance
Proceeds)) during any three (3) consecutive calendar months to (y) the average
of the month-end Pool Balances for such three-month period, exceeds 5% on an
annualized basis; provided, however, that this clause (e) may be revised or
-------- -------
waived without the consent of the Certificateholders and no such revision or
waiver shall be deemed an amendment of the terms hereof, but shall be a revision
or waiver made in accordance with the terms hereof if, prior to each such
revision or waiver, the Rating Agency Condition is satisfied; or
(f) the average Monthly Payment Rate (x) with respect to the three
(3) Collection Periods included in the period from January through March of any
calendar year is less than 12.0% and (y) with respect to any other three (3)
consecutive Collection Periods is less than 14.0%; provided, however, that this
-------- -------
clause (f) may be revised or waived without the consent of the
Certificateholders and no such revision or waiver shall be deemed an amendment
of the terms hereof, but shall be a revision or waiver made in accordance with
the terms hereof if, prior to each such reversion or waiver, the Rating Agency
Condition is satisfied; or
(g) the failure to pay the outstanding principal balance of the Class
A Certificates on the Class A Expected Final Payment Date or the failure to pay
the outstanding principal balance of the Class B Certificates on the Class B
Expected Payment Date; or
(h) the sum of all Eligible Investments and amounts on deposit in the
Excess Funding Account and excess funding accounts for all other Series
represents more than 50% of the total assets of the Trust on each of six or more
consecutive Distribution Dates, after giving effect to all payments made or to
be made on such Distribution Dates; and
(i) either (x) at any time during the period from and including the
Closing Date through May 31, 1998, more than 10% of the aggregate principal
amount of Domestic Inventory Receivables that were included in the Pool Balance
on the Closing Date and are then owned by the Trust have not been paid in full
within 491 days following the date of origination thereof or (y) at any time
during any four month period commencing June 1, October 1 and February 1 of each
year (each, an "Origination Period"), more than 10% of the aggregate principal
------------------
amount of Domestic Inventory Receivables that were originated and transferred to
the trust during the four month period commencing sixteen months prior to such
Origination Period and are then owned by the Trust have not been paid in full
within 491 days following the date of origination thereof.
35
<PAGE>
ARTICLE VII
Optional Repurchase
-------------------
SECTION 7.01. Optional Repurchase.
-------------------
(a) On any Distribution Date occurring on or after the date on which
the Invested Amount is reduced to 10% or less of the aggregate principal amount
of the Certificates on the Closing Date, the Depositor shall have the option,
subject to the condition set forth in subsection (c) of this Section 7.01, to
purchase the entire amount of, but not less than the entire amount of, the
Certificates, at a purchase price equal to the Reassignment Amount for such
Distribution Date.
(b) The Depositor shall give the Servicer and the Trustee at least
ten (10) days' prior written notice of the Distribution Date on which the
Depositor intends to exercise such purchase option. On the Business Day
immediately prior to such Distribution Date the Depositor shall deposit the
Reassignment Amount into the Collection Account in immediately available funds.
Such purchase option is subject to payment in full of the Reassignment Amount.
The Reassignment Amount shall be distributed as set forth in Section 8.01(b)
hereof.
(c) If at the time the Depositor exercises its purchase option
hereunder the Depositor's long-term unsecured debt has a rating lower than the
lowest investment grade rating of the Rating Agency, the Depositor shall deliver
to the Trustee on such Distribution Date an Opinion of Counsel (which must be an
independent outside counsel) to the effect that, in reliance on certain
certificates to the effect that the Certificates purchased by the Depositor
constitute fair value for the consideration paid therefor and as to the solvency
of the Depositor, the purchase of the Certificates would not be considered a
fraudulent conveyance under applicable law.
ARTICLE VIII
Final Distributions
-------------------
SECTION 8.01. Sale of Certificates Pursuant to Section 2.03 of the
----------------------------------------------------
Agreement; Distributions Pursuant to Section 7.01 of this Series Supplement or
- ------------------------------------------------------------------------------
Section 2.03 or 12.02(c) of the Agreement.
- -----------------------------------------
(a) The amount to be paid by the Depositor to the Collection Account
with respect to the Certificates in connection with a purchase of the
Certificates pursuant to Section 2.03 of the Agreement shall equal the
Reassignment Amount for the Distribution Date on which such repurchase occurs.
(b) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Section 7.01 of this Series Supplement or Section
2.03 of the Agreement
36
<PAGE>
or any Termination Proceeds deposited into the Collection Account pursuant to
Section 12.02(c) of the Agreement, the Trustee shall, not later than 12:00 noon,
New York City time, on the Distribution Date (or, if such date is not a
Distribution Date, on the immediately following Distribution Date) apply such
amounts in the following priority: (i) deposit the Reassignment Amount on such
date, into the Collection Account and (ii) pay the remainder of any Termination
Proceeds to the Holder(s) of the BCRC Certificate and any Supplemental
Certificate(s), pro rata in accordance with the respective percentage interests
--- ----
thereof.
(c) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, the entire amount deposited in the Collection
Account pursuant to Section 7.01 of this Series Supplement and Section 2.03 of
the Agreement and all other amounts on deposit therein shall be distributed in
full on the Certificates (up to the remaining outstanding principal amount
thereof together with all accrued and unpaid interest thereon) on such date and
any distribution made pursuant to paragraph (b) above shall be deemed to be a
final distribution pursuant to Section 12.02 of the Agreement with respect to
the Certificates.
SECTION 8.02. Distribution of Proceeds of Sale, Disposition or
------------------------------------------------
Liquidation of the Receivables Pursuant to Section 9.02 of the Agreement.
- ------------------------------------------------------------------------
(a) Not later than 12:00 noon, New York City time, on the
Distribution Date following the date on which the Trust Liquidation Proceeds are
deposited into the Collection Account pursuant to Section 9.02(b) of the
Agreement, the Trustee at the written direction of the Servicer shall first (in
each case, after giving effect to any deposits and distributions otherwise to be
made on such Distribution Date) deduct an amount equal to the Invested Amount on
such Distribution Date from the portion of the Trust Liquidation Proceeds
allocated to the Series 1997-1 Certificates and distribute such amount first to
Holders of Class A Certificates until the principal balance is reduced to zero
and the remainder to Holders of Class B Certificates up to the principal balance
thereof; provided that the amount of such distribution shall not exceed the
--------
product of Trust Liquidation Proceeds allocated to Principal Receivables and the
Principal Allocation Percentage (calculated without taking into account the Pre-
Allocated Invested Amount). The remainder of the portion of the Trust
Liquidation Proceeds allocated to the Principal Receivables shall be allocated
as provided in Section 9.02(b) of the Agreement.
(b) Not later than 12:00 noon, New York City time, on such
Distribution Date, the Trustee shall first (in each case, after giving effect to
any deposits and distributions otherwise to be made on such Distribution Date)
deduct an amount equal to the sum of (i) Monthly Interest for such Distribution
Date, (ii) any Monthly Interest previously due but not distributed on the
Certificates on any prior Distribution Date, (iii) the amount of Additional
Interest, if any, for such Distribution Date and any Additional Interest
previously due but not distributed on the Certificates on a prior Distribution
Date, and (iv) any Class A Carry-Over Amount and any Class B Carry-Over Amount
for such Distribution Date and any Class A Carry-Over Amount and any Class B
Carry-Over Amount previously due but not distributed to the Certificateholders
on a prior Distribution Date, from the portion of the Trust Liquidation Proceeds
allocated to Series 1997-1 and distribute such amount first to Class A
Certificates to the extent of such due and unpaid amounts and then to Class B
Certificates to
37
<PAGE>
the extent of such due and unpaid amounts provided that the amount of such
--------
distribution shall not exceed the product of Trust Liquidation Proceeds
allocated to Non-Principal Receivables and the Principal Allocation Percentage
(calculated without taking into account the Pre-Allocated Invested Amount). The
remainder of the portion of the Trust Liquidation Proceeds allocated to Non-
Principal Receivables shall be allocated as provided in Section 9.02(b) of the
Agreement.
(c) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, any distribution made pursuant to this Section 8.02
shall be deemed to be a final distribution pursuant to Section 12.02 of the
Agreement with respect to the Certificates.
ARTICLE IX
Miscellaneous Provisions
------------------------
SECTION 9.01. Ratification of Agreement. As supplemented by this
-------------------------
Series Supplement, the Agreement is in all respects ratified and confirmed and
the Agreement as so supplemented by this Series Supplement shall be read, taken
and construed as one and the same instrument.
SECTION 9.02. Counterparts. This Series Supplement may be executed
------------
in two or more counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which together shall constitute
one and the same instrument.
SECTION 9.03. GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
38
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused this Series Supplement to be duly executed by their respective officers
as of the day and year first above written.
BOMBARDIER CREDIT RECEIVABLES
CORPORATION, as Depositor,
By:
-------------------------------
Name:
-------------------------
Title:
------------------------
By:
-------------------------------
Name:
-------------------------
Title:
------------------------
BOMBARDIER CAPITAL INC., as Servicer,
By:
-------------------------------
Name:
-------------------------
Title:
------------------------
By:
-------------------------------
Name:
-------------------------
Title:
------------------------
BANKERS TRUST COMPANY, as Trustee,
By:
-------------------------------
Name:
-------------------------
Title:
------------------------
39
<PAGE>
EXHIBIT A
FORM OF FACE OF CLASS A CERTIFICATE
Initial
REGISTERED Principal Amount:
$_________________
Certificate No. A-[____]
BOMBARDIER RECEIVABLES MASTER TRUST
SERIES 1997-1
__________
FLOATING RATE ASSET BACKED CERTIFICATES
evidencing a fractional undivided interest in certain
assets of the
BOMBARDIER RECEIVABLES MASTER TRUST I
the corpus of which consists primarily of a pool of receivables (the
"Receivables") generated from time to time in the ordinary course of business in
a portfolio of revolving financing arrangements entered into by Bombardier
Capital Inc. ("BCI") or an Affiliate of BCI with certain dealers located in the
United States to finance such dealers' consumer, recreational and commercial
product inventory and the corpus of which may in the future consist of
Receivables arising from extensions of credit made by BCI or an Affiliate of BCI
or by other lenders and acquired by BCI or an Affiliate of BCI which extension
of credit was made to a dealer to finance such dealer's working capital needs or
to a manufacturer or distributor to finance manufacturing, production or
inventory of consumer, recreational or commercial products. This certificate (a
"Certificate") does not represent any interest in, or obligation of, Bombardier
Credit Receivables Corporation ("BCRC") or any Affiliate thereof.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement referred to on
the reverse side hereof or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BOMBARDIER RECEIVABLES MASTER
TRUST I
By: BANKERS TRUST COMPANY, not in its individual
capacity but solely as Trustee on behalf of
the Trust
By: ________________________
Authorized Officer
Dated: __________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates described in the within-mentioned Pooling and
Servicing Agreement.
BANKERS TRUST COMPANY,
as Trustee,
by ________________________
Authorized Officer
A-2
<PAGE>
FORM OF THE REVERSE OF CLASS A CERTIFICATE
This certifies that ____________________ (the "Holder"), is the
registered owner of a fractional undivided interest in certain assets of the
BOMBARDIER RECEIVABLES MASTER TRUST I (the "Trust") created pursuant to a
Pooling and Servicing Agreement (the "P&S") dated as of January 1, 1994, as
supplemented by the Series 1997-1 Supplement dated as of January 1, 1997 (the
"Series Supplement") and the Variable Funding Supplement dated as of January 1,
1994 (the "Variable Funding Supplement") and as amended by Amendment Number 1
dated as of January 1, 1997 (the "P&S Amendment"), each of such documents among
Bombardier Capital Inc., as Servicer, Bombardier Credit Receivables Corporation,
as Depositor, and BANKERS TRUST COMPANY, as trustee (the "Trustee"), that are
allocated to the interest represented by Class A Certificates pursuant to the
P&S and the Series Supplement. The P&S, the Series Supplement, the P&S
Amendment and the Variable Funding Supplement are hereinafter collectively
referred to as the Pooling and Servicing Agreement. The corpus of the Trust
will include (a) certain Receivables existing under the Accounts at the close of
business on January 1, 1994 (the "Initial Cut-off Date"), certain Receivables
generated under the Accounts from time to time thereafter, as well as certain
Receivables generated in those Accounts which have been added to the Trust since
the Initial Cut-Off Date and any Accounts added to the Trust from time to time
hereafter, (b) all funds collected or to be collected in respect of such
Receivables, (c) all funds on deposit in certain accounts of the Trust, (d) an
assignment of BCRC's rights, as purchaser, under the Receivables Purchase
Agreement, and (e) an assignment of a security interest, if any, in certain
consumer, recreational and commercial products financed by the Receivables
securing the Receivables. Prior to the issuance of the Certificates, two Series
of Investor Certificates have been issued pursuant to the Pooling and Servicing
Agreement, and the Class B Certificates will be issued simultaneously with the
Certificates. Additional Series of Investor Certificates may be issued in the
future. In addition, the Variable Funding Certificate and the BCRC Certificate
have been issued and Supplemental Certificates may be issued in the future. The
Variable Funding Certificate, the BCRC Certificate and any Supplemental
Certificates will represent interests in the Trust Assets not represented by the
Certificates or the Class B Certificates or other Series of Investor
Certificates.
The Receivables consist of advances made directly or indirectly by BCI
or an Affiliate of BCI to consumer, recreational and commercial products dealers
located in the United States and may in the future consist of extensions of
credit made by BCI or Affiliates of BCI to dealers, manufacturers and/or
distributors to finance working capital needs or the manufacturing, production
or inventory of consumer, recreational or commercial products.
Subject to the terms and conditions of the Pooling and Servicing
Agreement, the Depositor may from time to time direct the Trustee, on behalf of
the Trust, to issue one or more new Series, which will represent fractional
undivided interests in certain of the Trust Assets.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement to which, as
amended and supplemented from time to time, the Holder by virtue of the
acceptance hereof assents and is bound. In
A-3
<PAGE>
addition, the Holder, by virtue of the acceptance hereof, consents to those
amendments to the P&S contained in the P&S Amendment. Although a summary of
certain provisions of the Pooling and Servicing Agreement is set forth below,
this Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Trustee. A copy of the Pooling and Servicing Agreement (without schedules)
may be requested from the Trustee by writing to the Trustee at Four Albany
Street, New York, New York 10006, Attention: Corporate Trust & Agency Group,
Structured Finance Team. To the extent not defined herein, the capitalized
terms used herein have the meanings ascribed to them in the Pooling and
Servicing Agreement.
The Depositor has entered into the Pooling and Servicing Agreement and
the Certificates have been (or will be) issued with the intention that the
Certificates will qualify under applicable tax law as indebtedness of the
Depositor secured by the Receivables. The Depositor and each Holder, by the
acceptance of its Certificate, agrees to treat the Certificates as indebtedness
of the Depositor secured by the Receivables for Federal income taxes, state and
local income and franchise taxes and any other taxes imposed on or measured by
income.
On each Distribution Date, the Trustee shall distribute on behalf of
the Trust to each Holder of record at the close of business on the last day of
the month preceding the month in which such Distribution Date occurs (each a
"Record Date") such Holder's pro rata share (based on the aggregate fractional
--- ----
undivided interest represented by the Certificates held by such Holder, except
as otherwise provided in the Pooling and Servicing Agreement) of such amounts on
deposit in the Collection Account or the Series 1997-1 Accounts as are payable
in respect of such Certificate pursuant to the Pooling and Servicing Agreement.
Distributions with respect to this Certificate will be made by the Trustee by
wire transfer in immediately available funds (except for the final distribution
in respect of this Certificate). Final payment of this Certificate will be made
only upon presentation and surrender of this Certificate at the office or agency
specified in the notice of final distribution delivered by the Trustee to the
Certificateholder in accordance with the Pooling and Servicing Agreement.
On any Distribution Date occurring on or after the date on which the
Invested Amount is reduced to 10% or less of the aggregate original principal
amount of the Certificates and the Class B Certificates, the Depositor has the
option, subject to the condition set forth in Section 7.01(c) of the Series
Supplement, to purchase the entire interest in the Trust represented by the
Certificates and the Class B Certificates. The purchase price will be equal to
the Reassignment Amount (as defined in the Series Supplement).
This Certificate does not represent an obligation of, or an interest
in BCI, BCRC or any Affiliate of any of them and is not insured or guaranteed by
any governmental agency or instrumentality. This Certificate is limited in
right of payment to certain Collections with respect to the Receivables (and
certain other amounts), all as more specifically set forth herein and in the
Pooling and Servicing Agreement and the right to share in the distribution of
Collections is subordinated to the rights of the holders of the Class A
Certificates.
A-4
<PAGE>
The Pooling and Servicing Agreement may be amended from time to time
in accordance with Section 13.01 of the P&S.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register of the Trustee upon surrender of this
Certificate for registration of transfer at the office or agency of the Transfer
Agent and Registrar in New York City, accompanied by a written instrument of
transfer in form satisfactory to the Trustee or the Transfer Agent and Registrar
duly executed by the Holder hereof or such Holder's attorney duly authorized,
and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate fractional undivided interest will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class evidencing like aggregate fractional undivided
interests as requested by the Holder surrendering such Certificates. No service
charge may be imposed for any such exchange but the Transfer Agent and Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
The Depositor, the Servicer, the Trustee, the Transfer Agent and
Registrar and any agent of any of them, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Servicer nor the Trustee, the Transfer Agent and Registrar, nor
any agent of any of them, shall be affected by notice to the contrary except in
certain circumstances described in the Pooling and Servicing Agreement.
A-5
<PAGE>
ASSIGNMENT
Social Security or other identifying number of assignee:
______________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ______________________________________
_________________________________________________________________
(name and address of assignee)
the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ____________________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: ____________________ ____________________/*/
Signature Guaranteed:
_____________________
____________________
/*/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the reverse of the within Certificate in
every particular, without alteration, enlargement or any change whatsoever.
A-6
<PAGE>
EXHIBIT B
FORM OF FACE OF CLASS B CERTIFICATE
Initial
REGISTERED Principal Amount:
$_________________
Certificate No. B-[____]
BOMBARDIER RECEIVABLES MASTER TRUST
SERIES 1997-1
__________
____% FLOATING RATE ASSET BACKED CERTIFICATES
evidencing a fractional undivided interest in certain
assets of the
BOMBARDIER RECEIVABLES MASTER TRUST I
the corpus of which consists primarily of a pool of receivables (the
"Receivables") generated from time to time in the ordinary course of business in
a portfolio of revolving financing arrangements entered into by Bombardier
Capital Inc. ("BCI") or an Affiliate of BCI with certain dealers located in the
United States to finance such dealers' consumer, recreational and commercial
product inventory and the corpus of which may in the future consist of
Receivables arising from extensions of credit made by BCI or an Affiliate of BCI
or by other lenders and acquired by BCI or an Affiliate of BCI which extension
of credit was made to a dealer to finance such dealer's working capital needs or
to a manufacturer or distributor to finance manufacturing, production or
inventory of consumer, recreational or commercial products. This certificate (a
"Certificate") does not represent any interest in, or obligation of, Bombardier
Credit Receivables Corporation ("BCRC") or any Affiliate thereof.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement referred to on
the reverse side hereof or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BOMBARDIER RECEIVABLES MASTER TRUST I
By: BANKERS TRUST COMPANY, not in its individual
capacity but solely as Trustee on behalf of the
Trust
By: ________________________
Authorized Officer
Dated: ____________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates described in the within-mentioned Pooling and
Servicing Agreement.
BANKERS TRUST COMPANY,
as Trustee,
by ________________________
Authorized Officer
B-2
<PAGE>
FORM OF THE REVERSE OF CLASS B CERTIFICATE
This certifies that ____________________ (the "Holder"), is the
registered owner of a fractional undivided interest in certain assets of the
BOMBARDIER RECEIVABLES MASTER TRUST I (the "Trust") created pursuant to a
Pooling and Servicing Agreement (the "P&S") dated as of January 1, 1994, as
supplemented by the Series 1997-1 Supplement dated as of January 1, 1997 (the
"Series Supplement") and the Variable Funding Supplement dated as of January 1,
1994 (the "Variable Funding Supplement") and as amended by Amendment Number 1
dated as of January 1, 1997 (the "P&S Amendment") each of such documents among
Bombardier Capital Inc., as Servicer, Bombardier Credit Receivables Corporation,
as Depositor, and BANKERS TRUST COMPANY, as trustee (the "Trustee"), that are
allocated to the interest represented by Class B Certificates pursuant to the
P&S and the Series Supplement. The P&S, the Series Supplement, the P&S
Amendment and the Variable Funding Supplement are hereinafter collectively
referred to as the Pooling and Servicing Agreement. The corpus of the Trust
will include (a) certain Receivables existing under the Accounts at the close of
business on January 1, 1994 (the "Initial Cut-off Date"), certain Receivables
generated under the Accounts from time to time thereafter, as well as certain
Receivables generated in those Accounts which have been added to the Trust since
the Initial Cut-Off Date and any Accounts added to the Trust from time to time
hereafter, (b) all funds collected or to be collected in respect of such
Receivables, (c) all funds on deposit in certain accounts of the Trust, (d) an
assignment of BCRC's rights, as purchaser, under the Receivables Purchase
Agreement, and (e) an assignment of a security interest, if any, in certain
consumer, recreational and commercial products financed by the Receivables
securing the Receivables. Prior to the issuance of the Certificates, two Series
of Investor Certificates have been issued pursuant to the Pooling and Servicing
Agreement, and the Class A Certificates will be issued simultaneously with the
Certificates. Additional Series of Investor Certificates may be issued in the
future. In addition, the Variable Funding Certificate and the BCRC Certificate
have been issued and Supplemental Certificates may be issued in the future. The
Variable Funding Certificate, the BCRC Certificate and any Supplemental
Certificate will represent interests in the Trust Assets not represented by the
Certificates or the Class B Certificates or other Series of Investor
Certificates that may be issued from time to time.
The Receivables consist of advances made directly or indirectly by BCI
or an Affiliate of BCI to consumer, recreational and commercial products dealers
located in the United States and may in the future consist of extensions of
credit made by BCI or Affiliates of BCI to dealers, manufacturers and/or
distributors to finance working capital needs or the manufacturing, production
or inventory of consumer, recreational or commercial products.
Subject to the terms and conditions of the Pooling and Servicing
Agreement, the Depositor may from time to time direct the Trustee, on behalf of
the Trust, to issue one or more new Series, which will represent fractional
undivided interests in certain of the Trust Assets.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement to which, as
amended and supplemented
B-3
<PAGE>
from time to time, the Holder by virtue of the acceptance hereof assents and is
bound. In addition, the Holder, by virtue of the acceptance hereof, consents to
those amendments to the P&S contained in the P&S Amendment. Although a summary
of certain provisions of the Pooling and Servicing Agreement is set forth below,
this Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Trustee. A copy of the Pooling and Servicing Agreement (without schedules)
may be requested from the Trustee by writing to the Trustee at Four Albany
Street, New York, New York 10006, Attention: Corporate Trust & Agency Group,
Structured Finance Team. To the extent not defined herein, the capitalized
terms used herein have the meanings ascribed to them in the Pooling and
Servicing Agreement.
The Depositor has entered into the Pooling and Servicing Agreement and
the Certificates have been (or will be) issued with the intention that the
Certificates will qualify under applicable tax law as indebtedness of the
Depositor secured by the Receivables. The Depositor and each Holder, by the
acceptance of its Certificate, agrees to treat the Certificates as indebtedness
of the Depositor secured by the Receivables for Federal income taxes, state and
local income and franchise taxes and any other taxes imposed on or measured by
income.
On each Distribution Date, the Trustee shall distribute on behalf of
the Trust to each Holder of record at the close of business on the last day of
the month preceding the month in which such Distribution Date occurs (each a
"Record Date") such Holder's pro rata share (based on the aggregate fractional
--- ----
undivided interest represented by the Certificates held by such Holder, except
as otherwise provided in the Pooling and Servicing Agreement) of such amounts on
deposit in the Collection Account or the Series 1997-1 Accounts as are payable
in respect of such Certificate pursuant to the Pooling and Servicing Agreement.
Distributions with respect to this Certificate will be made by the Trustee by
wire transfer in immediately available funds (except for the final distribution
in respect of this Certificate). Final payment of this Certificate will be made
only upon presentation and surrender of this Certificate at the office or agency
specified in the notice of final distribution delivered by the Trustee to the
Certificateholder in accordance with the Pooling and Servicing Agreement.
On any Distribution Date occurring on or after the date on which the
Invested Amount is reduced to 10% or less of the aggregate original principal
amount of the Certificates and the Class A Certificates, the Depositor has the
option, subject to the condition set forth in Section 7.01(c) of the Series
Supplement, to purchase the entire interest in the Trust represented by the
Certificates and the Class A Certificates. The purchase price will be equal to
the Reassignment Amount (as defined in the Series Supplement).
This Certificate does not represent an obligation of, or an interest
in BCI, BCRC or any Affiliate of any of them and is not insured or guaranteed by
any governmental agency or instrumentality. This Certificate is limited in
right of payment to certain Collections with respect to the Receivables (and
certain other amounts), all as more specifically set forth herein and in the
Pooling and Servicing Agreement and the right to
B-4
<PAGE>
share in the distribution of Collections is subordinated to the rights of the
holders of the Class A Certificates.
The Pooling and Servicing Agreement may be amended from time to time
in accordance with Section 13.01 of the P&S.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the office or agency of the Transfer Agent and
Registrar in New York City, accompanied by a written instrument of transfer in
form satisfactory to the Trustee or the Transfer Agent and Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized, and
thereupon one or more new Certificates of authorized denominations evidencing
the same aggregate fractional undivided interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class evidencing like aggregate fractional undivided
interests as requested by the Holder surrendering such Certificates. No service
charge may be imposed for any such exchange but the Transfer Agent and Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
The Depositor, the Servicer, the Trustee, the Transfer Agent and
Registrar and any agent of any of them, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Servicer nor the Trustee, the Transfer Agent and Registrar, nor
any agent of any of them, shall be affected by notice to the contrary except in
certain circumstances described in the Pooling and Servicing Agreement.
B-5
<PAGE>
ASSIGNMENT
Social Security or other identifying number of assignee:
________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ______________________________________
_________________________________________________________________
(name and address of assignee)
the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ____________________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: /*/
____________________ ____________________
Signature Guaranteed:
____________________
____________________
/*/ NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the reverse of the within Certificate in
every particular, without alteration, enlargement or any change whatsoever.
B-6
<PAGE>
EXHIBIT C
FORM OF DISTRIBUTION DATE STATEMENT/1/
-----------------------------------
Distribution Date: __________, [199__] [200_]
<TABLE>
<C> <S> <C>
1. Amount of principal paid or
distributed:
(a) Class A Certificates: $__________
($____ per $1,000
original principal
amount of Class A
Certificates)
(b) Class B Certificates: $__________
($____ per $1,000
original principal
amount of Class B
Certificates)
2. Floating Allocation
Percentage for such
Collection Period/2/:
3. Principal Allocation
Percentage for such
Collection Period/2/:
4. Amount of interest paid or
distributed:
(a) Class A Certificates: $__________
($____ per $1,000
original principal
amount of Class A
Certificates)
(b) Class B Certificates: $__________
($____ per $1,000
original principal
amount of Class B
Certificates)
5. Investor Default Amount for
the following Distribution
Date: $__________
6. Required Subordination Draw
Amount, if any, for the
preceding Collection Period: $__________
</TABLE>
______________________
/1/ To be prepared by the Servicer at least 2 Business Days prior to each
Determination Date and forwarded by the Trustee to each Certificateholder
or record on each Distribution Date pursuant to Section 5.02(a) of this
Series Supplement.
/2/ After the Series 1994-1 Final Payment Date, such percentage for any
Collection Period shall be the average thereof for each Deposit Date in the
Collection Period.
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
7. Amount of:
(a) Investor Charge-Offs
for the preceding
Collection Period: $__________
(b) reimbursements of
Investor Charge-Offs
for the preceding
Collection Period: $__________
8. Amount of Class A Carryover
Amount being paid or
distributed (if any) and
amount remaining (if any):
(a) Distributed: $__________
($____ per $1,000
original principal
amount of Class A
Certificates)
(b) Balance: $__________
($____ per $1,000
original principal
amount of Class A
Certificates)
9. Pool Balance at end of
related Collection Period: $__________
10. After giving affect to
distributions on this
Distribution Date:
(a) Outstanding principal
amount of Class A
Certificates: $__________
(b) Outstanding principal
amount of Class B
Certificates: $__________
(c) Certificate Balance: $__________
</TABLE>
C-2
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
(d) Pool Factor for
Class A
Certificates/3/: __________
(e) Pool Factor for
Class B
Certificates/4/: __________
11. Applicable Interest Rate:
(a) In general:
(1) LIBOR for the
period from the
previous
Distribution Date
to this
Distribution Date
was ____%; and
(2) the Net
Receivables Rate
was ____%
(b) Class A Rate: LIBOR plus 0.20%
(c) Class B Rate: 5.20% (fixed)
12. (a) Amount of Monthly
Servicing Fee for
the preceding
Collection Period: $__________
($____ per $1,000
original principal
amount of
Certificates)
(b) Amount of Excess
Servicing Fee being
distributed and
remaining balance
(if any):
(1) Distributed: $__________
</TABLE>
- ---------------------------
/3/ Consisting of an eleven-digit decimal expressing the invested Amount
allocable to the Class A Certificaates for such Distribution Date
(determined after taking into account any reduction in the Invested Amount
allocable to the Class A Certificates which will occur on such Distributon
Date) as a proportion of the Adjusted Invested Amount allocable to the
Class A Certificates.
/4/ Consisting of an eleven-digit decimal expressing the Invested Amount
allocable to the Class B Certificates for such Distribution Date
(determined after taking into account any reduction in the Invested Amount
allocable to the Class B Certificates which will occur on such
Distribution Date) as a proportion of the adjusted Invested Amount
allocable to the Class B Certificates.
C-3
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
($____ per $1,000
original principal
amount of
Certificates)
(2) Balance: $__________
($____ per $1,000
original principal
amount of
Certificates)
13. Invested Amount on the
following Distribution Date
(after giving effect to all
distributions which will
occur on such Distribution
Date): $__________
14. The Available Subordinated
Amount on the immediately
preceding Distribution Date: $__________
15. The Incremental
Subordinated Amount on the
immediately preceding
Distribution Date: $__________
16. The Reserve Fund balance
for this Distribution Date: $__________
[17. The Excess Funding Account
Balance for this
Distribution Date: $__________/5/]
[18. Amount in the Excess
Funding Account at the end
of the Revolving Period to
be distributed as a payment
of principal in respect to:
(a) Class A
Certificates: $__________
(b) Class B
Certificates (only
if Class A
Certificates have
been paid in full): $__________]/6/
19. The Collection Account
balance with respect to
this Distribution Date:
</TABLE>
______________________
/5/ To be included for each Distribution Date during the Revolving Period.
/6/ To be included for the Distribution Date on or immediately following the
end of the Revolving Period.
C-4
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
20. An Early Amortization Event
has occurred: Yes/No
21. The ratio (expressed as a
percentage) of (x) the
average for each month of
the net losses on the
Receivables in the Pool/7/
during any 3 consecutive
calendar months to (y) the
average of the month-end
Pool Balances for such
three-month period is: ____%/8/
</TABLE>
- ---------------------------
/7/ I.e., gross losses less Recoveries on any Receivables (including, without
limitation, recoveries from Collateral Security in addition to the products
financed by the Receivables, recoveries from manufacturers, distributors or
importers and Insurance Proceeds.
/8/ An Early Amortization Event will occur if this ratio exceeds 5% on an
annualized basis unless the ratio requirement is amended or waived after
the Rating Agency Condition has been satisfied.
C-5
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
Name of Series Depository Institution
1997-1 Account and Account No.
- -------------- --------------------------
<S> <C>
Excess Funding Account Bankers Trust Company/_____
Reserve Fund Bankers Trust Company/_____
</TABLE>
<PAGE>
Exhibit 4.3
BOMBARDIER CREDIT RECEIVABLES CORPORATION,
Depositor,
BOMBARDIER CAPITAL INC.,
Servicer,
and
BANKERS TRUST COMPANY,
Trustee
_______________________________________
VARIABLE FUNDING SUPPLEMENT
Dated as of January 1, 1994
to
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 1994
_______________________________________
BOMBARDIER RECEIVABLES MASTER TRUST I
Variable Funding Certificate
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
Creation of the Variable Funding Certificate
SECTION 1.01. Designation............................................. 1
ARTICLE II
Definitions
SECTION 2.01. Definitions............................................. 1
ARTICLE III
Servicing Fee
SECTION 3.01. Servicing Compensation.................................. 3
ARTICLE IV
Rights of Holder of the Variable Funding Certificate and
Allocation and Application of Collections
SECTION 4.01. Allocations; Payments to Holder of Retained Interest.... 4
SECTION 4.02. Application of Funds in Series Accounts Following a
Liquidation Event................................... 4
ARTICLE V
Distributions and Reports to
Holder of the Variable Funding Certificate
SECTION 5.01. Distributions.......................................... 5
SECTION 5.02. Reports and Statements to Holder of the Variable
Funding Certificate................................. 5
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE VI
Final Distributions
<S> <C>
SECTION 6.01. Sale of Variable Funding Interest Pursuant to Section 2.03
of the Agreement; Distributions Pursuant to Section 2.03
or 12.02(c) of the Agreement........................................... 5
SECTION 6.02. Distribution of Proceeds of Sale, Disposition or Liquidation
of the Receivables Pursuant to Section 9.02 of the
Agreement.............................................................. 6
</TABLE>
<TABLE>
<CAPTION>
ARTICLE VII
Miscellaneous Provisions
<S> <C>
SECTION 7.01. Ratification of Agreement................................................ 7
SECTION 7.02. Counterparts............................................................. 7
SECTION 7.03. Governing Law............................................................ 7
</TABLE>
EXHIBITS
Exhibit A Form of Variable Funding Certificate
Exhibit B Form of Distribution Date Statement
ii
<PAGE>
VARIABLE FUNDING SUPPLEMENT dated as of January 1, 1994 (the "Variable
Funding Supplement"), among BOMBARDIER CREDIT RECEIVABLES CORPORATION, a
Delaware corporation, as Depositor, BOMBARDIER CAPITAL INC., a Massachusetts
corporation, as Servicer, and BANKERS TRUST COMPANY, a New York banking
corporation, as Trustee.
Pursuant to Section 6.03 of the Pooling and Servicing Agreement dated
as of January 1, 1994 (as amended and supplemented, the "Agreement"), among the
Depositor, the Servicer and the Trustee, the Depositor may from time to time
direct the Trustee to issue, on behalf of the Trust, a Variable Funding
Certificate representing fractional undivided interests in the Trust. The terms
of the Variable Funding Certificate are to be set forth in a Supplement to the
Agreement.
Pursuant to this Variable Funding Supplement, the Depositor and the
Trustee shall create and specify the terms thereof.
ARTICLE I
Creation of the Variable Funding Certificate
--------------------------------------------
SECTION 1.01. Designation. (a) There is hereby created a Variable
-----------
Funding Certificate to be issued pursuant to the Agreement and this Variable
Funding Supplement to be known as the "Variable Funding Certificate".
(b) In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Agreement, the terms and provisions of this Variable Funding Supplement shall
govern.
ARTICLE II
Definitions
-----------
SECTION 2.01. Definitions. (a) Whenever used in this Variable
-----------
Funding Supplement the following words and phrases shall have the following
meanings.
"Closing Date" shall mean January 24, 1994.
------------
"Initial Cut-Off Date" shall mean January 1, 1994.
--------------------
<PAGE>
"Initial Variable Funding Amount" shall mean $0.
-------------------------------
"Monthly Servicing Fee" shall have the meaning specified in
---------------------
Section 3.01.
"Reassignment Amount" shall mean, with respect to any Distribution
-------------------
Date, after giving effect to any deposits and distributions otherwise to be made
on such Distribution Date, the sum of (i) the Variable Funding Amount on such
Distribution Date and (ii) the Non-Principal Collections for the previous
Collection Period multiplied by the Variable Funding Percentage for such
Collection Period.
"Servicing Fee Rate" shall mean, with respect to the Variable Funding
------------------
Certificate, 2% or, for any Distribution Date in respect of which the Monthly
Servicing Fee has been waived, 0%.
"Variable Funding Amount" shall mean, on any date of determination,
-----------------------
the excess of the Pool Balance over the Required Pool Balance for such date.
"Variable Funding Certificate" shall mean the certificate evidencing
----------------------------
the Variable Funding Amount and substantially in the form of Exhibit A hereto.
"Variable Funding Default Amount" shall mean, with respect to any
-------------------------------
Distribution Date, an amount equal to the product of (a) the Defaulted Amount
for the related Collection Period and (b) the Variable Funding Percentage for
the related Collection Period.
"Variable Funding Percentage" for any Collection Period shall mean a
---------------------------
percentage (which percentage shall never be less than 0% nor more than 100%)
equal to the Variable Funding Amount as of the last day of the immediately
preceding Collection Period divided by the Pool Balance as of such last day;
provided, however, that for purposes of allocating Principal Collections
following the occurrence of a Liquidation Event, the Variable Funding Percentage
will be calculated on the basis of the Variable Funding Amount as of the last
day immediately preceding the date of such Liquidation Event; provided, further,
that following a Liquidation Event, the relative interest of the Variable
Funding Certificate in further allocations of Non-Principal Collections will not
be less than the relative interest thereof as of the Liquidation Event.
(b) All capitalized terms used herein and not otherwise defined herein
have the meanings ascribed to them in the Agreement. The definitions in Section
2.01 are applicable to the singular as well as the plural forms of such terms
and to the masculine as well as to the feminine and neuter genders of such
terms.
2
<PAGE>
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Variable Funding Supplement shall refer to this
Variable Funding Supplement as a whole and not to any particular provision of
this Variable Funding Supplement; references to any Article, Section or Exhibit
are references to Articles, Sections and Exhibits in or to this Variable Funding
Supplement unless otherwise specified; and the term "including" means "including
without limitation".
ARTICLE III
Servicing Fee
-------------
SECTION 3.01. Servicing Compensation. The monthly servicing fee
----------------------
hereunder (the "Monthly Servicing Fee") shall be payable to the Servicer, in
arrears, on each Distribution Date in respect of any Collection Period (or
portion thereof) occurring prior to the earlier of (x) the surrender of the
Variable Funding Certificate for the final payment thereon and (y) the Trust
Termination Date, in an amount equal to one-twelfth of the product of (a) the
Servicing Fee Rate and (b) the Variable Funding Percentage of the Pool Balance
as of the last day of the second Collection Period preceding such Distribution
Date (or with respect to the first Distribution Date, as of the Initial Cut-Off
Date). The remainder of the Servicing Fee shall be attributable to the Holder
of the Retained Certificate and the Holders of Investor Certificates, and the
Holder of the Variable Funding Certificate shall in no event be liable for the
share of the Servicing Fee to be attributable to the Holder of the Retained
Certificate or the Investor Certificateholders. The Monthly Servicing Fee shall
be payable to the Servicer solely to the extent amounts are available for
distribution in accordance with Section 4.01(a) hereof.
The Servicer will be permitted, in its sole discretion, to waive the
Monthly Servicing Fee for any Distribution Date by notice to the Trustee on or
before the related Determination Date, provided that the Servicer believes that
sufficient Non-Principal Collections will be available on any future
Distribution Date to pay the Monthly Servicing Fee relating to the amount
thereof so waived. If the Servicer so waives the Monthly Servicing Fee for any
Distribution Date, the Monthly Servicing Fee for such Distribution Date shall be
deemed to be zero for all purposes of this Variable Funding Supplement and the
Agreement.
3
<PAGE>
ARTICLE IV
Rights of Holder of the Variable Funding Certificate and
--------------------------------------------------------
Allocation and Application of Collections
-----------------------------------------
SECTION 4.01. Allocations; Payments to Holder of Retained Interest.
----------------------------------------------------
(a) Non-Principal Collections and Principal Collections, as they relate to the
Variable Funding Certificate, shall be allocated and distributed as set forth in
this Article.
(b) The Servicer shall withdraw from the Collection Account on each
Deposit Date and pay to the Holder of the Variable Funding Certificate an amount
equal to the Variable Funding Percentage for the related Collection Period of
Non-Principal Collections and Principal Collections received or deposited into
the Collection Account for such Deposit Date; provided, however, that the
-------- -------
Servicer shall (i) on each Distribution Date withdraw and pay to itself from
amounts on deposit in the Collection Account and otherwise payable to the Holder
of the Variable Funding Certificate an amount equal to the Monthly Servicing Fee
for the preceding Collection Period and (ii) on each Deposit Date thereafter,
withdraw and pay to itself from amounts otherwise payable to the Holder of the
Variable Funding Certificate on such date the amount, if any, by which such
Monthly Servicing Fee exceeded the sum of (x) the amount so withdrawn on such
Distribution Date pursuant to clause (i) and (y) the aggregate amount previously
withdrawn with respect to such Distribution Date under this clause (ii).
The withdrawals to be made from the Collection Account pursuant to
this Section 4.01(b) do not apply to deposits into the Collection Account that
do not represent Collections, including Miscellaneous Payments, payment of the
purchase price for any Certificates pursuant to Section 2.03 of the Agreement or
the provisions of any applicable Supplement, and proceeds from the sale,
disposition or liquidation of Receivables pursuant to Section 9.02 or 12.02 of
the Agreement (which proceeds from the sale, disposition or liquidation will be
distributed in accordance with Article VI).
SECTION 4.02. Application of Funds in Series Accounts Following a
---------------------------------------------------
Liquidation Event. On the Distribution Date, if any, following a Liquidation
- -----------------
Event upon which the Trust Liquidation Proceeds are required to be distributed
by the Trustee pursuant to Section 6.02 hereof, the Servicer shall instruct the
Trustee to withdraw from the Series Accounts an amount equal to the product of
the Variable Funding Percentage for the preceding Collection Period multiplied
by the aggregate amount on deposit in the Series Accounts (including any
investment earnings, if applicable) on such date, after giving effect to the
deposits in such Series Accounts otherwise required on such date, and distribute
such amount to the Holder of the Variable Funding Certificate.
4
<PAGE>
SECTION 4.03. Bankruptcy, Etc. Any beneficial or registered owner of
----------------
the Variable Funding Certificate agrees, by acceptance of such ownership, not to
file or cause to be filed, as a result of holding such Certificate, a voluntary
or involuntary petition for relief under the Federal Bankruptcy Code or any
similar applicable state law with respect to the Depositor; provided, that this
--------
sentence shall not prevent such filing as a result of other interests or rights
which such holder may have (other than solely as a result of owning the Variable
Funding Certificate).
ARTICLE V
Distributions and Reports to
----------------------------
Holder of the Variable Funding Certificate
------------------------------------------
SECTION 5.01. Distributions. Except as provided in Section 12.02 of
-------------
the Agreement with respect to a final distribution, distributions to the Holder
of the Variable Funding Certificate hereunder shall be made by wire transfer in
immediately available funds.
SECTION 5.02. Reports and Statements to Holder of the Variable
------------------------------------------------
Funding Certificate. (a) At least two Business Days prior to each
- -------------------
Determination Date, the Servicer will provide to the Trustee statements
substantially in the form of Exhibit B and on each Distribution Date the Trustee
shall forward to the Holder of the Variable Funding Certificate such statement
prepared by the Servicer setting forth certain information relating to the
Trust.
(b) A copy of each statement provided pursuant to paragraph (a) will
be made available for inspection at the Corporate Trust Office.
(c) On or before January 31 of each calendar year, beginning with
calendar year 1995, the Trustee shall furnish or cause to be furnished to each
Person who at any time during the preceding calendar year was a Holder of the
Variable Funding Certificate, a statement prepared by the Servicer containing
the information which is required to be contained in the statement to the Holder
of the Variable Funding Certificate as set forth in paragraph (a) above,
aggregated for such calendar year or the applicable portion thereof during which
such Person was a Holder of the Variable Funding Certificate, together with
other information as is required to be provided by an issuer of indebtedness
under the Internal Revenue Code and such other customary information as is
necessary to enable such Holder of the Variable Funding Certificate to prepare
its tax return. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Internal Revenue
Code as from time to time in effect.
5
<PAGE>
ARTICLE VI
Final Distributions
-------------------
SECTION 6.01. Sale of Variable Funding Interest Pursuant to Section
-----------------------------------------------------
2.03 of the Agreement; Distributions Pursuant to Section 2.03 or 12.02(c) of the
- --------------------------------------------------------------------------------
Agreement. (a) The amount to be paid by the Depositor to the Collection
- ---------
Account with respect to the Variable Funding Certificate in connection with a
purchase of the Variable Funding Certificate pursuant to Section 2.03 of the
Agreement shall equal the Reassignment Amount for the Distribution Date on which
such repurchase occurs.
(b) With respect to amounts deposited into the Collection Account
pursuant to Section 2.03 of the Agreement or any Termination Proceeds deposited
into the Collection Account pursuant to Section 12.02(c) of the Agreement, the
Trustee shall, not later than 12:00 noon, New York City time, on the
Distribution Date on which such amounts are deposited (or, if such date is not a
Distribution Date, on the immediately following Distribution Date) apply such
amounts in the following priority: (i) pay to the Holder of the Variable Funding
Certificate an amount equal to the sum of (x) the Variable Funding Amount on
such date and (y) the Non-Principal Collections for the previous Collection
Period multiplied by the Variable Funding Percentage for such Distribution Date,
up to the Reassignment Amount for the Variable Funding Certificate, and (ii) pay
the remainder of any Termination Proceeds to the Holder(s) of the Retained
Certificate.
(c) Notwithstanding anything to the contrary in this Variable Funding
Supplement or the Agreement, the entire amount deposited in the Collection
Account pursuant to Section 2.03 of the Agreement and all other amounts on
deposit therein shall be distributed in full on such date and any distribution
made pursuant to paragraph (b) above shall be deemed to be a final distribution
pursuant to Section 12.02 of the Agreement with respect to the Variable Funding
Certificate.
SECTION 6.02. Distribution of Proceeds of Sale, Disposition or
------------------------------------------------
Liquidation of the Receivables Pursuant to Section 9.02 of the Agreement. (a)
- ------------------------------------------------------------------------
Not later than 12:00 noon, New York City time, on the Distribution Date
following the date on which the Trust Liquidation Proceeds are deposited into
the Collection Account pursuant to Section 9.02(b) of the Agreement, the Trustee
shall first (in each case, after giving effect to any deposits and distributions
otherwise to be made on such Distribution Date) deduct an amount equal to the
Variable Funding Percentage for the related Collection Period multiplied by the
portion of the Trust Liquidation Proceeds allocated to Principal Collections and
distribute such amount to the Holder of the Variable Funding Certificate;
provided, however, that the amount of such deposit shall not exceed the Variable
Funding Amount.
(b) Not later than 12:00 noon, New York City time, on such
Distribution Date, the Trustee shall first (in each case, after giving effect to
any deposits and distributions otherwise to be made on such Distribution Date)
deduct an amount equal to the Variable
6
<PAGE>
Funding Percentage of the portion of the Trust Liquidation Proceeds allocated to
Non-Principal Collections and distribute such amount to the Holder of the
Variable Funding Certificate.
(c) Notwithstanding anything to the contrary in this Variable Funding
Supplement or the Agreement, any distribution made pursuant to this Section
shall be deemed to be a final distribution pursuant to Section 12.02 of the
Agreement with respect to the Variable Funding Certificate.
ARTICLE VII
Miscellaneous Provisions
------------------------
SECTION 7.01. Ratification of Agreement. As supplemented by this
-------------------------
Variable Funding Supplement, the Agreement is in all respects ratified and
confirmed and the Agreement as so supplemented by this Variable Funding
Supplement shall be read, taken and construed as one and the same instrument.
SECTION 7.02. Counterparts. This Variable Funding Supplement may be
------------
executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.
SECTION 7.03. Governing Law. This Variable Funding Supplement shall
-------------
be construed in accordance with the laws of the State of New York, without
reference to its conflict of laws provisions, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
7
<PAGE>
Exhibit 4.3
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused this Variable Funding Supplement to be duly executed by their respective
officers as of the day and year first above written.
BOMBARDIER CREDIT RECEIVABLES CORPORATION, as Depositor,
By: /s/ William P. Brady
--------------------------------------
Name: William P. Brady
---------------------------------
Title: Vice President
---------------------------------
By: /s/ Andrew Baranowsky
--------------------------------------
Name: Andrew Baranowsky
---------------------------------
Title: Assistant Secretary
---------------------------------
BOMBARDIER CAPITAL INC., as Servicer,
By: /s/ William P. Brady
--------------------------------------
Name: William P. Brady
---------------------------------
Title: Vice President
---------------------------------
By: /s/ Andrew Baranowsky
--------------------------------------
Name: Andrew Baranowsky
---------------------------------
Title: Assistant Treasurer
---------------------------------
BANKERS TRUST COMPANY, as Trustee,
By: /s/ Marie C. Rasch
--------------------------------------
Name: Marie C. Rasch
---------------------------------
Title: Vice President
---------------------------------
8
<PAGE>
EXHIBIT A
FORM OF FACE OF VARIABLE FUNDING CERTIFICATE
THIS VARIABLE FUNDING CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS VARIABLE FUNDING CERTIFICATE
NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
SUCH REGISTRATION PROVISIONS.
THIS VARIABLE FUNDING CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE WITH
THE TERMS OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
No. VFC-___
BOMBARDIER RECEIVABLES MASTER TRUST I
VARIABLE FUNDING CERTIFICATE
THIS CERTIFICATE REPRESENTS AN INTEREST IN CERTAIN
ASSETS OF THE BOMBARDIER RECEIVABLES MASTER TRUST I
Evidencing an interest in a trust, the corpus of which consists primarily of a
pool of receivables (the "Receivables") generated from time to time in the
ordinary course of business in a portfolio of revolving financing arrangements
entered into by Bombardier Capital Inc. ("BCI") with certain dealers located in
the United States to finance such dealers' consumer, recreational and commercial
product inventory and the corpus of which may in the future consist of accounts
purchased by BCI from its affiliates, which accounts consist of credit extended
by such affiliates to their customers for the purchase of certain products.
This certificate (a "Certificate") does not represent any interest in, or
obligation of, Bombardier Credit Receivables Corporation ("BCRC") or any
affiliate thereof.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Variable Funding
Certificate shall not be entitled to any benefit under the Pooling and Servicing
Agreement referred to on the reverse side hereof, or be valid for any purpose.
<PAGE>
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Trustee has caused this Variable Funding
Certificate to be duly executed on behalf of the Trust.
BOMBARDIER RECEIVABLES MASTER TRUST I
By: BANKERS TRUST COMPANY, not in its individual
capacity but solely as Trustee
By:_______________________________
Authorized Officer
Dated: __________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Variable Funding Certificate described in the within-
mentioned Pooling and Servicing Agreement.
BANKERS TRUST COMPANY,
as Trustee,
By:_________________________________
Authorized Officer
2
<PAGE>
FORM OF REVERSE OF VARIABLE FUNDING CERTIFICATE
This certifies that ________________ (the "Holder") is the registered
owner of a fractional undivided interest in certain assets of the BOMBARDIER
RECEIVABLES MASTER TRUST I (the "Trust") created pursuant to the Pooling and
Servicing Agreement (the "P&S") dated as of January 1, 1994, as supplemented by
the Variable Funding Supplement (the "Variable Funding Supplement") and the
Series 1994-1 Supplement (the "Series Supplement"), each dated as of January 1,
1994, among Bombardier Credit Receivables Corporation, as Depositor, Bombardier
Capital Inc., as Servicer, and Bankers Trust Company, as trustee (the
"Trustee"), that are allocated to the interest represented by the Variable
Funding Certificate (the "Certificate") pursuant to the P&S and the Variable
Funding Supplement. The P&S, the Variable Funding Supplement and the Series
Supplement are hereinafter collectively referred to as the Pooling and Servicing
Agreement. The corpus of the Trust will include (a) certain Receivables
existing under the Accounts at the close of business on January 1, 1994 (the
"Initial Cut-off Date"), certain Receivables generated under the Accounts from
time to time thereafter, as well as certain Receivables generated in any
Accounts added to the Trust from time to time after the Initial Cut-off Date,
(b) all funds collected or to be collected in respect of such Receivables, (c)
all funds on deposit on certain accounts of the Trust, (d) an assignment of
BCRC's rights, as purchaser, under the Receivables Purchase Agreement, and (e)
an assignment of a security interest, if any, in certain consumer, recreational
and commercial products financed by the Receivables securing the Receivables.
In addition to the Variable Funding Certificate, the Retained Certificate and
the Class A and Class B Certificates will be issued pursuant to the Pooling and
Servicing Agreement and one or more new Series may be issued pursuant to the
Pooling and Servicing Agreement.
The Receivables consist of advances made directly or indirectly by BCI
to consumer, recreational and commercial products dealers located in the United
States and may in the future also consist of extensions of credit made by
affiliates of BCI to their customers of certain products manufactured or
distributed by such affiliates.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement, as amended and supplemented from time to time,
the Holder by virtue of the acceptance hereof assents and is bound. Although a
summary of certain provisions of the Pooling and Servicing Agreement is set
forth below, this Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing Agreement
for information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Trustee. A copy of the Pooling and Servicing Agreement may be requested
from the Trustee by writing to the Trustee at Four Albany Street, New York, New
York 10006, Attention: Corporate Trust and Agency Group. To the extent not
defined herein, the
3
<PAGE>
capitalized terms used herein have the meanings ascribed to them in the Pooling
and Servicing Agreement.
Any beneficial or registered owner of the Variable Funding Certificate
agrees, by acceptance of such ownership, not to file or cause to be filed, as a
result of holding such Certificate, a voluntary or involuntary petition for
relief under the Federal Bankruptcy Code or any similar applicable state law
with respect to the Depositor; provided, that this sentence shall not prevent
--------
such filing as a result of other interests or rights which such holder may have
(other than solely as a result of owning the Variable Funding Certificate).
This Certificate is not permitted to be transferred, assigned,
exchanged or otherwise pledged or conveyed except in accordance with the Pooling
and Servicing Agreement, including Section 6.03(c) of the Pooling and Servicing
Agreement.
This Certificate is the Variable Funding Certificate, which represents
an interest in certain assets of the Trust, including the right to receive a
portion of the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement. The aggregate interest
represented by this Certificate at any time in the Receivables in the Trust
shall not exceed the Variable Funding Amount at such time.
The obligations created by the Pooling and Servicing Agreement and the
Trust created thereby shall terminate upon the Trust Termination Date.
4
<PAGE>
EXHIBIT B
DISTRIBUTION DATE STATEMENT
(a) The aggregate amount of Interest Collections and the aggregate
amount of Principal Collections processed during the immediately preceding
Collection Period;
(b) The Variable Funding Percentage for such Collection Period;
(c) The total amount, if any, distributed on the Variable Funding
Certificate;
(d) The amount of such distribution attributable to Principal
Collections for the related Collection Period;
(e) The amount of such distribution attributable to Non-Principal
Collections for the related Collection Period;
(f) The Variable Funding Amount for such Distribution Date;
(g) The Variable Funding Default Amount for such Distribution Date;
and
(h) The amount of the Monthly Servicing Fee for the preceding
Collection Period.
<PAGE>
Exhibit 4.4
================================================================================
BOMBARDIER CREDIT RECEIVABLES CORPORATION
Purchaser
and
BOMBARDIER CAPITAL INC.
Seller
RECEIVABLES PURCHASE AGREEMENT
Dated as of January 1, 1994
================================================================================
<PAGE>
Table of Contents
-----------------
<TABLE>
<CAPTION>
Page
----
ARTICLE I
Definitions
<S> <C> <C>
SECTION 1.01. Definitions.............................................. 1
SECTION 1.02. Other Definitional Provisions............................ 1
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables................................ 2
SECTION 2.02. Representations and Warranties of the Seller
Relating to the Seller and the Agreement................. 4
SECTION 2.03. Representations and Warranties of the Seller
Relating to the Receivables.............................. 6
SECTION 2.04. Addition of Accounts..................................... 8
SECTION 2.05. Covenants of the Seller.................................. 9
SECTION 2.06. Removal of Accounts...................................... 11
SECTION 2.07. Removal of Ineligible Accounts........................... 12
SECTION 2.08. Sale of Ineligible Receivables........................... 13
ARTICLE III
Administration and Servicing of Receivables
SECTION 3.01. Acceptance of Appointment and Other Matters
Relating to the Servicer................................. 13
SECTION 3.02. Servicing Compensation................................... 13
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
ARTICLE IV
Rights of Certificateholders and
Allocation and Application of Collections
<S> <C> <C>
SECTION 4.01. Allocations and Applications of Collections
and Other Funds.......................................... 13
ARTICLE V
Other Matters Relating to the Seller
SECTION 5.01. Merger or Consolidation of, or Assumption,
of the Obligations of the Seller......................... 14
SECTION 5.02. Seller Indemnification of the Purchaser.................. 14
ARTICLE VI
Termination
SECTION 6.01. Termination.............................................. 14
ARTICLE VII
[Reserved]
ARTICLE VIII
Miscellaneous Provisions
SECTION 8.01. Amendment............................................. 15
SECTION 8.02. Protection of Right, Title and Interest
to Receivables........................................ 17
SECTION 8.03. Limited Recourse...................................... 17
SECTION 8.04. No Petition........................................... 18
SECTION 8.05. GOVERNING LAW......................................... 18
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 8.06. Notices............................................. 18
SECTION 8.07. Severability of Provisions.......................... 18
SECTION 8.08. Assignment.......................................... 18
SECTION 8.09. Further Assurances.................................. 18
SECTION 8.10. No Waiver; Cumulative Remedies...................... 18
SECTION 8.11. Counterparts........................................ 19
SECTION 8.11. Third-Party Beneficiaries........................... 19
SECTION 8.12. Merger and Integration.............................. 19
SECTION 8.13. Headings............................................ 19
</TABLE>
iii
<PAGE>
EXHIBITS AND SCHEDULES
Exhibit A Form of Assignment
Exhibit B Form of Opinion of Counsel
Exhibit C [RESERVED]
Exhibit D-1 Form of Reassignment of Removed Accounts pursuant to Section 2.06
Exhibit D-2 Form of Reassignment of Ineligible Accounts pursuant to
Section 2.07
Exhibit E Form of BCRC Note
Exhibit F Form of Pledge Agreement
Schedule 1 List of Accounts
iv
<PAGE>
Exhibit 4.4
RECEIVABLES PURCHASE AGREEMENT, dated as of January 1, 1994, between
BOMBARDIER CREDIT RECEIVABLES CORPORATION, a Delaware corporation, as Purchaser,
and BOMBARDIER CAPITAL INC., a Massachusetts corporation, as Seller.
W I T N E S S E T H :
WHEREAS the Seller in the ordinary course of its business (i) finances
the purchase of floorplan and wholesale inventory by dealers of certain
consumer, recreational and commercial products thereby generating certain
payment obligations and (ii) purchases from its affiliates certain payment
obligations stemming from the extension of credit by such affiliates to their
customers of certain products manufactured or distributed by such affiliates;
WHEREAS the Seller wishes to sell certain of such existing and future
payment obligations from time to time to the Purchaser; and
WHEREAS the Purchaser desires initially to sell such payment
obligations to the Bombardier Receivables Master Trust I, pursuant to a Pooling
and Servicing Agreement dated as of January 1, 1994 (as the same may from time
to time be amended, supplemented or otherwise modified, the "Pooling and
-----------
Servicing Agreement"), among the Purchaser, as depositor, the Seller, as
- -------------------
servicer, and BANKERS TRUST COMPANY, as trustee (the "Trustee").
-------
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. Definitions. Capitalized terms used herein but not
------------
otherwise defined shall have the meanings set forth in the Pooling and Servicing
Agreement. In addition, the term "Agreement" means this Receivables Purchase
---------
Agreement, as the same may from time to time be amended, supplemented or
otherwise modified.
SECTION 1.02. Other Definitional Provisions. (a) The words
------------------------------
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement; Article, Section, Schedule, and Exhibit references
are references to Sections, Schedules and Exhibits in or to this Agreement
unless otherwise specified; and the term "including" shall mean "including
without limitation".
(b) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
<PAGE>
ARTICLE II
Conveyance of Receivables
-------------------------
SECTION 2.01. Conveyance of Receivables. (a) By execution of this
-------------------------
Agreement, the Seller does hereby sell, transfer, assign, set over and otherwise
convey, without recourse (except as expressly provided herein), to the Purchaser
on the first Closing Date, in the case of Initial Accounts, and on the
applicable Addition Date, in the case of Additional Accounts, all of its right,
title and interest in, to and under (x) the Receivables in each Account and all
Collateral Security with respect thereto owned by the Seller at the close of
business on the Cut-Off Date, in the case of the Initial Accounts, and on the
applicable Additional Cut-Off Date, in the case of Additional Accounts, and all
monies due or to become due and all amounts received with respect thereto and
all proceeds thereof (including "proceeds", as defined in Section 9-306 of the
UCC as in effect in the State of Vermont, and Recoveries) and (y) any repurchase
agreement (or similar recourse arrangement) between the Seller and the
manufacturer, importer or distributor of Eligible Products (or, if applicable,
such other party with whom such arrangement has been established) in effect from
time to time with respect to any such Receivables (collectively, the "Repurchase
----------
Agreements"). Subject to Article VI hereof, as of each Business Day prior to
- ----------
the earlier of (A) an Appointment Date and (B) the Trust Termination Date, on
which Receivables are created in the Accounts (each, a "Transfer Date"), the
-------------
Seller does hereby sell, transfer, assign, set over and otherwise convey,
without recourse (except as expressly provided herein), to the Purchaser, all of
its right, title and interest in, to and under the Receivables in each Account
(other than any Receivables created in (x) any Removed Account from and after
the applicable Removal Date or (y) any Ineligible Account from and after the
applicable Removal Commencement Date) and all Collateral Security with respect
thereto owned by the Seller at the close of business on such Transfer Date and
not theretofore conveyed to the Purchaser, all monies due or to become due and
all amounts received with respect thereto and all proceeds thereof (including
"proceeds", as defined in Section 9-306 of the UCC as in effect in the State of
Vermont, and Recoveries). The parties hereto intend that this Agreement
constitute an absolute sale; provided, however, that to the extent that this
-------- -------
Agreement is deemed or recharacterized not to constitute an absolute sale, the
parties intend this transaction to create a security interest under Article 9 of
the UCC. The foregoing sale, transfer, assignment, set-over and conveyance and
any subsequent sales, transfers, assignments, set-overs and conveyances do not
constitute, and are not intended to result in, the creation or an assumption by
the Purchaser of any obligation of the Servicer, the Seller, Bombardier
Corporation or any other Person in connection with the Accounts, the Receivables
or under any agreement or instrument relating thereto, including any obligation
to any Obligors.
(b) In connection with such sales, the Seller agrees to record and
file, at its own expense, a financing statement on form UCC-1 (and continuation
statements when applicable) naming the Seller as "seller" and the Purchaser as
"buyer" thereon with respect to the Receivables now existing and hereafter
created for the sale of "chattel paper" and "accounts" (as defined in Section 9-
105 of the UCC as in effect in any state where the Seller's or the Servicer's
chief executive offices or books and records relating to the Receivables are
located) meeting the requirements of applicable state law in such manner and
2
<PAGE>
in such jurisdictions as are necessary to perfect the sale and assignment of the
Receivables and the Collateral Security to the Purchaser, and to deliver a
filestamped copy of such financing statements or other evidence of such filing
to the Purchaser on or prior to the first Closing Date, in the case of Initial
Accounts, and (if any additional filing is so necessary) the applicable Addition
Date, in the case of Additional Accounts. In addition, the Seller shall cause
to be timely filed in the appropriate filing office any UCC-1 financing
statement and continuation statement necessary to perfect any sale of
Receivables to the Purchaser. The Purchaser shall be under no obligation
whatsoever to file such financing statement, or a continuation statement to such
financing statement, or to make any other filing under the UCC in connection
with such sales to the Purchaser. The parties hereto intend that the transfers
of Receivables effected by this Agreement be sales and hereby agree to so treat
such transfers.
(c) In connection with such sales, the Seller further agrees, at its
own expense, on or prior to the first Closing Date, in the case of Initial
Accounts, and the applicable Addition Date, in the case of Additional Accounts,
(a) to cause BCI to indicate in its computer files that the Receivables created
in connection with the Accounts have been sold, and the Collateral Security
assigned, to the Purchaser pursuant to this Agreement and sold to the Trust
pursuant to the Pooling and Servicing Agreement for the benefit of the
Certificateholders and the other Beneficiaries and (b) to deliver to the
Purchaser a computer file or microfiche or written list containing a true and
complete list of all such Accounts specifying for each such Account, as of the
Cut-Off Date, in the case of Initial Accounts, and the applicable Additional
Cut-Off Date, in the case of Additional Accounts, (i) its account number, (ii)
the aggregate amount of Receivables, if any, outstanding in such Account and
(iii) the aggregate amount of Principal Receivables, if any, in such Account.
Such file or list, as supplemented from time to time to reflect Additional
Accounts and Removed Accounts, shall be marked as Schedule 1 to this Agreement
and is hereby incorporated into and made a part of this Agreement.
(d) In consideration for the sale of $486,473,108.12 of the
Receivables, together with the related Collateral Security, transferred to the
Purchaser on the first Closing Date, the Purchaser shall (i) deliver to the
Seller an amount equal to $398,344,187.50 in cash, (ii) deliver to the Seller or
to whomever the Seller directs, an amount equal to $29,188,386.49 and (iii)
deliver to the Seller a promissory note, substantially in the form of Exhibit E
hereto (the "BCRC Note"), issued by the Purchaser in favor of the Seller with an
---------
initial principal amount as of the Closing Date equal to $63,698,668.03.
(e) The purchase price (i) with respect to Eligible Receivables sold
hereunder will equal the principal amount of such Receivables plus accrued and
----
unpaid interest thereon on the related Transfer Date and (ii) with respect to
Ineligible Receivables sold hereunder will equal 100% of the net book value (as
determined by the Seller) of such Receivables as of the related Transfer Date.
The consideration paid with respect to sales hereunder subsequent to the Closing
Date may be paid, at the election of Purchaser, (a) in cash, (b) partially in
cash with the balance added to the principal amount of the BCRC Note, or (c) in
its entirety by increasing the principal amount of the BCRC Note.
3
<PAGE>
(f) As security for the BCRC Note, the Purchaser shall pledge to the
Seller, pursuant to a Pledge Agreement substantially in the form of Exhibit F
hereto (the "Pledge Agreement"), the Variable Funding Certificate to be issued
----------------
pursuant to the Pooling and Servicing Agreement and held by the Purchaser.
(g) Principal and interest payable on the BCRC Note shall be paid by
the Purchaser in accordance with the terms thereof; provided, however, that
-------- -------
payment of the BCRC Note shall be subordinated, to the extent provided therein,
to any amounts payable under the Certificates.
SECTION 2.02. Representations and Warranties of the Seller Relating
-----------------------------------------------------
to the Seller and the Agreement. The Seller hereby represents and warrants to
- -------------------------------
the Purchaser as of the first Closing Date and each Series Issuance Date that:
(a) Organization and Good Standing. The Seller is a corporation duly
------------------------------
organized and validly existing and in good standing under the law of the State
of Massachusetts and has, in all material respects, full corporate power,
authority and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Agreement.
(b) Due Qualification. The Seller is duly qualified to do business
-----------------
and, where necessary, is in good standing as a foreign corporation (or is exempt
from such requirement) and has obtained all necessary licenses and approvals in
each jurisdiction in which the conduct of its business requires such
qualification except where the failure to so qualify or be in good standing or
obtain licenses or approvals would not have a material adverse effect on its
ability to perform its obligations hereunder.
(c) Due Authorization. The execution and delivery of this Agreement
-----------------
and the consummation of the transactions provided for or contemplated by this
Agreement have been duly authorized by the Seller by all necessary corporate
action on the part of the Seller.
(d) No Conflict. The execution and delivery of this Agreement, the
-----------
performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof and thereof, will not conflict with, result
in any breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a material default under,
any indenture, contract, agreement, mortgage, deed of trust, or other
instrument to which the Seller is a party or by which it or its properties
are bound, except to the extent that such conflict, breach or default will
not have a material adverse effect on the Seller's ability to perform its
obligations hereunder or under the Pooling and Servicing Agreement.
(e) No Violation. The execution and delivery of this Agreement, the
------------
performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof and thereof applicable to the Seller, will not
conflict with or violate any material Requirements of Law applicable to the
Seller.
4
<PAGE>
(f) No Proceedings. There are no pending proceedings or, to the best
--------------
knowledge of the Seller, investigations, pending or threatened against the
Seller, before any Governmental Authority (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, (iii) seeking any determination or ruling that,
in the reasonable judgment of the Seller, would materially and adversely affect
the performance by the Seller of its obligations under this Agreement, (iv)
seeking any determination or ruling that would materially and adversely affect
the validity or enforceability of this Agreement or (v) seeking to affect
adversely the income tax attributes of the Trust under the United States Federal
or any State income or franchise tax systems.
(g) All Consents Required. All appraisals, authorizations, consents,
---------------------
orders, approvals or other actions of any Person or of any governmental body or
official required for the execution and delivery by the Seller of this
Agreement, the performance by the Seller of the transactions contemplated by
this Agreement, and the fulfillment by the Seller of the terms hereof or
thereof, have been obtained.
(h) Enforceability. This Agreement constitutes a legal, valid and
--------------
binding obligation of the Seller enforceable against the Seller in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in general
and except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity) and the availability of
equitable remedies.
(i) Record of Accounts. As of the first Closing Date, in the case of
------------------
Initial Accounts, as of the applicable Addition Date, in the case of the
Additional Accounts, as of the applicable Removal Date, in the case of Removed
Accounts, and as of the applicable Removal Termination Date, in the case of
Ineligible Accounts, Schedule 1 to this Agreement (as amended from time to time)
is an accurate and complete listing in all material respects of all the Accounts
as of the Cut-Off Date, the applicable Additional Cut-Off Date, the applicable
Removal Date or the applicable Removal Termination Date, as the case may be, and
the information contained therein with respect to the identity of such Accounts
and the Receivables existing thereunder is true and correct in all material
respects as of the Cut-Off Date, such applicable Additional Cut-Off Date, such
Removal Date or such applicable Removal Termination Date, as the case may be.
(j) Valid Transfer. This Agreement or, in the case of Additional
--------------
Accounts, the related Assignment constitutes a valid sale, transfer and
assignment to the Purchaser of all right, title and interest of the Seller in
the Receivables whether now existing or hereafter created and the Collateral
Security and the proceeds thereof (other than Insurance Proceeds). Upon the
filing of the financing statements described in Section 2.01 hereof with the
Secretary of State of the State of Vermont and, in the case of the Receivables
hereafter created and the proceeds thereof, upon the creation thereof, the
Purchaser shall have under the UCC as in effect in Vermont a valid, subsisting
and enforceable first priority perfected ownership interest in such property.
Except as otherwise provided in the Pooling and Servic-
5
<PAGE>
ing Agreement, neither the Seller nor any Person claiming through or under the
Seller has any claim to or interest in the Trust Assets.
The representations and warranties set forth in this Section 2.02
shall survive the transfer and assignment of the Receivables to the Purchaser.
Upon discovery by the Seller or the Purchaser of a breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other party.
In the event of any breach of any of the representations and
warranties set forth in this Section 2.02 and if, as a result of any such
breach, the Purchaser shall be obligated to purchase the Investors' Interest
and/or the Variable Funding Interest pursuant to Section 2.03 of the Pooling and
Servicing Agreement, the Seller shall repurchase such Investors' Interest and/or
Variable Funding Interest, as the case may be, and shall pay to the Purchaser on
the Business Day preceding the Distribution Date on which such purchase of the
Investors' Interest and/or the Variable Funding Interest, as applicable, is to
be made by the Purchaser an amount equal to the purchase price therefor as
specified in Section 2.03 of the Pooling and Servicing Agreement. The
obligation of the Seller to purchase such Investors' Interest and/or Variable
Funding Interest, as the case may be, pursuant to this Section 2.02 shall
constitute the sole remedy against the Seller respecting an event of the type
specified in the first sentence of this paragraph available to the Purchaser and
to the Investor Certificateholders and/or the Holder of the Variable Funding
Certificate (or the Trustee on behalf of such Certificateholders).
SECTION 2.03. Representations and Warranties of the Seller Relating
-----------------------------------------------------
to the Receivables.
- ------------------
(a) Representations and Warranties. The Seller hereby represents and
-------------------------------
warrants to the Purchaser that:
(i) Each Receivable and all Collateral Security existing on the
first Closing Date has been or, in the case of Additional Accounts, on
the applicable Addition Date, and on each Transfer Date, will be
conveyed to the Purchaser free and clear of any Lien.
(ii) With respect to each Receivable and all Collateral Security
existing on the first Closing Date or, in the case of Additional
Accounts, on the applicable Addition Date, and on each Transfer Date,
all consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental Authority required
to be obtained, effected or given by the Seller in connection with the
conveyance of such Receivable or Collateral Security to the Purchaser
have been duly obtained, effected or given and are in full force and
effect.
(iii) On the Cut-Off Date, the initial Closing Date and each
Series Issuance Date, each Account is an Eligible Account and, in the
case of Additional Accounts, on the applicable Additional Cut-Off Date
and Addition Date, each such Additional Account is an Eligible
Account.
6
<PAGE>
(iv) On the first Closing Date, in the case of the Initial
Accounts, and, in the case of the Additional Accounts, on the
applicable Additional Cut-Off Date, and on each Transfer Date, each
Receivable conveyed to the Purchaser on such date is an Eligible
Receivable or, if such Receivable is not an Eligible Receivable, such
Receivable is conveyed to the Purchaser in accordance with Section
2.08 hereof.
(v) Each Domestic Inventory Receivable conveyed to the Trust was,
at the time of its creation, and is and will be secured by a first
priority perfected security interest in the related Eligible Product.
(vi) With respect to each Receivable transferred to BCRC on the
first Closing Date or, in the case of Additional Accounts, on the
applicable Addition Date, and on each Transfer Date, such Receivable
constitutes either an "account" or "chattel paper" for purposes of the
UCC as in effect in the State of Vermont from time to time.
(vii) All of the Seller's right, title and interest in, to and
under any repurchase agreement (or similar recourse arrangement)
between the Seller and the manufacturer, importer or distributor of
Eligible Products (or, if applicable, such other party with whom such
arrangement has been established) in effect from time to time with
respect to (x) in the case of the Initial Accounts, the Receivables in
each Initial Account and all Collateral Security with respect thereto
owned by the Seller at the close of business on the Cut-Off Date, and
all monies due or to become due and all amounts received with respect
thereto and all proceeds thereof (including "proceeds", as defined in
Section 9-306 of the UCC as in effect in the State of Vermont, and
Recoveries) have been and, (y) in the case of Additional Accounts, the
Receivables in each Additional Account and all Collateral Security
with respect thereto owned by the Seller on the applicable Additional
Cut-Off Date, and all monies due or to become due and all amounts
received with respect thereto and all proceeds thereof (including
"proceeds", as defined in Section 9-306 of the UCC as in effect in the
State of Vermont, and Recoveries) will be conveyed to the Purchaser
free and clear of any Lien.
(viii) On the first Closing Date, all Repurchase Agreements with
respect to the Initial Accounts shall have been effectively assigned
to the Purchaser (and all required consents from the related
manufacturers, importers or distributors shall have been obtained),
except with respect to Initial Accounts the Receivables in which
aggregate not more than 1% of the Pool Balance as of the Cut-Off Date.
(b) Notice of Breach. The representations and warranties set forth
----------------
in this Section 2.03 shall survive the transfer and assignment of the
Receivables to the Purchaser. Upon discovery by the Seller or the Purchaser of
a breach of any of the representations and warranties set forth in this Section
2.03, the party discovering such breach shall give prompt written notice to the
other party.
7
<PAGE>
(c) Repurchase. In the event any representation or warranty under
----------
Section 2.03(a) is not true and correct as of the date specified therein with
respect to any Receivable or Account and the Purchaser is, as the result of any
such breach, required to accept a reassignment of such Receivable or all
Receivables in such Account pursuant to Section 2.04(c) of the Pooling and
Servicing Agreement, then, within thirty (30) days (or such longer period as may
be agreed to by the Purchaser) of the earlier to occur of the discovery of any
such event by the Seller or the Purchaser, or receipt by the Seller or the
Purchaser of written notice of any such event given by the Trustee or any
Enhancement Providers, the Seller shall, unless a Liquidation Event has
occurred, repurchase the Receivable or Receivables of which the Purchaser is
required to accept reassignment pursuant to the Pooling and Servicing Agreement
on the Business Day preceding the Determination Date on which such reassignment
is to occur.
The Seller shall purchase each such Receivable pursuant to this
Section 2.03 by making a payment to the Purchaser in immediately available funds
on the Business Day preceding the Distribution Date on which such reassignment
is to occur in an amount equal to the Purchase Price for such Receivable. Upon
payment of the Purchase Price, the Purchaser shall automatically and without
further action be deemed to sell, transfer, assign, set over and otherwise
convey to the Seller, without recourse, representation or warranty, all the
right, title and interest of the Purchaser in and to such Receivable, all
Collateral Security and all monies due or to become due with respect thereto and
all proceeds thereof. The Purchaser shall execute such documents and
instruments of transfer or assignment and take such other actions as shall
reasonably be requested by the Seller to effect the conveyance of such
Receivables pursuant to this Section. The obligation of the Seller to
repurchase any such Receivable shall constitute the sole remedy respecting the
event giving rise to such obligation available to the Purchaser and to the
Certificateholders (or the Trustee on behalf of Certificateholders).
SECTION 2.04. Addition of Accounts. (a) The Seller may from time to
--------------------
time offer to voluntarily designate additional Eligible Accounts to be included
as Accounts, subject to the conditions specified in paragraph (b) below. If any
such offer is accepted by the Purchaser, Receivables and Collateral Security
from such Additional Accounts shall be sold to the Purchaser effective on a date
(the "Addition Date") specified in a written notice provided by the Seller (or
-------------
the Servicer on its behalf) to the Purchaser and any Enhancement Providers
specifying the Additional Cut-Off Date and the Addition Date for such Additional
Accounts (the "Addition Notice") on or before the tenth Business Day but not
---------------
more than the 30th day prior to the related Addition Date (the "Notice Date").
-----------
(b) The Seller shall be permitted to convey to the Purchaser the
Receivables and all Collateral Security related thereto in any Additional
Accounts designated by the Seller as such pursuant to subsection (a) above only
upon satisfaction of each of the following conditions on or prior to the related
Addition Date:
(i) The Seller shall provide the Purchaser and any Enhancement
Providers with a timely Addition Notice;
8
<PAGE>
(ii) Such Additional Accounts shall all be Eligible Accounts and the
Rating Agency Condition shall have been satisfied;
(iii) The Seller shall have delivered to the Purchaser a duly
executed written assignment in substantially the form of Exhibit A hereto
(the "Assignment") and the computer file or microfiche or written list
----------
required to be delivered pursuant to Section 2.01 hereof;
(iv) The Seller, to the extent required by Section 4.03 of the Pooling
and Servicing Agreement, shall have delivered to the Purchaser for deposit
in the Collection Account all Collections with respect to such Additional
Accounts since the Additional Cut-Off Date;
(v) (A) No selection procedures believed by the Seller to be
adverse to the interests of the Purchaser or the Beneficiaries were used in
selecting such Additional Accounts; (B) the list of Additional Accounts
delivered pursuant to clause (iii) above is true and correct in all
material respects as of the Additional Cut-Off Date and (C) as of each of
the Notice Date and the Addition Date, neither the Seller, the Purchaser
nor the Servicer are insolvent nor will have been made insolvent by such
transfer nor are aware of any pending insolvency;
(vi) The addition of the Receivables arising in such Additional
Accounts shall not in the reasonable belief of the Seller result in the
occurrence of an Early Amortization Event; and
(vii) The Seller shall have delivered to the Purchaser and any
Enhancement Providers a certificate of a Vice President or more senior
officer confirming the items set forth in clauses (ii) through (vi) above.
(c) The Seller hereby represents and warrants as of the applicable
Addition Date as to the matters set forth in clause (v) of subsection (b) of
this Section 2.04. The representations and warranties set forth in clause (v)
of subsection (b) of this Section 2.04 shall survive the sale and assignment of
the respective Receivables and Collateral Security to the Purchaser. Upon
discovery by the Seller or the Purchaser of a breach of any of the foregoing
representations and warranties, the party discovering the breach shall give
prompt written notice to the other party and to any Enhancement Providers.
(d) At least ten (10) days prior to each Addition Date in respect of
the designation of any Additional Accounts pursuant to this Section 2.04, the
Seller shall have given written notice of such designation to the Rating
Agencies.
SECTION 2.05. Covenants of the Seller. The Seller hereby covenants
-----------------------
that:
(a) No Liens. Except for the conveyances hereunder and tax liens and
--------
certain other statutory liens (including liens in favor of the Pension Benefit
Guaranty Corporation), the Seller will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien
on, any Receivable or any Collateral Security, whether
9
<PAGE>
now existing or hereafter created, or any interest therein, and the Seller shall
defend the right, title and interest of the Purchaser and the Trust in, to and
under the Receivables and the Collateral Security, whether now existing or
hereafter created, against all claims of third parties claiming through or under
the Seller.
(b) Inventory Security Agreements and Financing Guidelines. The
------------------------------------------------------
Seller shall (i) comply with and perform its servicing obligations with respect
to the Receivables and (ii) if applicable, cause its Affiliates to comply with
and perform their respective servicing obligations with respect to the
Receivables in accordance with the Inventory Security Agreements relating to the
Accounts, to the extent applicable, and the Financing Guidelines, and otherwise
in accordance with the provisions of the Pooling and Servicing Agreement except
insofar as any failure to so comply or perform would not materially and
adversely affect the rights of the Purchaser, Trust or any of the Beneficiaries.
Subject to compliance with all Requirements of Law, the Seller or any of its
Affiliates may change the terms and provisions of the Inventory Security
Agreements or the Financing Guidelines in any respect (including the calculation
of the amount or the timing of charge-offs and the rate of the finance charge,
if any, assessed thereon) only if such change would be permitted pursuant to
Section 3.01(d) of the Pooling and Servicing Agreement.
(c) Account Allocations. In the event that the Seller is unable for
-------------------
any reason to transfer Receivables with respect to any Account to the Purchaser,
then the Seller agrees that it shall allocate, after the occurrence of such
event, payments on each Account with respect to the principal balance of such
Account first to the oldest principal balance of such Account and to have such
payments applied as Collections in accordance with the terms of the Pooling and
Servicing Agreement. The parties hereto agree that Non-Principal Receivables,
whenever created, accrued in respect of Principal Receivables which have been
conveyed to the Purchaser and by the Purchaser to the Trust shall continue to be
a part of the Trust notwithstanding any cessation of the transfer of additional
Principal Receivables to the Purchaser and Collections with respect thereto
shall continue to be allocated and paid in accordance with Article IV of the
Pooling and Servicing Agreement.
(d) Delivery of Collections. In the event that the Seller receives
-----------------------
Collections, the Seller agrees to pay the Servicer or any Successor Servicer all
payments received by the Seller in respect of the Receivables with respect to
any Account as soon as practicable after receipt thereof by the Seller, but in
no event later than two (2) Business Days after the receipt by the Seller
thereof. Receipt by the Seller's Affiliates of payments in respect of Other
Account Receivables shall not be deemed to be received by the Seller until
received by the Seller from such Affiliate.
(e) Notice of Liens. The Seller shall notify the Purchaser and the
---------------
Trustee promptly after becoming aware of any Lien on any Receivable other than
the conveyances hereunder or under the Pooling and Servicing Agreement.
(f) Compliance with Law. The Seller hereby agrees to comply in all
--------------------
material respects with all Requirements of Law applicable to the Seller in
connection with its servicing of the Receivables and the Accounts the failure to
comply with which would have a materially adverse effect on the interests of the
Beneficiaries.
10
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(g) BCRC Note. The Seller agrees not to transfer the BCRC Note to
---------
any other person while any Investor Certificates are outstanding, except that
(i) this subsection (g) shall not apply to any merger or consolidation involving
the Seller or a sale of all or substantially all of the Seller's assets and (ii)
this subsection (g) shall not apply following a Liquidation Event with respect
to any transfer of the BCRC Note as a result of any foreclosure sale, attachment
of assets or other action by any creditors of the Seller or by any trustee,
receiver or custodian with respect to it or its assets.
SECTION 2.06. Removal of Accounts. (a) On each date on which
-------------------
Accounts, including all amounts then held by the Trust or thereafter received by
the Trust with respect to such Accounts, are removed from the Trust pursuant to
Section 2.07 of the Pooling and Servicing Agreement, the Purchaser shall be
deemed to have offered to the Seller automatically and without notice to or
action by or on behalf of the Purchaser, the right to remove Accounts from the
operation of this Agreement in the manner prescribed in subsection (b) below.
(b) To accept such offer and remove Accounts, including all amounts
then held by the Trust or thereafter received by the Trust with respect to such
Accounts being removed, the Seller (or the Servicer on its behalf) shall take
the following actions and make the following determinations:
(i) not less than five (5) Business Days prior to the Removal Date,
furnish to the Purchaser, the Trustee, any Enhancement Providers and the
Rating Agencies a written notice (the "Removal Notice") specifying the date
--------------
on which removal of one or more Accounts (the "Removed Accounts") will
----------------
occur (a "Removal Date");
------------
(ii) from and after such Removal Date, cease to transfer to the
Purchaser any and all Receivables arising in such Removed Accounts;
(iii) represent and warrant that the removal of any such Account on
any Removal Date shall not, in the reasonable belief of the Seller, cause
an Early Amortization Event to occur or cause the Pool Balance to be less
than the Required Pool Balance;
(iv) represent and warrant that no selection procedures believed by
the Seller to be adverse to the interests of the Beneficiaries were
utilized in selecting the Accounts to be removed;
(v) represent and warrant that such removal will not result in a
reduction or withdrawal of the rating of any outstanding Series or Class by
the applicable Rating Agency;
(vi) on or before the related Removal Date, deliver to the Trustee
and any Enhancement Providers an Officers' Certificate confirming the items
set forth in clauses (iii) through (v) above, the Trustee may conclusively
rely on such Officers' Certificate and shall have no duty to make inquiries
with regard to the matters set forth therein and shall incur no liability
in so relying; and
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<PAGE>
(vii) on or before the fifth Business Day after the Removal Date,
furnish to the Trustee a computer file, microfiche list or other list of
the Removed Accounts that were removed on the Removal Date, specifying for
each Removed Account (x) its number, (y) as of the date of the Removal
Notice, the aggregate amount outstanding in such Removed Account and (z) as
of the Removal Date, the aggregate amount of Principal Receivables therein
and represent that such computer file, microfiche list or other list of the
Removed Accounts is true and complete in all material respects.
(c) Subject to subsection (b) above, on the Removal Date with respect
to any such Removed Account, such Removed Account shall be deemed removed by
operation of this Agreement for all purposes. After the Removal Date and upon
the written request of the Servicer, the Purchaser shall deliver to the Seller a
reassignment in substantially the form of Exhibit D-1 hereto (a "Reassignment").
------------
SECTION 2.07. Removal of Ineligible Accounts. (a) On or prior to
------------------------------
the fifth Business Day following any date on which an Account becomes an
Ineligible Account (such fifth Business Day, the "Removal Commencement Date"),
-------------------------
the Seller shall commence removal of the Receivables of such Ineligible Account
in the manner prescribed in subsection (b) of this Section 2.07.
(b) With respect to each Account that becomes an Ineligible Account,
the Seller (or the Servicer on its behalf) shall take the following actions and
make the following determinations:
(i) furnish to the Purchaser, the Trustee, the Rating Agencies, any
Agent and any Enhancement Providers a Removal Notice specifying the Removal
Commencement Date and the Ineligible Accounts to be removed;
(ii) from and after such Removal Commencement Date, cease to transfer
to the Purchaser any and all Receivables arising in such Ineligible
Accounts and allocate all Collections with respect to such Receivables as
provided in subsection (c) of this Section 2.07; and
(iii) within five (5) Business Days after the Removal Commencement Date,
amend Schedule 1 by delivering to the Trustee a computer file or microfiche
or written list containing a true and complete list of the related
Ineligible Accounts to be removed, specifying for each such Account, as of
the date immediately preceding the Removal Commencement Date, its account
number, the aggregate amount of Receivables outstanding in such Account and
the aggregate outstanding principal balance therein.
(c) Subject to subsection (b) of this Section 2.07, on each Business
Day from and after the Removal Commencement Date until the Removal Termination
Date with respect to any Ineligible Account, the Seller shall proceed to
allocate any Collections therefor in accordance with Section 2.08(b)(v) of the
Pooling and Servicing Agreement, until the principal balances of the Receivables
included in the Trust with respect to any such Account have been reduced to zero
(such date being deemed a Removal Date), upon which such Account shall be deemed
a Removed Account. After the Removal Termination Date and
12
<PAGE>
upon the written request of the Servicer, the Purchaser shall deliver to the
Seller a Reassignment in substantially the form of Exhibit D-2 hereto.
SECTION 2.08. Sale of Ineligible Receivables. The Seller shall sell
------------------------------
to the Purchaser on each Transfer Date any and all Receivables arising in any
Eligible Accounts that are Ineligible Receivables; provided, however, that on
-------- -------
the Cut-Off Date or, in the case of Receivables arising in Additional Accounts,
on the related Additional Cut-Off Date, and on the applicable Transfer Date, the
Account in which such Receivables arise is an Eligible Account.
ARTICLE III
Administration and Servicing of Receivables
-------------------------------------------
SECTION 3.01. Acceptance of Appointment and Other Matters Relating to
-------------------------------------------------------
the Servicer. (d) The Seller agrees to act as the Servicer under this
- ------------
Agreement and the Pooling and Servicing Agreement, and the Purchaser consents to
the Seller acting as Servicer. The Seller will have ultimate responsibility for
servicing, managing and making collections on the Receivables and will have the
authority to make any management decisions relating to such Receivables, to the
extent such authority is granted to the Servicer under this Agreement and the
Pooling and Servicing Agreement.
(e) The Servicer shall service and administer the Receivables in
accordance with the provisions of the Pooling and Servicing Agreement.
SECTION 3.02. Servicing Compensation. As full compensation for its
----------------------
servicing activities hereunder and under the Pooling and Servicing Agreement,
the Servicer shall be entitled to receive the Servicing Fee on each Distribution
Date. The Servicing Fee shall be paid in accordance with the terms of the
Pooling and Servicing Agreement.
ARTICLE IV
Rights of Certificateholders and
--------------------------------
Allocation and Application of Collections
-----------------------------------------
SECTION 4.01. Allocations and Applications of Collections and Other
-----------------------------------------------------
Funds. The Servicer will apply all Collections with respect to the Receivables
- -----
and all funds on deposit in the Collection Account as described in Article IV of
the Pooling and Servicing Agreement.
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<PAGE>
ARTICLE V
Other Matters Relating to the Seller
------------------------------------
SECTION 5.01. Merger or Consolidation of, or Assumption, of the
-------------------------------------------------
Obligations of the Seller. The Seller shall not consolidate with or merge into
- -------------------------
any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(f) the corporation formed by such consolidation or into which the
Seller is merged or the Person which acquires by conveyance or transfer the
properties and assets of the Seller substantially as an entirety shall be a
corporation organized and existing under the laws of the United States of
America or any State or the District of Columbia and, if the Seller is not
the surviving entity, such corporation shall assume, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, the performance of every covenant and obligation of the Seller
hereunder; and
(g) the Seller has delivered to the Purchaser and the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer comply with this Section 5.01
and that all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 5.02. Seller Indemnification of the Purchaser. Subject to
---------------------------------------
the last sentence of Sections 2.02 and 2.03, the Seller shall indemnify and hold
harmless the Purchaser, from and against any loss, liability, expense, claim,
damage or injury suffered or sustained as a result of a breach of any of its
representations, warranties, covenants or agreements set forth herein or,
including any judgment, award, settlement, reasonable attorneys' fees and other
costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided, however, that the Seller shall
-------- -------
not indemnify the Purchaser if such acts, omissions or alleged acts or omissions
constitute fraud, gross negligence or wilful misconduct by the Purchaser; and
provided, further, that the Seller shall not indemnify the Purchaser for any
- -------- -------
liabilities, cost or expense of the Purchaser with respect to any Federal, state
or local income or franchise taxes (or any interest or penalties with respect
thereto) required to be paid by the Purchaser in connection herewith to any
taxing authority. Any indemnification under this Article V shall survive the
termination of the Agreement.
ARTICLE VI
Termination
-----------
SECTION 6.01. Termination. This Agreement will terminate immediately
-----------
after the Trust terminates pursuant to the Pooling and Servicing Agreement. In
addition, upon an Appointment Date, the Purchaser shall not purchase Receivables
nor shall the Seller designate Additional Accounts. In addition, the Purchaser
shall not purchase Receivables nor
14
<PAGE>
shall the Seller designate Additional Accounts if the Seller shall become an
involuntary party to (or be made the subject of) any proceeding provided for by
any insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Seller or relating to all or
substantially all of its property (an "Involuntary Case") and such Involuntary
----------------
Case shall have continued for a period of ten (10) Business Days from and
including the day of receipt by the Seller at its principal corporate office of
notice of such Involuntary Case; provided, however, that during such ten (10)
-------- -------
Business Day period, the Purchaser shall suspend its purchase of Receivables and
shall hold all Collections of Principal Receivables that would have been
available to purchase Receivables in the Collection Account and (a) if by the
first Business Day after such ten (10) Business Day period, the Purchaser has
not obtained an order from the court having jurisdiction of such case or filing
which order approves the continuation of the sale of Receivables by the Seller
to the Purchaser and which provided that the Purchaser and any of its
transferees (including the Trustee) may rely on such order for the validity and
nonavoidance of such transfer (the "Order"), the Purchaser shall hold such
-----
Collections in the Collection Account until such time as they may be paid as
elsewhere provided herein and shall not purchase Receivables thereafter or
designated Additional Accounts for transfer to the Purchaser, or (b) if by such
first Business Day, the Purchaser has obtained such Order, the Seller may
continue selling Receivables, and the Purchaser may continue purchasing
Receivables, pursuant to the terms hereof, as modified by the immediately
succeeding sentence. During the period after the ten (10) Business Day period
described above and before the end of the 60-day period described below, the
purchase price of the Receivables transferred during such period,
notwithstanding anything in this Agreement to the contrary, shall be paid to the
Seller by the Purchaser in cash not later than the same Business Day of any
sale of Receivables. During such period, Receivables will be considered
transferred to the Purchaser only to the extent that the purchase price therefor
has been paid in cash on the same Business Day. If an Order is obtained but
subsequently is reversed or rescinded or expires, the Seller shall immediately
cease selling Receivables to the Purchaser and the Purchaser shall immediately
cease buying Receivables. The Seller shall give prompt written notice to each
of the Purchaser and the Trustee immediately upon becoming a party to an
Involuntary Case. If by the first Business Day after the 60-day period after
such involuntary filing, such Involuntary Case has not been dismissed, the
Purchaser shall not purchase thereafter Receivables or designated Additional
Accounts for transfer to the Trustee.
ARTICLE VII
[Reserved]
ARTICLE VIII
Miscellaneous Provisions
------------------------
SECTION 8.01. Amendment. (a) This Agreement may be amended from
---------
time to time by the Seller and the Purchaser; provided, however, that such
-------- -------
action shall not adversely affect in any material respect the interests of any
Investor Certificateholder or the
15
<PAGE>
Holder of the Variable Funding Certificate; provided, however, that any
-------- -------
amendment to this Agreement in order to conform to the description of the
Certificates and the Receivables and the other matters set forth in the
Registration Statement filed by the Purchaser with the Securities and Exchange
Commission relating to the initial Investor Certificates, as such Registration
Statement is in effect on the first Closing Date, shall not be deemed to
adversely affect the interests of any Certificateholder or the Holder of the
Variable Funding Certificate.
(b) This Agreement may also be amended from time to time by the
Purchaser and Seller with the consent of the Holders of Investor Certificates
evidencing not less than a majority of the aggregate unpaid principal amount of
the Investor Certificates of all materially adversely affected Series, and with
the consent of the Holder of the Variable Funding Certificate, if adversely
affected by such amendment, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Seller; provided, however, that no
-------- -------
such amendment shall (i) reduce in any manner the amount of or delay the timing
of any distributions to be made to Certificateholders or the Holder of the
Variable Funding Certificate or deposits of amounts to be so distributed or the
amount available under any Enhancement without the consent of each affected
Certificateholder or the Holder of the Variable Funding Certificate, as
applicable, (ii) change the definition of or the manner of calculating the
interest of any Certificateholders or the Holder of the Variable Funding
Certificate without the consent of each affected Certificateholder or the Holder
of the Variable Funding Certificate, as applicable, (iii) adversely affect the
rating of any Series or Class by any Rating Agency without the consent of the
Holders of Investor Certificates of such Series or Class evidencing not less
than 66-2/3% of the aggregate unpaid principal amount of the Investor
Certificates of such Series or Class or (iv) reduce any aforesaid percentage
required to consent to any such amendment without the consent of each
Certificateholder and/or the Holder or the Variable Funding Certificate, as
appropriate. Any amendment to be effected pursuant to this subsection (b) shall
be deemed to materially adversely affect all outstanding Series, other than any
Series with respect to which such action shall not, as evidenced by an Opinion
of Counsel for the Seller, addressed and delivered to the Trustee, adversely
affect in any material respect the interests of any Certificateholder of such
Series. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's rights, duties or immunities under this
Agreement or otherwise.
(c) Promptly after the execution of any such amendment or consent
(other than an amendment pursuant to subsection (a) above), the Seller shall
furnish notification of the substance of such amendment to each
Certificateholder, each Enhancement Provider, each Agent and each Rating Agency.
(d) It shall not be necessary for the consent of Certificateholders
under this Section 8.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable requirements as the Trustee may prescribe.
16
<PAGE>
(e) Notwithstanding anything in this Section 8.01 to the contrary, no
amendment may be made to this Agreement which would adversely affect in any
material respect the interests of any Enhancement Provider without the consent
of such Enhancement Provider.
SECTION 8.02. Protection of Right, Title and Interest to Receivables.
------------------------------------------------------
(a) The Seller shall cause this Agreement, all amendments hereto and/or all
financing statements and continuation statements and any other necessary
documents covering the Purchaser's right, title and interest to the Receivables
and Collateral Security relating thereto to be promptly recorded, registered and
filed, and at all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Purchaser hereunder. The Seller
shall deliver to the Purchaser file-stamped copies of, or filing receipts for,
any document recorded, registered or filed as provided above, as soon as
available following such recording, registration or filing. The Purchaser shall
cooperate fully with the Seller in connection with the obligations set forth
above and will execute any and all documents reasonably required to fulfill the
intent of this Section 8.02(a).
(b) Prior to the Seller making any change in its name, identity or
corporate structure which would make any financing statement or continuation
statement filed in accordance with subsection (a) above seriously misleading
within the meaning of Section 9-402(7) of the UCC as in effect in the State of
Vermont, the Seller shall give the Purchaser and any Agent notice of any such
change and shall prior to the effectiveness of any such change file such
financing statements or amendments as may be necessary to continue the
perfection of the Purchaser's security interest in the Receivables and the
proceeds thereof.
(c) The Seller will give the Purchaser prompt written notice of any
relocation of any office at which it keeps records concerning the Receivables or
of its principal executive office and whether, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement and shall file such financing statements or amendments as
may be necessary to perfect or to continue the perfection of the Purchaser's
security interest in the Receivables and the proceeds thereof. The Seller will
at all times maintain its principal executive office within the United States of
America.
(d) The Seller will deliver to the Purchaser upon the execution and
delivery of each amendment of this Agreement, an Opinion of Counsel to the
effect specified in Exhibit B hereto addressed and delivered to the Trustee.
SECTION 8.03. Limited Recourse. Notwithstanding anything to the
----------------
contrary contained herein, the obligations of the Purchaser hereunder shall not
be recourse to the Purchaser (or any person or organization acting on behalf of
the Purchaser or any affiliate, officer or director of the Purchaser), other
than to any assets of the Purchaser not pledged to third parties or otherwise
encumbered in a manner permitted by the Purchaser's Certificate of
Incorporation; provided, however, that any payment by the Purchaser made in
-------- -------
accordance with this Section 8.03 shall be made only after payment in full of
any amounts that the Purchaser is obligated to deposit in the Collection Account
pursuant to the Pooling and
17
<PAGE>
Servicing Agreement; and provided, further, that the Certificateholders shall be
-------- -------
entitled to the benefits of the subordination of the Collections allocable to
the Retained Interest to the extent provided in the applicable Supplements.
SECTION 8.04. No Petition. The Seller hereby covenants and agrees
-----------
that it will not at any time institute against the Purchaser any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law.
SECTION 8.05. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 8.06. Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to the parties at such addresses specified in the Pooling
and Servicing Agreement.
SECTION 8.07. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders.
SECTION 8.08. Assignment. Notwithstanding anything to the contrary
----------
contained herein, this Agreement may not be assigned by the Seller without the
prior consent of the Purchaser and the Trustee. The Purchaser may assign its
rights, remedies, powers and privileges under this Agreement to the Trust
pursuant to the Pooling and Servicing Agreement.
SECTION 8.09. Further Assurances. Each of the Seller and the
------------------
Purchaser agrees to do and perform, from time to time, any and all acts and to
execute any and all further instruments required or reasonably requested by the
other more fully to effect the purposes of this Agreement, including the
execution of any financing statements or continuation statements relating to the
Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
SECTION 8.10. No Waiver; Cumulative Remedies. No failure to exercise
------------------------------
and no delay in exercising, on the part of the Purchaser or the Seller, as the
case may be, any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
18
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SECTION 8.11. Counterparts. This Agreement may be executed in two or
------------
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
SECTION 8.11. Third-Party Beneficiaries. This Agreement will inure
-------------------------
to the benefit of and be binding upon the parties hereto, the Certificateholders
and the other Beneficiaries and their respective successors and permitted
assigns. Except as otherwise provided in this Agreement, no other Person will
have any right or obligation hereunder.
SECTION 8.12. Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
SECTION 8.13. Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
19
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Receivables Purchase Agreement to be duly executed by their respective officers
as of the day and year first above written.
BOMBARDIER CREDIT RECEIVABLES CORPORATION, Purchaser
By: /s/ William P. Brady
--------------------------------------
Name: William P. Brady
---------------------------------
Title: Vice President
---------------------------------
By: /s/ Andrew Baranowsky
--------------------------------------
Name: Andrew Baranowsky
---------------------------------
Title: Assistant Secretary
---------------------------------
BOMBARDIER CAPITAL INC., Seller
By: /s/ William P. Brady
--------------------------------------
Name: William P. Brady
---------------------------------
Title: Vice President
---------------------------------
By: /s/ Andrew Baranowsky
--------------------------------------
Name: Andrew Baranowsky
---------------------------------
Title: Assistant Treasurer
---------------------------------
20
<PAGE>
EXHIBIT A TO RPA
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
(As required by Section 2.04
of the Receivables Purchase Agreement)
ASSIGNMENT No. _____ OF RECEIVABLES IN ADDITIONAL ACCOUNTS dated as of
_____________, ______, between BOMBARDIER CREDIT RECEIVABLES CORPORATION, as
purchaser (the "Purchaser"), and BOMBARDIER CAPITAL INC., as seller (the
---------
"Seller"), pursuant to the Receivables Purchase Agreement referred to below.
------
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS the Seller and the Purchaser are parties to a Receivables
Purchase Agreement dated as of January 1, 1994 (as amended or supplemented, the
"Receivables Purchase Agreement");
------------------------------
WHEREAS, pursuant to the Receivables Purchase Agreement, the Seller
wishes to designate Additional Accounts to be included as Accounts and to convey
the Receivables and related Collateral Security of such Additional Accounts,
whether now existing or hereafter created, to the Purchaser for conveyance to
the Trust (as each such term is defined in the Receivables Purchase Agreement);
and
WHEREAS the Purchaser is willing to accept such designation and
conveyance subject to the terms and conditions hereof;
NOW, THEREFORE, the Seller and Purchaser hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have the
-------------
meanings ascribed to them in the Receivables Purchase Agreement unless otherwise
defined herein.
"Addition Date" shall mean, with respect to the Additional Accounts
-------------
designated hereby, __________, 19__.
2. Designation of Additional Accounts. The Seller hereby delivers
----------------------------------
herewith a computer file or microfiche or written list containing a true and
complete list of all such Additional Accounts specifying for each such Account,
as of the Additional Cut-Off Date, its account number, the aggregate amount of
Receivables, if any, outstanding in such Account
A-1
<PAGE>
and the aggregate amount of Principal Receivables, if any, in such Account.
Such file or list shall, as of the date of this Assignment, supplement Schedule
1 to the Receivables Purchase Agreement.
3. Conveyance of Receivables. (a) The Seller does hereby sell,
-------------------------
transfer, assign, set over and otherwise convey, without recourse (except as
expressly provided in the Receivables Purchase Agreement), to the Purchaser, on
the Addition Date of all its right, title and interest in, to and under the
Receivables in such Additional Accounts and all Collateral Security with respect
thereto, owned by the Seller and existing at the close of business on the
Additional Cut-Off Date and thereafter created from time to time, all monies due
or to become due and all amounts received with respect thereto and all proceeds
(including "proceeds" as defined in Section 9-306 of the UCC as in effect in the
State of Vermont and Recoveries) thereof. The parties hereto intend that this
Assignment constitute an absolute sale; provided, however, that to the extent
-------- -------
that this Assignment is deemed or recharacterized not to constitute an absolute
sale, the parties intend this transaction to create a security interest under
Article 9 of the UCC. The foregoing sale, transfer, assignment, set-over and
conveyance does not constitute and is not intended to result in the creation or
an assumption by the Purchaser of any obligation of the Servicer, the Seller,
Bombardier Corporation or any other Person in connection with the Accounts, the
Receivables or under any agreement or instrument relating thereto, including any
obligation to any Dealers.
(b) In connection with such sale, the Seller agrees to record and
file, at its own expense, a financing statement on form UCC-1 (and continuation
statements when applicable) with respect to the Receivables now existing and
hereafter created for the sale of "chattel paper" and "accounts" (as defined in
Section 9-105 of the UCC as in effect in any state where the Seller's or the
Servicer's chief executive offices or books and records relating to the
Receivables are located) meeting the requirements of applicable state law in
such manner and in such jurisdictions as are necessary to perfect the sale and
assignment of the Receivables and the Collateral Security to the Purchaser, and
to deliver a file-stamped copy of such financing statements or other evidence of
such filing to the Purchaser on or prior to the Addition Date. In addition, the
Seller shall cause to be timely filed in the appropriate filing office any UCC-1
financing statement and continuation statement necessary to perfect any sale of
Receivables to the Purchaser. Unless requested to do so by the Seller, the
Purchaser shall be under no obligation whatsoever to file such financing
statement, or a continuation statement to such financing statement, or to make
any other filing under the UCC in connection with such sale to the Purchaser.
The parties hereto intend that the sales of Receivables effected by this
Agreement be sales and shall so treat such sales.
(c) In connection with such sale, the Seller further agrees, at its
own expense, on or prior to the Addition Date, to indicate in its computer files
that the Receivables created in connection with the Additional Accounts
designated hereby have been sold and the Collateral Security assigned to the
Purchaser pursuant to this Assignment and sold to the Trust pursuant to the
Pooling and Servicing Agreement for the benefit of the Certificateholders and
the other Beneficiaries.
A-2
<PAGE>
4. Acceptance by Purchaser. Subject to the satisfaction of the
-----------------------
conditions set forth in Section 6 of this Assignment, the Purchaser hereby
acknowledges its acceptance of all right, title and interest to the property,
now existing and hereafter created, conveyed to the Purchaser pursuant to
Section 3(a) of this Assignment. The Purchaser further acknowledges that, prior
to or simultaneously with the execution and delivery of this Assignment, the
Seller delivered to the Purchaser the computer file or microfiche or written
list relating to the Additional Accounts described in Section 2 of this
Assignment.
5. Representations and Warranties of the Seller. The Seller hereby
--------------------------------------------
represents and warrants to the Purchaser, on behalf of the Trust, as of the date
of this Assignment and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Assignment constitutes
-----------------------------------
a legal, valid and binding obligation of the Seller, enforceable against
the Seller in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting creditors'
rights in general and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in
equity) and the availability of equitable remedies;
(b) Organization and Good Standing. The Seller is a corporation duly
------------------------------
organized and validly existing and in good standing under the law of the
State of Massachusetts and has, in all material respects, full corporate
power, authority and legal right to own its properties and conduct its
business as such properties are presently owned and such business is
presently conducted, and to execute, deliver and perform its obligations
under this Assignment.
(c) Due Qualification. The Seller is duly qualified to do business
-----------------
and, where necessary, is in good standing as a foreign corporation (or is
exempt from such requirement) and has obtained all necessary licenses and
approvals in each jurisdiction in which the conduct of its business
requires such qualification except where the failure to so qualify or
obtain licenses or approvals would not have a material adverse effect on
its ability to perform its obligations hereunder;
(d) Eligible Accounts. Each Additional Account designated hereby is
-----------------
an Eligible Account;
(e) Selection Procedures. No selection procedures believed by the
--------------------
Seller to be adverse to the interests of the Beneficiaries were utilized in
selecting the Additional Accounts designated hereby;
(f) Insolvency. As of the Notice Date and the Addition Date, the
----------
Seller is not insolvent nor, after giving effect to the conveyance set
forth in Section 3 of this
A-3
<PAGE>
Assignment, will it have been made insolvent, nor is it aware of any
pending insolvency;
(g) Valid Transfer. This Assignment constitutes a valid sale,
--------------
transfer and assignment to the Purchaser of all right, title and interest
of the Seller in the Receivables whether now existing or hereafter created
in the Accounts and the Collateral Security and the proceeds thereof (other
than Insurance Proceeds) and upon the filing of the financing statements
described in Section 3 of this Assignment with the Secretary of State of
the State of Vermont and, in the case of the Receivables hereafter created
and the proceeds thereof, upon the creation thereof, the Purchaser shall
have a valid, subsisting and enforceable first priority perfected ownership
interest in such property, except for Liens permitted under Section 2.06(a)
of the Pooling and Servicing Agreement and tax and certain other statutory
liens (including liens in favor of the Pension Benefit Guaranty
Corporation);
(h) Due Authorization. The execution and delivery of this Assign-
-----------------
ment and the consummation of the transactions provided for or contemplated
by this Assignment have been duly authorized by the Seller by all necessary
corporation action on the part of the Seller.
(i) No Conflict. The execution and delivery of this Assignment, the
-----------
performance of the transactions contemplated by this Assignment and the
fulfillment of the terms hereof, will not conflict with, result in any
breach of any of the material terms and provisions of, or constitute (with
or without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust, or other
instrument to which the Seller is a party or by which it or its properties
are bound except to the extent that such conflict, breach or default will
not have a material adverse effect on the Seller's ability to perform its
obligations hereunder;
(j) No Violation. The execution and delivery of this Assignment by
------------
the Seller, the performance of the transactions contemplated by this
Assignment and the fulfillment of the terms hereof will not conflict with
or violate any material Requirements of Law applicable to the Seller;
(k) No Proceedings. There are no pending proceedings or, to the
--------------
best knowledge of the Seller, investigations pending or threatened against
the Seller before any Governmental Authority (l) asserting the invalidity
of this Assignment, (m) seeking to prevent the consummation of any of the
transactions contemplated by this Assignment, (n) seeking any determination
or ruling that, in the reasonable judgment of the Seller, would materially
and adversely affect the performance by the Seller of its obligations under
this Assignment, (o) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Assignment or (p) seeking to affect adversely the income tax attributes of
the Trust under the United States Federal or any State income, single
business or franchise tax systems;
A-4
<PAGE>
(l) Record of Accounts. As of the Addition Date, Schedule 1 to this
------------------
Assignment is an accurate and complete listing in all material respects of
all the Additional Accounts as of the Additional Cut-Off Date being
conveyed pursuant to this Agreement and the information contained therein
with respect to the identity of such Accounts and the Receivables existing
thereunder is true and correct in all material respects as of the
Additional Cut-Off Date;
(m) No Liens. Each Receivable and all Collateral Security existing
--------
on the Addition Date has been conveyed to the Purchaser free and clear of
any Lien, except for Liens permitted under Section 2.06(c) of the Pooling
and Servicing Agreement and tax and certain other statutory liens
(including liens in favor of the Pension Benefit Guaranty Corporation);
(n) All Consents Required. With respect to each Receivable and all
---------------------
Collateral Security existing on the Addition Date, all consents, licenses,
approvals or authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by the
Seller for the conveyance of such Receivable or Collateral Security to the
Trust, the execution and delivery of this Assignment and the performance of
the transactions contemplated hereby have been duly obtained, effected or
given and are in full force and effect; and
(o) Eligible Receivables. On the Additional Cut-Off Date each
--------------------
Receivable conveyed to the Trust as of such date is an Eligible Receivable
or, if such Receivable is not an Eligible Receivable, such Receivable is
conveyed to the Purchaser in accordance with Section 2.08 of the
Receivables Purchase Agreement.
6. Conditions Precedent. The acceptance of the Trustee set forth
--------------------
in Section 4 of this Assignment is subject to the satisfaction, on or prior to
the Addition Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Seller in Section 5 of this Assignment shall be true
and correct as of the date of this Assignment and as of the Addition Date;
(b) Agreement. Each of the conditions set forth in Section 2.04(b)
---------
of the Receivables Purchase Agreement applicable to the designation of the
Additional Accounts to be designated hereby shall have been satisfied; and
(c) Additional Information. The Seller shall have delivered to the
----------------------
Purchaser such information as was reasonably requested by the Purchaser to
satisfy itself as to the accuracy of the representation and warranty set
forth in Section 5(d) of this Assignment.
A-5
<PAGE>
(d) Officers' Certificate. The Seller shall have delivered to the
---------------------
Purchaser an Officers' Certificate, dated the date of this Assignment, in
which an officer of the Seller shall state that the representations and
warranties of the Seller under Section 5 hereof are true and correct. The
Purchaser may conclusively rely on such Officers' Certificate, shall have
no duty to make inquiries with regard to the matters set forth therein and
shall incur no liability in so relying.
7. Ratification of Agreement. As supplemented by this Assignment,
-------------------------
the Receivables Purchase Agreement is in all respects ratified and confirmed and
the Receivables Purchase Agreement as so supplemented by this Assignment shall
be read, taken and construed as one and the same instrument.
8. Counterparts. This Assignment may be executed in two or more
------------
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.
9. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE
-------------
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF
LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-6
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Assignment to be duly executed and delivered by their respective duly authorized
officers as of the day and the year first above written.
BOMBARDIER CREDIT RECEIVABLES CORPORATION, as Purchaser
By:
__________________________________
Name:
__________________________
Title:
__________________________
By:
__________________________________
Name:
__________________________
Title:
__________________________
BOMBARDIER CAPITAL INC., as Seller
By:
__________________________________
Name:
___________________________
Title:
___________________________
By:
__________________________________
Name:
___________________________
Title:
___________________________
A-7
<PAGE>
EXHIBIT B TO RPA
FORM OF OPINION OF COUNSEL
(As required by Section 8.02(d)(i)
----------------------------------
of the Receivables Purchase Agreement)
--------------------------------------
(a) The Amendment to the Receivables Purchase Agreement, attached
hereto as Schedule 1 (the "Amendment"), has been duly authorized, executed and
---------
delivered by the Seller and constitutes the legal, valid and binding agreement
of the Seller, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
from time to time in effect. The enforceability of the Seller's obligations is
also subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(b) The Amendment has been entered into in accordance with the terms
and provisions of Section 8.01 of the Receivables Purchase Agreement.
<PAGE>
EXHIBIT C TO RPA
[Reserved]
C-1
<PAGE>
EXHIBIT D-1 TO RPA
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(As required by Section 2.06 of the Receivables
Purchase Agreement referred to below)
REASSIGNMENT NO. ______ OF RECEIVABLES,
dated as of ______________, ____,
by and between BOMBARDIER CREDIT RECEIVABLES CORPORATION,
as purchaser (the "Purchaser"), and
---------
BOMBARDIER CAPITAL INC., as seller (the "Seller"),
------
pursuant to the Receivables Purchase Agreement
referred to below.
WITNESSETH
WHEREAS the Seller and the Purchaser are parties to the Receivables
Purchase Agreement dated as of January 1, 1994 (as amended or supplemented, the
"Receivable Purchase Agreement");
-----------------------------
WHEREAS, pursuant to Section 2.06 of the Receivables Purchase
Agreement, the Seller wishes to remove all Receivables from certain Accounts and
the Collateral Security in respect thereof (the "Removed Accounts") and to cause
----------------
the Purchaser to reconvey the Receivables of such Removed Accounts and such
Collateral Security, whether now existing or hereafter created, and all amounts
currently held by the Purchaser or thereafter received by the Trust in respect
of such Removed Accounts, from the Purchaser to the Seller (as each such term is
defined in the Receivables Purchase Agreement); and
WHEREAS the Purchaser is willing to accept such removal and to
reconvey the Receivables in the Removed Accounts, such Collateral Security and
any related amounts held or received by the Trust subject to the terms and
conditions hereof.
NOW, THEREFORE, the Seller and the Purchaser hereby agree as follows:
1. Defined Terms. All terms defined in the Agreement and used
-------------
herein shall have such defined meanings when used herein, unless otherwise
defined herein.
"Removal Date" shall mean, with respect to the Removed Accounts
------------
designated hereby, ___________________, 199__.
2. Notice of Removed Accounts. (a) Not less than five (5) Business
--------------------------
Days prior to the Removal Date, the Seller shall furnish to the Purchaser, any
Agent, any
D-1-1
<PAGE>
Enhancement Providers and the Rating Agencies a written notice specifying the
date on which removal of the Receivables of one or more Accounts will occur,
such date being a Removal Date.
(b) On or before the fifth business day after the Removal Date, the
Seller shall furnish to the Trustee a computer file, microfiche list or other
list of the Removed Accounts that were removed on the Removal Date, specifying
for each Removed Account (x) its number, (y) as of the date of the Removal
Notice, the aggregate amount outstanding in such Removed Account and (z) as of
the Removal Date, the aggregate amount of Principal Receivables therein and
represent that such computer file, microfiche list or other list of the Removed
Accounts is true and complete in all material respects. Such file or list shall
be marked as Schedule 1 to this Reassignment and shall be incorporated into and
made a part of this Reassignment as of the Removal Date and shall amend Schedule
1 to the Receivables Purchase Agreement.
3. Conveyance of Receivables and Accounts. (a) The Purchaser does
--------------------------------------
hereby transfer, assign, set over and otherwise convey to the Seller, without
recourse, representation or warranty on and after the Removal Date, all right,
title and interest of the Trust in, to and under all Receivables now existing at
the close of business on the Removal Date and thereafter created from time to
time until the termination of the Trust in Removed Accounts designated hereby,
all Collateral Security in respect thereof, all monies due or to become due and
all amounts received with respect thereto (including all Non-Principal
Receivables) and all proceeds (as defined in Section 9-306 of the UCC as in
effect in the State of Vermont) and Recoveries thereof relating thereto.
(b) If requested by the Seller, in connection with such transfer,
the Purchaser agrees to execute and deliver to the Seller on or prior to the
date of this Reassignment, a termination statement with respect to the
Receivables existing at the close of business on the Removal Date and thereafter
created from time to time and Collateral Security in respect thereof in the
Removed Accounts reassigned hereby (which may be a single termination statement
with respect to all such Receivables and Collateral Security) evidencing the
release by the Trust of its lien on the Receivables in the Removed Accounts and
the Collateral Security with respect thereto, and meeting the requirements of
applicable state law, in such manner and such jurisdictions as are necessary to
remove such lien.
4. Acceptance by Purchaser. The Purchaser hereby acknowledges that,
-----------------------
prior to or simultaneously with the execution and delivery of this Reassignment,
the Seller delivered to the Purchaser the computer file or such microfiche or
written list described in Section 2(b) of this Reassignment.
5. Representations and Warranties of the Seller. The Seller hereby
--------------------------------------------
represents and warrants to the Purchaser as of the date of this Reassignment and
as of the Removal Date:
D-1-2
<PAGE>
(a) Legal, Valid and Binding Obligation. This Reassignment
-----------------------------------
constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights generally and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity) and the availability of equitable
remedies;
(b) No Early Amortization Event. The removal of the Accounts hereby
---------------------------
removed shall not, in the reasonable belief of the Seller, cause an Early
Amortization Event to occur or cause the Pool Balance to be less than the
Required Pool Balance;
(c) Selection Procedures. If this Removal Notice relates to the
--------------------
optional removal of Accounts from the Trust, no selection procedures
believed by the Seller to be adverse to the interests of the Beneficiaries
were utilized in selecting the Accounts to be removed;
(d) True and Complete List. If this Removal Notice relates to the
----------------------
optional removal of Accounts from the Trust, the list of Removed Accounts
described in Section 2(b) of this Assignment is, as of the Removal Date,
true and complete in all material respects;
6. Condition Precedent. In addition to the conditions precedent set
-------------------
forth in Section 2.06 of the Receivables Purchase Agreement, the obligation of
the Purchaser to execute and deliver this Reassignment is subject to the Seller
having delivered on or prior to the Removal Date to the Purchaser, any Agent,
and any Enhancement Providers an Officers' Certificate certifying that (a) as of
the Removal Date, all requirements set forth in Section 2.07 of the Agreement
for removing such Accounts and reconveying the Receivables of such Removed
Accounts and the Collateral Security with respect thereto, whether existing at
the close of business on the Removal Date or thereafter created from time to
time until the termination of the Trust, have been satisfied, and (b) each of
the representations and warranties made by the Seller in Section 5 hereof is
true and correct as of the date of this Reassignment and as of the Removal Date.
The Purchaser may conclusively rely on such Officers' Certificate, shall have no
duty to make inquiries with regard to the matters set forth therein and shall
incur no liability in so relying.
7. Ratification of Agreement. As supplemented by this Reassignment,
-------------------------
the Receivables Purchase Agreement is in all respects ratified and confirmed and
the Receivables Purchase Agreement as so supplemented by this Reassignment shall
be read, taken and construed as one and the same instrument.
8. Counterparts. This Reassignment may be executed in two or more
------------
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
D-1-3
<PAGE>
9. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the undersigned have caused this Reassignment to
be duly executed and delivered by their respective duly authorized officers on
the day and year first above written.
BOMBARDIER CREDIT RECEIVABLES CORPORATION, Purchaser
By:
__________________________________
Name:
___________________________
Title:
___________________________
By:
__________________________________
Name:
___________________________
Title:
___________________________
BOMBARDIER CAPITAL INC., Seller
By:
__________________________________
Name:
___________________________
Title:
___________________________
By:
__________________________________
Name:
__________________________
Title:
__________________________
D-1-4
<PAGE>
EXHIBIT D-2 TO RPA
FORM OF REASSIGNMENT OF RECEIVABLES IN INELIGIBLE ACCOUNTS
(As required by Section 2.07 of the Receivables
Purchase Agreement referred to below)
REASSIGNMENT NO. ______ OF RECEIVABLES,
dated as of ______________, ____, by and between
BOMBARDIER CREDIT RECEIVABLES CORPORATION,
as purchaser (the "Purchaser"), and
---------
BOMBARDIER CAPITAL INC., as seller (the "Seller"),
------
pursuant to the Receivables Purchase Agreement
referred to below.
WITNESSETH
WHEREAS the Seller and the Purchaser are parties to the Receivables
Purchase Agreement dated as of January 1, 1994 (as amended or supplemented, the
"Receivable Purchase Agreement");
-----------------------------
WHEREAS, pursuant to the Receivables Purchase Agreement, the Seller is
required to remove all Receivables from Ineligible Accounts and the Collateral
Security in respect thereof and to cause the Purchaser to reconvey the
Receivables of such Ineligible Accounts and such Collateral Security, whether
now existing or hereafter created, and all amounts currently held by the
Purchaser or thereafter received by the Trust in respect of such Ineligible
Accounts, from the Purchaser to the Seller (as each such term is defined in the
Receivables Purchase Agreement); and
WHEREAS the Purchaser is willing to accept such removal and to
reconvey the Receivables in the Ineligible Accounts, such Collateral Security
and any related amounts held or received by the Trust subject to the terms and
conditions hereof.
NOW, THEREFORE, the Seller and the Purchaser hereby agree as follows:
1. Defined Terms. All terms defined in the Agreement and used
-------------
herein shall have such defined meanings when used herein, unless otherwise
defined herein.
2. Notice of Ineligible Accounts. (a) Not less than two (2)
-----------------------------
Business Days prior to the Removal Commencement Date, the Seller shall furnish
to the Purchaser, any Agent, any Enhancement Providers and the Rating Agencies a
written notice specifying the
D-2-1
<PAGE>
date on which removal of the Receivables of one or more Accounts will commence,
such date being a Removal Commencement Date.
(b) On or before the fifth business day after the Removal
Commencement Date, the Seller shall furnish to the Trustee a computer file,
microfiche list or other list of the Ineligible Accounts the removal of which
commenced on the Removal Commencement Date, specifying for each Ineligible
Account as of the date of the Removal Notice its number, the aggregate amount
outstanding in such Ineligible Account and the aggregate amount of Principal
Receivables therein and represent that such computer file, microfiche list or
other list of the Ineligible Accounts is true and complete in all material
respects. Such file or list shall be marked as Schedule 1 to this Reassignment
and shall be incorporated into and made a part of this Reassignment as of the
Removal Commencement Date and shall amend Schedule 1 to the Receivables Purchase
Agreement.
3. Conveyance of Receivables and Accounts. (a) The Purchaser does
--------------------------------------
hereby transfer, assign, set over and otherwise convey to the Seller, without
recourse, representation or warranty on and after the Removal Commencement Date,
all right, title and interest of the Trust in, to and under (x) all Receivables
created from time to time on and after the Removal Commencement Date until the
Removal Termination Date in the Ineligible Accounts designated hereby and all
monies due or to become due and all amounts received with respect thereto
(including all Non-Principal Receivables) and all proceeds thereof (as defined
in Section 9-306 of the UCC as in effect in the State of Vermont) and Recoveries
thereof relating thereto and (y) on the Removal Termination Date, all Collateral
Security in connection with such Ineligible Accounts and all proceeds thereof
(as defined in Section 9-306 of the UCC as in effect in the State of Vermont and
Recoveries) relating thereto.
(b) If requested by the Seller, in connection with such transfer,
the Purchaser agrees to execute and deliver to the Seller on or prior to the
date of this Reassignment, a termination statement with respect to the
Receivables created from time to time on and after the Removal Commencement Date
until the Removal Termination Date in respect thereof in the Ineligible Accounts
reassigned hereby (which may be a single termination statement with respect to
all such Receivables and Collateral Security) evidencing the release by the
Seller of its lien on such Receivables in the Ineligible Accounts, and meeting
the requirements of applicable state law, in such manner and such jurisdictions
as are necessary to remove such lien.
4. Acceptance by Purchaser. The Purchaser hereby acknowledges that,
-----------------------
prior to or simultaneously with the execution and delivery of this Reassignment,
the Seller delivered to the Purchaser the computer file or such microfiche or
written list described in Section 2(b) of this Reassignment.
5. Representations and Warranties of the Seller. The Seller hereby
--------------------------------------------
represents and warrants to the Purchaser as of the date of this Reassignment and
as of the Removal Commencement Date:
D-2-2
<PAGE>
(a) Legal, Valid and Binding Obligation. This Reassignment
-----------------------------------
constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights generally and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity) and the availability of equitable
remedies;
(b) No Early Amortization Event. The removal of the Accounts hereby
---------------------------
removed shall not, in the reasonable belief of the Seller, cause an Early
Amortization Event to occur or cause the Pool Balance to be less than the
Required Pool Balance;; and
(c) True and Complete List. The list of Ineligible Accounts
----------------------
described in Section 2(b) of this Assignment is, as of the Removal
Commencement Date, true and complete in all material respects.
6. Condition Precedent. In addition to the conditions precedent set
-------------------
forth in Section 2.07 of the Receivables Purchase Agreement, the obligation of
the Purchaser to execute and deliver this Reassignment is subject to the Seller
having delivered on or prior to the Removal Commencement Date to the Purchaser,
any Agent, and any Enhancement Providers an Officers' Certificate certifying
that (a) as of the Removal Commencement Date, all requirements set forth in
Section 2.08 of the Agreement for removing such Ineligible Accounts and
reconveying the Receivables of such Ineligible Accounts and the Collateral
Security, whether existing at the close of business on the Removal Commencement
Date or thereafter created from time to time until the Removal Termination Date,
have been satisfied, and (b) each of the representations and warranties made by
the Seller in Section 5 hereof is true and correct as of the date of this
Reassignment and as of the Removal Commencement Date. The Purchaser may
conclusively rely on such Officers' Certificate, shall have no duty to make
inquiries with regard to the matters set forth therein and shall incur no
liability in so relying.
7. Ratification of Agreement. As supplemented by this Reassignment,
-------------------------
the Receivables Purchase Agreement is in all respects ratified and confirmed and
the Receivables Purchase Agreement as so supplemented by this Reassignment shall
be read, taken and construed as one and the same instrument.
8. Counterparts. This Reassignment may be executed in two or more
------------
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
D-2-3
<PAGE>
9. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
D-2-4
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Reassignment to
be duly executed and delivered by their respective duly authorized officers on
the day and year first above written.
BOMBARDIER CREDIT RECEIVABLES
CORPORATION, Purchaser
By:
__________________________________
Name:
___________________________
Title:
___________________________
By:
__________________________________
Name:
___________________________
Title:
___________________________
BOMBARDIER CAPITAL INC., Seller
By:
__________________________________
Name:
___________________________
Title:
___________________________
By:
__________________________________
Name:
___________________________
Title:
___________________________
D-2-5
<PAGE>
OH&S DRAFT
01/09/97
Exhibit 4.5
================================================================================
BOMBARDIER CREDIT RECEIVABLES CORPORATION
Depositor
BOMBARDIER CAPITAL INC.
Servicer
and
BANKERS TRUST COMPANY
Trustee
Bombardier Receivables Master Trust I
AMENDMENT NUMBER 1
Dated as of January 1, 1997
to
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 1994
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Cross Reference to Definitions in Agreement................ 1
SECTION 1.02. Terms Confined to this Amendment........................... 1
SECTION 1.03. Amendment of Definitions................................... 2
ARTICLE II
Current Amendments to Definitions and Agreement Concerning Charge-Offs
SECTION 2.01. Effective Date............................................. 2
SECTION 2.02. Amendments................................................. 2
ARTICLE III
Delayed Amendments to Definitions
SECTION 3.01. Effective Date............................................. 4
SECTION 3.02. Amendments................................................. 4
ARTICLE IV
Current Amendments Relating to Addition of Accounts
SECTION 4.01. Covenant Not to Add Other Account Receivables.............. 13
ARTICLE V
Delayed Amendment Relating to Addition of Accounts.
SECTION 5.01. Amendment of Provisions Relating to Additional Accounts.... 14
SECTION 5.02. Amendments Relating to Permitted Liens and Activities of
the Depositor.............................................. 17
i
<PAGE>
Page
----
ARTICLE VI
Current Amendment to Covenants Concerning Activities of the Depositor
SECTION 6.01. Amendments Relating to Depositor Covenants................. 18
ARTICLE VII
Delayed Amendment Relating to Discount Option
SECTION 7.01. Amendment of Provision Relating to Discount Option......... 19
SECTION 2.07 Removal of Accounts........................................ 20
ARTICLE X
Current Amendment Relating to Servicing of the Receivables
SECTION 10.01. Amendment Relating to Charge-Offs.......................... 24
ARTICLE XI
Delayed Amendments Relating to Servicing Functions
SECTION 11.01. Amendment Relating to Delegation of Servicing Functions.... 25
SECTION 11.02. Amendment Relating to Representation Relating to Liens..... 25
ARTICLE XIII
Delayed Amendments Relating to Collections
SECTION 13.01. Amendment of Provisions Relating to Collections............ 26
ARTICLE XIV
Delayed Amendment Relating to Delegation
SECTION 14.01. Amendment Relating to Delegation........................... 28
ii
<PAGE>
Page
----
ARTICLE XV
Current Amendments Relating to Amendments
SECTION 15.01. Current Amendment Relating to Amendments Procedures........ 29
ARTICLE XVI
Delayed Amendments Relating to Amendment Procedures
SECTION 16.01. Amendment Relating to Amendment Procedures................. 30
SECTION 16.02. Amendment Relating to Rating Agency Condition.............. 30
ARTICLE XVII
Delayed Amendments Relating to Exhibits
SECTION 17.01. Amendments to Exhibit A.................................... 31
ARTICLE XVIII
Miscellaneous
SECTION 18.01. Representation Concerning Place of Business and Notice.... 33
SECTION 18.02. Counterparts.............................................. 33
SECTION 18.03. Headings.................................................. 33
iii
<PAGE>
AMENDMENT NUMBER 1 dated as of January 1, 1997 (this "Amendment") to
the POOLING AND SERVICING AGREEMENT dated as of January 1, 1994 (the "Original
Agreement"), each among BOMBARDIER CREDIT RECEIVABLES CORPORATION, a Delaware
corporation, as Depositor, BOMBARDIER CAPITAL INC., a Massachusetts corporation,
as Servicer, and BANKERS TRUST COMPANY, a New York banking corporation, as
Trustee.
Section 13.01 of the Original Agreement provides that, under the
circumstances and subject to the conditions set forth therein, the Agreement may
be amended from time to time and, in accordance therewith, by the execution and
delivery of this Amendment, the parties hereby amend the Original Agreement to
the extent and on the terms set forth in this Amendment.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and for the benefit of
the Certificateholders and the other Beneficiaries to the extent provided
herein:
ARTICLE I
Definitions
-----------
SECTION 1.01. Cross Reference to Definitions in Agreement. Except to
-------------------------------------------
the extent the context clearly indicates otherwise, capitalized terms used in
this Amendment and not defined herein or amended by the terms of this Amendment
shall have the meaning assigned to such terms in the Original Agreement together
with any subsequent amendment thereto.
SECTION 1.02. Terms Confined to this Amendment. Whenever used in
--------------------------------
this Amendment, the following words shall have the following meanings:
"Agreement" shall mean, the Original Agreement as amended and
---------
supplemented by this Amendment and as otherwise modified, amended and
supplemented from time to time.
"Amendment" shall mean this Amendment Number 1 dated as of January 1,
---------
1997 to the Original Agreement, as such Amendment Number 1 may be modified,
amended and supplemented hereafter.
"Delayed Amendments" shall mean those amendments to the Original
------------------
Agreement set forth herein which are specified herein as having an Effective
Date as of the day after the Series 1994-1 Final Payment Date.
"Effective Date" shall mean the date on which the respective
--------------
amendments to the Original Agreement contained in this Amendment shall become
effective which (i) with respect to those amendments set forth in Articles II,
IV, VI, VIII, X, XII and XV shall be as of the date of execution and delivery of
this Amendment by each of the parties hereto as
<PAGE>
specified on the signature page hereto and (ii) with respect to those amendments
set forth in all other Articles of this Amendment shall be as of the day after
the Series 1994-1 Final Payment Date.
"Original Agreement" shall mean the Pooling and Servicing Agreement
------------------
dated as of January 1, 1994 among Bombardier Credit Receivables Corporation, as
Depositor, Bombardier Capital Inc., as Servicer, and Bankers Trust Company, as
Trustee.
"Series 1994-1 Certificates" shall mean those Certificates issued
--------------------------
pursuant to the Supplement to the Agreement designated as the Series 1994-1
Supplement dated as of January 1, 1994, as modified, amended and supplemented
from time to time.
"Series 1994-1 Final Payment Date" shall mean the date on which the
--------------------------------
full amount of the principal amount of the Series 1994-1 Certificates and all
interest accrued thereon have been paid in full and the Series 1994-1
Certificates have been fully discharged and have no further interest in the
Trust.
SECTION 1.03. Amendment of Definitions. Certain defined terms set
------------------------
forth in the Original Agreement are amended by this Amendment, and the Original
Agreement is also amended hereby by the addition of certain new defined terms.
Those new and amended defined terms with respect to which the Effective Date is
the date of execution and delivery of this Amendment by each of the parties
hereto as specified on the signature page hereto are contained in Article II
hereof and those new and amended defined terms with respect to which the
Effective Date is the day after the Series 1994-1 Final Payment Date are
contained in Article III hereof.
ARTICLE II
Current Amendments to Definitions and Agreement Concerning Charge-Offs
----------------------------------------------------------------------
SECTION 2.01. Effective Date. Definitions set forth in the Original
--------------
Agreement and amended by this Amendment which have an Effective Date which is
the date of execution and delivery of this Amendment by each of the parties
hereto as specified on the signature page hereto are set forth in this Article
II.
SECTION 2.02. Amendments. The following definitions, contained in
----------
the Original Agreement, are hereby amended to read as follows and those
definitions which are contained in this Section 2.02 but which are not contained
in the Original Agreement are hereby added to Section 1.01 of the Agreement in
appropriate alphabetical sequence are:
"Account" shall mean each Initial Account and, from and after the
-------
related Addition Date, each Additional Account. The Term "Account" shall
not apply to any Removed Accounts reassigned or assigned to the Depositor
or the Servicer in accordance with the terms of this Agreement provided
that accouonts which are being removed under the provisions of Section
12.07 shall continue to be included as Accounts until the removal
Termination Date with respect to such Accounts.
2
<PAGE>
"Rating Agency Condition" shall mean, with respect to any action, if
-----------------------
the terms of the Agreement or the Supplement set forth a specific time in
advance of the effectiveness of the action that notice must be given to the
Rating Agencies, notice shall have been given in accordance with such
requirement or if no advance notice is required or no specific time is
stated for such notice, the Rating Agencies have received written notice of
the proposed action at least 10 days prior to the proposed effective date
of such action and either (i) as of the proposed effective date of the
action, no Rating Agency shall have notified the Depositor, the Servicer or
the Trustee in writing that such action will result in a reduction or
withdrawal of any rating of any outstanding Series or Class with respect to
which it is a Rating Agency, or (ii) each such Rating Agency shall have
confirmed in writing to the Depositor, the Servicer or the Trustee that
such action will not result in a reduction or withdrawal of the rating of
any outstanding Series or Class with respect to which it is a Rating
Agency.
"Removal Commencement Date" shall have the meaning specified in
-------------------------
Section 2.07(b) or 2.08 (a).
"Removal Termination Date" shall have the meaning specified in Section
------------------------
2.09 (b) or 2.08 (h) hereof.
"Repurchase Agreement" shall mean any repurchase agreement (or similar
--------------------
recourse arrangement) between BCI or an Affiliate of BCI and the
manufacturer, importer or distributor of Eligible Products (or, if
applicable, such other party with whom such arrangement has been
established) relating to Eligible Products which have been financed with
advances the repayment of which are Receivables transferred to the Trust.
"SAU" shall mean, with respect to a Receivable, that if such
---
Receivable was originally secured by a security interest in an Eligible
Product, such Eligible Product has been sold and such Receivable has not
been paid in full.
"Variable Funding Amount" shall mean, on any date of determination,
-----------------------
the excess of the Pool Balance over the Required Pool Balance at the close
of business on the preceding day.
SECTION 2.03. Agreement Concerning Charge-Offs. The Servicer and the
--------------------------------
Depositor hereby, in accordance with the terms of Section 3.01(a) of the
Original Agreement, having given the Rating Agencies ten (10) days' prior
written notice and the Rating Agency Condition with respect to the following
election having been satisfied, elect not to take the actions to charge-off
Receivables as set forth in clauses (x), (y) and (z) of the first sentence of
Section 3.01(a) of the Original Agreement. The Servicer and the Depositor hereby
elect and agree that, from the date of execution and delivery of this Amendment,
until the Amendments set forth in Article III hereof become effective, the
Servicer shall, in accordance with the provisions of Section 3.01(a), charge-off
Receivables in the following categories: (x) all Receivables (other than (i)
Receivables that were designated as Ineligible
3
<PAGE>
Receivables at the time of transfer to the Trust and (ii) Receivables which
became Ineligible Receivables because they were not paid in full within 491 days
after the origination thereof) charged off as uncollectible, (y) all Receivables
that have been SAU for more than 60 days and (z) all Receivables in an Account
in which interest in the amount of $150 or more has been delinquent for 90 days
or more.
ARTICLE III
Delayed Amendments to Definitions
---------------------------------
SECTION 3.01. Effective Date. The Effective Date of the amendments
--------------
to certain definitions contained in the Original Agreement as set forth in this
Article III and the new definitions added to the Agreement by this Article III
shall be the day after the Series 1994-1 Final Payment Date. Terms contained in
the Original Agreement which are amended by this Article III shall, prior to
such Effective Date, continue to have the meanings assigned thereto in the
Original Agreement.
SECTION 3.02. Amendments. The following definitions contained in the
----------
Original Agreement are hereby amended to read as follows and those definitions
which are contained in this Section 3.02 but which are not contained in the
Original Agreement are hereby added to Section 1.01 of the Agreement in
appropriate alphabetical sequence, in each case, as of the Effective Date
applicable to this Article as stated in Section 3.01 above.
"Additional Accounts" shall mean (i) each individual financing account
-------------------
established or acquired by BCI or an Affiliate of BCI with an Obligor
pursuant to an Inventory Security Agreement in the ordinary course of
business and (ii) each credit account established or acquired in the
ordinary course of business by BCI or an Affiliate of BCI with a dealer to
finance such dealer's working capital needs or, with a manufacturer or
distributor for the purpose of financing the production, manufacturing or
inventory of Eligible Products, and which account, in each case, is
designated pursuant to Section 2.05(a) or (b) hereof to be included as an
Account and is identified in the computer file or microfiche or written
list delivered to the Trustee by the Depositor pursuant to Section 2.01 or
Section 2.05(d) hereof, as applicable.
"Asset-Based Receivables" shall mean Receivables arising from
-----------------------
extensions of credit made by BCI or Affiliates of BCI or Receivables
arising from extensions of credit made by other lenders and acquired by BCI
or an Affiliate of BCI which extension of credit was made to a dealer to
finance such dealer's working capital needs or to a manufacturer or
distributor to finance manufacturing, production or inventory of consumer,
recreational or commercial products.
"Available Retained Collections" shall mean, with respect to any
------------------------------
Deposit Date, the sum of (a) the Available Retained Non-Principal
Collections for such Deposit Date and (b) the Available Retained Principal
Collections for such Deposit Date; provided, however, that the Available
-------- -------
Retained Collections shall be zero for any Collection
4
<PAGE>
Period with respect to which the Available Subordinated Amount is zero for the
Distribution Date occurring in such Collection Period.
"Available Retained Non-Principal Collections" shall mean, with respect to
--------------------------------------------
any Deposit Date, an amount equal to the product of (a) the excess of (i) the
Retained Percentage for such Deposit Date over (ii) the Excess Retained
Percentage for such Deposit Date multiplied by (b) Non-Principal Collections for
such Deposit Date.
"Available Retained Principal Collections" shall mean, with respect to any
----------------------------------------
Deposit Date, an amount equal to the result obtained by multiplying (a) the
excess of (i) the Retained Percentage for such Deposit Date) over (ii) the
Excess Retained Percentage for such Deposit Date by (b) Principal Collections
for such Deposit Date.
"Collateral Security" shall mean, with respect to any Receivable and
-------------------
subject to the terms of the Receivables Purchase Agreement, the security
interest, granted by or on behalf of the related Obligor to secure payment of
such Receivable which, (i) with respect to Domestic Inventory Receivables shall
include first priority perfected security interest in the Eligible Product
financed and (ii) with respect to Asset-Based Receivables shall include a first
priority perfected security interest, in accounts, goods, work in process, raw
materials, component parts or other rights or assets of the Obligor. If a
Participation Interest has been created in respect of a Receivable or
Receivables in an Account and such interest has been removed from the Trust,
upon the removal of such Participation Interest, that portion of such security
interest that is allocable to such Participation Interest shall not be part of
the "Collateral Security and with respect to any Receivable which is removed
from the Trust, the security interest with respect to such Receivable shall no
longer be part of the Collateral Security.
"Collections" shall mean, without duplication, all payments by or on behalf
-----------
of Obligors received by the Servicer in respect of the Receivables, in the form
of cash, checks, wire transfers or any other form of payment as provided in such
Obligors' Inventory Security Agreements or otherwise agreed upon between the
applicable Obligors and BCI or its Affiliates in connection with the extension
of credit in the ordinary course of their respective businesses; provided,
however, that Collections shall not include amounts, if any, received by the
Servicer, but which represent amounts due to another lender as a result of the
granting of a Participation Interest. Collections of Non-Principal Receivables
shall include all Recoveries. Collections of Insurance Proceeds with respect to
Receivables which are not Defaulted Receivables shall be deemed to be
Collections of Principal Receivables.
"Defaulted Amount," with respect to any Collection Period, or any other
----------------
period of determination, shall mean an amount (which shall not be less than
zero) equal to (a) the sum for all the Accounts included in the Pool of the
amount of Principal Receivables which became Defaulted Receivables during the
immediately preceding Collection Period minus (b) the full amount of any such
-----
Defaulted Receivables which are subject to reassignment or assignment to the
Depositor or the Servicer in accordance with the terms of this Agreement;
provided, however, that, if an Insolvency Event occurs with respect to the
- -------- -------
Depositor or if a Liquidation Event
5
<PAGE>
has occurred, the amounts of such Defaulted Receivables which are subject to
reassignment or assignment to the Depositor shall not be included in clause (b)
and, if an Insolvency Event occurs with respect to the Servicer or if a
Liquidation Event has occurred, the amount of such Defaulted Receivables which
are subject to assignment to the Servicer shall not be included in clause (b).
"Defaulted Receivables" shall mean, with respect to any Collection Period,
---------------------
without duplication, (a) all Receivables (other than (i) Receivables that were
designated as Ineligible Receivables at the time of transfer to the Trust and
(ii) Receivables which became Ineligible Receivables because they were not paid
in full within 491 days after the origination thereof) in an Account which are
charged off by the Servicer as uncollectible in respect of the immediately
preceding Collection Period, (b) all Receivables that have been SAU for more
than 60 days, (c) all Receivables in an Account in which interest in the amount
of $150 or more has been delinquent for 90 days or more and (d) all Receivables
which were Eligible Receivables when transferred to the Trust on the initial
Closing Date or the related Addition Date or on their respective Transfer Date,
which arose in an Account that thereafter became an Ineligible Account and which
were not Eligible Receivables for any six consecutive Distribution Dates
(inclusive of the Distribution Date on which such determination is being made)
after such Account became an Ineligible Account. Receivables will not be
Defaulted Receivables merely because they become Ineligible Receivables.
"Deposit Date" shall mean each day on which the Servicer receives
------------
Collections.
"Domestic Inventory Receivables" shall mean Receivables arising from
------------------------------
extensions of credit and advances made to dealers of consumer, recreational and
commercial products which dealers are located in the United States of America
(including its territories and possessions).
"Eligible Account" shall mean (i) each individual financing account with an
----------------
Obligor established by BCI or by an Affiliate of BCI, or established by a third
party (but which satisfies BCI's customary underwriting standards) and acquired
by BCI or acquired by an Affiliate of BCI, with respect to Eligible Products
pursuant to an Inventory Security Agreement in the ordinary course of business,
and (ii) any individual line of credit or financing agreement extended to an
Obligor by BCI or an Affiliate of BCI or by a third party (but which satisfies
BCI's customary underwriting standards) and acquired by BCI or an Affiliate of
BCI, for the purpose of financing working capital, manufacturing, production, or
inventory of Eligible Products and secured by assets of such Obligor and which,
in each case, as of the date of determination thereof (a) relates to an Obligor
which is an Eligible Obligor and (b) is in existence and after its establishment
or acquisition by BCI (or an Affiliate of BCI) is maintained and serviced by BCI
(subject to BCI's rights to delegate or assign certain servicing functions in
accordance with the terms of this Agreement) it being understood that an
Eligible Account may at the time of transfer to the Trust and/or from time to
time thereafter contain no Receivables. For purposes of this definition,
6
<PAGE>
acquisition of an Account includes acquisition of such Account as a result of an
acquisition of another entity or by merger or consolidation with another entity.
An Account which otherwise qualifies as an Eligible Account may be an Eligible
Account notwithstanding the fact that a Participation Interest exists in such
Account or any receivable therein. With respect to any Initial Account, if any
required consent to the assignment to BCRC of the related Repurchase Agreement
(as defined in the Receivables Purchase Agreement) shall not have been obtained
on or prior to February 15, 1994 such account shall as of such date be deemed an
Ineligible Account. This definition of Eligible Account may be amended from time
to time without complying with the terms of Section 13.01 of this Agreement,
provided that, as the only conditions to the effectiveness of such amendment (i)
BCI delivers to the Trustee a certificate of an authorized officer stating that,
in the reasonable belief of BCI, such amendment will not, at the date of such
amendment adversely affect, in a material way, the interest of the
Certificateholders and (ii) the Rating Agency Condition is satisfied.
"Eligible Obligor" shall mean an Obligor that, as of the date of
----------------
determination thereof, (a) in the case of Domestic Inventory Receivables, is a
dealer located in the United States of America (including its territories and
possessions), (b) in the case of Asset-Based Receivables is a dealer,
distributor or manufacturer that is located in the United States of America
(including its territories and possessions) and (c) in the case of Domestic
Inventory Receivables and Asset-Based Receivables, has not been identified by
the Servicer as being the subject of any voluntary or involuntary bankruptcy,
insolvency, liquidation or receivership proceedings.
"Eligible Products" shall mean any consumer, recreational and commercial
-----------------
products, including, but not limited to, marine equipment (boats, engines and
trailers), snowmobiles, snow-grooming equipment, personal watercraft,
recreational vehicles, manufactured housing, motorcycles, lawn and garden
equipment, horse trailers, personal computers and consumer electronics and
appliances and spares and parts relating to such products.
"Eligible Receivable" shall mean each Receivable:
-------------------
(a) which was (x) originated by BCI in the ordinary course of
business or (y) originated by an Affiliate of BCI in the ordinary course of
business or which was acquired by BCI or an Affiliate of BCI in the
ordinary course of business and upon satisfying BCI's customary
underwriting standards; for purposes of this definition, acquisition of a
Receivable includes acquisition of such Receivable as a result of an
acquisition of another entity or by merger or consolidation with another
entity;
(b) which arose under an Account that at the time such Receivable was
transferred to the Trust was an Eligible Account;
(c) which is owned by BCI at the time of sale or contribution by BCI
to the Depositor;
7
<PAGE>
(d) which represents the obligation of an Obligor to repay an advance made
to or on behalf of such Obligor (or credit extended to or on behalf of such
Obligor) to finance (i) in the case of Domestic Inventory Receivables, the
acquisition of Eligible Products, or (ii) in the case of Asset-Based
Receivables, working capital or the production, manufacturing or inventory of
Eligible Products;
(e) which, (i) in the case of Domestic Inventory Receivables, at the time
of creation and, except in the case of Receivables that are payable in
accordance with a repayment schedule providing for repayment in full regardless
of whether the related Eligible Products have been sold and with respect to
which the related Eligible Products have been sold, at the time of transfer to
the Trust, is secured by, inter alia, a first priority perfected security
----- ----
interest in the Eligible Products relating thereto and (ii) in the case of
Asset-Based Receivables, at the time of transfer to the Trust is secured by,
inter alia, a first priority perfected security interest, in accounts, goods,
- ----- ----
work in process, raw materials, component parts or other rights or assets of the
Obligor; except, in the case of clause (i) and clause (ii), to the extent of
Liens permitted by Section 2.06(a) of this Agreement;
(f) which is not unenforceable as a result of any violation of
Requirements of Law applicable thereto and, (i) in the case of Domestic
Inventory Receivables, the related Inventory Security Agreement is not
unenforceable as a result of any violation of Requirements of Law applicable to
any party thereto and (ii) in the case of Asset-Based Receivables, the operative
documents pursuant to which the Account was created are not unenforceable as a
result of any violation of Requirements of Law applicable to any party thereto;
(g) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any Governmental
Authority required to be obtained, effected or given by BCI or an Affiliate of
BCI or the Depositor in connection with the creation or acquisition of such
Receivable or, if applicable, the transfer thereof to the Depositor and the
Trust or, (i) in the case of Domestic Inventory Receivables, the performance by
BCI or an Affiliate of BCI of the related Inventory Security Agreement or (ii)
in the case of Asset-Based Receivables, the performance by BCI or an Affiliate
of BCI of the operative documents pursuant to which the Account was created,
have been duly obtained, effected or given and are in full force and effect;
(h) as to which at all times following the transfer of such Receivable to
the Trust, the Trust will have good and marketable title thereto free and clear
of all Liens arising prior to the transfer or arising at any time other than (i)
Liens permitted by this Agreement and (ii) tax and certain other statutory liens
(including liens in favor of the Pension Benefit Guaranty Corporation) which may
arise thereafter and which relate to Affiliates of the Depositor;
8
<PAGE>
(i) which has been the subject of a valid transfer and assignment
from the Depositor to the Trust of all the Depositor's right, title and
interest therein (including, with certain exceptions, any proceeds
thereof);
(j) which will at all times be the legal, valid, binding and
assignable payment obligation of the Obligor relating thereto, enforceable
against such Obligor in accordance with its terms (as such terms may be
modified or revised from time to time with the consent of the Servicer),
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now or
hereafter in effect, affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity) or
the availability of equitable remedies;
(k) which at the time of transfer to the Trust is enforceable against
the Obligor to the extent of the full principal amount of such Receivable,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now or
hereafter in effect, affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity) or
the availability of equitable remedies;
(l) as to which, at the time of transfer of such Receivable to the
Trust, BCI or an Affiliate of BCI and the Depositor have satisfied all
their respective obligations under this Agreement with respect to such
Receivable required to be satisfied at such time;
(m) as to which, at the time of transfer of such Receivable to the
Trust, neither BCI or an Affiliate of BCI nor the Depositor has taken any
action (or failed to take any action required under this Agreement or the
Receivables Purchase Agreement) which would impair the rights of the Trust
or the Certificateholders therein; and
(n) which constitutes "chattel paper" or an "account" as defined in
Article 9 of the UCC as then in effect in the State of Vermont;
provided, however, that "Eligible Receivables" shall not include any Domestic
- -------- -------
Inventory Receivables that have not been paid in full within 491 days following
the origination thereof, subject, however, for the period from January ____,
1997, through May 31, 1998, with respect to Domestic Inventory Receivables
included in the Pool Balance on January ____, 1997, no more than 10% of the
aggregate principal balance of such Domestic Inventory Receivables (which
percentage is expected to equal approximately $79,000,000) will be excluded from
Eligible Receivables pursuant to this proviso, and subject further, to the
limitation that commencing June 1, 1998, with respect to each Origination
Period, no more than
9
<PAGE>
10% of the aggregate principal balance of Domestic Inventory Receivables
originated and transferred to the Trust during the four month period commencing
16 months prior to each Origination Period will be excluded from Eligible
Receivables pursuant to this proviso;
provided further, that this definition of Eligible Receivable may be amended
- -------- -------
from time to time without complying with the terms of Section 13.01 of this
Agreement provided that, as the only conditions to the effectiveness of such
amendment (i) BCI delivers to the Trustee a certificate of an authorized officer
stating that, in the reasonable belief of BCI, such amendment will not, at the
date of such amendment adversely affect, in a material way, the interest of the
Certificateholders and (ii) the Rating Agency Condition is satisfied.
"Excess Retained Percentage" shall mean, for any date of determination,
--------------------------
(x) the Retained Percentage for such date minus (y) the percentage equivalent of
a fraction, the numerator of which is equal to the Pool Available Subordinated
Amount as of the end of the immediately preceding day and the denominator of
which is the Pool Balance as of the end of the immediately preceding day.
"Financing Guidelines" shall mean the written policies and procedures of
--------------------
BCI and its Affiliates, as such policies and procedures may be amended from time
to time, (a) relating to the operation of BCI's floorplan financing business,
including the written policies and procedures for determining the interest rate
charged to Obligors, the other terms and conditions relating to BCI's wholesale
financing accounts, the creditworthiness of Obligors and the extension of credit
to Obligors, (b) relating to the extension of credit by BCI and Affiliates of
BCI to dealers, distributors and manufacturers in connection with Asset-Based
Receivables and (c) relating to the maintenance of accounts and collection of
receivables.
"Insurance Proceeds" with respect to an Account shall mean any amounts
------------------
received by the Servicer pursuant to any policy of insurance which is required
to be paid to BCI or an Affiliate of BCI pursuant to an Inventory Security
Agreement.
"Inventory Security Agreement" shall mean, collectively, the agreement or
----------------------------
group of related agreements between and among a lender (provided that, if such
lender was not BCI or an affiliate of BCI at the time the agreement was
originated, the lender's rights thereunder have been acquired by BCI or an
Affiliate of BCI), the Obligor with respect thereto and, in certain cases, the
related manufacturer or distributor, pursuant to which (a) the lender agrees to
extend credit to such Obligor to finance Eligible Products, (b) such Obligor
grants to the lender a security interest in the specific Eligible Products
financed, and (c) such Obligor agrees to repay advances made under such
agreement either (i) at the time of sale of the related Eligible Products to
which such advance relates or (ii) in accordance with a repayment schedule
providing for repayment in full of the related advance; for purposes of this
definition, references to the "lender" may include multiple lenders in the case
of an Account or receivables therein which are subject to a Participation
Agreement
10
<PAGE>
provided that one of the lenders is BCI or an Affiliate of BCI or the rights of
one of the lenders has been acquired by BCI or an Affiliate of BCI.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, participation interest, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including any
conditional sale or other title retention agreement and any financing lease
having substantially the same economic effect as any of the foregoing; provided,
however, that (i) any lien, encumbrance or interest created by this Agreement,
any Supplement or any Participation Agreement and (ii) any security interest in
any Collateral Security which security interest is subordinate to the security
interest securing the Receivables shall not be deemed to constitute a Lien.
"Liquidation Event" shall mean any event specified in Section 9.01(b) or
-----------------
Section 9.01(c) of this Agreement occurs with respect to BCI or the Depositor.
"Obligor" shall mean a Person that is engaged generally in the business of
-------
purchasing Eligible Products from a manufacturer, importer or distributor of
Eligible Products for sale in the ordinary course of business or (ii) is a
manufacturer, importer or distributor of Eligible Products.
"Origination Period" shall mean each four-month period commencing June 1,
------------------
1998 or any October 1, February 1 or October 1 thereafter.
"Participation Agreement" shall mean an agreement pursuant to which
-----------------------
(i) BCI or an Affiliate of BCI, as applicable, conveys to a lender an undivided
interest in the right to receive payment of a Receivable or Receivables in an
Account, and in the related Collateral Security and any other associated rights
which interest is pari passu (other than nonsubordinated interest strips and
fees) with the undivided interest retained by BCI or such Affiliate of BCI, as
applicable, except that BCI or such Affiliate of BCI will retain the servicing
rights with respect to such credit arrangement; such Participation Agreement may
be entered into prior to the designation of the account in which the
Participation Interest exists as an Account to be included in the Trust or may
be entered into with respect to an Account which is included in the Trust
provided, that with if a Participation Agreement is entered into with respect to
an Account which has been designated to the Trust, the Participation Interest
shall be removed from the Trust in accordance with the terms of Section 2.12
hereof.
"Participation Interest" shall mean an undivided interest created pursuant
----------------------
to a Participation Agreement and held by a lender and not conveyed to the Trust
or removed from the Trust and conveyed to such lender; such Participation
Interest may include an interest in the receivable, in the collateral securing
such receivable and other rights associated with such receivable; the undivided
interest in such receivable conveyed to or remaining in the Trust shall
constitute a Receivable to the extent of the undivided interest held by the
Trust.
11
<PAGE>
"Participation Interest Removal Date" shall have the meaning specified in
-----------------------------------
Section 2.12 of this Agreement.
"Participation Removal Notice" shall have the meaning specified in
----------------------------
Section 2.12 of this Agreement.
"Receivables" shall mean, with respect to an Account, all amounts shown on
-----------
the Servicer's records as amounts payable by the related Obligor from time to
time in respect of advances made to such Obligor to finance the acquisition of
Eligible Products or to finance working capital needs of such Obligor or the
production, manufacturing or inventory of Eligible Products together, if
applicable, with the rights under the group of writings evidencing such amounts
and the security interest created in connection therewith. Receivables which
become Defaulted Receivables shall not be shown on the Servicer's records as
amounts payable (and will cease to be included as Receivables) on the day on
which they become Defaulted Receivables and Receivables and interests therein
and the rights and security interests created in connection therewith removed
from the Trust shall cease to be Receivables on the Removal Date. Receivables
which BCI is unable to transfer to the Depositor pursuant to the Receivables
Purchase Agreement or which the Depositor is unable to transfer to the Trust as
provided in Section 2.06(b) hereof and Receivables which arise in Removed
Accounts from and after the related Removal Commencement Date shall not be
included in calculating the amount of Receivables. If a Participation Interest
exists in respect of such Account or if a Participation Interest exists in
respect of a specific obligation or obligations within an Account, the amounts
so payable by the related Obligor that are allocable to such Participation
Interest shall, not be part of the "Receivables" in respect of such Account.
"Recoveries" on any Distribution Date shall mean all amounts received,
----------
including Insurance Proceeds and any proceeds resulting from Repurchase
Agreements (or similar arrangements) between BCI or an Affiliate of BCI and
manufacturers, importers and distributors of Eligible Products or other parties,
by the Servicer during the Collection Period immediately preceding such
Distribution Date with respect to Receivables which have previously become
Defaulted Receivables.
"Removed Participation Interest" shall have the meaning specified in
------------------------------
Section 2.12 of this Agreement.
"Required Pool Balance" shall mean, the amount calculated as of the end of
---------------------
any Business Day equal to (i) the sum of the amounts for each Series obtained by
multiplying the required investor percentage for such Series by the adjusted
invested amount for such Series as of the close of business on such preceding
day, plus (ii) the Pool Available Subordinated Amount at the close of business
----
of such preceding day, minus (iii) any amount on deposit in any reserve fund at
-----
such time; provided that, the amount on deposit in a reserve fund for any Series
-------------
which will be subtracted in calculating the Required Pool Balance may be limited
as provided in the Supplement pursuant to which such reserve fund was created.
12
<PAGE>
"Retained Percentage" for any date of determination shall mean (i)
-------------------
with respect to Non-Principal Collections, 100% minus the sum of (a) the
aggregate of the floating allocation percentages for each outstanding
Series of Investor Certificates on such date of determination and (b) the
Variable Funding Percentage for such date of determination and (ii) with
respect to Principal Collections, 100% minus the sum of (a) the aggregate
of the floating allocation percentages on such date of determination for
each outstanding Series of Investor Certificates in their respective
Revolving Periods, (b) the aggregate of the principal allocation percentage
on such date of determination for each outstanding Series of Investor
Certificates that are not in their respective Revolving Periods and (c) the
Variable Funding Percentage for such date of determination, but in any case
the Retained Percentage shall not be less than 0%.
"Variable Funding Percentage" shall mean, for any date of
---------------------------
determination, a percentage (which percentage shall never be less than 0%
nor more than 100%) equal to the Variable Funding Amount on such date of
determination divided by the Pool Balance at the close of business on the
preceding day; provided, however, that for purposes of allocating Principal
-------- -------
Collections following the occurrence of a Liquidation Event, the Variable
Funding Percentage will be calculated on the basis of the Variable Funding
Amount as of the last day immediately preceding the date of such
Liquidation Event; and provided further, that following a Liquidation
-------- -------
Event, the relative interest of the Variable Funding Certificate in further
allocations of Non-Principal Collections will not be less than the relative
interest thereof as of the Liquidation Event.
ARTICLE IV
Current Amendments Relating to Addition of Accounts
---------------------------------------------------
SECTION 4.01. Covenant Not to Add Other Account Receivables.
---------------------------------------------
Section 2.05 of the Original Agreement is hereby amended effective on the date
of execution and delivery of this Amendment by each of the parties hereto as
specified on the signature page hereto to delete all references to Other Account
Receivables from such Section 2.05, and BCRC hereby covenants and agrees, that,
not withstanding any provision of the Original Agreement, it shall not include
any Other Account Receivables in any Additions made to the Trust pursuant to
Section 2.05 of the Agreement or in any other manner.
ARTICLE V
Delayed Amendment Relating to Addition of Accounts.
--------------------------------------------------
SECTION 5.01. Amendment of Provisions Relating to Additional
----------------------------------------------
Accounts. Section 2.05 of the Original Agreement is hereby amended, effective
- --------
on the day after the Series 1994-1 Final Payment Date, to read, in its entirety,
as follows:
SECTION 2.05. Addition of Accounts. (a) If, as of any date, (i) the
--------------------
Pool Balance calculated as of the close of business on the preceding day is
less than the
13
<PAGE>
Required Pool Balance also calculated as of the close of business on such
preceding day, or (ii) the aggregate interest in the Pool represented by the
BCRC Certificate and any Variable Funding Certificate held by BCRC is less than
2% of the aggregate amount of Receivables included in the Pool at the close of
business on the preceding day, then, unless a Liquidation Event has occurred, on
or prior to the tenth Business Day following the date on which (i) or (ii)
occurred (the "Addition Date"), the Depositor shall be required to purchase or
-------------
acquire from BCI under the Receivables Purchase Agreement (but BCI shall have no
obligation to sell or contribute to BCRC), and shall designate (pursuant to an
Addition Notice delivered pursuant to Section 2.05(c) hereof) and transfer to
the Trust, the Receivables (and any related Collateral Security) of additional
Eligible Accounts of the Depositor to be included as Accounts in a sufficient
amount such that, after giving effect to such addition: (x) the Pool Balance as
of the close of business on the Addition Date is at least equal to the Required
Pool Balance and (y) the aggregate amount of Receivables included in the Pool
represented by the BCRC Certificate and any Variable Funding Certificate held by
BCRC, is equal to at least 2% of the aggregate amount of Receivables included in
the Pool and (z) the Pool shall consist of the same type of Receivables as shall
have been included in the Pool prior to such addition (i.e., Domestic Inventory
Receivables, Asset-Based Receivables or both, as the case may be); provided,
--------
however, that so long as the Rating Agency Condition has been satisfied with
- -------
respect to the addition of Asset-Based Receivables to the Trust as set forth in
subsection 2.05(i) below (whether in connection with the addition of Accounts at
such time or in connection with a previous addition of Accounts to the Trust),
then, at the option of the Depositor and BCI, Additional Accounts containing
Asset-Based Receivables may be added in satisfaction of such requirement even if
the only Accounts previously included in the Trust are Accounts containing
Domestic Inventory Receivables; and provided, further, that for purposes of
-------- -------
clause (ii) and sub-clause (y) of this subsection (a), the Variable Funding
Certificate shall be deemed to be "held" by BCRC even though the registered
Holder thereof is BCI, as pledgee, so long as BCI has not exercised its remedies
in respect thereof. The Depositor shall satisfy the conditions specified in
subsection (d) of this Section 2.05 in designating such Additional Accounts and
conveying the related Receivables to the Trust. The failure of the Depositor to
transfer Receivables to the Trust as provided in this subsection (a) solely as a
result of the unavailability of a sufficient amount of Eligible Receivables or
subsequent to a Liquidation Event shall not constitute a breach of this
Agreement; provided, however, that any such failure will nevertheless result in
-------- -------
the occurrence of an Early Amortization Event described in Section 9.01(a)
hereof if the conditions set forth therein shall occur.
(b) The Depositor may from time to time, at its sole discretion, subject
to the conditions specified in subsection (d) below, voluntarily designate
additional Eligible Accounts to be included as Accounts and transfer to the
Trust the Receivables (and the related Collateral Security) of such Additional
Accounts.
(c) Receivables and Collateral Security from Additional Accounts conveyed
to the Trust pursuant to subsection (b) above shall be sold to the Trust
effective on a date (the "Addition Date") specified in an Addition Notice on or
-------------
before the tenth
14
<PAGE>
Business Day but not more than the 30th day prior to the related Addition
Date (the "Notice Date").
-----------
(d) The Depositor shall be permitted to convey to the Trust the
Receivables and all Collateral Security related thereto in any Additional
Accounts designated by the Depositor as such pursuant to Section 2.05(a) or (b)
hereof only upon satisfaction of each of the following conditions on or prior to
the related Addition Date:
(i) the Depositor shall have provided the Trustee, any Agent, the
Rating Agencies and any Enhancement Providers with an Addition Notice;
(ii) such Additional Accounts shall all be Eligible Accounts and,
with respect to Additional Accounts designated pursuant to subsection (b)
above, unless the Account is being added pursuant to the Automatic Addition
Condition set forth in subsection (g) of this Section 2.05, the Rating
Agency Condition shall have been satisfied;
(iii) the Depositor shall have delivered to the Trustee a duly
executed written assignment in substantially the form of Exhibit B hereto
(the "Assignment") and the computer file or microfiche or written list
----------
required to be delivered pursuant to Section 2.01 hereof;
(iv) the Depositor shall, to the extent required by Section 4.03
hereof, have deposited in the Collection Account all Collections with
respect to such Additional Accounts since the Additional Cut-Off Date;
(v)(A) no selection procedures reasonably believed by the Depositor
to be adverse to the interests of the Beneficiaries or any Enhancement
Provider were used in selecting such Additional Accounts; (B) the list of
Additional Accounts delivered pursuant to clause (iii) above is true and
correct in all material respects as of the Additional Cut-Off Date and (3)
as of each of the Notice Date and the Addition Date, neither BCI nor the
Depositor were insolvent nor will either of them have been made insolvent
by such transfer nor are either of them aware of either pending insolvency;
(vi) the addition of the Receivables arising in such Additional
Accounts shall not, in the reasonable belief of the Depositor, result in
the occurrence of an Early Amortization Event;
(vii) in the case of an addition of Receivables pursuant to
subsection (a) above, the additional Receivables are either Domestic
Inventory Receivables, Asset-Based Receivables or both; and
(viii) the Depositor shall have delivered to the Trustee and any
Enhancement Providers a certificate of a Vice President or more senior
officer confirming the items set forth in sub-clauses (ii) through (vi)
above; and
15
<PAGE>
(e) The Depositor hereby represents and warrants as of the applicable
Addition Date as to the matters set forth in clause (v) of subsection (d) of
this Section 2.05. Upon discovery by the Depositor, the Servicer, any Agent, the
Trustee or any Enhancement Providers of a breach of the foregoing
representations and warranties, the party discovering the breach shall give
prompt written notice to the other parties, to any Agent and to any Enhancement
Providers.
(f) Unless the Account is being added pursuant to the Automatic Addition
Condition set forth in subsection (g) of this Section 2.05, on or before each
Addition Date, the Depositor shall have delivered to the Trustee and any
Enhancement Providers, an Opinion of Counsel, substantially in the form of
Exhibit G-2 hereto, with respect to the Receivables in the Additional Accounts
conveyed hereunder on such Addition Date.
(g) The provisions set forth in this subsection (g) are herein referred to
as the "Automatic Addition Condition." If the conditions set forth in this
subsection (g) are satisfied, the Depositor may voluntarily designate additional
Eligible Accounts to be included as Accounts and transfer to the Trust the
Receivables (and the related Collateral Security) of such Additional Accounts in
accordance with Section 2.05(d) but without satisfaction of the Rating Agency
Condition specified in clause (ii) of such Section 2.05(d) and without delivery
of the Opinion of Counsel described in subsection (f) above. The Automatic
Addition Condition will be satisfied if each of the following conditions are
met:
(i) such Accounts do not contain Asset-Based Receivables unless
Asset-Based Receivables have been previously added to the Trust after
having met the Rating Agency Condition, (ii) during the calendar quarter in
which such addition occurs, the number of new Accounts which have been
added (after taking into account such addition) will not exceed 5% of the
number of all Accounts at the end of the preceding calendar quarter and the
aggregate dollar amount of Principal Receivables in such new Accounts added
pursuant to the Automatic Addition Condition during such calendar quarter
shall not exceed 5% of the Pool Balance at the end of the preceding
calendar quarter, and (iii) during the 12 consecutive calendar months
ending with the calendar month in which the addition is made and including
such addition, the number of such new Accounts does not exceed 20% of the
number of all Accounts at the beginning of such 12 month period and the
aggregate dollar amount of Principal Receivables in such new Accounts added
pursuant to the Automatic Addition Condition during such 12-month period
shall not exceed 20% of the Pool Balance at the beginning of such 12-month
period. When determining the amount of Accounts and Principal Receivables
which have been added to the Trust for purposes of the tests set forth in
(ii) and (iii) of this paragraph, only those Accounts and the Receivables
therein which have been added pursuant to the Automatic Addition Condition
will be taken into consideration. Additions made under other provisions of
the Pooling and Servicing Agreement will not be included.
16
<PAGE>
(h) If Accounts are added to the Trust pursuant to the Automatic
Addition Condition, the Depositor shall, to the extent the addition of such
Accounts have not been covered by such opinions previously delivered to the
Trustee, every six months deliver to the Trustee an Opinion of Counsel
substantially in the form of Exhibit G-2 hereto, with respect to the
Receivables in the Additional Accounts conveyed pursuant to the Automatic
Addition Condition since the time of delivery of the immediately preceding
Opinion of Counsel delivered under this Section 2.05 and covering the
Additional Accounts designated to the Trust; provided that, unless the
Rating Agency Condition is satisfied with respect to the delivery of such
opinions by in-house Counsel, such Opinion of Counsel shall be from outside
counsel [so long as the rating of the unsecured long-term debt of
__________ __________ is below investment grade.]
(i) The Rating Agency Condition, as described in this subsection (i),
shall be met prior to the first transfer of any Asset-Based Receivables to
the Trust. For such purposes the Rating Agency Condition shall be
satisfied only if the Depositor shall provide to each Rating Agency prior
written notice of the Depositor's intention to transfer Asset-Based
Receivables to the Trust, and the Trustee shall receive a letter from each
Rating Agency confirming that the inclusion of Accounts containing Asset-
Based Receivables will not result in the reduction or withdrawal of the
rating of any Series or Class of Certificates then outstanding.
SECTION 5.02. Amendments Relating to Permitted Liens and Activities
-----------------------------------------------------
of the Depositor. Section 2.06(a) and Section 2.06(f)(i)(B) of the Original
- ----------------
Agreement are hereby amended, effective on the day after the Series 1994-1 Final
Payment Date, to read, in their entirely, as follows:
SECTION 2.06(a) is amended to read:
(a) No Liens. Except for (i) the conveyances hereunder, (ii) as
--------
provided in subsection (c) or (d) of Section 6.03 hereof, (iii) any
Participation Interest granted pursuant to a Participation Agreement, (iv)
the sale, assignment or transfer to the Depositor for subsequent transfer
directly or indirectly to a third party of Receivables, the Collateral
Security and other associated rights removed from the Trust in accordance
with the provisions of Section 2.13 of this Agreement and (v) tax and
certain other statutory liens (including liens in favor of the Pension
Benefit Guaranty Corporation), the Depositor will not sell, pledge, assign
or transfer to any other Person, or grant, create, incur, assume or suffer
to exist any Lien on any Receivable or any Collateral Security, whether now
existing or hereafter created, or any interest therein, or the Depositor's
rights, remedies, powers or privileges with respect to the Receivables
under the Receivables Purchase Agreement, or the Variable Funding Interest,
the Variable Funding Certificate, the Retained Interest, the BCRC
Certificate or any Supplemental Certificate and the Depositor shall defend
the right, title and interest of the Trust in, to and under the Receivables
and the Collateral Security, whether now existing or hereafter created, and
such rights, remedies, powers and privileges, against all claims of third
parties claiming through or under the Depositor. In addition, the
Depositor shall maintain such records and take such other actions as
17
<PAGE>
may be necessary or desirable to preserve the Trust's perfected security
interest in the Receivables.
Section 2.06(f)(i)(B) is amended to read:
(f) Activities of the Depositor. The Depositor will not engage in any
---------------------------
business or activity of any kind or enter into any transaction other than:
(i) the businesses, activities and transactions contemplated and
authorized by this Agreement or the Related Documents, including
without limitation:
(B) acquiring, selling, financing, holding, assigning,
pledging and otherwise dealing with receivables arising out of
the sale of consumer, recreational and commercial products and
the financing of working capital and the financing of the
production, manufacturing and carrying in inventory of consumer,
recreational and commercial products;
ARTICLE VI
Current Amendment to Covenants Concerning Activities of the Depositor
---------------------------------------------------------------------
SECTION 6.01. Amendments Relating to Depositor Covenants.
------------------------------------------
Section 2.06(g) and Section 2.06(j) of the Original Agreement are hereby
amended, effective on the date of execution and delivery of this Amendment as
stated on the signature page hereto, to read in their entirety, as follows:
SECTION 2.06(g) is amended to read:
(g) Indebtedness. Other than the BCRC Note (as defined in the
------------
Receivables Purchase Agreement) the Depositor will not create, incur or
assume any indebtedness or issue any securities (except pursuant to
Section 2.06 (j)) or sell or transfer any receivables to a trust or other
Person which issues securities in respect of any such receivables, unless
(i) any such indebtedness or securities have no recourse to any assets of
the Depositor other than the specified assets to which such indebtedness or
securities relate and (ii) the Depositor has given the Rating Agencies at
least ten (10) days' prior notice and the Rating Agency Condition shall
have been satisfied in connection therewith prior to the incurrence or
issuance thereof.
SECTION 2.06(j) is amended to read:
(j) Stock; Merger. The Depositor will not (i) sell any shares of any
-------------
class of its capital stock to any Person (other than Bombardier Corporation
or BCI) or enter into any transaction of merger or consolidation unless
(A) the surviving Person of such merger or consolidation assumes all of the
Depositor's obligations under this Agreement, (B) the Depositor shall have
given the Rating Agencies and the Trustee at
18
<PAGE>
least ten (10) days' prior written notice and the Rating Agency Condition
shall have been satisfied with respect to such transaction and (C) such
merger or consolidation does not conflict with any provisions of the
Certificate of Incorporation of the Depositor, or (ii) terminate, liquidate
or dissolve itself (or suffer any termination, liquidation or dissolution),
or (iii) acquire or be acquired by any Person (other than as permitted
pursuant to clause (i) above), or (iv) otherwise make (or suffer) any
material change in the organization of or method of conducting its
business.
ARTICLE VII
Delayed Amendment Relating to Discount Option
---------------------------------------------
SECTION 7.01. Amendment of Provision Relating to Discount Option.
--------------------------------------------------
Section 2.10 of the Original Agreement is hereby amended, effective as of the
day after the Series 1994-1 Final Payment Date, to read in its entirety, as
follows:
SECTION 2.10. Discount Option. The Depositor may, at any time, upon
---------------
ten (10) days' prior written notice to the Servicer, the Trustee and each
Rating Agency, designate a fixed percentage of the amount of Collections in
respect of Receivables arising in the Accounts on and after the date of
such designation that otherwise would be treated as Principal Collections
to be treated as Non-Principal Collections. Such designation will become
effective on the date specified therein only if (i) the Depositor shall
have delivered to the Trustee an Officers' Certificate, dated the date of
such designation, to the effect that the Depositor reasonably believes that
such designation will not result in an Early Amortization Event or have a
materially adverse effect on the Investor Certificateholders and (ii) the
Rating Agency Condition has been satisfied.
ARTICLE VIII
Current Amendment Relating to Removal of Accounts
-------------------------------------------------
SECTION 8.01. Amendment Relating to Removal of Accounts. The Original
-----------------------------------------
Ageement is hereby amended effective on the date of execution and delivery of
this Amendment by each of the parties hereto as specified on the signature page
hereto to read in its entirety as follows:
SECTION 2.07 Removal of Accounts. (a) The Depositor shall have
-------------------
the right to cease transferring newly originated Receivables to specific
Accounts and thereby, when the principal balance in such Accounts is
reduced to zero, to remove such Accounts from Trust in the manner
prescribed in subsection (b) of this Section 2.07.
19
<PAGE>
(b) To commence the process of the removal of an Account and to
cease transferring newly originated receivables in such Account to the
Trust, the Depositor (or the Servicer on its behalf) shall take the
following actions and make the following determinations:
1. not less than five (5) Business Days prior to the date on
which the transfer of newly originated receivables will cease (the
"Removal Commencement Date") furnish to the Trustee, any
Enhancement Providers and the Rating Agencies a written notice (the
"Removal Notice") specifying the date of the Removal Commencement
Date;
2. from and after such Removal Commencement Date, cease to
transfer to the Trust any and all Receivables arising in such
Accounts (the "Removed Accounts");
3. represent and warrant that the removal of any such Account
shall not, in the reasonable belief of the Depositor (or the
Servicer on behalf of the Depositor), cause an Early Amortization
Event to occur or cause the Pool Balance to be less than the
Required Pool Balance;
4. represent and warrant that no selection procedures reasonably
believed by the Depositor (or the Servicer on behalf of the
Depositor) to be adverse to the interests of the Beneficiaries were
utilized in selecting the Removed Accounts to be removed;
5. represent and warrant that such removal will not result in a
reduction or withdrawal of the rating of any outstanding Series or
Class by the applicable Rating Agency;
6. on or before the related Removal Commencement Date, deliver
to the Trustee and any Enhancement Providers an Officers'
Certificate confirming the items set forth in clauses (3) through
(5) above, the Trustee may conclusively rely on such Officers'
Certificate and shall have no duty to make inquiries with regard to
the matters set forth therein and shall incur no liability in so
relying; and
7. [within five (5) Business Days after the Removal Commencement
Date,] amend Schedule 1 hereto by delivering to the Trustee a
computer file or microfiche or written list containing a true and
complete list of the Removed Accounts to be removed, specifying for
each such Account, as of the date immediately preceding the Removal
Commencement Date, its account number, the aggregate amount of
Receivables outstanding in such Account and the aggregate
outstanding principal balance therein (the "Designated Balance");
8. from and after the Removal Commencement Date with respect to
any Removed Account to be removed, allocate Principal Collections
in
20
<PAGE>
respect of such Removed Account first to the oldest outstanding
principal balance of such Removed Account, until the Designated
Balance in such Removed Account is reduced to zero (the date on
which any such Designated Balance is so reduced to zero, the
"Removal Termination Date"); and
-------------------------
9 on each Business Day from and after the Removal Commencement
Date with respect to any Removed Account to be removed, until the
related Removal Termination Date, allocate Non-Principal
Collections in respect of such Removed Account (A) to the Trust,
based on the ratio of (1) the amount of Principal Receivables in
such Removed Account on such Business Day that were previously sold
to the Trust to (2) the total amount of Principal Receivables in
such Removed Account on such Business Day and (B) to the Depositor,
the remainder of Non-Principal Collections in respect of such
Ineligible Account on such Business Day.
(c) Subject to subsection (b) of this Section 2.07, on the
Removal Termination Date with respect to any Removed Account, such Account
shall be deemed removed from the Trust for all purposes. After the Removal
Termination Date and upon the written request of the Servicer, the Trustee
shall deliver to the Depositor a Reassignment [in substantially the form of
Exhibit ____ hereto.]
ARTICLE IX
Delayed Amendments Relating to Removal of Receivables
-----------------------------------------------------
SECTION 9.01. Amendment Relating to Removal of Participation Interests. The
--------------------------------------------------------
Original Agreement is hereby amended, effective on the day after the Series
1994-1 Final Payment Date, to add Section 2.12 which shall read in its entirety,
as follows:
SECTION 2.12 Removal of Participation Interests. (a) Subject to the
----------------------------------
terms and conditions of this Section 2.12, the Depositor shall have the
right to require the reassignment to it or its designee of a Participation
Interest in designated Receivables from the Trust for the purpose of
conveying such Participation Interest to a third party lender.
(b) To effect a reassignment of a Participation Interest from the
Trust, the Depositor (or the Servicer on its behalf) shall take the
following actions and make the following determinations:
(i) not less than five (5) Business Days prior to the Removal Date,
furnish to the Trustee, any Enhancement Providers and the Rating Agencies a
written notice (the "Participation Removal Notice") specifying the date on
----------------------------
which removal of the Participation Interest (the "Removed Participation
---------------------
Interest") will occur (a "Participation Interest Removal Date");
-------- -----------------------------------
21
<PAGE>
(ii) represent and warrant that the removal of any such interest on
any Participation Interest Removal Date shall not, in the reasonable belief
of the Depositor (or the Servicer on behalf of the Depositor), cause an
Early Amortization Event to occur or cause the Pool Balance to be less than
the Required Pool Balance;
(iii) represent and warrant that no selection procedures reasonably
believed by the Depositor (or the Servicer on behalf of the Depositor) to
be adverse to the interests of the Beneficiaries were utilized in selecting
the Accounts in which the Participation Interest is to be conveyed;
(iv) represent and warrant that such removal will not result in a
reduction or withdrawal of the rating of any outstanding Series or Class by
the applicable Rating Agency;
(v) on or before the related Removal Date, deliver to the Trustee
and any Enhancement Providers an Officers' Certificate confirming the items
set forth in clauses (b), (c) and (d) above, (i) the Trustee may
conclusively rely on such Officers' Certificate and shall have no duty to
make inquiries with regard to the matters set forth therein and shall incur
no liability in so relying; and
(vi) on or before the fifth Business Day after the Removal Date,
furnish to the Trustee a computer file, microfiche list or other list of
the Removed Participation Interests, specifying for each Removed
Participation Interest, (x) the number of the Account in which such
Receivable or Receivables existed, (y) as of the date of the Participation
Removal Notice, the aggregate amount of Principal Receivables outstanding
in the Account from which the Participation Interest was removed and (z) as
of the Removal Date, the aggregate amount of Principal Receivables in such
Account (after the removal of the Removed Participation Interests) and
represent that such computer file, microfiche list or other list describing
the interests removed is true and complete in all material respects.
(c) Subject to satisfaction of the conditions set forth above in
subsection (b) of this Section 2.12, on the Participation Interest Removal Date
with respect to any such Removed Participation Interest, the Trustee, without
further action, shall be deemed to sell, transfer, assign, set over and
otherwise convey to the Depositor or its designee, effective as of the
Participation Removal Date, the Participation Interest, and such Removed
Participation Interest shall be deemed removed from the Trust for all purposes
and shall no longer be included as a "Receivable" and the undivided interest in
such Account which have not been removed shall continue as "Receivables."
SECTION 9.02 Removal of Receivables for Assignment to Third Parties
------------------------------------------------------
and Removal of Aged Receivables. The Original Agreement is hereby amended,
- -------------------------------
effective on the day after the Series 1994-1 Final Payment Date to add
Section 2.13 which shall read in its entirety, as follows:
22
<PAGE>
SECTION 2.13. Removal of Receivables for Assignment to Third Parties
------------------------------------------------------
and Removal of Aged Receivables. (a) Subject to the conditions set forth
-------------------------------
in Section (b), and, when applicable, Section (c) below, the Depositor,
shall have the right to remove Receivables from the Trust if such
Receivables either:
(i) are removed for the purpose of selling, assigning or
transferring such Receivables to a lender other than BCRC, BCI or an
Affiliate of BCI (a "third-party lender"), either directly by transfer
from the Depositor to the third-party lender or by transfer from the
Depositor to BCI for such purpose, and provided that such transfer to
the third-party lender is for a purchase price at least equal to the
outstanding principal balance of the Receivables removed plus the
accrued interest thereon to the date of removal; or
(ii) are Receivables which (i) at any time during the period from
January ____, 1997 through May 31, 1998, are Domestic Inventory
Receivables which were included in the Pool Balance on January ____,
1997 that continue to be unpaid in full 450 or more days following the
origination thereof, provided that the aggregate amount of such
Domestic Inventory Receivables that may be so removed and reassigned
under this clause shall not exceed 10% of the aggregate principal
balance of Domestic Inventory Receivables included in the Pool Balance
on January ____, 1997 and (ii) at any time during any Origination
Period commencing after May 31, 1998, are Domestic Inventory
Receivables originated and transferred to the Trust during the four
month period commencing 16 months prior to such Origniation Period and
which continue to be unpaid in full 450 or more days following the
origination thereof, provided that the aggregate amount of such
Domestic Inventory Receivables that may be so removed and reassigned
under this clause shall not exceed 10% of the aggregate principal
balance of Domestic Inventory Receivables originated and transferred
to the Trust during such four month period commencing 16 months prior
to such Origination Period.
(b) Each removal of Receivables pursuant to this Section 2.13 shall be
subject to the condition that, on or prior to the date such Receivables are
removed, the Servicer shall transfer or cause to be transferred to the
Trust in immediately available funds for deposit into the Collection
Account an amount equal to the outstanding principal balance of the
Receivables removed plus accrued interest thereon to the date such
Receivables are removed from the Trust for application as Collections in
accordance with the terms of this Agreement and each Supplement.
(c) The Depositor hereby represents and covenants, that it will not
remove Receivables under the terms of this Section 2.13 if, in the
reasonable belief of BCRC, such removal would cause an Early Amortization
Event to occur.
(d) The Depositor's right to remove aged Receivables as described in
(a)(ii) above shall not impose on the Trust any obligation to hold such
Receivables for the purpose of allowing the Depositor to repurchase such
Receivables.
23
<PAGE>
ARTICLE X
Current Amendment Relating to Servicing of the Receivables
----------------------------------------------------------
SECTION 10.01. Amendment Relating to Charge-Offs. The first sentence
---------------------------------
of Section 3.01(a) of the Original Agreement is hereby amended, effective on the
date of execution and delivery of this Amendment as set forth on the signature
page hereto, to read in its entirety, as follows:
SECTION 3.01(a) Acceptance of Appointment and Other Matters Relating
----------------------------------------------------
to the Servicer. The Servicer shall (or, to the extent applicable, shall
---------------
cause its Affiliates to) service and administer the Receivables, collect
payments due under the Receivables and charge-off as uncollectible
Receivables, all in accordance with the Inventory Security Agreements (as
amended from time to time) relating to the Accounts (if applicable), the
Financing Guidelines and otherwise in accordance with procedures that are
customary and usual in the industry for servicing receivables comparable to
the Receivables, except insofar as any failure to so comply or perform
would not materially and adversely affect the rights of the Trust or any of
the Beneficiaries; and provided that, for purposes of determining the
amount of Defaulted Receivables, Receivables shall be charged-off as
described in the definition of Defaulted Receivables.
ARTICLE XI
Delayed Amendments Relating to Servicing Functions
--------------------------------------------------
SECTION 11.01. Amendment Relating to Delegation of Servicing
---------------------------------------------
Functions. Section 3.01(a) commencing with subsection (v) and continuing to the
- ---------
end of such Section 3.01(a) is hereby amended, effective on the day after the
Series 1994-1 Final Payment Date, to read as follows:
(v) subject to the provisions of Section 8.07 hereof, to
delegate all or a portion of its servicing, collection, enforcement
and administrative duties hereunder with respect to the Accounts and
the Receivables to any Person who agrees to conduct such duties in
accordance with the Financing Guidelines and this Agreement.
The Trustee shall furnish the Servicer with any powers of attorney and
other documents reasonably necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties
hereunder.
SECTION 11.02. Amendment Relating to Representation Relating to
------------------------------------------------
Liens. Section 3.03 (a) (xi) is hereby amended, effective as of the day after
- -----
the Series 1994-1 Final Payment Date, to read, in its entirety, as follows:
24
<PAGE>
(xi) Negative Pledge. Except for the conveyances under the
---------------
Receivables Purchase Agreement and under this Agreement and
encumbrances, transfers, interests and Liens permitted by Section 2.06
(a) of this Agreement, the Servicer will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or
suffer to exist any Lien on, any Receivable sold and assigned to the
Trust, whether now existing or hereafter created, or any interest
therein, and the Servicer shall defend the rights, title and interest
of the Trust in, to and under any Receivable sold and assigned to the
Trust, whether now existing or hereafter created, against all claims
of third parties claiming through or under the Depositor or the
Servicer.
ARTICLE XII
Current Amendment Relating to Allocation of Collections
-------------------------------------------------------
SECTION 12.01. Amendment Relating to the Allocation of Collections.
---------------------------------------------------
Section 4.03 of the Original Agreement is hereby amended effective on the date
of execution and delivery of this Amendment as set forth on the signature page
hereto by the addition of a paragraph which shall be the concluding paragraph of
such Section 4.03 and shall follow subsection (d) in the Original Agreement and
shall follow subsection (e) upon and following the effective date of the
amendments set forth in Article XIII of this Amendment. The paragraph being
added shall read in its entirety as follows:
Notwithstanding any other provision of this Agreement or of any
Supplement:
(i) with respect to the allocation of Principal Collections among the
Series and the Variable Funding Certificate for any Collection Period,
if the sum of (i) the sum of the floating allocation percentages for
all Series in their respective revolving periods, (ii) the sum of the
principal allocation percentages for all Series in an amortization,
accumulation or early amortization period and (iii) the Variable
Funding Percentage exceeds 100%, then Principal Collections for such
Collection Period will be allocated among the Series and the Variable
Funding Certificate on the basis of such allocation percentages after
the pro rata reduction of such percentages so that the sum thereof
equals 100% for such period; and
(ii) with respect to the allocation of Non-Principal Collections among
Series and the Variable Funding Certificate for any Collection Period,
if the sum of (i) the sum of the floating allocation percentages for
all series and (ii) the Variable Funding Percentage exceeds 100%, then
Non-Principal Collections for such Collection Period will be allocated
among the Series and the Variable Funding Certificate on the basis of
such allocation percentages after the pro rata reduction of such
percentages so that the sum thereof equals 100% for such period.
25
<PAGE>
ARTICLE XIII
Delayed Amendments Relating to Collections
------------------------------------------
SECTION 13.01. Amendment of Provisions Relating to Collections. In
-----------------------------------------------
addition to the current amendment to Section 4.03 of the Original Agreement set
forth in Aricle XII of this Amendment, such Section 4.03 is hereby further
amended, effective on the day after the Series 1994-1 Final Payment Date, by
replacing subsections 4.03(a), (c) and (d) in their entirety and inserting a new
subsection 4.03(e), in each case to read as follows:
(a) Except as otherwise provided below or as expressly provided in
any Supplement with respect to the Collections allocated to the related
Series, the Servicer shall deposit Collections into the Collection Account
as promptly as possible after receipt of such Collections, but in no event
later than the second Business Day after such receipt.
(c) Subject to Section 4.04 hereof, but notwithstanding anything else
in this Agreement to the contrary, with respect to any Collection Period,
whether the Servicer is required to make deposits of Collections pursuant
to subsections (a) or (b) above, (i) the Servicer will be required to
deposit Collections into the Collection Account only up to the aggregate
amount of Collections required to be deposited into all Series Accounts or,
without duplication, distributed on the related Distribution Date to all
Investor Certificateholders or to each Enhancement Provider pursuant to the
terms of any Supplement or Enhancement Agreement and (ii) if at any time
prior to such Distribution Date the amount of collections deposited in the
Collection Account exceeds the amount required to be deposited pursuant to
clause (i) above, the Servicer will be permitted to withdraw the excess
from the Collection Account.
(d) Collections of Non-Principal Receivables and Principal
Receivables, Defaulted Receivables and Miscellaneous Payments will be
allocated to each Series of Investor Certificates from and after the Series
Cut-Off Date as specified in the related Supplement, and amounts so
allocated to any Series will not, except as specified in the related
Supplements, be available to the Investor Certificateholders of any other
Series. Allocations of Principal Collections and Non-Principal Collections
among the Investors' Interest of each Series of Investor Certificates, the
Variable Funding Interest and the Retained Interest and among the Classes
in any Series shall be set forth in this Agreement and in the related
Supplement or Supplements.
(e) Throughout the existence of the Trust, unless otherwise stated in
any Supplement, the Servicer shall (x) allocate to the Holder of the
Variable Funding Certificate on each Deposit Date an amount equal to the
product of the Variable Funding Percentage and the amount of Collections on
such Deposit Date and (y) allocate to the Holder(s) of the BCRC Certificate
and any Supplemental Certificate(s), pro rata in accordance with the
--- ----
respective percentage interests thereof, on each Deposit Date an amount
equal to the Excess Retained Percentage and the amount of Collections on
such Deposit Date. Notwithstanding anything in this Agreement to the
26
<PAGE>
contrary, unless otherwise stated in any Supplement, the Servicer need not
deposit this amount or any other amounts so allocated to the Variable
Funding Certificate, the BCRC Certificate or any Supplemental
Certificate(s) pursuant to any Supplement into the Collection Account and
shall pay, or be deemed to pay, such amounts as collected to the Holders of
the Variable Funding Certificate, the BCRC Certificate and any Supplemental
Certificate(s).
The payments to be made to the Holders of the Variable Funding Certificate,
the BCRC Certificate or any Supplemental Certificate(s) pursuant to this
subsection 4.03(e) do not apply to deposits into the Collection Account or
other amounts that do not represent Collections, including Miscellaneous
Payments, payment of the purchase price for the Investor Certificates
pursuant to Section 2.03 of the Agreement and proceeds from the sale,
disposition or liquidation of Receivables pursuant to Section 9.02 or
Section 12.02 of the Agreement.
SECTION 13.02 Provisions Relating to Allocation Among Series. The
----------------------------------------------
Original Agreement is hereby amended, effective on the day after the Series
1994-1 Final Payment Date, to add Section 4.05 thereto which Section 4.05 shall
read in its entirety as follows:
SECTION 4.05. Allocations When Available Retained Collections Are
---------------------------------------------------
Insufficient. If for any Distribution Date the Available Retained
------------
Collections on deposit in the Collection Account are not sufficient to
satisfy the needs of all of the Series, the amount available shall be
allocated as provided in this Section.
(a) If for any Distribution Date, the sum of the required
subordination draw amounts for all Series outstanding exceeds the Available
Retained Collections on deposit in the Collection Account on such
Distribution Date, then such Available Retained Collections shall be
allocated among such Series pro rata on the basis of such required
--- ----
subordination draw amounts for the respective Series.
(b) If for any Distribution Date, the sum of the amount required to
be deposited into the reserve funds created for more than one Series of
Certificates, exceeds the Available Retained Collections on deposit in the
Collection Account on such Distribution Date, then such Available Retained
Collections shall be allocated among such Series pro rata on the basis of
--- ----
such required deposits into the respective reserve funds.
(c) If for any Distribution Date, the sum of the amount of the excess
reserve fund required amounts for more than one Series of Certificates,
exceeds the exceeds the Available Retained Collections on deposit in the
Collection Account on such Distribution Date, then such Available
Retained Collections shall be allocated among such Series pro rata on the
--- ----
basis of such amounts required to be deposited in each such reserve fund to
fund the excess reserve fund required amount.
27
<PAGE>
ARTICLE XIV
Delayed Amendment Relating to Delegation
----------------------------------------
SECTION 14.01. Amendment Relating to Delegation. Section 8.07 of the
--------------------------------
Original Agreement is hereby amended, effective as of the day after the Series
1994-1 Final Payment Date, to read in its entirety as follows:
SECTION 8.07. Delegation of Duties. In the ordinary course of
--------------------
business, the Servicer or any Affiliate of BCI servicing Receivables may at
any time delegate any duties hereunder to any Person who agrees to conduct
such duties in accordance with the Financing Guidelines and this Agreement.
The Servicer shall give prompt written notice of any such material
delegation of its servicing duties to the Rating Agencies, the Trustee, any
Agent and any Enhancement Providers. Such delegation shall not relieve the
Servicer of its liability, indemnity and responsibility with respect to
such duties, and shall not constitute a resignation within the meaning of
Section 8.05 hereof and the Rating Agency Condition shall have been
satisfied with respect to such material delegation prior to such
delegation. It is understood that Affiliates of BCI perform servicing
activities on behalf of BCI with respect to certain Receivables and that no
action on the part of the Servicer under this Section 8.07 is required and
the Rating Agency Condition is deemed to have been satisfied in connection
with such servicing activities.
ARTICLE XV
Current Amendments Relating to Amendments
-----------------------------------------
SECTION 15.01. Current Amendment Relating to Amendments Procedures.
---------------------------------------------------
Section 13.01 (a) of the Original Agreement is hereby amended, effective on the
date of execution and delivery of this Amendment by each of the parties hereto
as specified on the signature page hereto, to read in its entirety, as follows:
SECTION 13.01. Amendment. (a) This Agreement or any Supplement
---------
may be amended from time to time (including in connection with the issuance
of a Supplemental Certificate) by the Servicer, the Depositor, the Trustee
and BCI (if BCI is not the Servicer) without the consent of any of the
Certificateholders, provided that such action shall not, as evidenced by an
Opinion of Counsel for the Depositor, addressed and delivered to the
Trustee, adversely affect in any material respect the interests of any
Certificateholder or the Holder of the Variable Funding Certificate.
Notwithstanding anything contained herein to the contrary, (i) the Trustee,
with the consent of any Enhancement Providers, may at any time and from
time to time amend, modify or supplement the form of Distribution Date
Statement (ii) the Servicer, the Depositor, the Trustee and BCI (if not
then the Servicer) may, at any time, without the consent of any of the
Certificateholders, any Enhancement Provider or any other person, amend
Section 12.01 hereof to conform to the terms of such section as set forth
in the Agreement prior to the amendment
28
<PAGE>
thereof by Amendment Number 1 to the Pooling and Servicing Agreement;
provided that as a condition to such amendment under this provision (ii),
BCI shall deliver to the Trustee a written statement to the effect that,
after such amendment to conform to the original terms of the Agreement,
such provision will, under generally accepted accounting principles, be
consistent with sale treatment afforded the Receivables by BCRC to the
Trust; and (iii) subject to the provisions of the following sentence, the
Servicer, the Depositor, the Trustee and BCI (if not then the Servicer)
may, with the consent of the Rating Agencies but without the consent of any
of the Certificateholders, any Enhancement Provider or any other person,
amend from time to time (including in connection with the issuance of a
Supplemental Certificate) this Agreement or any Supplement in order to
conform such documents to the description of the Certificates and the
Receivables and the other matters set forth in the Registration Statement
filed by the Depositor with the Securities and Exchange Commission relating
to the initial Investor Certificates, as such Registration Statement is in
effect on the first Closing Date. Any amendment made under the provisions
of clause (iii) of the preceding sentence shall be confined to an amendment
of the terms of the Series 1994-1 Certificates or matters which affect only
the Series 1994-1 Certificates and do not affect any other Series of
Certificates and any such amendment shall be conditioned upon the delivery
to the Trustee of an Opinion of Counsel to the effect that such amendment
is confined to matters affecting the Series 1994-1 Certificates and will
not cause the Registration Statement filed with respect to any other Series
to be inaccurate in any material respect with respect to the description of
the terms of the Agreement after such amendment.
ARTICLE XVI
Delayed Amendments Relating to Amendment Procedures
---------------------------------------------------
SECTION 16.01. Amendment Relating to Amendment Procedures.
------------------------------------------
Section 13.01(a) of the Original Agreement is hereby amended, effective on the
day after the Series 1994-1 Final Payment Date, to read in its entirety as
follows:
SECTION 13.01. Amendment. (a) This Agreement or any Supplement may
---------
be amended from time to time (including in connection with the issuance of
a Supplemental Certificate) by the Servicer, the Depositor, the Trustee and
BCI (if BCI is not the Servicer) without the consent of any of the
Certificateholders, provided that such action shall not, as evidenced by an
Opinion of Counsel for the Depositor, addressed and delivered to the
Trustee, adversely affect in any material respect the interests of any
Certificateholder or the Holder of the Variable Funding Certificate and
provided, further, that any Supplement may, to the extent that such
-------- -------
Supplement specifically provides for amendment thereof in accordance with
terms which are different from those set forth in this Section 13.01, be
amended pursuant to the specific terms thereof without compliance with the
provisions of this Section 13.01. Notwithstanding anything contained
herein to the contrary, the Trustee, with the consent of any Enhancement
Providers, may at any time and from time to time amend, modify or
supplement the form of Distribution Date Statement.
29
<PAGE>
SECTION 16.02. Amendment Relating to Rating Agency Condition.
---------------------------------------------
Section 13.01 of the Original Agreement is hereby amended, effective on the day
after the Series 1994-1 Final Payment Date, to add the following subsection (g)
as the concluding provision in such Section 13.01. Such Section 13.01 (g) shall
read in its entirety as follows:
(g) Whenever a provision of this Agreement or of any Supplement
states that an adjustment, revision, amendment or other change may be made
upon satisfaction of the Rating Agency Condition, such adjustment,
revision, amendment or change shall be effective upon the satisfaction of
the Rating Agency Condition and any other conditions set forth in the
specific provision hereof or thereof, but shall not be controlled by the
terms of this Section 13.01 and compliance with the terms of this
Section 13.01 shall not be applicable thereto.
ARTICLE XVII
Delayed Amendments Relating to Exhibits
---------------------------------------
SECTION 17.01. Amendments to Exhibit A. Exhibit A to the Original
-----------------------
Agreement is hereby amended, effective on the day after the Series 1994-1 Final
Payment Date, as set forth in this Section 15.01, and after the Series 1994-1
Final Payment Date, BCRC shall deliver to the Trustee the original BCRC
Certificate in exchange for a new BCRC Certificate which new BCRC Certificate
shall represent the same interest as that delivered for exchange, provided that
the new certificate shall be in the form of Exhibit A as amended by this
provision. The Trustee is hereby authorized and directed to execute the
replacement BCRC Certificate after the Series 1994-1 Final Payment Date and to
authenticate such certificate and deliver it to BCRC in exchange for the
existing BCRC Certificate. Exhibit A shall be amended as follows:
Those provisions on the face of BCRC Certificate which describe the
interest represented by the certificate are amended to read as follows:
THIS CERTIFICATE REPRESENTS AN INTEREST IN CERTAIN
ASSETS OF THE BOMBARDIER RECEIVABLES MASTER TRUST I
Evidencing an interest in a trust, the corpus of which consists primarily
of payment obligations generated from time to time and resulting from (i)
extensions of credit and advances (referred to as inventory, wholesale or
floor plan financing) which loans are made or acquired by Bombardier
Capital Inc.("BCI") or an affiliate of BCI and (ii) extensions of credit
and advances made for the purpose of financing working capital or the
manufacturing or production or inventory with respect to consumer,
recreational and commercial products (collectively, the "Receivables") and
maintained by BCI in a portfolio of financing arrangements (the "Accounts")
meeting certain eligibility criteria. This certificate (the "BCRC
Certificate") does not represent an interest in or obligation of Bombardier
Credit Receivables Corporation (the "Depositor" or "BCRC"), BCI or any
Affiliate thereof.
30
<PAGE>
On the form of reverse of BCRC Certificate, the fifth paragraph is amended
to read as follows:
The Receivables consist of amounts payable by obligors as a result of
(i) advances made to domestic dealers of certain consumer, recreational and
commercial products and (ii) advances made to domestic dealers,
manufacturers and distributors to finance working capital, manufacturing,
production and inventory with respect to consumer, recreational and
commercial products.
SECTION 17.02. Amendments to Exhibit C. Exhibit C to the Original
-----------------------
Agreement is hereby amended, effective on the day after the Series 1994-1 Final
Payment Date, as set forth in this Section 17.02.
Paragraphs 4 and 5 of the Form of Annual Servicer's Certificate are hereby
amended to read as follows:
4. Based on such review, the Servicer has, to the best of our
knowledge, performed in all material respects all of its obligations under
the Agreement throughout such year and no material default in the
performance of such obligations has occurred or is continuing except as set
forth in paragraph 5 below.
5. The following is a description of each material default in the
performance of the Servicer's obligations under the provisions of the
Agreement known to us to have been made by the Servicer during the year
ended December 31, ____, which sets forth in detail the (a) nature of each
such default, (b) the action taken by the Servicer, if any, to remedy each
such default and (c) the current status of each such default: [If
applicable, insert "None."]
SECTION 17.03. Amendments to Exhibit G-2. The caption and introductory
-------------------------
provisions to Exhibit G-2 are hereby amended, effective on the day after the
Series 1994-1 Final Payment Date to read as follows and to add, prior to
paragraph (a) a new provision, all as follows:
EXHIBIT G-2
TO POOLING AND SERVICING AGREEMENT
FORM OF OPINION OF COUNSEL
IN CONNECTION WITH ADDITION OF ACCOUNTS
Provisions to be Included in
----------------------------
Opinion of Counsel Delivered Pursuant
-------------------------------------
to Section 2.05(f) or Section 2.05(h)
-------------------------------------
The opinions described herein shall, if given under the provisions of
Section 2.05 (f), be given with respect to a specific assignment made on the
date of the opinion and refer only to such assignment and to the Transferred
Property which is the subject of such
31
<PAGE>
assignment and shall, if given under Section 2.05(h) following the addition of
Accounts under the Automatic Addition Condition, be given with respect to all
such assignments of Additional Accounts under the Automatic Addition Condition
provisions and the Transferred Property which was the subject of such
assignments and which have not previously been covered by an opinion covering
the matters set forth in the Exhibit G-2.
ARTICLE XVIII
Miscellaneous
-------------
SECTION 18.01. Representation Concerning Place of Business and
-----------------------------------------------
Notice. The Depositor hereby represents and warrants to the Trust and to the
- ------
Trustee that, as of the date of execution and delivery of this Amendment that
the principal place of business of the Depositor is in [Burlington,] Vermont and
the offices where the Depositor keeps its records concerning the Receivables and
related contracts are in Colchester, Vermont. To the extent that this provision
differs from that set forth in Section 2.03 (j) of the Original Agreement, such
Original Agreement is hereby amended on the date of execution and delivery of
this Amendment.
With respect to Section 13.06 of the Original Agreement, BCI hereby
designates to BCRC and the Trustee, that for purposes of delivering demands,
notices, instructions, directions and communication under the Agreement, the
address of BCI has changed and the current address is "1600 Mountain View Drive,
Colchester, Vermont [05402]."
SECTION 18.02. Counterparts. This Amendment may be executed in two
------------
or more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
SECTION 18.03. Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation or
any provision hereof.
SECTION 18.04. Agreement in Full Force and Effect as Amended. Except
---------------------------------------------
as specifically amended or waived hereby, all of the terms and conditions of the
Original Agreement shall remain in full force and effect. All references to the
Original Agreement in any other document or instrument shall be deemed to mean
such Original Agreement as amended by this Amendment. This Amendment shall not
constitute a novation of the Original Agreement, but shall constitute an
amendment thereof. The parties hereto agree to be bound by the terms and
obligations of the Original Agreement, as amended by this Amendment, as though
the terms and obligations of the Original Agreement were set forth herein.
SECTION 18.05. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY
-------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS.
32
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused this Amendment Number 1 to be duly executed by their respective officers
as of the day and year specified on the signature page hereof.
The date of execution and delivery of this Amendment Number 1 is
January ____, 1997.
BOMBARDIER CREDIT RECEIVABLES
CORPORATION, Depositor
By:
--------------------------------
Name:
-------------------------
Title:
-------------------------
By:
--------------------------------
Name:
-------------------------
Title:
-------------------------
BOMBARDIER CAPITAL INC., Servicer
By:
--------------------------------
Name:
-------------------------
Title:
-------------------------
By:
--------------------------------
Name:
-------------------------
Title:
-------------------------
BANKERS TRUST COMPANY, Trustee
By:
--------------------------------
Name:
-------------------------
Title:
-------------------------
33
<PAGE>
OH&S DRAFT
01/09/97
Exhibit 4.6
================================================================================
BOMBARDIER CREDIT RECEIVABLES CORPORATION
Purchaser
and
BOMBARDIER CAPITAL INC.
Seller
AMENDMENT NUMBER 1
Dated as of January 1, 1997
to
RECEIVABLES PURCHASE AGREEMENT
Dated as of January 1, 1994
================================================================================
<PAGE>
Table of Contents
-----------------
Page
----
ARTICLE I
Definitions
SECTION 1.01. Cross Reference to Definitions in the Pooling and Servicing
Agreement .................................................... 1
SECTION 1.02. Terms Confined to this Amendment.............................. 2
SECTION 1.03. Effective Dates............................................... 2
ARTICLE II
Current Amendments Relating to Contribution of Receivables
SECTION 2.01. General Amendment Relating to Contribution of Receivables..... 2
SECTION 2.02. Amendment Relating to Purchase Price.......................... 3
ARTICLE III
Amendments Relating to Representations and Warranties
SECTION 3.01. Current Amendment to Representations and Warranties of the
Seller Relating to the Seller and the Agreement............... 3
SECTION 3.02. Delayed Amendment to Representations and Warranties of the
Seller Relating to the Receivables........................... 4
SECTION 3.03. Current Amendment Relating to Removal of Accounts............ 4
SECTION 2.06. Removal of Accounts
SECTION 3.04. Delayed Amendment Relating to Removal of Receivables in
Connection with the Granting of a Participation Interest..... 5
SECTION 3.05. Delayed Amendment Relating to Removal of Receivable for
Assignment to a Third Party and Removal of Aged Receivables.. 7
ARTICLE IV
Delayed Amendments Relating to the Addition of Accounts
SECTION 4.01. Amendments Relating to the Automatic Addition of Accounts.... 7
i
<PAGE>
ARTICLE V
Delayed Amendments Relating to Liens
SECTION 5.01. Amendments Relating to Liens................................... 9
ARTICLE VI
Delayed Amendment Relating to Repurchase Agreements
SECTION 6.01. Addition of Provision Relating to Repurchase Agreements........ 9
ARTICLE VII
Current Amendment Relating to Amendments
SECTION 7.01. Amendment to Provisions Relating to Amendment of the
Receivables Purchase Agreement................................. 10
ARTICLE VIII
Current Amendments to Exhibits
SECTION 8.01. Amendments to Exhibit A........................................ 11
SECTION 8.02. Amendments to Exhibit D-1...................................... 11
ARTICLE IX
Miscellaneous
SECTION 9.01. Counterparts................................................... 12
SECTION 9.02. Headings....................................................... 12
ii
<PAGE>
AMENDMENT NUMBER 1 dated as of January 1, 1997 (this "Amendment") to
the RECEIVABLES PURCHASE AGREEMENT dated as of January 1, 1994 (the "Original
Receivables Purchase Agreement"), each between BOMBARDIER CREDIT RECEIVABLES
CORPORATION, a Delaware corporation, as Purchaser, and BOMBARDIER CAPITAL INC.,
a Massachusetts corporation, as Seller.
W I T N E S S E T H :
WHEREAS (i) the Seller, in the ordinary course of its business,
finances the purchase of floorplan and wholesale inventory by dealers of certain
consumer, recreational and commercial products thereby generating certain
payment obligations and (ii) the Seller plans, in the ordinary course of its
business, to finance working capital needs and the production, manufacturing and
holding in inventory of consumer, recreational and commercial products for
dealers, distributors and manufacturers, and thereby also to generate payment
obligations; and
WHEREAS the Seller entered into the Original Receivables Purchase
Agreement for the purpose of selling certain of such existing and future payment
obligations from time to time to the Purchaser; and
WHEREAS, the Seller, the Purchaser and BANKERS TRUST COMPANY, as
Trustee (the "Trustee"), have entered into a Pooling and Servicing Agreement
dated as of January 1, 1994 and, simultaneously herewith, are entering into
Amendment Number 1 to such Pooling and Servicing Agreement (such Pooling and
Servicing Agreement as amended by such Amendment Number 1 and as the same may
hereafter from time to time be amended, supplemented or otherwise modified, the
"Pooling and Servicing Agreement"); and
WHEREAS, the Seller and the Purchaser have agreed that, from time to
time, the Seller may transfer Receivables to the Purchaser by contribution
rather than by sale and the parties wish to make provisions for such
contributions; and
WHEREAS, the Seller and the Purchaser, in accordance with Section 8.01
of the Original Receivables Purchase Agreement, by the execution and delivery of
this Amendment, hereby amend the Original Receivables Purchase Agreement to the
extent and on the terms set forth in this Amendment.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. Cross Reference to Definitions in the Pooling and
-------------------------------------------------
Servicing Agreement. Capitalized terms used herein and not defined herein or
- -------------------
amended by the terms of this Amendment shall have the meanings set forth in the
Pooling and Servicing
<PAGE>
Agreement, including the Amendment to Pooling and Servicing Agreement, and in
the Original Receivables Purchase Agreement.
SECTION 1.02. Terms Confined to this Amendment. Whenever used in
--------------------------------
this Amendment, the following words shall have the following meanings:
"Amendment" shall mean this Amendment Number 1 dated as of January 1,
---------
1997 to the Original Receivables Purchase Agreement, as such Amendment Number 1
may be modified, amended and supplemented hereafter.
"Amendment to Pooling and Servicing Agreement" shall mean Amendment
--------------------------------------------
Number 1, dated as of January 1, 1997, to the Original Pooling and Servicing
Agreement.
"Delayed Amendments" shall mean those amendments to the Original
------------------
Receivables Agreement set forth herein which are specified herein as having an
Effective Date of the day following the Series 1994-1 Final Payment Date.
"Effective Date" shall mean the date on which the respective
--------------
amendments to the Original Receivables Purchase Agreement contained in this
Amendment shall become effective which (i) with respect to those amendments set
forth in ARTICLES II, VII, VIII and Sections 3.01 and 3.03 shall be the date of
execution and delivery of this Amendment by each of the parties hereto as
specified on the signature page hereto and (ii) with respect to those amendments
set forth in all other Sections and Articles of this Amendment shall be the day
following the Series 1994-1 Final Payment Date.
"Original Receivables Purchase Agreement" shall mean the Receivables
---------------------------------------
Purchase Agreement dated as of January 1, 1994 between Bombardier Capital Inc.,
as Seller, and Bombardier Credit Receivables Corporation, as Purchaser.
"Receivables Purchase Agreement" shall mean, the Original Receivables
------------------------------
Purchase Agreement as amended and supplemented by this Amendment and as
otherwise modified, amended and supplemented from time to time.
SECTION 1.03. Effective Dates. The Amendment to Pooling and
---------------
Servicing Agreement sets forth the respective Effective Dates of the defined
terms added to the Pooling and Servicing Agreement or amended by the Amendment
to Pooling and Servicing Agreement. With respect to each such new or amended
definition the respective Effective Dates in the Amendment to Pooling and
Servicing Agreement shall also be the Effective Dates under this Amendment.
ARTICLE II
Current Amendments Relating to Contribution of Receivables
----------------------------------------------------------
SECTION 2.01. General Amendment Relating to Contribution of
---------------------------------------------
Receivables. The Original Receivables Purchase Agreement is hereby amended and
- -----------
supplement effective
2
<PAGE>
the day of execution and delivery of this Amendment by each of the parties
hereto as specified on the signature page hereto, to provide that Receivables,
in addition to being sold by the Seller to the Purchaser, may, be transferred
from the Seller to the Purchaser in the form of a capital contribution.
Notwithstanding the fact that the Original Receivables Purchase Agreement refers
only to the sale of Receivables, wherever in the Receivables Purchase Agreement
there is a reference to a sale of Receivables by the Seller to the Purchase,
such provision shall also be applicable to the transfer of Receivables in the
form of a contribution.
SECTION 2.02. Amendment Relating to Purchase Price. Section 2.01 (e)
------------------------------------
of the Original Receivables Purchase Agreement is hereby specifically amended
effective the day of execution and delivery of this Amendment by each of the
parties hereto as specified on the signature page hereto to read in its entirety
as follows:
(e) The purchase price (i) with respect to Eligible Receivables sold
hereunder will equal the principal amount of such Receivables plus accrued
----
and unpaid interest thereon on the related Transfer Date and (ii) with
respect to Ineligible Receivables sold hereunder will equal 100% of the net
book value (as determined by the Seller) of such Receivables as of the
related Transfer Date. If Receivables are contributed by the Seller to the
Purchaser, the value of such contribution (i) with respect to Eligible
Receivables contributed hereunder will equal the principal amount of such
Receivables plus accrued and unpaid interest thereon on the related
----
Transfer Date and (ii) with respect to Ineligible Receivables contributed
hereunder will equal 100% of the net book value (as determined by the
Seller) of such Receivables as of the related Transfer Date. The
consideration paid with respect to sales hereunder subsequent to the
Closing Date may be paid, at the election of Purchaser, (a) in cash, (b)
partially in cash with the balance added to the principal amount of the
BCRC Note, or (c) in its entirety by increasing the principal amount of the
BCRC Note. With respect to Receivables which are contributed by the Seller
to the Purchaser the value of the contribution shall be recorded as a
contribution to the capital of the Purchaser.
ARTICLE III
Amendments Relating to Representations and Warranties and Removal of Accounts
- -----------------------------------------------------------------------------
and of Receivables.
- ------------------
SECTION 3.01. Current Amendment to Representations and
----------------------------------------
Warranties of the Seller Relating to the Seller and the Agreement. Section
- -----------------------------------------------------------------
2.02 (a) of the Original Receivables Purchase Agreement is hereby amended,
effective the day of execution and delivery of this Amendment by each of the
parties hereto as specified on the signature page hereto, to read in its
entirety as follows:
(a) Organization and Good Standing. The Seller is a corporation duly
------------------------------
organized and validly existing and in good standing under the laws of the
state of its incorporation and has, in all material respects, full
corporate power, authority and legal right to own its properties and
conduct its business as such properties are
3
<PAGE>
presently owned and such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement.
SECTION 3.02. Delayed Amendment to Representations and Warranties of
------------------------------------------------------
the Seller Relating to the Receivables. Subsections (a)(i) and (a)(v) of
- --------------------------------------
Section 2.03 of the Original Receivables Purchase Agreement are hereby amended,
effective the day after the Series 1994-1 Final Payment Date, to read in their
entirety, respectively, as follows:
(i) Each Receivable and all Collateral Security existing on the
first Closing Date has been or, in the case of Additional Accounts, on
the applicable Addition Date, and on each Transfer Date, will be
conveyed to the Purchaser free and clear of any Lien except for Liens
permitted under Section 2.06(a) of the Pooling and Servicing
Agreement.
(v) Each Domestic Inventory Receivable conveyed to the Trust
was, at the time of its creation, and is and will be secured by a
first priority perfected security interest in the related Eligible
Product except to the extent of Liens permitted by Section 2.06(a) of
the Pooling and Servicing Agreement.
SECTION 3.03. Current Amendment Relating to Removal of Accounts.
-------------------------------------------------
Section 2.06 of the Original Receivables Purchase Agreement is hereby amended,
effective the day after the Series 21994-1 Final Payment Date, to read in its
entirety as follows:
SECTION 2.06. Removal of Accounts. (a) On each Removal
-------------------
Termination Date on which Accounts are removed from the Trust pursuant
to Section 2.07 of the Pooling and Servicing Agreement, the Purchaser
shall be deemed to have offered to the Seller automatically and
without notice to or action by or on behalf of the Purchaser, the
right to remove Accounts from the operation of this Agreement in the
manner prescribed in subsection (b) below.
(b) To accept such offer and remove Accounts, the Seller
(or the Servicer on its behalf) shall take the following actions
and make the following determinations:
(i) not less than five (5) Business Days prior to the
Removal Commencement Date, furnish to the Purchaser, the
Trustee, any Enhancement Providers and the Rating Agencies a
written notice (the "Removal Notice") specifying the date on
--------------
which the Purchaser is to cease transferring newly originate
Receivables in one or more Accounts (the "Removed Accounts")
----------------
to the Trust (the "Removal Commencement Date");
(ii) represent and warrant that the removal of any such
Account shall not, in the reasonable belief of the Seller,
cause an Early Amortization Event to occur or cause the Pool
Balance to be less than the Required Pool Balance;
4
<PAGE>
(iii) represent and warrant that no selection
procedures believed by the Seller to be adverse to the
interests of the Beneficiaries were utilized in selecting
the Accounts to be removed;
(iv) represent and warrant that such removal will not
result in a reduction or withdrawal of the rating of any
outstanding Series or Class by the applicable Rating Agency;
(v) on or before the related Removal Commencement
Date, deliver to the Trustee and any Enhancement Providers
an Officers' Certificate confirming the items set forth in
clauses (ii) through (iv) above, the Trustee may
conclusively rely on such Officers' Certificate and shall
have no duty to make inquiries with regard to the matters
set forth therein and shall incur no liability in so
relying; and
(vi) within five (5) Business Days after the Removal
Commencement Date, amend Schedule 1 to the Pooling and
Servicing Agreement by delivering to the Trustee a computer
file or microfiche or written list containing a true and
complete list of the Removed Accounts to be removed,
specifying for each such Account, as of the date immediately
preceding the Removal Commencement Date, its account number,
the aggregate amount of Receivables outstanding in such
Account and the aggregate outstanding principal balance
therein (the "Designated Balance");
(c) Subject to subsection (b) above, on the Removal
Termination Date with respect to any such Removed Account, such
Removed Account shall be deemed removed by operation of this Agreement
for all purposes. After the Removal Date and upon the written request
of the Servicer, the Purchaser shall deliver to the Seller a
reassignment in substantially the form of Exhibit ___ hereto (a
"Reassignment").
-------------
SECTION 3.04. Delayed Amendment Relating to Removal of Receivables in
-------------------------------------------------------
Connection with the Granting of a Participation Interest. The Original
- --------------------------------------------------------
Receivables Purchase Agreement is hereby amended, effective the day after the
Series 1994-1 Final Payment Date, to add Section 2.09 which shall read in its
entirety, as follows:
SECTION 2.09 Removal of Participation Interests. (a) On each
----------------------------------
date on which an interest in a Receivable or in Receivables is removed
from the Trust pursuant to Section 2.12 of the Pooling and Servicing
Agreement, the Purchaser shall be deemed to have offered to the Seller
automatically and without notice to or action by or on behalf of the
Purchaser, the right to remove the interest from the operation of this
Agreement in the manner prescribed in subsection (b) below.
5
<PAGE>
(b) To accept such offer and remove interests in Receivables in connection
with the granting of a Participation Interest, the Seller (or the
Servicer on its behalf) shall take the following actions and make the
following determinations:
(i) not less than five (5) Business Days prior to the
removal date, furnish to the Trustee, any Enhancement Providers
and the Rating Agencies a written notice (the "Participation
-------------
Removal Notice") specifying the date on which removal of the
--------------
participation interest (the "Removed Participation Interest")
------------------------------
will occur (a "Participation Interest Removal Date");
-----------------------------------
(ii) represent and warrant that the removal of any such
interest on any Participation Interest Removal Date shall not, in
the reasonable belief of the Seller, cause an Early Amortization
Event to occur or cause the Pool Balance to be less than the
Required Pool Balance;
(iii) represent and warrant that no selection procedures
reasonably believed by the Seller to be adverse to the interests
of the Beneficiaries were utilized in selecting the Accounts or
the Receivables in which the Participation Interest is to be
conveyed;
(iv) represent and warrant that such removal will not result
in a reduction or withdrawal of the rating of any outstanding
Series or Class by the applicable Rating Agency;
(v) on or before the related Removal Date, deliver to the
Trustee and any Enhancement Providers an Officers' Certificate
confirming the items set forth in clauses (ii), (iii) and (iv)
above; the Trustee may conclusively rely on such Officers'
Certificate and shall have no duty to make inquiries with regard
to the matters set forth therein and shall incur no liability in
so relying; and
(vi) on or before the fifth Business Day after the
Participation Removal Date, furnish to the Trustee a computer
file, microfiche list or other list of the Removed Participation
Interests, specifying for each Removed Participation Interest,
(x) the number of the Account in which such Receivable or
Receivables existed, (y) as of the date of the Participation
Removal Notice, the aggregate amount of Principal Receivables
outstanding in the Account from which the Participation Interest
was removed and (z) as of the Participation Interest Removal
Date, the aggregate amount of Principal Receivables in such
Account (after the removal of the Removed Participation
Interests) and represent that such computer file, microfiche list
or other list describing the interests removed is true and
complete in all material respects.
6
<PAGE>
(c) Subject to satisfaction of the conditions set forth above in
subsection (b) of this Section 2.09, on the Participation Interest
Removal Date with respect to any such Removed Participation Interest,
such Removed Participation Interest shall be deemed removed from the
operation of this Agreement for all purposes and shall no longer be
included as a "Receivable" and the interest in such Account which have
not been removed shall continue as "Receivables" subject to the terms
hereof and of the Trust. After the Participation Interest Removal
Date and upon the written request of the Servicer, the Purchaser shall
deliver to the Seller a reassignment in substantially the form of
Exhibit _____ hereto.
SECTION 3.05. Delayed Amendment Relating to Removal of Receivable for
-------------------------------------------------------
Assignment to a Third Party and Removal of Aged Receivables. The Original
- -----------------------------------------------------------
Receivables Purchase Agreement is hereby amended, effective the day after the
Series 1994-1 Final Payment Date, to add Section 2.10 which shall read in its
entirety, as follows:
SECTION 2.10. Removal of Receivables for Assignment to a Third
------------------------------------------------
Party and Removal of Aged Receivables. (a) On each date on which a
-------------------------------------
Receivable or Receivables are withdrawn from the Trust (the "Removal Date")
pursuant to Section 2.13 of the Pooling and Servicing Agreement, the
Purchaser shall be deemed to have offered to the Seller automatically and
without notice to or action by or on behalf of the Purchaser the right to
remove the Receivable or Receivables from the operation of this Agreement
in the manner prescribed in subsection (b) below:
(b) To accept such offer and remove interests in Receivables,
the Seller (or the Servicer on its behalf) shall, on behalf of the
Purchaser, pay to the Trustee on or before the Removal Date for
deposit into the Collection Account an amount at least equal to the
principal amount of such removed Receivables together with interest
accrued thereon to the Removal Date.
Upon each such removal from this Agreement, the Seller represents and
covenants that the removal will not, in the reasonable belief of the Seller,
cause an Early Amortization Event to occur.
ARTICLE IV
Delayed Amendments Relating to the Addition of Accounts
-------------------------------------------------------
SECTION 4.01. Amendments Relating to the Automatic Addition of
------------------------------------------------
Accounts. Subsections (ii) of Section 2.04 (b) and Section 2.04 (d) of the
- --------
Original Receivables Purchase Agreement are hereby amended, effective the day
after the Series 1994-1 Final Payment Date, to read in their entirety,
respectively, as follows:
7
<PAGE>
Section 2.04(b)(ii) is hereby amended to read:
(ii) Such Additional Accounts shall all be Eligible Accounts and
unless the Account is being added pursuant to the Automatic Addition
Condition set forth in subsection (g) of Section 2.05 of the Pooling
and Servicing Agreement, the Rating Agency Condition shall have been
satisfied;
Section 2.04(d) is hereby amended to read:
(d) At least ten (10) days prior to each Addition Date in respect of
the designation of any Additional Accounts pursuant to this Section
2.04, unless the Account is being added pursuant to the Automatic
Addition Condition set forth in subsection (g) of Section 2.05 of the
Pooling and Servicing Agreement, the Seller shall have given written
notice of such designation to the Rating Agencies.
ARTICLE V
Delayed Amendments Relating to Liens
------------------------------------
SECTION 5.01. Amendments Relating to Liens. Section 2.05(a) of the
----------------------------
Original Receivables Purchase Agreement is hereby amended, effective as of the
day after the Series 1994-1 Final Payment Date, to read in its entirety, as
follows:
(a) No Liens. Except for (i) the conveyances hereunder, (ii) any
--------
Participation Interests granted pursuant to a Participation Agreement,
(iii) the sale, assignment or transfer to a Third Party of
Receivables, the Collateral Security and other associated rights
removed from the Trust pursuant to the terms of the Pooling and
Servicing Agreement and (iv) any tax liens and certain other statutory
liens (including liens in favor of the Pension Benefit Guaranty
Corporation), the Seller will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist
any Lien on, any Receivable or any Collateral Security, whether now
existing or hereafter created, or any interest therein, and the Seller
shall defend the right, title and interest of the Purchaser and the
Trust in, to and under the Receivables and the Collateral Security,
whether now existing or hereafter created, against all claims of third
parties claiming through or under the Seller.
ARTICLE VI
Delayed Amendment Relating to Repurchase Agreements
---------------------------------------------------
SECTION 6.01. Addition of Provision Relating to Repurchase
--------------------------------------------
Agreements. The following new section shall, effective the day after the Series
- ----------
1994-1 Final Payment Date, be added to Article II of the Receivables Purchase
Agreement:
8
<PAGE>
SECTION 2.09. Provisions Relating to Repurchase Agreements. The
--------------------------------------------
Seller and Purchaser agree that, with respect to the Repurchase Agreements,
the rights under such Repurchase Agreements and the recoveries thereunder
which are conveyed by the Seller to the Purchaser pursuant to the terms of
this Agreement shall be those rights and recoveries which relate to
Receivables conveyed hereunder and the Collateral Security which secures
such Receivables. To the extent that any of such Repurchase Agreements also
relate to obligations due to the Seller which are not Receivables conveyed
to the Purchaser hereunder and any collateral security or other associated
rights, any rights under such Repurchase Agreement related to such non-
conveyed obligations, collateral security and other associated rights,
shall remain with the Seller and any recoveries under such Repurchase
Agreement, to the extent that such recoveries related to such non-conveyed
obligations, collateral security and other associated rights shall be the
property of the Seller and are not conveyed to the Purchaser hereunder and,
to the extent the Purchaser collects amounts under a Repurchase Agreement
which amounts relate to such non-conveyed obligations, collateral security
and other associated rights, the Purchaser shall pay such amount to the
Seller. In addition, if a Repurchase Agreement or an interest therein has
been conveyed to the Purchaser in connection with a Receivable or
Receivables conveyed hereunder and such Receivable or Receivables have been
repurchased or otherwise removed from the Trust and from this Agreement, to
the extent such Repurchase Agreement related to such removed Receivable,
provided the Receivable was removed in compliance with the terms hereof and
of the Pooling and Servicing Agreement, then the rights in any Repurchase
Agreement to the extent they related to such removed Receivables, shall
revert to the Seller. All representations and warranties of the Seller
hereunder with respect to any such Repurchase Agreements shall relate only
to the interest in such agreements which relates to the Receivables
conveyed to the Purchaser hereunder.
ARTICLE VII
Current Amendment Relating to Amendments
----------------------------------------
SECTION 7.01. Amendment to Provisions Relating to Amendment of the
----------------------------------------------------
Receivables Purchase Agreement. Section 8.01(a) of the Original Receivables
- ------------------------------
Purchase Agreement is hereby amended, effective as of the day of execution and
delivery of this Amendment by each of the parties hereto as specified on the
signature page hereto, to read in its entirety as follows:
SECTION 8.01. Amendment. (a) This Agreement may be amended from
---------
time to time by the Seller and the Purchaser; provided, however, that such
-------- -------
action shall not adversely affect in any material respect the interests of
any Investor Certificateholder or the Holder of the Variable Funding
Certificate; provided, however, that any amendment to this Agreement in
order to conform to the description of the Certificates and the Receivables
and other matters set forth in the Registration Statement filed by the
Purchaser with the Securities and Exchange Commission relating to the
Series 1994-1 Certificates, as such Registration Statement
9
<PAGE>
was in effect on the date of issuance of the Series 1994-1 Certificates,
shall not be deemed to adversely affect the interests of any
Certificateholder or the Holder of the Variable Funding Certificate if (i)
shall be confined to an amendment of the terms of the Series 1994-1
Certificates or matters which affect only the Series 1994-1 Certificates
and does not affect any other Series of Certificates and (ii) any such
amendment is conditioned upon the delivery to the Trustee of an Opinion of
Counsel to the effect that such amendment is confined to matters affecting
the Series 1994-1 Certificates and will not cause the Registration
Statement filed with respect to any other Series to be inaccurate in any
material respect with respect to the description of the terms of this
Agreement after such amendment. Notwithstanding any other provision of
this Agreement or of the Pooling and Servicing Agreement, the Servicer and
the Purchaser may amend Section 2.06 of this Agreement, at any time, to
conform with the terms of such Section prior to the amendments contained in
Amendment Number 1 to the Receivables Purchase Agreement if Section 12.01
of the Pooling and Servicing Agreement is amended to conform with the terms
thereof prior to the amendments contained in Amendment Number 1 to the
Pooling and Servicing Agreement.
ARTICLE VIII
Current Amendments to Exhibits
------------------------------
SECTION 8.01. Amendments to Exhibit A. Exhibit A to the Original
-----------------------
Receivables Repurchase Agreement is hereby amended, effective the day of
execution and delivery of this Amendment by all of the parties hereto as
specified on the signature page hereto, in the following respects:
Provision 5(b) is hereby amended to read:
(b) Organization and Good Standing. The Seller is a corporation duly
------------------------------
organized and validly existing and in good standing under the law of the
state of its incorporation and has, in all material respects, full
corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such
business is presently conducted, and to execute, deliver and perform its
obligations under this Assignment.
Provision 5(m) is hereby amended to read:
(m) No Liens. Each Receivable and all Collateral Security existing on
--------
the Addition Date has been conveyed to the Purchaser free and clear of any
Lien, except for Liens permitted under Section 2.06(a) of the Pooling and
Servicing Agreement and tax and certain other statutory liens (including
liens in favor of the Pension Benefit Guaranty Corporation);
SECTION 8.02. Amendments to Exhibit D-1. Exhibit D-1 to the Original
-------------------------
Receivables Repurchase Agreement is hereby amended, effective the day of
execution and
10
<PAGE>
delivery of this Amendment by all of the parties hereto as specified on the
signature page hereto, in the following respect:
Provision 3(a) is hereby amended to read:
3. Conveyance of Receivables and Accounts. (a) The Purchaser
--------------------------------------
does hereby transfer, assign, set over and otherwise convey to the Seller,
without recourse, representation or warranty on and after the Removal Date,
all right, title and interest of the Trust in, to and under all Receivables
now existing at the close of business on the Removal Date and thereafter
created from time to time until the termination of the Trust in Removed
Accounts designated hereby, all Collateral Security in respect thereof, any
rights under any Repurchase Agreement with respect to such Receivables and
the Collateral Security and rights in respect thereof, all monies due or to
become due and all amounts received with respect thereto (including all
Non-Principal Receivables) and all proceeds (as defined in Section 9-306 of
the UCC as in effect in the State of Vermont) and Recoveries thereof
relating thereto.
SECTION 8.03. Amendments to Exhibit D-2. Exhibit D-2 to the Original
-------------------------
Receivables Agreement is hereby amended, effective as of the day after the
Series 1994-1 Final Payment Date, in the following respect:
Provision 3(a) is hereby amended to read:
3. Conveyance of Receivables and Accounts. (a) The Purchaser
--------------------------------------
does hereby transfer, assign, set over and otherwise convey to the Seller,
without recourse, representation or warranty on and after the Removal
Commencement Date, all right, title and interest of the Trust and the
Purchaser in, to and under (x) all Receivables created from time to time on
and after the Removal Commencement Date until the Removal Termination Date
in the Ineligible Accounts designated hereby and all monies due or to
become due and all amounts received with respect thereto and any rights
under any Repurchase Agreement with respect to such Receivables and the
Collateral Security in respect thereof, all monies due or to become due and
all amounts received with respect thereto (including all Non-Principal
Receivables) and all proceeds thereof (as defined in Section 9-306 of the
UCC as in effect in the State of Vermont) and Recoveries thereof relating
thereto and (y) on the Removal Termination Date, all Collateral Security in
connection with such Ineligible Accounts and all proceeds thereof (as
defined in Section 9-306 of the UCC as in effect in the State of Vermont
and Recoveries) relating thereto.
SECTION 8.04. Amendment to Add Exhibit D-3. The Original Receivables
----------------------------
Purchase Agreement is hereby amended, effective the day after the Series 1994-1
Final Payment Date to add Exhibit D-3 thereto. Exhibit D-3 shall be in the form
attached to this Amendment as Exhibit A.
11
<PAGE>
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Counterparts. This Agreement may be executed in two or
------------
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
SECTION 9.02. Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
12
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Amendment Number 1 to the Receivables Purchase Agreement to be duly executed by
their respective officers as of the day and year specified on the signature page
hereof.
The date of execution and delivery of this
Amendment Number 1 is January __, 1997.
BOMBARDIER CREDIT RECEIVABLES
CORPORATION, Purchaser
By:
----------------------------------
Name:
-------------------------
Title:
--------------------------
By:
----------------------------------
Name:
-------------------------
Title:
--------------------------
BOMBARDIER CAPITAL INC., Seller
By:
----------------------------------
Name:
-------------------------
Title:
--------------------------
By:
----------------------------------
Name:
-------------------------
Title:
--------------------------
13
<PAGE>
EXHIBIT A TO AMENDMENT NUMBER 1
TO RECEIVABLES PURCHASE AGREEMENT
EXHIBIT D-4 TO RPA
FORM OF REASSIGNMENT OF REMOVED PARTICIPATION INTERESTS IN RECEIVABLES
(As required by Section 2.09 of the Receivables
Purchase Agreement referred to below)
REASSIGNMENT NO. OF RECEIVABLES,
------
dated as of , ,
-------------- ----
by and between BOMBARDIER CREDIT RECEIVABLES CORPORATION,
as purchaser (the "Purchaser"), and
---------
BOMBARDIER CAPITAL INC., as seller (the "Seller"),
------
pursuant to the Receivables Purchase Agreement
referred to below.
WITNESSETH
WHEREAS the Seller and the Purchaser are parties to the Receivables
Purchase Agreement dated as of January 1, 1994, as amended by Amendment Number 1
to Receivables Purchase Agreement dated as of January 1, 1997 (and as hereafter
further amended or supplemented, the "Receivable Purchase Agreement");
-----------------------------
WHEREAS, pursuant to Section 2.09 of the Receivables Purchase
Agreement, the Seller wishes to remove certain interests in the Receivables or a
portion of certain Receivables from an Account or Accounts and the related
interest in the Collateral Security and other rights in respect thereof (the
"Removed Participation Interests") and to cause the Purchaser to reconvey the
- --------------------------------
Removed Participation Interests and such Collateral Security and rights, whether
now existing or hereafter created, and all amounts currently held by the
Purchaser or thereafter received by the Trust in respect of such Removed
Participation Interests, from the Purchaser to the Seller (as each such term is
defined in the Receivables Purchase Agreement); and
WHEREAS the Purchaser is willing to accept such removal and to
reconvey the Removed Participation Interests, such Collateral Security and
rights and any related amounts held or received by the Trust subject to the
terms and conditions hereof.
NOW, THEREFORE, the Seller and the Purchaser hereby agree as follows:
1. Defined Terms. All terms defined in the Agreement and used herein
-------------
shall have such defined meanings when used herein, unless otherwise defined
herein.
D-3-1
<PAGE>
"Participation Interest Removal Date" shall mean, with respect to the
-----------------------------------
Removed Participation Interests designated hereby, _______________,____.
2. Notice of Removed Participation Interests. (a) Not less than
-----------------------------------------
five (5) Business Days prior to the Participation Interest Removal Date, the
Seller shall furnish to the Purchaser, any Agent, any Enhancement Providers and
the Rating Agencies a written notice specifying the date on which removal of
such interests in Receivables will occur, such date being a Participation
Interest Removal Date.
(b) On or before the fifth business day after the Participation
Interest Removal Date, the Seller shall furnish to the Trustee a computer file,
microfiche list or other list of the Removed Participation Interests, specifying
for each Removed Participation Interest (x) the number of the Account in which
such receivable or Receivables existed, (y) as of the date of the Participation
Removal Notice, the aggregate amount of Principal Receivables outstanding in the
Account from which the Receivable or Receivables were to be removed and (z) as
of the Participation Interest Removal Date, the aggregate amount of Principal
Receivables in such Account (after the removal of the Removed Participation
Interests) and represent that such computer file, microfiche list or other list
of the Removed Participation Interest is true and complete in all material
respects. Such file or list shall be marked as Schedule 1 to this Reassignment
and shall be incorporated into and made a part of this Reassignment as of the
Participation Removal Date and shall amend Schedule 1 to the Receivables
Purchase Agreement.
3. Conveyance of Removed Interests. (a) The Purchaser does hereby
-------------------------------
transfer, assign, set over and otherwise convey to the Seller, without recourse,
representation or warranty on and after the Participation Interest Removal Date,
all right, title and interest of the Trust in, to and under all Removed
Participation Interests all Collateral Security and rights in respect thereof,
any rights under any Repurchase Agreement with respect to such Removed
Participation Interests and all monies due or to become due and all amounts
received with respect thereto (including all Non-Principal Receivables) and all
proceeds (as defined in Section 9-306 of the UCC as in effect in the State of
Vermont) and Recoveries thereof relating thereto.
(b) If requested by the Seller, in connection with such transfer, the
Purchaser agrees to execute and deliver to the Seller on or prior to the date of
this Reassignment, a termination statement with respect to the Removed
Participation Interest existing at the close of business on the Participation
Interest Removal Date and thereafter created from time to time and Collateral
Security in respect thereof to the extent of the Removed Participation Interests
evidencing the release by the Trust of its lien with respect to such Removed
Participation Interests and the interests in the Collateral Security with
respect thereto, and meeting the requirements of applicable state law, in such
manner and such jurisdictions as are necessary to remove such lien.
4. Acceptance by Purchaser. The Purchaser hereby acknowledges that,
-----------------------
prior to or simultaneously with the execution and delivery of this Reassignment,
the Seller delivered to the Purchaser the computer file or such microfiche or
written list described in Section 2(b) of this Reassignment.
D-3-2
<PAGE>
5. Representations and Warranties of the Seller. The Seller hereby
--------------------------------------------
represents and warrants to the Purchaser as of the date of this Reassignment and
as of the Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment
-----------------------------------
constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights generally and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity) and the availability of equitable
remedies;
(b) No Early Amortization Event. The removal of the Removed
---------------------------
Participation Interests hereby removed shall not, in the reasonable belief
of the Seller, cause an Early Amortization Event to occur or cause the Pool
Balance to be less than the Required Pool Balance;
(c) Selection Procedures. No selection procedures believed by the
--------------------
Seller to be adverse to the interests of the Beneficiaries were utilized in
selecting the Removed Participation Interests to be removed;
6. Condition Precedent. In addition to the conditions precedent set
-------------------
forth in Section 2.09 of the Receivables Purchase Agreement, the obligation of
the Purchaser to execute and deliver this Reassignment is subject to the Seller
having delivered on or prior to the Participation Interest Removal Date to the
Purchaser, any Agent, and any Enhancement Providers an Officers' Certificate
certifying that (a) as of the Participation Interest Removal Date, all
requirements set forth in Section 2.09 of the Agreement for removing such
Accounts and reconveying the Removed Participation Interests and related
interests in the Collateral Security with respect thereto, whether existing at
the close of business on the Participation Interest Removal Date or thereafter
created from time to time until the termination of the Trust, have been
satisfied, and (b) each of the representations and warranties made by the Seller
in Section 5 hereof is true and correct as of the date of this Reassignment and
as of the Participation Interest Removal Date. The Purchaser may conclusively
rely on such Officers' Certificate, shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no liability in so
relying.
7. Ratification of Agreement. As supplemented by this Reassignment,
-------------------------
the Receivables Purchase Agreement is in all respects ratified and confirmed and
the Receivables Purchase Agreement as so supplemented by this Reassignment shall
be read, taken and construed as one and the same instrument.
8. Counterparts. This Reassignment may be executed in two or more
------------
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
D-3-3
<PAGE>
9. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE
-------------
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF
LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the undersigned have caused this Reassignment to
be duly executed and delivered by their respective duly authorized officers on
the day and year first above written.
BOMBARDIER CREDIT RECEIVABLES
CORPORATION, Purchaser
By:
----------------------------------
Name:
-------------------------
Title:
--------------------------
By:
----------------------------------
Name:
-------------------------
Title:
--------------------------
BOMBARDIER CAPITAL INC., Seller
By:
----------------------------------
Name:
-------------------------
Title:
--------------------------
By:
----------------------------------
Name:
-------------------------
Title:
--------------------------
D-3-4
<PAGE>
Exhibit 5.1
January 9, 1997
Bombardier Credit Receivables Corporation
P.O. Box 5544
Burlington, Vermont 05402
Bombardier Capital Inc.
1600 Mountain View Drive
Colchester, Vermont 05446
Re: Bombardier Receivables Master Trust I--
Registration Statement on Form S-1 filed
with the Securities and Exchange Commission
(File No. 333-14431)
--------------------
Ladies and Gentlemen:
We have acted as special counsel to Bombardier Credit Receivables Corporation, a
Delaware corporation, as depositor (the "Company"), and Bombardier Capital Inc.,
a Massachusetts corporation, as servicer (the "Servicer"), in connection with
the sale of $400,000,000 principal amount of Floating Rate Class A Asset Backed
Certificates, Series 1997-1 (the "Class A Certificates") and $27,125,000
principal amount of Floating Rate Class B Asset Backed Certificates Series 1997-
1 (the "Class B Certificates" and together with the Class A Certificates, the
"Certificates") to the underwriters pursuant to a certain underwriting agreement
(the "Underwriting Agreement") among the Company, the Servicer and J.P. Morgan
Securities Inc., CS First Boston Corporation and Merrill Lynch, Pierce, Fenner &
Smith Incorporated.
Each Certificate represents an undivided interest in the Bombardier Receivables
Master Trust I (the "Trust") formed pursuant to a Pooling and Servicing
Agreement dated as of January 1, 1994, as amended by Amendment Number 1
("Amendment No. 1") dated as of January 1, 1997 to the Pooling and Servicing
Agreement (as so amended, the "Pooling and Servicing Agreement"), among the
Company, the Servicer and Bankers Trust Company, as trustee (the "Trustee").
Each Certificate is issued pursuant to the Series 1997-1 Supplement to the
Pooling and Servicing Agreement, dated as of January 1, 1997 (the "Supplement").
In such capacity, we have examined, among other documents (i) the above-
captioned Registration Statement on Form S-1 filed by the Company with the
Securities and Exchange Commission (the "Commission") on October 18, 1996 as
amended by Amendment No. 1 dated the date hereof filed by the Company with the
Commission on the date hereof (collectively, the "Registration Statement") and
(ii) the forms of the Pooling and Servicing Agreement, the
<PAGE>
January 9, 1997
Page 2
Supplement and the Underwriting Agreement previously filed or filed herewith, as
the case may be, as exhibits to the Registration Statement.
In connection with the foregoing, we have examined originals or copies
satisfactory to us of all such corporate records, agreements, certificates,
governmental orders, permits, authorizations and other documents as we have
deemed relevant and necessary as a basis for the opinion hereinafter expressed.
In such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of all documents submitted to us as copies. As to
any facts material to such opinions, we have, to the extent that such facts were
not independently established by us, relied upon certificates of public
officials or certificates of officers or other representatives of the Company or
of the Servicer.
In giving the opinion expressed below we have also assumed: (i) the due
existence of the Trust and the Trustee; (ii) the legal right and power of the
Trustee under all applicable laws and regulations to execute, deliver and
perform the Pooling and Servicing Agreement and the Supplement (including
without limitation to execute, authenticate and deliver the Certificates); (iii)
the due authorization, execution and delivery by the Trustee of the Pooling and
Servicing Agreement and the Supplement; and (iv) the validity, binding effect
and enforceability of the Pooling and Servicing Agreement and the Supplement in
accordance with their respective terms against the Trustee. We have also
assumed that, as required by the certificate of incorporation of the Company,
the Company has and will continue to have two "special directors" (as defined in
the Company's certificate of incorporation).
In giving the opinion expressed below, we do not purport to be experts in, and
are not opining on, the laws of any jurisdiction other than the laws of the
State of New York, United States federal law and the General Corporation Law of
the State of Delaware.
Based on and subject to the foregoing, we are of the opinion that the
Certificates to be sold under the Registration Statement have been duly and
validly authorized by the Company and when (i) the Supplement and the Pooling
and Servicing Agreement shall have been duly executed and delivered by the
Company, the Servicer and the Trustee and (ii) the Certificates shall have been
duly issued, executed, authenticated and delivered as provided in the Pooling
and Servicing Agreement and delivered against payment therefor in accordance
with the Underwriting Agreement, the Certificates will be legally issued, fully
paid and non-assessable.
We are furnishing this letter in our capacity as special counsel to the Company
and the Servicer and this letter is not to be used, circulated, quoted or
otherwise referred to for any other purpose, except as set forth below.
<PAGE>
January 9, 1997
Page 3
We consent to the use of our name under the caption "Legal Matters" in the
Prospectus constituting a part of the Registration Statement and to the filing
of a copy of this opinion as an exhibit thereto. In giving such consent, we do
not thereby concede that we are within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Commission issued thereunder or that we are "experts"
within the meaning of such act, rules and regulations.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
Exhibit 8.1
January 9, 1997
Bombardier Credit Receivables Corporation
P.O. Box 5544
Burlington, VT 05402
Bombardier Capital Inc.
1600 Mountain View Drive
Colchester, Vermont 05446
Re: Bombardier Receivables Master Trust I--
Registration Statement on Form S-1 filed
with the Securities and Exchange Commission
(File No. 333-14431)
--------------------------------------------
Ladies and Gentlemen:
We have acted as special tax counsel to Bombardier Credit Receivables
Corporation, a Delaware corporation (the "Company"), in connection with the
proposed issuance by Bombardier Receivables Master Trust I, a trust formed
pursuant to the Pooling and Servicing Agreement dated as of January 1, 1994, as
heretofore and herewith amended as supplemented, among the Company, as
depositor, Bombardier Capital Inc., as servicer, and Bankers Trust Company, as
Trustee, of asset-backed certificates in a public offering being registered with
the Securities and Exchange Commission under the United States Securities Act of
1933, as amended (the "Securities Act"), pursuant to a registration statement of
the Company on Form S-1 (Registration No. 333-14431), as amended to the date
hereof (the "Registration Statement"). Capitalized terms used herein and not
otherwise defined herein have the respective meanings ascribed to them in the
Registration Statement.
In connection with the foregoing, we have examined originals or copies
satisfactory to us of all such corporate records, agreements, instruments and
other documents as we have deemed relevant and necessary as a basis for the
opinion hereinafter expressed. In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with the original documents of all documents
submitted to us as copies. We understand and assume that (i) any agreement
which we have examined will represent the valid and binding obligation of the
respective parties thereto, enforceable in accordance with its respective terms,
and the entire agreement between the parties with respect to
<PAGE>
January 9, 1997
Page 2
the subject matter thereof, (ii) the parties to each such agreement will comply
with all of their respective covenants, agreements and undertakings contained
therein, and (iii) the transactions provided for by each such agreement will be
carried out in accordance with its terms.
Our opinion is based upon existing United States federal income tax laws,
regulations, administrative pronouncements and judicial decisions. All such
authorities are subject to change, either prospectively or retroactively. No
assurance can be provided as to the effect of any such change upon our opinion.
Based upon and subject to the foregoing, we hereby confirm the opinion referred
to in the Registration Statement in the first sentence under the heading
"Certain Federal Income Tax Consequences - Characterization of the Certificates
and the Trust" and, furthermore, we are of the opinion that the descriptions of
matters of law and legal conclusions set forth in the Registration Statement
under the heading "Certain Federal Income Tax Consequences" are correct in all
material respects. While such descriptions discuss the material anticipated
United States federal income tax consequences applicable to certain Series 1997-
1 Certificateholders, they do not purport to discuss all federal income tax
consequences and our opinion is limited to those federal income tax consequences
specifically discussed therein.
In giving the foregoing opinion, we express no opinion other than as to the
federal income tax law of the United States of America.
We are furnishing this letter in our capacity as special tax counsel to the
Company and this letter is not to be used, circulated, quoted or otherwise
referred to for any other purpose, except as set forth below.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and we further consent to the use of our name under the
caption "Certain Federal Income Tax Consequences" in the Registration Statement.
In giving such consent, we do not thereby concede that we are within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Commission issued
thereunder or that we are "experts" within the meaning of such act, rules and
regulations.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
Exhibit 99.1
Form # 1290
INVENTORY SECURITY AGREEMENT
[LOGO of BOMBARDIER] AND POWER OF ATTORNEY
================================================================================
1. Parties: The parties to this Agreement are Bombardier Capital Inc.
("BCI") and the Dealer who has singed at the end of this Agreement
("Dealer").
2. Advances: At Dealer's request, BCI, at its option, will advance funds
for the acquisition of Dealer's Inventory ("Inventory"), or for such
other purpose satisfactory to BCI, secured, in whole part, by a security
interest in the Collateral described in Paragraph 4 below. In each case,
BCI will send Dealer a schedule or schedules as described in Paragraph 3
below. If Dealer does not agree with the schedules(s), it must
immediately notify BCI in writing of any objections. Dealer's failure to
notify BCI of its objections within seven (7) days shall constitute an
acceptance of the schedule(s).
3. Payment: Dealer shall repay BCI in accordance with either or a
combination of the following Plans, which shall be chosen at the sole
discretion of BCI:
a) Pay As Sold Plan: BCI shall deliver to Dealer a schedule or
schedules listing each item of Inventory on which BCI has advanced
funds and the amount of the advance. Immediately upon the sale of
each item of Inventory, Dealer will pay to BCI the total amount due
on that item. Dealer will pay to BCI the total amount due on unsold
Inventory within the period established from time to time by BCI or
upon demand by BCI, whichever first occurs and will pay such
curtailments as BCI may require.
b) Scheduled Payment Plan: BCI shall deliver to Dealer a schedule or
schedules listing the repayment items for the Inventory on which it
has advanced funds and the amount of the advance. Dealer will
thereafter pay to BCI the payment due, when due or upon demand by
BCI, whichever comes first, as shown on the schedule(s) BCI supplies
Dealer.
Under either Plan, Dealer agrees that:
a) Dealer will pay BCI financing and service charges, insurance charges
(if any), and late charges according to and upon receipt of the
billing statements which BCI delivers to Dealer and within the time
specified by BCI.
b) BCI, at its discretion, may at any time and without notice to Dealer
apply or reapply any monies received from Dealer in payment of any
Dealer's obligations or liabilities to BCI, in such order of
application as BCI may determine.
4. Collateral:
a) In order to secure repayment to BCI of all extensions of credit made
by BCI under this Agreement, and to secure payment of all other
debts or liabilities and performance of all obligations of Dealer to
BCI, whether now existing or hereafter existing, Dealer agrees that
BCI shall have and hereby grants to BCI a security interest in all
of the rights, titles and interests (whether now existing or
hereafter arising or acquired from time to time) of the Dealer in,
to and under all Inventory, including but not limited to, all goods
manufactured and/or sold by any manufacturer, distributor or seller,
which inventory is owned by Dealer or in which Dealer has an
interest, the purchase of which was financed or floorplanned by BCI
for the Dealer of whatever kind or nature, wherever located, and all
returns, repossessions, exchanges, substitutions, replacements,
attachments, parts, accessories and accessions thereto and thereof,
and all other goods used or intended to be used in conjunction
therewith and all proceeds and products thereof, and documents
relating thereto (the "Collateral").
b) Dealer shall execute and deliver such financing statement and
amendments thereto and all further writings as BCI shall rquest to
accomplish the purpose of this Agreement and Dealer shall bear all
the costs of recording and perfection.
5. Dealer's Duties: Dealer agrees:
a) That upon purchase of each item of Inventory, Dealer shall deliver
to BCI upon request, the Certificate of Title or Certificate of
Origin issued for same, if any, and BCI shall have the right to have
its lien, encumbrance or security interest noted thereon and/or
retain such Certificate of Origin.
b) To sell and deliver inventory only in the ordinary course of
business and not to use, rent or dispose of Collateral except as
herein provided, not permit any encumbrance upon the Collateral
without BCI's prior written consent.
c) To keep all Collateral in good order, repair and operating condition
and to pay all transportation and storage charges on the Collateral.
1
<PAGE>
d) To pay immediately all taxes, expenses, assessments and charges
which may now or hereafter be levied or assessed against the
Collateral.
e) To hold any funds and proceeds payable to BCI, in the same form
as received, IN TRUST for BCI, separate and apart from Dealer's
funds and goods. BCI shall apply all amounts so received from
Dealer toward the payment of and liabilities of Dealer, in such
order of application as BCI may determine.
f) To reimburse BCI for BCI's expense and cost incurred in connection
with inspections of the Collateral, and its collection and
administration costs.
g) That for purposes of determining the rate of charge hereunder, any
other language herein to the contrary notwithstanding, charges
shall be deemed to have been accrued and accruing from the date of
purchase of each item of Inventory and shall be determined on an
annualized basis (without regard to any "free-flooring" period).
h) Dealer agrees to keep all Collateral insured against risks covered
by standard forms of fire, theft and extended coverage insurance
and such other risks as may be required by BCI, in such amounts and
under such policies issued by such insurance company or companies
as are satisfactory to BCI. BCI shall be named either as a co-
insured or under a loss payable clause, to the extent its interest
may appear. Should Dealer fail to procure such insurance upon
request, BCI may, but is not obligated to, procure the same and
collect the cost thereof from Dealer.
i) To keep all of the Collateral only at its place(s) of business
referred to in Section 13 and to permit BCI to inspect the
Collateral during Dealer's business hours and at other reasonable
times and to inspect and make copies of Dealer's books and records.
j) Dealer shall at all times keep full and accurate records of its
business and Dealer shall upon demand, furnish BCI all such
information regarding Dealer's business and financial condition
as BCI may reasonably request.
k) That BCI may hold any sums or monies belonging to the Dealer which
come into the possession of BCI and may apply all or a portion of
said sums or monies to any outstanding indebtedness, liabilities
or obligations of the Dealer.
6. Power of Attorney: Dealer grants to BCI:
a) A power of attorney under which BCI may a) execute on behalf of
Dealer any notes, chattel paper, UCC financing statements,
amendments thereto and continuations thereof (or similar statements
of notice, registration, amendment or continuation under the laws
of any jurisdiction), or other writing in connection with this
Agreement or the Collateral as BCI may require for the purpose of
protecting, maintaining or enforcing the Collateral or the security
interest granted to BCI in the Collateral and b) adjust, make,
pursue, settle and collect any insurance claim in connection with
this Agreement, as attorney-in-fact for Dealer.
7. Default: The following shall constitute default under this Agreement:
a) Any breach or failure of Dealer to observe or perform any of its
obligations, convenants or undertakings hereunder.
b) Misrepresentation by Dealer to BCI in connection with the business
and financial condition of Dealer or relating to Collateral.
c) Death or dissolution of Dealer, or if any action or proceedings to
dissolve Dealer be instituted.
d) Dealer becoming insolvent or making an assignment for the benefit
of creditors, or if a Petition in Bankruptcy is filed by or against
Dealer, or a complaint in equity or other proceedings for the
appointment of a receiver for Dealer is filed, or if proceedings
for reorganization or for composition with creditors under any law
be instituted by or against Dealer, or if any or all of the goods
of Dealer shall be attached.
e) BCI in good faith deems itself insecure.
8. Remedies: If Dealer defaults, BCI can, at its option and without
notice, demand immediate payment of all obligations under this Agreement
and any other indebtedness owed to BCI. BCI shall have all the rights
and remedies of a secured party under the Uniform Commercial Code in
effect in the jurisdiction where the Collateral is kept including, but
not limited to, the right to enter any of Dealer's premises with or
without legal process, but without force, and to take possession and
remove the Collateral. At BCI's request and to the extent Dealer may
lawfully do so, Dealer will assemble, prepare for removal and make
available to BCI at a place to be designated by BCI which is reasonably
convenient to both parties such items of Collateral as BCI may deem
sufficient to cover all of Dealer's obligations to BCI. Dealer agrees
that private sale of any item financed by BCI at the amount owned to BCI
on that item, less a reasonable restocking charge shall be a
commercially reasonable method of disposition. Five (5) days written
notice of public sale date or the date after which a private sale may
occur shall be a reasonable notice. BCI shall not be chargeable with
responsibility for the accuracy or validity of
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any document or for the existence or value of any Collateral.
Dealer further agrees to pay reasonable attorney's fees and legal
expenses incurred by BCI in enforcing this Agreement after default
by Dealer. To the extent not prohibited by law, Dealer waives all
valuation and exemption laws and releases all right of appeal after
payment in full.
9. Time and Acknowledgement: Time is of the essence in the performance
of Dealer's duties, but the failure of BCI to enforce it rights
under this Agreement shall not be deemed a waiver of BCI's rights
under this Agreement. Dealer will not assert against BCI any claim
or defense Dealer may have against any seller of goods to Dealer.
Dealer acknowledges receipt of a copy of this Agreement.
10. Assignment: This Agreement may be assigned by BCI but Dealer may
not assign this Agreement without the prior written consent of BCI.
11. Modification: This Agreement may not be modified, altered or
amended in any manner whatsoever, except by a further agreement
in writing signed by both Dealer and BCI.
12. Governing Law: The validity, enforceability and interpretation of
this Agreement shall be governed by the laws of the State of
New York.
13. Dealer Business and Warehouse Addresses:
(Attach a schedule if more space required)
SECTION A.
Effective as of the day of , 19 .
------ ----------------- ----
DEALER:
WITNESS: ------------------------------
(OR ATTEST) Type or print name of Dealer.
By:
- -------------------------------------- ----------------------------------
(SEAL) Name:
- -------------------------------------- --------------------------------
Secretary Title:
-------------------------------
SECTION C.
Accepted By:
BOMBARDIER CAPITAL INC.
By
------------------------------------
Title
---------------------------------
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SECTION B
ACKNOWLEDGMENT BY DEALER IF INDIVIDUAL(S) OR PARTNERSHIP
STATE OF
COUNTY OF
On this the ____________________ day of ____________________, 19_______,
before me personally appeared ______________________________________ known to me
to be the person(s) whose name(s) is (are) subscribed to the foregoing Inventory
Security Agreement and Power of Attorney and acknowledged that he (they)
voluntarily executed the same for the purposes therein contained.
In Witness Whereof I Hereunto set my hand and Official Seal.
----------------------------
Notary Public
ACKNOWLEDGMENT BY DEALER IF A CORPORATION
STATE OF
COUNTY OF
On this the ____________________ day of ____________________, 19_______,
before me personally appeared ______________________________________ who
acknowledged himself to be the ___________________________ of _________________,
a corporation, and that he, being authorized by the Board of Directors,
voluntarily executed the foregoing Inventory Security Agreement and Power of
Attorney for the purposes therein contained, by signing the name of the
corporation by himself.
In Witness Whereof I Hereunto set my hand and Official Seal.
----------------------------
Notary Public
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