<PAGE>
As filed with the Securities and Exchange Commission on October 14, 1999
Registration No. 333-77091
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
BOMBARDIER RECEIVABLES MASTER TRUST I
(ISSUER WITH RESPECT TO CERTIFICATES)
(EXACT NAME OF CO-REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
NEW YORK 6189 03-0340600
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
--------------------
BOMBARDIER CREDIT RECEIVABLES CORPORATION
(ORIGINATOR OF THE TRUST DESCRIBED HEREIN)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 9999 03-0340600
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
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)
--------------------
GEORGE W. CALVER
P.O. BOX 5544
BURLINGTON, VERMONT 05402
(802) 655-2824
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
--------------------
COPIES TO:
<TABLE>
<S> <C>
Steven J. Molitor, Esq. Paul Weiffenbach, Esq.
Morgan, Lewis & Bockius LLP Orrick, Herrington & Sutcliffe LLP
101 Park Avenue 1150 18th Street, N.W.
New York, New York 10178 Washington, D.C. 20036
(212) 309-6183
</TABLE>
--------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended, 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, 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 this Form is post-effective amendment filed pursuant to Rule 462(d)
under that 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
<TABLE>
<CAPTION>
=============================================================================================================================
Proposed Proposed
Title of Each Maximum Maximum Amount of
Class of Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered Registered Per Share* Price* Fee**
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset Backed Certificates..... $1,000,000 100% $1,000,000 $278.00
=============================================================================================================================
</TABLE>
(*) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457 under the Securities Act of 1933.
(**) The registration fee has been previously paid.
<PAGE>
We hereby amend this Registration Statement on such date or dates as
may be necessary to delay its effective date until we shall file a further
amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933, as amended, or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
PROSPECTUS
BOMBARDIER RECEIVABLES MASTER TRUST I
ISSUER
$_______ FLOATING RATE CLASS A ASSET BACKED CERTIFICATES, SERIES 1999-1
$_______ FLOATING RATE CLASS B ASSET BACKED CERTIFICATES, SERIES 1999-1
BOMBARDIER CREDIT RECEIVABLES CORPORATION
DEPOSITOR
BOMBARDIER CAPITAL INC.
SERVICER
---------------------------
The certificates represent
obligations of the trust
only and do not represent
interests in or obligations
of Bombardier Credit
Receivables Corporation,
Bombardier Capital Inc. or
any of their affiliates. The
certificates will not be
insured or guaranteed by
any governmental agency.
INVESTING IN THE
CERTIFICATES INVOLVES RISKS.
YOU SHOULD CONSIDER
CAREFULLY THE INFORMATION
UNDER THE CAPTION "RISK
FACTORS" BEGINNING ON
PAGE __.
The certificates will represent interests in a pool of receivables due
from dealers of consumer, recreational and commercial products under
financing arrangements.
<TABLE>
<CAPTION>
Class A Class B Total
<S> <C> <C> <C>
Initial certificate
balance $__________ $__________ $_________
Certificate rate Libor + ___% Libor + ___% __________%
Price to public $__________ $__________ $_________
Underwriting
discounts and
commissions __________% __________% $_________
Proceeds to
depositor __________% __________% $_________
First interest
payment date [Oct. 15], 1999 [Oct. 15], 1999
</TABLE>
The interest rates for the certificates for any interest period will be the
variable rates shown above, subject to a maximum interest rate, as
described in this prospectus under "Description of the
Certificates -- Distributions from the Collection Account; Reserve Fund;
Principal Account." The price to public will include any accrued interest
at the applicable certificate rate from ____________, 1999. The proceeds
are calculated before deducting expenses payable by the depositor which are
estimated to be $700,000.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
J.P. Morgan & Co.
[Underwriter]
The date of this Prospectus is __________, 1999.
<PAGE>
Important Notice about the Information in this Prospectus
You should rely only on the information contained in this document or to which
we have referred you. Bombardier Credit Receivables Corporation has not
authorized anyone to provide you with information that is different. This
document may only be used where it is legal to sell these securities. Bombardier
Credit Receivables Corporation is not offering these certificates in any state
where the offer is not permitted.
This prospectus includes cross-references to captions in these materials where
you can find further discussions about related topics. The following table of
contents provides the pages on which these captions are located.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary.......................................................................................... 5
Risk Factors................................................................................................ 11
The Depositor and the Trust................................................................................. 21
The Depositor...................................................................................... 21
The Trust.......................................................................................... 22
Use of Proceeds............................................................................................. 23
The Floorplan and Asset-Based Financing Business ........................................................... 23
General .......................................................................................... 23
Creation of the Receivables........................................................................ 26
Credit Underwriting Process and Security........................................................... 27
Payment Terms...................................................................................... 29
Billing and Collection Procedures.................................................................. 30
Revenue Experience................................................................................. 30
Relationship with Manufacturers, Importers and Distributors........................................ 31
Monitoring......................................................................................... 33
Collection Activity................................................................................ 34
Participation Arrangements......................................................................... 35
The Accounts................................................................................................ 35
General .......................................................................................... 35
Historical Size.................................................................................... 39
Delinquency........................................................................................ 40
Loss Experience.................................................................................... 40
Product Mix........................................................................................ 41
Aging Experience................................................................................... 44
Geographic Distribution............................................................................ 45
Bombardier Capital Inc...................................................................................... 46
Maturity and Principal Payment Considerations............................................................... 47
Description of the Certificates............................................................................. 49
General .......................................................................................... 49
Interest .......................................................................................... 50
Principal.......................................................................................... 51
Extension of Initial Principal Payment Date........................................................ 53
Book-entry Registration............................................................................ 53
Definitive Certificates............................................................................ 57
Retained Interest and Variable Funding Certificate................................................. 58
New Issuances...................................................................................... 60
Supplemental Certificate........................................................................... 62
Conveyance of Receivables and Collateral Security.................................................. 63
Representations and Warranties..................................................................... 64
Eligible Accounts and Eligible Receivables......................................................... 67
Ineligible Receivables............................................................................. 70
Addition of Accounts............................................................................... 70
Removal of Accounts and Assignment of Receivables.................................................. 72
Credit Support for the Certificates................................................................ 75
Collection Account................................................................................. 75
Excess Funding Account............................................................................. 75
Allocation Percentages............................................................................. 76
Deposits in Collection Account..................................................................... 79
Daily Allocations.................................................................................. 80
Limited Subordination of Retained Interest......................................................... 81
Distributions from the Collection Account; Reserve Fund; Principal Account......................... 84
Discount Option................................................................................... 88
Defaulted Receivables and Recoveries.............................................................. 89
Investor Charge-Offs.............................................................................. 90
Optional Repurchase............................................................................... 90
Early Amortization Events......................................................................... 90
Termination....................................................................................... 94
Indemnification................................................................................... 95
Collection and Other Servicing Procedures......................................................... 96
Servicer Covenants................................................................................ 97
Servicing Compensation and Payment of Expenses.................................................... 98
Matters Regarding the Servicer.................................................................... 98
Servicer Default.................................................................................. 99
Reports ........................................................................................ 100
Evidence as to Compliance........................................................................ 102
Amendments....................................................................................... 102
List of Certificateholders....................................................................... 103
The Trustee...................................................................................... 104
Description of the Receivables Purchase Agreement......................................................... 104
Sale and Transfer of Receivables................................................................. 105
Representations and Warranties................................................................... 106
Covenants........................................................................................ 107
Termination...................................................................................... 107
Material Legal Aspects of the Receivables................................................................. 107
Transfer of Receivables and Certificates......................................................... 107
Material Matters Relating to Bankruptcy.......................................................... 110
Material Federal Income Tax Consequences.................................................................. 112
Characterization of the Certificates and the Trust............................................... 112
Possible Characterization of the Trust as a Partnership.......................................... 113
Possible Characterization of the Trust as a Corporation.......................................... 113
Taxation of Interest Income to Certificateholders................................................ 114
Sale or Exchange of Certificates................................................................. 115
Foreign Investors................................................................................ 115
Information Reporting and Backup Withholding..................................................... 116
State and Local Taxation......................................................................... 116
Underwriting.............................................................................................. 117
Legal Matters............................................................................................. 118
Where You Can Find More Information....................................................................... 118
Reports to Certificateholders............................................................................. 119
</TABLE>
3
<PAGE>
Prospectus Summary
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS AND
DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU NEED TO CONSIDER IN
MAKING YOUR INVESTMENT DECISION. TO UNDERSTAND ALL OF THE TERMS OF THE
SERIES 1999-1 CERTIFICATES, YOU SHOULD CAREFULLY READ THIS ENTIRE
PROSPECTUS.
The Trust
The trust was formed by a 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.
The Offered Certificates
The trust will issue a new series of certificates designated as the "Series
1999-1 Certificates." The new series will include the Class A certificates and
the Class B certificates.
<TABLE>
<CAPTION>
Class A Class B
Certificates Certificates
------------ -------------
<S> <C> <C>
Initial principal
balance: $[300,000,000] $[20,339,000]
Certificate rate: LIBOR + __% LIBOR +__%
Ratings
(S&P/Moody's): AAA/Aaa _________
First interest
payment date: [Oct. 15, 1999] [Oct. 15, 1999]
Scheduled principal
payment date: __________ _________
Legal final
payment date: __________ _________
</TABLE>
The certificate rate of the Series 1999-1 Certificates will be subject to a cap
based upon the interest rates of the receivables in the trust less the servicing
fee rate.
Principal Parties
Issuer: Bombardier Receivables Master Trust I will
issue the Series 1999-1 Certificates.
Depositor: Bombardier Credit Receivables Corporation which is a wholly-owned
subsidiary of Bombardier Capital Inc. ] Bombardier Credit Receivables
Corporation's address is P.O. Box 5544, Burlington, Vermont 05402 and its
telephone number is (802) 655-2824. See "The Depositor and the Trust -- The
Depositor" in this prospectus.
Servicer: Bombardier Capital Inc. services the receivables on behalf of the
trust. Bombardier Capital Inc.'s address is 1600 Mountain View Drive,
Colchester, Vermont 05446 and its telephone number is (802) 654-8100. See
"Description of the Certificates--Collection and Other Servicing Procedures" and
"Bombardier Capital Inc."
Trustee: Bankers Trust Company, a New York banking corporation acts as trustee
for the trust. Bankers Trust Company's address is Four Albany Street, New York,
New York 10006 and its telephone number is (212)-250-6652. See "Description of
the Certificates -- The Trustee."
Trust Assets
The assets of the trust include:
receivables arising in accounts established by inventory security agreements
entered into with dealers to purchase or finance consumer, recreational and
commercial product inventory which have been added to the trust and those
which will be added in the future less receivables paid or charged-off and
excluding receivables generated in removed accounts or ineligible accounts,
receivables removed from the trust from time to time and any undivided
interest in the receivables that has been transferred to a third party;
4
<PAGE>
all funds collected or to be collected with respect of the receivables;
all funds on deposit in all accounts of the trust, including the reserve
funds, the excess funding accounts, the principal account and the collection
account;
any enhancement issued with respect to any other series -- the Series 1999-1
Certificates do not benefit from any enhancement for another series; and
an assignment of any security interests in] products, contracts or other
assets securing the receivables.
Interests in the trust will be evidenced by the Series 1999-1 Certificates,
investor certificates of other series, the BCRC Certificate and the Variable
Funding Certificate.
Bombardier Credit Receivables Corporation may, at its option, add accounts to
the trust including accounts established in connection with the extension of
credit to dealers to finance working capital needs and to manufacturers and
distributors to finance the production, manufacturing and inventory of consumer,
recreational and commercial products. If receivables in the trust fall below
required levels, Bombardier Credit Receivables Corporation may be required to
designate additional accounts. See "The Floorplan and Asset-Based Financing
Business," "Description of the Certificates--Addition of Accounts" and
"--Removal of Accounts and Assignment of Receivables."
All new receivables arising under the designated accounts during the term of the
trust will be transferred by Bombardier Credit Receivables Corporation to the
trust. 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.
Prior Series and Issuance of New Series
The trust has issued four prior series of investor certificates, three of which
are outstanding as of [___________]. Bombardier Credit Receivables Corporation
has summarized information concerning the outstanding prior series in Annex I to
this prospectus. Annex I is hereby incorporated by reference into this
prospectus. Bombardier Credit Receivables Corporation may cause the trust to
issue one or more new series of investor certificates. See "Description of the
Certificates--New Issuances."
Distribution Date
All distributions on your certificates will be made on the 15th day of each
month with the first interest distribution to be made on [October 15], 1999.
If the 15th day is not a business day, distributions will occur on the next
business day.
The Revolving Period, the Controlled Accumulation Period, the Initial
Amortization Period and the Early Amortization Period
The period your certificates are in will determine the method used for
allocating collections on receivables and the timing of principal payments to
you.
The certificates will be in the revolving period from the issuance date to
[DATE] unless an initial amortization period or early amortization period
occurs. During the revolving period, principal collections allocable to your
certificates will generally be allocated to the BCRC Certificate, the excess
funding account or other outstanding series.
The certificates will be in the controlled accumulation period from [DATE] to
the date which you have received all payments due to you, unless an initial
amortization period or early amortization period occurs. During the
controlled accumulation period, in each month a specified amount of principal
collections allocable to your certificates will be deposited into the
principal
5
<PAGE>
account until the amount on deposit is sufficient to pay the principal amount
on your certificates.
The initial amortization period will occur if the servicer elects not to
extend the initial payment date. The first date on which the servicer can
elect not to extend will be the _________ distribution date. See "Description
of the Certificates--Extension of Initial Principal Payment Date."
The early amortization period will begin if specified triggering events occur
with respect to the trust assets, the servicer or to Bombardier Credit
Receivables Corporation. See "Description of the Certificates--Early
Amortization Events" for a discussion of these triggers.
During either the initial amortization period or an early amortization period,
principal collections allocable to your certificates will be deposited into the
collection account for distribution as principal payments on your certificates,
until the outstanding principal balance of your certificates has been reduced to
zero or until the __________ distribution date. Under limited circumstances an
early amortization period may end and the revolving period, the initial
amortization period or controlled accumulation period will begin. See
"Description of the Certificates--Early Amortization Events."
Allocations of Collections of Receivables and Defaulted Receivables
Varying percentages of non-principal collections, principal collections and
defaulted receivables for each calendar month will be allocated to Series
1999-1. See "Description of the Certificates--Allocation Percentages."
Non-principal collections, principal collections and defaulted receivables not
allocated to the Series 1999-1 Certificates will be allocated to the other
certificates issued by the trust.
Non-principal collections and defaulted receivables at all times and principal
collections during the revolving period will be allocated to the Series 1999-1
Certificates daily based on the floating allocation percentage. Generally, the
floating allocation percentage for any calender month is the percentage, which
will never exceed 100%, obtained by dividing the principal amount of the Series
1999-1 Certificates as of each day by the total principal amount of receivables
in the trust as of that day.
During the revolving period principal collections allocable to the Series 1999-1
Certificates and not necessary for any deposit or payment with respect to the
Series 1999-1 Certificates will be allocated to other certificates issued by the
trust in exchange for the allocation to the Series 1999-1 Certificates of an
equal interest in the receivables that are new or that would otherwise be
allocable to other certificates. See "Description of the
Certificates--Allocation Percentages,"; "Deposits in Collection Account,"
"--Limited Subordination of the Retained Interest" and "--Distributions from the
Collection Account; Reserve Fund; Principal Account."
During the controlled accumulation period or any type of amortization period,
principal collections generally will be allocated to the Series 1999-1
Certificates based on the percentage obtained by dividing the principal amount
of the Series 1999-1 Certificates on the last day of the revolving period by the
total principal amount of receivables in the trust. See "Description of the
Certificates--Allocation Percentages--Principal Collections for all Series" and
"--Distributions from the Collection Account; Reserve Fund; Principal Account--
Principal Collections."
Interest Payments
You will receive interest monthly on each distribution date, commencing
[October 15], 1999. The certificates will accrue interest beginning on the
preceding distribution date to but excluding the distribution date on which this
interest is due. In the case of the first distribution date, interest will
accrue beginning on ____________, 1999 to but excluding the first distribution
date. Interest will be calculated based on the actual number of days
6
<PAGE>
elapsed during the related interest period and a 360-day year.
Subject to a variable cap,
the Class A certificate
rate will equal: LIBOR + ___%
Subject to a variable cap,
the Class B certificate
rate will equal: LIBOR + ___%
The trustee will calculate LIBOR as described in "Description of the
Certificates--Interest". The certificate rate for each class of certificates
will be subject to a cap based upon the interest rates on the receivables less
the servicing fee rate. You may be reimbursed for any reduction due to this cap
on subsequent distribution dates if funds are available. See "Description of
the Certificates -- Distributions from the Collection Account; Reserve Fund;
Principal Account."
Interest payments on the Series 1999-1 Certificates will be derived solely from
non-principal collections for the related calendar month, any amount on deposit
in the reserve fund, investment proceeds, if any, and available retained
collections which are a portion of the collections allocated to the BCRC
Certificate. See "Description of the Certificates--Interest."
Principal Payments
Bombardier Credit Receivables Corporation expects the Class A certificates to
receive one principal distribution equal to the full principal amount of the
Class A certificates on the _________ distribution date.
Bombardier Credit Receivables Corporation expects the Class B certificates to
receive, after the Class A certificates are reduced to zero, a principal
distribution on the _____________ distribution date.
The Series 1999-1 Certificates will receive principal earlier than expected if
the servicer elects not to extend the initial principal payment date. The first
date on which the servicer can elect not to extend is the __________
distribution date. See "Description of the Certificates--Extension of Initial
Principal Payment Date."
The Series 1999-1 Certificates may also receive principal earlier than expected
as described in "Description of the Certificates--Early Amortization Events."
The final principal distribution on the Series 1999-1 Certificates will be made
not later than the ________ distribution date.
In addition, on the first distribution date following the monthly period in
which an early amortization event occurs or, if applicable, beginning on the
initial principal payment date, any amounts on deposit in the excess funding
account will be distributed to certificateholders. See "Description of the
Certificates--Distributions from the Collection Account; Reserve Fund; Principal
Account."
Excess Funding Account
If the receivables in the trust are less than the required amount on the dates
described in this prospectus, a deposit to the excess funding account will be
required. Amounts in that account will be made available for payment on the
Series 1999-1 Certificates as described under "Description of
Certificates--Credit Support for the Certificates--Excess Funding Account."
Reallocation of Excess Principal Collections
Principal collections and other amounts that are allocated to the Series 1999-1
Certificates and are not needed to make payment to you, may be applied to cover
principal distributions to certificateholders or enhancement providers of other
series. Principal collections and other amounts allocable to other series during
any amortization or accumulation
7
<PAGE>
period to the extent they are not needed to make payment with respect to these
other series, may be applied as principal distributions or principal
accumulation on your certificates. See "Description of the
Certificates--Allocation Percentages--Principal Collections for all Series."
Credit Enhancement
Retained Interest: A portion of the collections allocated to the interest in the
trust represented by the BCRC Certificate retained by Bombardier Credit
Receivables Corporation will be available to cover amounts payable with respect
to the Series 1999-1 Certificates and the monthly servicing fee described below.
See "Description of the Certificates--Retained Interest and Variable Funding
Certificate."
If the non-principal collections, investment proceeds, amounts in the reserve
fund and other amounts allocable to the Series 1999-1 Certificates for any
monthly period are not sufficient to cover:
the interest payable on the Series 1999-1 Certificates on the next
distribution date;
the amount of overdue interest and the interest due on this amount, if any;
the net servicing fee;
any allocations to the Series 1999-1 Certificates of defaults on the
receivables; and
any amounts required to be paid by Bombardier Credit Receivables
Corporation with respect to adjustments to the balances of the receivables,
a portion of the collections allocated to the retained interest represented by
the BCRC Certificate will be applied to make up the deficiency.
Collections of receivables are allocated to our interest as well as to the
interests in the trust owned by you and other holders of investors'
certificates. A portion of the amounts allocated to our retained interests is,
however, subordinated and, if needed will be diverted to make payments on the
investors' certificates. The portion of our interest, which is subordinated, is
the available subordinated amount.
It is expected that the available subordinated amount for the first distribution
date will be no less than $[18,643,730]. The available subordinated amount for
subsequent distribution dates will fluctuate as described under "Description of
the Certificates--Limited Subordination of the Retained Interest."
Subject to limitations, the retained interest available to make payments on the
Series 1999-1 Certificates may be increased at our option. See "Description of
the Certificates--Allocation of Collections; Deposits in Collection Account;
Limited Subordination of the Retained Interest;" "--Available Subordination
Amount."
Reserve Fund: A reserve fund will be established and maintained in the name of
the trustee for the benefit of the Series 1999-1 Certificates. On the date the
certificates are issued, Bombardier Credit Receivables Corporation will deposit
in the reserve fund an amount no less than $[1,601,695]. Any amounts on deposit
in the reserve fund will be withdrawn to make payments [of interest] on the
Series 1999-1 Certificates , 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; Principal
Account."
Subordination: The Class A certificates have the benefit of the subordination of
the Class B certificates to the extent described in this prospectus. The Class A
certificates will receive payments of interest prior to any payment of interest
to the Class B certificates on any distribution date. In addition, no principal
payments will be made with respect to the Class B certificates until the
principal balance of the Class A certificates is reduced to zero. See
"Description of the Certificates."
Federal Income Tax Consequences
8
<PAGE>
The material tax consequences to you are described under "Material Federal
Income Tax Consequences." As more fully set forth in that section, Morgan,
Lewis & Bockius LLP, special U.S. tax counsel to the depositor and trust, is of
the opinion that, although no transaction closely comparable to the issuance of
the certificates has been the subject of any Treasury regulation, public ruling
or judicial decision, for federal income tax purposes, the certificates will be
characterized as indebtedness of the depositor secured by the Receivables, and
the trust will be treated as a mere security device and will not be subject to
tax. You will agree by accepting the certificates to treat the certificates as
debt for federal income tax purposes.
ERISA Considerations
Generally, you may not acquire Class A certificates or Class B certificates if
you are purchasing with the assets of a retirement plan, individual retirement
plan or other employee benefit plan. See "ERISA Considerations."
Ratings
The Series 1999-1 Certificates will not be offered unless they receive the
ratings indicated on page 4 of this prospectus.
A RATING IS NOT A RECOMMENDATION TO BUY, SELL OR HOLD SECURITIES AND EITHER
RATING AGENCY CAN REVISE OR WITHDRAW ITS RATING AT ANY TIME. IN GENERAL RATINGS
ADDRESS CREDIT RISK AND DO NOT ADDRESS THE LIKELIHOOD OF PREPAYMENT. See "Risk
Factors -- Reduction in the Certificate Rating of Your Certificates Could Have
an Adverse Effect on the Value of the Your Certificates."
9
<PAGE>
Risk Factors
The Certificates May Lack Liquidity Which May Limit Your Ability to Sell Your
Certificates
The underwriters intend to make a market for the purchase and sale of
the certificates but have no obligation to do so. There is no assurance that a
secondary market will develop or, if it develops, that it will continue.
Consequently, you may not be able to sell your certificates readily or at
desirable prices.
The secondary markets for asset-backed securities have experienced
periods of illiquidity and can be expected to do so in the future. Illiquidity
could have a severely adverse effect on the prices at which your certificates
can be sold.
You May Not Receive Payments Of Your Certificates When You Expect Or Your
Payments May Be Reduced If The Transfer of Receivables To The Trust Is Not
Considered A Sale In The Event Of Bankruptcy
Bombardier Capital Inc. will treat the sale of the receivables to
Bombardier Credit Receivables Corporation as a sale and Bombardier Credit
Receivables Corporation will treat the transfer of the receivables to the trust
as a sale. Furthermore, the trust has been created to be bankruptcy remote from
Bombardier Capital Inc. However, in the event that Bombardier Capital Inc.
or Bombardier Credit Receivables Corporation or one of their affiliates becomes
bankrupt, a trustee in bankruptcy may argue that the trust assets were not sold
but were only pledged to secure a loan to Bombardier Capital Inc. If that
argument is made, you could experience delays or losses on your certificates. If
that argument is successful, the trustee in bankruptcy could elect to sell the
receivables and pay down the certificates early. Thus, you could lose the right
to future payments of interest, and might suffer reinvestment loss in a lower
interest rate environment. In addition if the servicer becomes bankrupt, a
bankruptcy trustee or receiver may have the power to prevent the trustee from
appointing a successor servicer. Any related delays in servicing could result in
increased delinquencies or losses on the receivables.
Delayed Funding Receivables May Not Be Collectible If Bombardier Capital Inc.
Does Not Pay Manufacturers Thus Increasing The Risk Of Loss On Your Certificates
Bombardier Credit Receivables Corporation sells to the trust
receivables in which Bombardier Capital Inc. has not yet funded its obligation
to the related manufacturer, importer or distributor. If Bombardier Capital Inc.
were to become bankrupt, Bombardier Capital Inc. might be unable to pay the
manufacturer, importer or distributor. If for this or any other reason
Bombardier Capital Inc. does not pay, the unfunded receivables may not be
collected from the dealer and a manufacturer, importer or distributor might be
able to delay or prevent receipt by the trust of payments otherwise owing to the
trust with respect to these receivables. This could cause
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a loss on your certificates. See "The Floorplan and Asset-Based Financing
Business -- Creation of the Receivables."
The Possibility Of Bankruptcy Events Related To Bombardier Capital Inc. Or
Bombardier Capital Receivables Corporation And The Uncertain Timing Of Obligor
Repayments Render The Life Of Your Certificates Uncertain And Therefore You May
Receive Principal On Dates Other Than When You Anticipate
Early amortization events will cause the revolving period of the trust
to end and collections of principal to be used to amortize certificates issued
by the trust. An early amortization event may cause you to receive principal
payments sooner than you anticipate. Thus you could lose the right to future
payments of interest, and might suffer reinvestment loss in a lower interest
rate environment. If bankruptcy events related to Bombardier Capital Inc. or
Bombardier Credit Receivables Corporation were to occur, then an early
amortization event would occur and additional receivables may no longer be
transferred to the trust. Therefore in the event of a bankruptcy of Bombardier
Credit Receivables Corporation or Bombardier Capital Inc. the timing of
principal payments to you may be subject to the actions of a bankruptcy trustee,
receiver or conservator. See " Material Legal Aspects of the
Receivables--Transfer of Receivables and Certificates" and "--Material Matters
Relating to Bankruptcy."
Domestic inventory receivables are generally payable by dealers either
upon the sale by the dealer of the product or, in some cases, in accordance with
a payment schedule. 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 repayments will occur. Because
payment of principal on the certificates is dependent on obligor repayments, the
certificates may not be fully amortized on ___________. This could delay the
return of principal on your certificates thus extending their maturity and
increasing their exposure to losses in the trust. See "Description of the
Certificates--Termination."
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
and your receiving principal sooner than you expect.
State And Federal Law May Limit The Abilities Of The Servicer To
Realize On Receivables Thus Causing Losses On Your Certificates
Application of federal and state bankruptcy and debtor relief laws
could affect your interest in the receivables if these or similar laws result in
any receivables being reduced or written off as uncollectible or result in
delays in payments due on these receivables. See "Description of the
Certificates--Defaulted Receivables and Recoveries."
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If a Dealer Fails To Remit Amounts Owed For Sold Products The Servicer May Fail
To Realize On The Receivables Thus Causing Losses On Your Certificate
Bombardier Capital Inc. and Bombardier Credit Receivables Corporation
represent and warrant that each eligible domestic inventory receivable
originated by an inventory security agreement is at the time of creation secured
by a first priority perfected security interest in the related 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 Uniform Commercial Code financing
statements. Bombardier Capital Inc. takes all actions necessary under applicable
state laws to perfect these security interest in the related eligible products.
However, at the time any of these products is sold by the dealer, the security
interest in the product will terminate. Therefore, if a dealer fails to remit
amounts owed for products that have been sold, the related receivables will no
longer be secured by those products.
If asset-based receivables are added to the trust, they 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 related obligor.
In the event that asset-based receivables are secured 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.
Additional Accounts May Have Characteristics Different From The Current Accounts
Thus Limiting Your Ability To Assess Your Risk Of Loss On Your Certificates
Bombardier Credit Receivables Corporation expects and in some cases
will be obligated, to designate additional accounts, the receivables in which
will be conveyed to the trust. Although these additional accounts must be
eligible, they may include accounts with criteria different from those which
were applied to the accounts previously added to the trust. In addition, there
is no limitation on the number of additional accounts which may be delinquent.
These additional accounts may also provide financing for types of products
different from those currently included in the trust and if the required
conditions are met, asset-based receivables may be added to trust. Consequently,
there can be no assurance that 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. On the date of the issuance of the
certificates no more than 5% of the accounts in the trust will be different
from those described in this prospectus.
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Bombardier Capital Inc. Has Limited Experience With Asset-Based Receivables
Thus Limiting Your Ability To Assess Your Risk Of Loss On Your
Certificates
The historical experience of the domestic inventory receivables
portfolio is presented under "The Floorplan and Asset-Based Financing Business"
and "The Accounts." Because Bombardier Capital Inc. only has 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. Bombardier Capital Inc.
expects to create a number of accounts that will be transferred to the trust in
the future. The actual performance characteristics with respect to these
additional accounts may be different from the accounts currently held by the
trust. There can be no assurance that the performance characteristics 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 May Cause Dealers To Be Unable To Sell
Products Securing Receivables Causing Losses On Receivables And Thus Your
Certificates Or Accelerating Payments Of Principal To You
Payment of the domestic inventory receivables is largely dependent upon
the retail sale of the related 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 like 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, thus
increasing the risk of loss on your certificates. Similar issues relate to the
asset-based receivables.
If Bombardier Credit Receivables Corporation And Bombardier Capital Inc. Are
Unable To Generate And Transfer Sufficient Receivables To The Trust You Will
Receive Principal Sooner Than You May Expect
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Neither Bombardier Credit Receivables Corporation nor Bombardier
Capital Inc. or any affiliate thereof is obligated to make any payments in
respect of the certificates or the receivables, other than the obligation of
Bombardier Credit Receivables Corporation or Bombardier Capital Inc. to purchase
receivables from the trust due to the failure to comply with specific covenants
or the breach by Bombardier Credit Receivables Corporation or Bombardier Capital
Inc. of representations and warranties, as described below and under
"Description of the Certificates--Representations and Warranties" and
"--Servicer Covenants," and other than affiliate support agreements relating to
receivables described under "The Floorplan and Asset-Based Financing
Business--Relationship with Manufacturers, Importers and Distributors."
However, the trust is completely dependent upon Bombardier Capital Inc.
for the generation of new receivables. The ability of Bombardier Capital Inc. to
generate receivables is in turn dependent to a large extent on the sales of
eligible products as well as competition from other financing sources. There can
therefore be no assurance that Bombardier Capital Inc. will continue to generate
receivables at the same rate as in prior years. If sufficient sales do not occur
an amortization event may occur and you could receive principal sooner than you
expect. Thus you could lose the right to future payments of interest, and might
suffer reinvestment loss in a lower interest rate environment. See "Maturity and
Principal Payment Considerations."
Your Certificates Have Limited Credit Enhancement Increasing The Risk Of Loss On
The Certificates
Credit enhancement of the certificates will be provided by a fraction
of the retained interest and by amounts in the reserve fund. The Class A
certificates will also have the benefit of the subordination of the Class B
certificates. The amount of credit enhancement is limited and will be reduced
from time to time as described in this prospectus. See "Description of the
Certificates--Allocation of Collections; Deposits in Collection Account; Limited
Subordination of the Retained Interest."
Subordination Increases Risk Of Loss On 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.
Investor charge-offs will result in reductions of amounts available to
distribute principal on the Class B certificates before any reductions of this
type will be incurred in respect of the Class A certificates.
Any Amounts On Deposit In The Excess Funding Account Will Earn Interest At A
Rate Lower Than That Of The Receivables Increasing The Risk That You Will Not
Receive All Payments Due To You
Funds, if any, deposited in the excess funding account will be subject
to specified investment restrictions and, as a result, will likely earn a rate
of return lower than the interest rates borne by a comparable amount of
receivables. Accordingly, during any period during
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which funds are on deposit in the excess funding account, these funds will
reduce the amount of non-principal collections available to make payments to
you.
Existence Of Other Series Of Certificates May Limit Your Ability To Take Actions
With Respect To The Trust Beneficial To You
The consent or approval of the holders of a specified percentage of all
outstanding certificates of all outstanding series will be required to permit or
to take specified actions that affect all series, including amending the
agreement which created the trust in some circumstances and directing a
reassignment of the entire portfolio of the receivables. In addition, following
the occurrence of an insolvency event of Bombardier Credit Receivables
Corporation or an early amortization event as a result of Bombardier Credit
Receivables Corporation's 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 .
Existence Of Other Series Of Certificates May Affect When You Receive Principal
The trust, as a master trust, has previously issued four series of
investor certificates three of which remain outstanding. The trust may issue
additional series of investor certificates. Each series may be represented by
different classes within the series.
There can be no assurance 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 you. See "Description of the
Certificates--New Issuances."
Furthermore, excess principal collections may be available for
reallocation to the certificates during any early amortization period, initial
amortization period or controlled accumulation period from other series which
may shorten the maturity of your certificates. The issuance of an additional
series does not require your consent.
The Interest Rate Of Your Certificates Will Be Subject To A Limitation Which May
Limit The Interest You Receive
For each interest period, your certificates will bear interest at a
rate equal to the lesser of the net receivables rate and LIBOR plus __%, for
Class A certificates, or the net receivables rate and LIBOR plus __%, for Class
B certificates. The net receivables rate is determined based upon the weighted
average interest rates borne by the receivables in the trust less 2% if
Bombardier Capital Inc. is the servicer and less 3% if Bombardier Capital Inc.
is not the servicer. Fluctuations in interest rates, particularly reductions in
the yield on the receivables in the trust or increases in LIBOR without
corresponding increases in the yield on the receivables in the trust may result
in limitations on the rate of interest paid on your certificates.
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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 April 30, 1999, from -1.0% to 8.5%. Movements in LIBOR and in the
prime rate are not always equivalent. Also, Bombardier Capital Inc. may, at any
time, reduce the interest rates applicable to any of the receivables.
Furthermore, as of April 30, 1999, approximately 0.46% 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 trust, could have the effect of reducing
or possibly eliminating the positive spread, if any, between the limitation
described above and the Class A certificate rate or the Class B certificate rate
based upon LIBOR, with a corresponding risk of a reduction in interest due to
you.
Reduction In The Certificate Rating Of Your Certificates Could Have An
Adverse Effect On The Value Of Your 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. 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.
The rating 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 the
likelihood that any amounts not paid to you because of the interest rate cap on
the certificates will be paid or the likelihood of payment in full of the
outstanding principal balance of the certificates on their expected final
payment dates. A rating is not a recommendation to buy, sell or hold securities,
inasmuch as it 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. Any suspension, reduction or
withdrawal in the ratings assigned to the certificates would probably reduce the
market value of the certificates and may affect your ability to sell them.
Book-Entry Registration Will Limit Your Ability To Exercise Your Rights And May
Cause Delays In Payment And Difficulties In Pledging
Your certificates will be initially represented by one or more
certificates registered in the name of Cede, the nominee for The Depository
Trust Company and will not be registered in your
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name or your nominee. Because of this you will not be recognized by the trustee
as a certificateholder. Unless definitive certificates are issued, you will only
be able to exercise your rights indirectly through The Depository Trust Company,
Cedel Bank, societe anonyme, Euroclear System and their participating
organizations. See "Description of the Certificates--Book-Entry Registration"
and "--Definitive Certificates."
You may hold certificates only in book-entry form through The
Depository Trust Company, the Euroclear System or Cedel Bank, societe anonyme.
Your ability to pledge a certificate to a person that does not participate in
those systems may be limited because of the lack of a physical certificate. In
addition certificate payments will not be made directly to you. Instead, the
trustee or its paying agent will send all distributions to The Depository Trust
Company, which will then credit those distributions to the participating
organizations. Those organizations must in turn credit accounts you have either
directly or indirectly through indirect participants for you to receive your
payments. This may cause you to experience some delay in receiving payments on
the your certificates.
Geographic Concentration May Create Additional Risks Of Loss On Your
Certificates
As of April 30, 1999, approximately 9.29%, 8.64%, 8.61%, 7.17%, 6.12%
5.26% and 4.42% of the obligors under the receivables by aggregate principal
balance as of the cut-off date were located in the States of Texas, Florida,
North Carolina, Georgia, California, Arizona and South Carolina, respectively.
Consequently, losses on the receivables and resultant payments on the offered
certificates may, both generally and particularly, be affected significantly by
deterioration of economic conditions in these states. Because a material
percentage of the obligors are located in the southern states of the United
States, an economic downturn in that region may have a disproportionately
material adverse effect on the receivables and your certificates.
Year 2000 Readiness Disclosure: You Could be Adversely Affected In Absence Of
Year 2000 Compliance
Bombardier Capital Inc. has made efforts to identify, modify or replace
computer systems which are not year 2000 compliant and to address other related
issues associated with the change of the millennium, although there is no
assurance these efforts will be fully successful. In the event that computer
problems arise out of a failure to identify, modify or replace appropriate
systems on time, or in the event that the computer systems of Bombardier Capital
Inc., the trustee or external suppliers are not fully year 2000 compliant, the
resulting disruptions in the collection or distribution of receipts on the
receivables could materially and adversely affect the holders of the
certificates.
With respect to the year 2000 problem, The Depository Trust Company has
informed members of the financial community that it has developed and is
implementing a program so that its systems, as they relate to the timely payment
of distributions, including principal and interest payments, to certificate
holders, book-entry deliveries, and settlement of trades within The Depository
Trust Company, continue to function appropriately on and after January 1, 2000.
This program includes a technical assessment and a remediation plan, each of
which is complete.
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Additionally, The Depository Trust Company's plan includes a testing phase,
which is expected to be completed within appropriate time frames. Bombardier
Credit Receivables Corporation has not independently verified the information
provided to it by The Depository Trust Company.
However, The Depository Trust Company's ability to perform properly its
services is also dependent upon other parties, including but not limited to, its
participating organizations, through which you will hold your certificates, as
well as the computer systems of third party service providers. The Depository
Trust Company has informed the financial community that it is contacting and
will continue to contact third party vendors from whom The Depository Trust
Company acquires services to:
impress upon them the importance of their services being year
2000 compliant; and
determine the extent of their efforts for year 2000
remediation, and, as appropriate, testing, of their services.
In addition, The Depository Trust Company has stated that it is in the process
of developing these contingency plans as it deems appropriate.
If problems associated with the year 2000 problem were to occur with
respect to The Depository Trust Company and the services described above,
payments to you could be delayed or otherwise adversely affected.
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Capitalized Terms
For purposes of clarity, a number of terms used in this prospectus have
been assigned specialized definitions. These terms appear throughout this
prospectus as capitalized words and phrases. Definitions for these terms may be
found in the glossary at the back of this prospectus.
Forward-Looking Statements
In this prospectus, Bombardier Credit Receivables Corporation uses
forward-looking statements. These forward-looking statements are found in the
material, including each of the tables, set forth under "Risk Factors" and
"Maturity and Principal Payment Considerations." Forward-looking statements are
also found elsewhere in this prospectus and include words like "expects,"
"intends," "anticipates," "estimates" and other similar words. These statements
are inherently subject to a variety of risks and uncertainties. Actual results
differ materially from those we anticipate due to changes in, among other
things:
economic conditions and industry competition;
political, social and economic conditions;
the law and government regulatory initiatives; and
interest rate fluctuations.
Bombardier Credit Receivables Corporation will not update or revise any
forward-looking statements to reflect changes in its expectations or changes in
the conditions or circumstances on which the statements were originally based.
Origination of Receivables
Bombardier Capital Inc. provides floorplan financing to dealers for
eligible products. The dealers are obligated to repay BCI for advances made by
BCI to or for the benefit of the dealer. The dealers are also obligated to pay
interest on the advances to the extent required by the agreement with BCI. In
addition to dealer floorplan financing originated directly by BCI, BCI also
acquires dealer floorplan accounts and the receivables therein originated by
affiliates of BCI or by nonaffiliated entities. BCI has selected accounts from
its portfolio and sold or contributed the receivables in the selected accounts
to Bombardier Credit Receivables Corporation as the depositor under the terms of
a Receivables Purchase Agreement between BCI and the depositor. The Receivables
Purchase Agreement is dated as of January 1, 1994 and was amended as of January
1, 1997 by Amendment Number 1. BCI expects that it will, from time to time,
select additional accounts and sell or contribute the receivables in the
additional accounts to the depositor.
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BCI also provides asset based financing. Asset based financing refers
to loans made to dealers to finance working capital needs and loans made to
manufacturers and distributors to finance manufacturing, production or inventory
of consumer, recreational or commercial products. The Receivables Purchase
Agreement permits BCI to sell or contribute to the depositor receivables arising
from asset-based loans. The Pooling and Servicing Agreement also permits
asset-based receivables to be included in the trust. The Pooling and Servicing
Agreement includes conditions which must be met before asset-based receivables
can first be included in the trust. As of the date of this prospectus, no
asset-based receivables have been added to the trust.
The Depositor and the Trust
The Depositor
Bombardier Credit Receivables Corporation is the depositor to the
trust. The depositor is a wholly-owned subsidiary of BCI and an indirect
wholly-owned subsidiary of Bombardier Inc. The depositor was incorporated on
November 9, 1993. The depositor was organized for limited purposes. The purposes
include purchasing receivables, beneficial ownership interests and participation
interests in receivables, debt obligations secured by receivables and other
forms of indebtedness and transferring these receivables, interests, debt
obligations and indebtedness to third parties. The purposes also include
activities incidental to and necessary or convenient for the accomplishment of
the primary purposes.
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 United States bankruptcy code or other bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
enforcement of creditors' rights generally 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. The depositor's certificate of
incorporation contains limitations on the nature of the depositor's business 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 requires that
at least two of its directors 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 other statutory liabilities, like liabilities to
the Pension Benefit Guaranty Corporation relating to the underfunding of pension
plans of Bombardier Inc. or any of
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its subsidiaries including Bombardier Corporation and BCI, can be asserted
against the depositor. To the extent that these or similar 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
of these 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 is the Bombardier Receivables Master Trust I. It was formed
under, and is administered in accordance with, the laws of the State of New York
by the Pooling and Servicing Agreement. The depositor conveys the Receivables to
the trust, without recourse.
The depositor has previously sold investor certificates representing
interests in the assets of the trust, and from time to time, the depositor may
offer other series of investor certificates representing interests in the assets
of the trust . To date, the trust has issued the Series 1994-1 Certificates, the
Series 1996-1 Certificates, the Series 1997-1 Certificates and the Series 1997-2
Certificates. The Series 1994-1 Certificates are no longer outstanding. The
property of the trust consists of the Receivables existing in the Accounts on
January 1, 1994, the Receivables existing in the Additional Accounts added since
the issuance of the Series 1994-1 Certificates as set forth in Annex II hereto
- --which is hereby incorporated by reference into this prospectus--and all
Receivables generated in the Accounts after the applicable cut-off date during
the term of the trust. The property of the trust will also include Receivables
generated in Accounts added to the trust from time to time hereafter. In each
case the Receivables are reduced by Receivables paid or charged-off and exclude:
(1) Receivables generated in Removed Accounts after the date on which
the transfer of these Receivables has ceased or Receivables generated in
Ineligible Accounts after the removal of these Receivables has begun;
(2) Receivables removed from the trust, and
(3) 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."
In addition to the Receivables, the property of the trust includes:
the security granted to secure the Receivables;
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the depositor's rights, remedies, powers and privileges in the
Receivables under the Receivables Purchase Agreement; except
any repurchase or other agreements with manufacturers,
importers or distributors relating to the obligors;
all funds collected or to be collected in respect of
Receivables;
all funds on deposit in the Collection Account and the
accounts established with respect to any series issued by the
trust; and
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 enhancement issued for the benefit of any
other series. See "Description of the Certificates--Addition
of Accounts."
The holders of the Series 1999-1 Certificates will not have any
interest in any series accounts created for other series and 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 like the Series 1994-1 Certificates, the Series 1996-1
Certificates, the Series 1997-1 Certificates, the Series 1997-2 Certificates,
the Series 1999-1 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 in this prospectus, but rather will only
acquire and hold the Receivables and the other assets of the trust and proceeds
therefrom, issue the Series 1999-1 Certificates, other series of investor
certificates, the BCRC Certificate and the Variable Funding Certificate, 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.
Use of Proceeds
The net proceeds from the sale of the Certificates will be paid to the
depositor, which will use these 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 or the Series 1997-2
Certificates. BCI will use the related proceeds to reduce commercial paper
borrowings and for general corporate purposes.
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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 of receivables which are assets of the trust consists solely of Domestic
Inventory Receivables. The pool may, in the future, include Asset-Based
Receivables as provided in this section. The descriptions below of practices and
procedures apply to current practices and procedures; these practices and
procedures may change over time. The descriptions below set forth practices with
respect to Domestic Inventory Receivables and Asset Based Receivables under
separate headings when these practices are materially different.
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 the obligors' businesses. In some
cases, designated Accounts and the Receivables arising thereunder transferred to
the trust have been acquired by BCI or an affiliate of BCI from another lender
and Accounts and the Receivables arising thereunder may in the future be
acquired from other lenders. 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 these types of
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 designation of Additional Accounts
and the addition of Asset-Based Receivables are subject to satisfaction of
conditions described under "Description of the Certificates--Addition of
Accounts."
The entities to which credit is extended are the obligors. The obligors
include entities engaged in the business of purchasing Eligible Products from a
manufacturer, importer or distributor for sale in the ordinary course of
business and entities that are manufacturers, importers or distributors of
Eligible Products.
Currently, the Receivables sold to the depositor consist solely of
Domestic Inventory Receivables. The Receivables may, however, at the option of
BCI and the depositor subject to conditions specified in the Pooling and
Servicing Agreement, also consist of Asset-Based Receivables. The depositor is
under no obligation to cause Asset-Based Receivables to be included in the
trust. The types of products covered by Domestic Inventory Receivables and
Asset-Based Receivables may change over time, however, any Receivable in the
trust will be denominated in U.S. dollars and will be due from a dealer located
in the United States.
BCI services the Domestic Inventory Receivables, and expects to service
the Asset-Based Receivables, through its executive offices in Colchester,
Vermont.
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<PAGE>
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 the trust.
Domestic Inventory Receivables
The Domestic Inventory Receivables are secured by the products financed
by BCI for these dealers and occasionally by, among other things, mortgages,
assignments of certificates of deposit or letters of credit. The Receivables and
Products are required to be located in the United States. The Asset-Based
Receivables would be generally expected to be secured by finished goods
inventory, accounts receivable arising from the sale of inventory,
work-in-process, raw materials and component parts, as well as other assets of
the borrower. The property securing Asset-Based Receivables is required to be
located in the United States.
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 these 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 the relevant 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 some manufacturers, importers or
distributors.
As of April 30, 1999, the loans in the BCI Domestic Inventory Portfolio
were outstanding to 4,036 obligors. As of April 30, 1999, no single obligor
represented more than 3% of the BCI Domestic Inventory Portfolio or 2.72% of the
Receivables in the Trust.
BCI primarily provides secured financing to dealers located principally
in the United States for the purchase of recreational, consumer and commercial
products from specified manufacturers and distributors. The principal products
for which BCI currently provides inventory financing, also referred to as
wholesale or floorplan financing, include:
(1) recreational products manufactured by Bombardier Inc. like
Ski-Doo'r' snowmobiles, Sea-Doo'r' personal watercraft,
sport boats, neighborhood vehicles and all-terrain vehicles
and related parts and accessories;
(2) marine products, like boats, motors and trailers, which are
not Bombardier Inc. products;
(3) manufactured housing;
(4) recreational vehicles, trailers and campers and specialty
vehicles; and
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(5) other recreational and consumer products not manufactured by
Bombardier Inc.
BCI is in the process of developing financing opportunities which may
include those involving consumer electronics and appliances, machine tools and
keyboard musical instruments. As of April 30, 1999, BCI was providing inventory
financing to approximately 4,036 dealers located throughout the United States
for products sold by approximately 645 manufacturers and distributors. BCI
expects to expand the type of products for which it provides domestic inventory
financing in the future. As of April 30, 1999, approximately 25.84% based on
outstanding receivables or 19.29% based on financing volume for the three month
period ended April 30, 1999 of the Domestic Inventory Receivables in the BCI
Domestic Inventory Portfolio were attributable to products manufactured by
Bombardier Inc. or its subsidiaries.
Asset-Based Receivables
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.
The products for which BCI expects to provide dealer, manufacturer or
distributor financing giving rise to Asset-Based Receivables are expected to be
varied. Generally 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 their production
and inventory of consumer, recreational and commercial products.
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 this
inventory to the financed dealers. BCI generally will advance funds directly to
the manufacturer, importer or distributor on behalf of the dealer.
In most cases, although BCI will have incurred the obligation to make
an advance, BCI will negotiate a delay in funding the advance for a period
ranging, in most cases, from a few days up to 70 days for Eligible Products not
manufactured by affiliates of BCI, and ranging up to 30 days for Eligible
Products manufactured by affiliates of BCI, after the date of the invoices. Any
receivable that is funded on a delayed basis will be sold to, paid for by the
trust and included as a Receivable on the date it is added to the trust even
though it is not funded by BCI until a later date, namely, when BCI pays the
advance to the manufacturer in payment of the invoice price. A Receivable funded
on a delayed basis is included as an Eligible Receivable on or after the date
the product is shipped to the dealer for all purposes of the Agreement.
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<PAGE>
BCI and the manufacturer may also agree that BCI may discount the
invoice price of the inventory ordered by the dealer. Under this type of
arrangement, the manufacturer will deem itself paid in full upon receipt of the
discounted amount.
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 or trade-in 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 this dealer from the relevant
manufacturer, importer or distributor, up to the credit limits established from
time to time for this dealer. BCI may limit or cancel this arrangement if the
dealer fails to perform its obligations under its 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 working capital needs and to 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, under
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 begins with a credit underwriting of
the manufacturer, importer or distributor. BCI attempts to obtain a repurchase
agreement from the manufacturer, importer or distributor. Under the repurchase
agreement, the manufacturer, importer or distributor agrees for a specified
period of time--in most cases one to two years after the dealer purchases the
goods financed--to repurchase any of its goods that were financed by BCI and
which have been repossessed by BCI after a dealer defaults, subject to
conditions which are contained in the agreements. For further discussion of
repurchase agreements, see "--Relationship with Manufacturers, Importers and
Distributors" below.
After this period, BCI may assist the relevant manufacturer, importer
or distributor, in preparing and distributing promotional material for the
purpose of encouraging all eligible and
26
<PAGE>
credit worthy dealers of the relevant manufacturer, importer or distributor to
participate in the program. In some cases, the manufacturer, importer or
distributor is the primary promoter of the program offered by BCI.
When available, a list of dealers together with the recommended credit
line limits for these dealers is 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 this 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 in favor of BCI. Credit
limits are subject to different levels of management approval generally based on
the amount of the proposed credit limit.
Domestic inventory financing originated by BCI is documented by an
inventory security agreement providing for a security interest in favor of BCI
in all inventory of the dealer which was financed or floorplanned by BCI. The
agreements also set forth the dealer's obligations with respect to repayment,
the maintenance and security, including insurance, of the inventory, remedies of
BCI upon a default by the dealer and other matters relating to the dealer's
inventory and business and BCI's rights. The inventory security agreements
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
this insurance will not be transferred by BCI to the depositor, or by the
depositor to the trust, BCI has agreed under the Pooling and Servicing Agreement
to treat the insurance proceeds received by BCI as collections on the related
Domestic Inventory Receivables.
BCI holds a security interest in each item financed until it is sold by
the dealer. The inventory security agreements also require the dealer to take,
or assist BCI in taking, all actions necessary for BCI to perfect its security
interest in the financed products. Usually the dealer is required to repay the
financed amount upon sale of the inventory, or within a specified period of
time. In some cases a dealer may be permitted to extend its obligations for
unsold inventory for limited periods of time. In cases where the dealer is
required to repay the financed amount according to a payment schedule, the
inventory being financed may be sold before the scheduled payment date of the
related receivable. As a result, BCI would no longer hold a security interest in
the sold inventory.
BCI may also acquire receivables underwritten by third-party lenders.
Although these receivables may not arise in an account under an inventory
security agreement established by BCI, BCI will reunderwrite the account.
BCI maintains an active and ongoing relationship with the dealers to
whom it provides floorplan financing and reevaluates individual dealers' status:
27
<PAGE>
(1) prior to increasing a credit limit;
(2) at least bi-annually; and
(3) if a dealer is experiencing financial difficulties or is not
complying with its obligations under its inventory security
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, BCI may establish a dealer line of credit that would otherwise not
be granted on the strength of dealer credit alone if the manufacturer provides
additional security or recourse that BCI's management deems appropriate. See
"--Relationship with Manufacturers, Importers and Distributors."
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 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 like 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 like 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 so
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.
BCI expects that any Asset-Based Receivables will be secured by
collateral of the borrower. Security requirements will be established by BCI
at the time of origination of the related Asset-Based Receivables.
Payment Terms
Domestic Inventory Receivables.
28
<PAGE>
BCI is entitled to receive repayment in full of the related loan upon sale
of the inventory for which floorplan financing has been provided unless the
dealer is permitted to participate in a scheduled payment program. This payment
system is commonly 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 to some manufacturer's,
importer's and distributor's eligible dealers in limited instances where it is
impractical or not customary in the industry to require repayment upon sale .
These dealers may schedule the repayment of financed inventory over several
months, generally 90 to 180 days, whether sold or not. The first payment is
generally due 30 days from the invoice date and subsequent payments are
generally due each 30 days following the due date of the first payment. 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 some instances
interest on the amount advanced to the dealer. In some cases where there is a
scheduled payment program, there is no interest collected on the receivables,
since the advances were made at a discount from the face amount of the
receivables. See "Description of the Certificates--Discount Option."
Asset-Based Receivables.
Obligors on Asset-Based Receivables would be expected to be obligated to
pay interest on outstanding borrowings according to a schedule, which normally
would be expected to be monthly or quarterly. Principal payments and draws would
also be expected to be settled on a periodic basis, 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, that is, 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 mailed or otherwise transmitted to each dealer on a monthly
basis. Each dealer's statement is generated and distributed on the second or
third day following BCI's month-end cut-off date. Interest and other
non-principal 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 those amounts are billed. Both interest and other non-principal charges
are billed in arrears. Where practical, dealers remit payments to bank lock
boxes. In cases where a manufacturer, importer or distributor is responsible for
a payment, like interest payments in specified situations, billing
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<PAGE>
goes to the manufacturer, importer or distributor. Exceptions to the procedures
described are made on a case by case basis with management approval.
Revenue Experience
Domestic Inventory Receivables.
BCI generally charges dealers interest at a floating rate determined by BCI
on each business day. BCI's policy is to charge a rate equal to the "prime rate"
designated in the "Wall Street Journal," plus a spread generally ranging from
- -1% 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
accounts included in the BCI Domestic Inventory Portfolio and the average prime
rate as of the end of each month have been averaged for the fiscal quarter ended
April 30, 1999 and 1998 and for the fiscal years ended January 31, 1999, 1998,
1997, 1996 and 1995 and are set forth in the chart below.
Average Spread and Prime Rate
<TABLE>
<CAPTION>
Three Months
Ended April 30 Year Ended January 31
-------------- ---------------------
1999 1998 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C>
Average Spread
over Prime Rate 2.14% 3.44% 3.27% %3.67% 3.87% 3.98% 4.45%
Average Prime
Rate 7.75% 8.50% 8.29% %8.46% 8.25% 8.85% 7.34%
Spread plus Prime
Rate 9.89% 11.94% 11.56% 12.13% 12.12% 12.83% 11.79%
</TABLE>
There is seasonality in the level of outstanding accounts included in the
BCI Domestic Inventory Portfolio and in repayments of principal. Dealer
inventory financed by BCI 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
accounts included in the BCI Domestic Inventory Portfolio related to marine
products and Bombardier products. See "Maturity and Principal Payment
Considerations."
Relationship with Manufacturers, Importers and Distributors
Domestic Inventory Receivables.
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BCI's primary marketing focus is the manufacturer, importer or distributor
of the financed product. Affiliates of BCI manufacture products, including
Ski-Doo'r' snowmobiles, Sea-Doo'r' personal watercraft sport boats, neighborhood
vehicles and all-terrain vehicles, and related parts and accessories, which are
financed directly by BCI. These affiliate manufactured products represented in
the aggregate, as of April 30, 1999, approximately 25.84% of BCI's Domestic
Inventory Receivables Portfolio. With the exception of five independent
manufacturers who accounted, as of April 30, 1999, for approximately, 4.26%,
4.18%, 3.91%, 3.35% and 3.03%, respectively, of BCI's Domestic Inventory
Portfolio, no other manufacturer, importer, or distributor currently accounts
for more than 3% of BCI's Domestic Inventory 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 some 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 these cases, the
manufacturer, importer or distributor makes the interest 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 their products after a dealer defaults. In some cases, these
repurchase obligations lapse when an unsold product reaches a specified age. The
repurchase price to be paid to BCI is generally equal to the unpaid loan balance
with respect to the repossessed goods plus specified costs of repossession less
in some circumstances, a scheduled amount determined according to the age of the
repossessed goods. In some 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 some 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 these repurchase commitments may vary, both by industry and by
manufacturer, importer or distributor. In some circumstances, the
manufacturer's, importer's or distributor's repurchase obligation may be limited
to a specified percentage of the amount financed. In addition, current trends in
the domestic inventory financing business indicate that repurchase commitments
may not always be available from manufacturers, importers and distributors or
may be replaced with a commitment by the manufacturer or distributor to remarket
the goods financed in the case of a dealer default.
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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, these agreements will, in
accordance with the Receivables Purchase Agreement, be assigned by BCI to the
depositor, but not by the depositor to the trust. BCI agrees under the Pooling
and Servicing Agreement to use reasonable efforts to collect on behalf of the
depositor under these agreements with manufacturers, importers and distributors
with respect to the Domestic Inventory Receivables, and the depositor and BCI
agree to treat these amounts as collections on the related Receivables and to
deposit all of these collections into the trust.
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 the dealer's BCI financed inventory level remains
within the limits of that dealer's credit line. Provided the relevant account is
in good standing, performing under its inventory security agreement and the
credit line has not been withdrawn, approval will normally be given.
In order to ensure a dealer's compliance with the pay-as-sold program, BCI
periodically conducts audit inspections of dealers. In most cases, inventory is
inspected from three to six times per year based upon the performance of the
related dealer and the size of outstanding receivables with respect to that
dealer. Audits may be conducted as infrequently as once per 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 audit may include:
(1) check the actual inventory;
(2) inspect products for signs of use or excessive wear and tear;
(3) spot check dealer sales orders with respect to manufactured housing
related receivables and spot check contracts pending with respect to
other receivables;
(4) complete condition reports on product that is materially worn or
damaged;
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<PAGE>
(5) inspect the dealer's place of business and report unusual conditions;
(6) attempt collection for principal as needed; and
(7) 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.
BCI Outsources Some Activities.
BCI has delegated some of its servicing and administrative duties to third
parties and BCI may from time to time in the future delegate all or a portion of
its servicing and administrative duties with respect to the Receivables to third
parties, provided that no delegation of this sort shall relieve BCI of its
responsibility as servicer with respect to these duties.
Collection Activity
Domestic Inventory Receivables.
BCI is 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 these instances, if the manufacturer, importer or distributor has
entered into a repurchase agreement, it is generally obligated under the
repurchase agreement to pay BCI the sum of the unpaid principal amount of the
Receivables with respect to the repossessed product plus some of the costs of
repossession and less, in some circumstances, 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 non-principal 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
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<PAGE>
collections in respect of the related Receivables. Any legal action against a
dealer is generally initiated by BCI as servicer of the Receivables.
All payments on the 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.
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 this inspection, a decision is generally made
either to extend the payment due date or to institute other collection measures.
Asset-Based Receivables.
If the obligor of an Asset-Based Receivable defaults, BCI will continue its
ongoing assessment of the obligor's financial condition and will determine its
best course of action for collection, including the possibility of immediate
liquidation of all collateral.
Charge-Off Policy.
BCI's historical charge-off policy regarding receivables included in the
BCI Domestic Inventory Portfolio is described under "The Accounts--Loss
Experience." Receivables are charged off with respect to the trust as described
under "Description of the Certificates--Defaulted Receivables and Recoveries."
Receivables will be charged-off in accordance with BCI's policies in effect from
time to time.
Participation Arrangements
From time to time BCI may permit other financing sources to participate in
some of its financing arrangements with obligors. In these cases, BCI will
convey a participation interest to these other financing sources by granting to
or transferring to them an undivided interest in the receivables, related
collateral security and other rights associated therewith. Any undivided
interest in receivables held by a participant is not part of the trust's assets
and does not provide credit support to your Certificates. The documentation for
the underlying line of credit will remain in the name of BCI, as lender and BCI
will be the servicer under this arrangement. In a separate contractual
arrangement with BCI, the holder of the Participation Interest will agree to
provide a portion of the funding for the 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. Subject to the Rating Agency
Condition being satisfied with respect to the form of the documentation under
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.
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<PAGE>
The depositor is permitted to cause the trust to transfer an undivided
interest in specified Receivables, related Collateral Security and other
associated rights included in the trust's assets to the depositor, which
afterwards may transfer the interest in the form of a Participation Interest
subject to the Rating Agency Condition being satisfied with respect to the form
of the documentation under which these Participation Interests are to be
granted. These interests are no longer part of the trust. The depositor has
caused interests in some receivables to be transferred to it from the trust and
the depositor has transferred these interests to BCI.
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 in this prospectus. BCI and the depositor have the option, subject to
specified 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 their designation as Accounts. In order to be an Eligible
Account, each Account must meet 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 designated by BCI in accordance with the Receivables
Purchase Agreement to be included as Accounts will be designated by the
depositor as Accounts under the Pooling and Servicing Agreement and the
Receivables in the Accounts will be included as Receivables. 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 from which Receivables will be
transferred to the depositor.
As long as an Account is an Eligible Account, the Receivables in that
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 under which the Domestic Inventory Receivables have been or
will be generated by BCI or an affiliate of BCI are evidenced by inventory
security agreements entered into by dealers with BCI to finance the purchase by
the dealers of inventory.
The accounts under which the Asset-Based Receivables will be generated,
which accounts may in the future also be included in the trust 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 their production, manufacturing and inventory of
consumer, recreational and commercial products. The terms of these revolving
credit arrangements would be generally between BCI or an affiliate of BCI and
the borrower and, therefore, no general form of financing agreement exists with
respect to the Asset-Based Receivables.
Under the Pooling and Servicing Agreement, the depositor has the right,
subject to specified 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 these Additional
Accounts, including Receivables created after this designation. These accounts
must meet the eligibility criteria to qualify as Eligible Accounts as of the
date these accounts are designated as Additional Accounts. Under the Receivables
Purchase Agreement, BCI will from time to time sell or contribute the
Receivables then existing, with some exceptions, or later created under the
Accounts and under any Additional Accounts to the depositor, which will transfer
these Receivables to the trust in accordance with 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.
Subject to conditions specified in the Pooling and Servicing Agreement,
the depositor 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 the depositor on January 1, 1994 plus
any Additional Accounts, minus any Accounts removed from the trust.
Under the Pooling and Servicing Agreement, the servicer, which is expected
to be BCI, or any subservicer, which may include a BCI affiliate, may, subject
to specified conditions, change the terms relating to the Accounts and the
Receivables. See "Description of the Certificates--Collection and Other
Servicing Procedures."
36
<PAGE>
Information with respect to the accounts in the trust as of April 30, 1999
is set forth in the charts below. On the date of the issuance of the
certificates no more than 5% of the accounts in the trust will be different from
those described in this prospectus.
Credit Limits of the Accounts
<TABLE>
<CAPTION>
Accounts with Credit Limits Principal Amount of % of Receivables in
Ranging From: Receivables the Trust
- ------------------------------- --------------------------- ------------------------
<S> <C> <C>
$0 to $249,999 $67,513,584 6.31%
$250,000 to $499,999 $172,328,548 16.12%
$500,000 to $999,999 $286,096,770 26.76%
$1,000,000 to $15,000,000 $454,992,896 42.56%
$15,000,001 to $41,000,000 $88,170,418 8.25%
-----------------------------------------------------------------
Totals $1,069,102,216 100%
=================================================================
</TABLE>
Year Accounts Established
<TABLE>
<CAPTION>
Year Account Principal Amount of % of Receivables
Established: Receivables in Trust
- -------------------------------------------------------------------------------
<S> <C> <C>
1999 $71,213,973.40 6.66%
1998 $132,542,536.49 12.40%
1997 $105,638,577.28 9.88%
1996 $88,925,058.24 8.32%
1995 or earlier $670,782,070.81 62.74%
-------------------------------------------------------
Totals $1,069,102,216.22 100%
=======================================================
</TABLE>
As of April 30, 1999:
There were approximately 3519 Accounts which had been designated to the
trust.
Receivables in these Accounts had an aggregate principal balance of
approximately $1,112,500,000.
The average aggregate credit limit per Account was approximately
$559,908.
37
<PAGE>
The average principal balance of Receivables per Account was
approximately $320,059.
The aggregate principal balance of Receivables as a percentage of the
aggregate credit limits of these Eligible Accounts was approximately 57.16%.
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. which was formerly BCI
Recovery Inc. BCI Finance Inc. was incorporated in 1991 and is a wholly-owned
subsidiary 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 the depositor 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 in
"Historical Size", "Delinquency", "Loss Experience", "Product Mix", "Aging
Experience" and "Geographic Distribution" below may vary significantly over
time.
Historical Size
The 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 in the table below.
The following table sets forth information for the entire BCI Domestic
Inventory Portfolio on the aggregate fiscal year-end and April 30 outstanding
principal balances, average number of dealers financed, average month-end
outstanding principal balance per dealer on receivables and average volume per
dealer for each of the periods shown.
38
<PAGE>
Size of Portfolio
Size of Portfolio
BCI Domestic Inventory Portfolio
<TABLE>
<CAPTION>
April 30 January 31,
-------------------- --------------------------------------------------------
1999 1998 1999 1998 1997 1996 1995
-------------------- --------------------------------------------------------
(U.S. Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Outstanding Principal Balance........ 1,214,473 1,030,197 1,214,066 924,279 1,016,719 759,700 652,800
Average Number of Dealers............ 4,036 3,761 3,785 3,657 3,444 3,377 3,945
Average Month-End
Principal Balances PerDealer......... 308.48 265.16 239.63 249.58 233.11 184.90 131.80
Average Financing Volume
Per Dealer........................... 197.67 144.00 573.53 571.70 673.17 527.70 404.70
</TABLE>
The figures for outstanding principal balance and the average financing volume
per dealer in the table above reflect data for principal balance and number of
dealers existing as of the dates indicated. The figures for average number of
dealers for each of the fiscal years ended January 31 were calculated by taking
the average of the number of dealers at the beginning and end of that fiscal
year. The figures for average number of dealers for the fiscal quarters ended
April 30 reflect data for the number of dealers as of the end of that fiscal
quarter. The figures for average month-end principal balances per dealer
represent the average of the end of month averages of principal balance per
dealer over the course of the three month periods ending April 30 or the one
year periods ending January 31, as applicable.
Delinquency
The following table shows delinquency information for the BCI Domestic
Inventory Portfolio as of the dates shown.
39
<PAGE>
Delinquency Experience
BCI Domestic Inventory Portfolio
<TABLE>
<CAPTION>
April 30 January 31,
-------------------- --------------------------------------------------------
1999 1998 1999 1998 1997 1996 1995
-------------------- --------------------------------------------------------
(U.S. Dollars in Millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Outstanding Principal Balance........... $1,214.4 $1,030.1 $1,214.0 $924.2 $1,016.7 $759.7 $652.8
Delinquent Amount ...................... $ 6.17 $ 11.15 $ 8.84 $ 9.84 $ 4.97 $ 4.8 $ 9.6
Delinquent Amount/
Outstanding Principal Balance........... 0.5% 1.1% 0.7% 1.1% 0.5% 0.6% 1.5%
Allowance for Credit Losses on
Losses on BCI's Books................... $ 7.7 $ 15.52 $ 4.85 $13.22 $ 12.0 $ 9.7 $ 12.8
Allowance/Outstanding
Principal Balance....................... 0.6% 1.5% 0.4% 1.43% 1.18% 1.3% 2.0%
</TABLE>
The Delinquent Amount consists of the total principal on receivables which were
unpaid when due as a result of retail sale of the underlying product, that is,
sold out of trust, or were unpaid when due under a scheduled payment program and
with respect to which BCI determined that the payment was undercollateralized
after the due date plus the past due interest on these receivables to the extent
that the receivables are from an account which has past due interest of $1,000
or more. The percentage of outstanding receivables in the BCI Domestic Inventory
Portfolio 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 average principal
receivables balance reflects the average over the relevant period of the
principal balance in the BCI Domestic Inventory Portfolio at the end of each
month during that period. 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 in the table below.
40
<PAGE>
Loss Experience
BCI Domestic Inventory Portfolio
<TABLE>
<CAPTION>
Three Months
Ended April 30, Year Ended January 31,
---------------------- -----------------------------------------------------------
1999 1998 1999 1998 1997 1996 1995
---------------------- -----------------------------------------------------------
(U.S. Dollars in Millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Principal Receivables
Balance................................ $1,245.0 $977.3 $907.0 $912.7 $802.8 $624.4 $520.1
Net Losses............................. $ -0.17 $ 0.98 $ 12.7 $ 1.0 $ 1.8 $ 7.1 $ 0.7
Net Losses/Liquidations................ -0.03% 0.22% 0.61% 0.05% 0.09% 0.42% 0.04%
Net Losses/Average Principal -0.01% 0.10% 1.40% 0.11% 0.22% 1.13% 0.13%
Receivables Balance....................
</TABLE>
When reviewing the information in the immediately preceding table, you
should be aware that prior to January 1999, BCI's policy was to charge-off a
receivable based upon management discretion. Beginning in 1999, BCI's policy is
to charge off a principal receivable on or before 90 days after it is discovered
that the product related to that receivable was sold. The change in BCI's
charge-off policy increased the Net Losses, Net Losses/Liquidations and Net
Losses/Average Principal Receivables Balance for 1999. These figures were
negative for April 30, 1999 because recoveries on Receivables previously charged
off exceeded Net Losses. The figures set out under "Average Principal
Receivables Balance" indicate the average of the month-end outstanding principal
balances for the twelve months ending on the last day of the period. The figures
representing net losses in any period were derived by reducing gross losses by
recoveries for that period. Recoveries include recoveries from collateral
security in addition to the products.
See the last two paragraphs under "General" above.
Management Discussion and Analysis
Management believes that portfolio losses and delinquencies have not
deviated significantly over recent years. As noted in the preceding paragraph,
loss and recovery data were affected by Bombardier Capital Inc.'s change in
write-off policy. There can be no assurance that the delinquency and loss
experience on the portfolio will remain consistent with past performance. In
particular, a change in the current economic conditions could have a material
adverse effect on the assets in the trust. See "Risk Factors--Social, Economic
and Other Factors May Cause Dealers To Be Unable To Sell Products Securing
Receivables Causing Losses On Receivables And Thus Your Certificates or
Accelerating Payments of Principal to You." Some of the asset types in the trust
may be more sensitive to recessive cycles than others. For example, if an
economic recession occurs, consumers are less likely to buy high-end
recreational products. This would cause dealers to have difficulty selling the
high-end recreational products that secure receivables. In addition, unexpected
events may cause an increase in delinquencies and losses. For example, an
increase in the delinquency experience occurred in the first half of 1998
because of the adverse effect on several California dealers of a ban on the use
of personal watercraft on some waterways.
As may be observed from the average spread over prime data, the spread
over prime has decreased. This is known as rate compression and may adversely
affect the yield on the portfolio. Rate compression has occurred in part due
to increased price competition and consolidation in the wholesale finance
industry which can be expected to continue.
Product Mix
The level of BCI's domestic inventory financing has increased over the
last four years. The following table details BCI's domestic inventory financing
activity by outstanding aggregate receivables and by volume based on current
product categories for the BCI Domestic Inventory Portfolio. The increase in
financing is not across all industry sectors. 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.
41
<PAGE>
Outstanding Receivables
BCI Domestic Inventory Portfolio
<TABLE>
<CAPTION>
January 31,
-----------------------------------------------------------------------------------
Product 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Recreational
Products....................... $ 307,690,567 $ 336,030,779 $ 425,913,649 $291,465,014 $202,823,844
Marine Products
other than Bombardier
Products....................... $ 315,569,409 $ 339,873,244 $ 339,344,956 $270,099,808 $228,946,126
Manufactured Housing .......... $ 399,859,041 $ 130,011,993 $ 143,944,972 $119,500,029 $139,735,673
Recreational Vehicles.......... $ 99,460,273 $ 67,524,207 $ 57,682,597 $ 44,838,513 $ 40,149,670
Other.......................... $ 91,486,875 $ 50,839,216 $ 59,833,013 $ 33,823,269 $ 41,147,314
---------------------------------------------------------------------------------
Totals......................... $1,214,066,165 $ 924,279,439 $1,016,719,187 $759,726,633 $652,802,627
=================================================================================
</TABLE>
<TABLE>
<CAPTION>
April 30, April 30,
---------------------------------------
Product 1999 1998
- ---------------------------------------------------------------------
<S> <C> <C>
Recreational Products......... $ 313,893,215 $ 393,715,815
Marine Products other than
Bombardier Products........... $ 303,411,093 $ 333,268,340
Manufactured Housing ......... $ 381,568,582 $ 159,715,087
Recreational Vehicles......... $ 120,720,401 $ 78,421,506
Other......................... $ 94,880,707 $ 65,076,794
----------------------------------
Totals........................ $1,214,473,998 $1,030,197,542
==================================
</TABLE>
42
<PAGE>
Financing Volume
BCI Domestic Inventory Portfolio
<TABLE>
<CAPTION>
January 31,
-----------------------------------------------------------------------------------------------
Product 1999 1998 1997 1996 1995
- ---------------------- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Recreational
Products.............. $ 785,229,267 $ 966,826,316 $1,146,277,315 $ 837,613,268 $ 539,542,272
Marine Products other
than Bombardier
Products.............. $ 529,938,038 $ 485,264,014 $ 505,727,332 $ 434,175,608 $ 383,848,160
Manufactured
Housing .............. $ 475,987,545 $ 303,678,821 $ 345,244,048 $ 303,200,572 $ 447,885,641
Recreational
Vehicles.............. $ 177,719,671 $ 134,223,576 $ 121,753,617 $ 100,988,542 $ 87,033,102
Other................. $ 201,920,641 $ 200,713,551 $ 199,387,951 $ 106,127,093 $ 138,046,628
--------------------------------------------------------------------------------------------
Totals................ $2,170,795,162 $2,090,706,277 $2,318,390,263 $1,782,105,084 $1,596,355,804
============================================================================================
</TABLE>
<TABLE>
<CAPTION>
April 30, April 30,
---------------------------------
Product 1999 1998
- ----------------------------------------------------------
<S> <C> <C>
Recreational Products.. $153,997,464 $215,787,473
Marine Products other
than Bombardier
Products.............. $133,637,955 $136,432,125
Manufactured
Housing .............. $379,199,432 $101,694,432
Recreational
Vehicles.............. $ 70,470,343 $ 40,304,853
Other................. $ 60,499,679 $ 47,348,946
------------------------------
Totals................ $797,799,872 $541,567,829
==============================
</TABLE>
43
<PAGE>
Bombardier Recreational Products
As a manufacturer, Bombardier Inc. is one of the BCI's most significant
customers. Bombardier recreational products financed by BCI include Ski-Doo'r'
snowmobiles, Sea-Doo'r' personal watercraft, sport boats, neighborhood vehicles
and all-terrain vehicles, and related parts and accessories.
Marine Products Other Than Bombardier Products
As of April 30, 1999, BCI provided inventory finance to approximately
1,370 dealers for purchases of the products of approximately 285 marine
manufacturers and distributors. The marine products financed by BCI are
primarily boats under 30 feet in length, outboard motors and trailers, including
packages consisting of all three products.
Manufactured Housing
Manufactured housing products for which BCI provides inventory financing
consist of single wide, 14 feet, and double wide, 28 feet, manufactured housing
units. As of April 30, 1999, BCI was financing approximately 723 dealers for
purchases of the products of approximately 116 manufacturers of manufactured
homes. In January 1999, BCI significantly expanded its manufactured housing
inventory receivables through a portfolio purchase from NationsCredit
Manufactured Housing Corporation in the principal amount of approximately US$203
million.
Recreational Vehicles
The recreational vehicles financed by BCI are primarily motorized
on-the-road recreational vehicles, pull-behind travel trailers and campers. The
specialty vehicles financed by BCI include horse trailers, cargo trailers, buses
and specified trucks.
Other
BCI also provides inventory financing for motorcycles and hot tubs and
is currently developing other inventory financing opportunities. BCI has also
recently begun financing fleet purchases by rental car dealers and has
instituted a program to finance fleet purchases of previously rented vehicles by
specified used car dealers. To date, management has elected not to include these
assets in the trust.
See the last two paragraphs under "General" above.
Aging Experience
44
<PAGE>
The following table provides the age distribution of product inventory
for all dealers in the BCI Domestic Inventory Portfolio as a percentage of total
principal outstanding at the date indicated. Because the Accounts designated to
the trust will comprise only a portion of the entire BCI Domestic Inventory
Portfolio, which also includes accounts which have not been designated to the
trust, actual age distribution with respect to the Accounts may be different.
Product Age Distribution
BCI Domestic Inventory Portfolio
<TABLE>
<CAPTION>
April 30, April 30, January 31,
------------------------ -----------------------------------------------------------
Days 1999 1998 1999 1998 1997 1996 1995
- --------------------- ------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1-120................ 47.2% 48.9% 52.93% 44.34% 58.50% 61.44% 64.79%
121-180.............. 16.9% 13.8% 14.04% 14.23% 13.42% 13.92% 14.25%
181-270.............. 15.5% 12.6% 11.52% 13.30% 11.26% 9.37% 8.95%
Over 270............. 20.4% 24.7% 21.05% 28.14% 16.83% 15.54% 12.01%
</TABLE>
See the last two paragraphs under "General" above.
Geographic Distribution
The following table provides information concerning those seven states
which have the greatest number of receivables outstanding and the number of
dealers generating these receivables with respect to the BCI Domestic Inventory
Portfolio. This table includes dealers who have either month-end outstanding
principal balances as of April 25, 1999 or who had a positive average daily
principal balance for the month ended April 25, 1999. 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.
45
<PAGE>
Geographic Distribution
BCI Domestic Inventory Portfolio
<TABLE>
<CAPTION>
Receivables Percentage of Percentage of
Outstanding (U.S. Receivables Total Number Number of
State Dollars in Thousands) Outstanding of Accounts Accounts
- -------------------------- -------------------- ------------- ----------- --------------
<S> <C> <C> <C> <C>
Texas..................... 112,858,659 9.29% 300 7.43%
Florida................... 104,934,647 8.64% 233 5.77%
North Carolina............ 104,548,074 8.61% 200 4.96%
Georgia................... 87,052,367 7.17% 165 4.09%
California................ 74,299,164 6.12% 215 5.33%
Arizona................... 63,880,583 5.26% 76 1.88%
South Carolina............ 53,633,456 4.42% 133 3.30%
</TABLE>
No state other than those listed in this table represents more than 4%
of the outstanding receivables in the BCI Domestic Inventory Portfolio.
See the last two paragraphs under "General" above.
Bombardier Capital Inc.
BCI is a financial services company incorporated in Massachusetts in
1974 and is a wholly-owned subsidiary of Bombardier Capital Holdings Inc., a
Delaware corporation located in Jacksonville, Florida. Bombardier Capital
Holdings Inc. is wholly-owned by Bombardier Corporation, an Idaho corporation,
which in turn is wholly-owned by Bombardier Corporation (Delaware), a Delaware
corporation. Bombardier Corporation (Delaware) is wholly-owned by Bombardier
Inc., a Canadian corporation. BCI's executive office is located at 1600 Mountain
View Drive, Colchester, Vermont 05446. The telephone number of the executive
office is (802) 654-8100.
BCI's business operations are carried on through five divisions. As at
January 31, 1999, the Inventory Finance Division and the Commercial & Industrial
Finance Division accounted for approximately 69.65% of the managed assets of
BCI. The Consumer Finance Division, the Mortgage Division and the Technology
Management and Finance Division were created in 1997.
The Inventory Finance Division, which has been in operation since the
inception of BCI, provides secured purchase money inventory financing to dealers
selling recreational, commercial and consumer products. The Commercial &
Industrial Finance Division has been in operation since 1991 and provides
domestic and international lending, leasing and asset management services in
connection with a range of business aircraft and other commercial and industrial
46
<PAGE>
products and provides factoring of accounts receivable and other financial
services to affiliated Bombardier companies. BCI has entered new market segments
by launching its own consumer retail and manufactured housing financing
operations through its Consumer Finance Division and Mortgage Division. In
addition, BCI has begun providing commercial leasing services relating to
computer and telecommunications hardware and software and related equipment
through its Technology Management and Finance Division. BCI operates in highly
competitive markets.
As of January 31, 1997, January 31, 1998 and January 31, 1999, BCI's
total assets under management -- primarily financing assets -- were
approximately $1,539 million, $2,062 million and $4,404 million, respectively,
and shareholders' equity was approximately $139 million, $159 million and $388
million, respectively. For the fiscal years ended 1997, 1998 and 1999, total BCI
revenues were approximately $110 million, $171 million and $280 million,
respectively.
Bombardier Inc. is a Canadian corporation which, directly and through
its subsidiaries, is engaged in design, development, manufacture and marketing
in the aerospace, recreational products and transportation equipment industries.
In addition, Bombardier Inc. and its subsidiaries offer support, maintenance and
training services, as well as operations management in the public and private
sectors. Through various subsidiaries, Bombardier Inc. is engaged in financial
services and one division of Bombardier Inc. is involved in the development of
real estate interests earmarked for new uses. Bombardier Inc. and its
subsidiaries operate plants in Canada, Mexico, the United States, Austria,
Belgium, the Czech Republic, Finland, France, Germany, Switzerland and the
United Kingdom.
Bombardier Inc.'s equity securities are publicly traded on The Montreal
Exchange and The Toronto Stock Exchange, on the Brussels stock exchange in
Belgium and on the Frankfurt Stock Exchange in Germany. 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. Bombardier Inc. does not have
securities registered in the United States.
"Sea-Doo'r'", "Ski-Doo'r'" and various other words, numbers and
configurations used in this prospectus are trademarks and/or trade names of
various products of Bombardier Inc. and/or its affiliates and are registered
and/or otherwise protected under applicable law.
The registered office of Bombardier Inc. is at 800 Rene-Levesque
Boulevard West, Montreal, Quebec, Canada H3B 1Y8.
Maturity and Principal Payment Considerations
Principal of the Series 1999-1 Certificates is scheduled to be paid on
the _______ distribution date. It is possible, however, that principal on the
Certificates may be paid earlier if
47
<PAGE>
an Early Amortization Event has occurred or if 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. It is expected that a single
principal payment in respect of the Class A Certificates will be made on the
_______ distribution date and that a single principal payment in respect of the
Class B Certificates will also be made on this 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 in this section.
The majority of Domestic Inventory Receivables are payable upon the
retail sale of the related Eligible Product and therefore, the timing of these
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, the depositor may be unable to convey new
Receivables to 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
some circumstances applies to Accounts of the same type or types as are then
included in the trust. Therefore, if the trust includes only Accounts containing
Domestic Inventory Receivables, only Domestic Inventory Receivables would be
required to be added to the trust unless BCI and the depositor, at their
options, and subject to specified conditions, decide to designate accounts
containing Asset-Based Receivables. This failure to convey new Receivables to
the trust on the part of the depositor would constitute an Early Amortization
Event, causing principal payments on the Certificates to commence earlier than
would otherwise have been the case.
Further, during the Controlled Accumulation 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 trust.
Alternatively, the issuance of other series may result in the allocation of
Excess Principal Collections from these 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."
Domestic Inventory Receivables arise through financing arrangements
related to Eligible Products.
48
<PAGE>
The amount of new Receivables generated in any month and monthly payment
rates on the Receivables may vary because of seasonal variations in sales and
inventory levels of Eligible Products, retail incentive programs provided by the
manufacturers, importers and distributors of the Eligible Products and various
economic factors affecting Eligible Product sales. The following table sets
forth the highest and lowest monthly payment rates for the BCI Domestic
Inventory 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 this period.
There can be no assurance that the rate of principal collections will be similar
to the historical experience set forth in the table below. Because the Accounts
designated to the trust will comprise only a portion of the entire BCI Domestic
Inventory Portfolio, which includes accounts which have not been designated to
the trust, actual monthly payment rates with respect to the Eligible Accounts
may be different.
Monthly Principal Payment Rates
BCI Domestic Inventory Portfolio
<TABLE>
<CAPTION>
Three Months
Ended April 30, Year Ended January 31,
------------------------ -----------------------------------------------------------
1999 1998 1999 1998 1997 1996 1995
-------------------------- -----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Highest Month.............. 22.35% 16.69% 31.14% 29.48% 34.01% 35.9% 37.3%
Lowest Month............... 12.90% 12.30% 10.38% 10.99% 10.54% 11.1% 14.4%
Average of the Months in
the Period................. 16.93% 14.45% 19.32% 19.33% 21.68% 22.9% 24.4%
</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 _______ distribution date and, in the case of
the Class B Certificates, prior to the _______ distribution date. See
"Description of the Certificates--Early Amortization Events" and "--Extension of
Initial Principal Payment Date."
Description of the Certificates
General
49
<PAGE>
The Certificates will be issued in accordance with the Pooling and
Servicing Agreement 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. The Pooling and Servicing Agreement provides
that it is governed by New York law. The following discussion represents a
summary of the material 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, copies of which, without specified 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 terms
as further described in this section, funds up to, but not in excess of, the
amounts required to make payments of interest on and principal of the
Certificates under the Pooling and Servicing Agreement and the Series 1999-1
supplement to the Pooling and Servicing Agreement. The Series 1999-1
Certificates will be issued in two classes, Class A and Class B. The initial
principal balance of the Class A Certificates will be $[300,000,000] and the
initial principal balance of the Class B Certificates will be $[20,339,000]. The
Certificates will initially be represented by two or more certificates
registered in the name of the nominee of The Depository Trust Company.
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 The Depository Trust Company that its nominee will be Cede &
Co. Accordingly, Cede & Co. is expected to be the holder of record of the
Certificates. No Certificate Owner will be entitled to receive a certificate
representing his or her beneficial interest in the Certificates, unless and
until definitive certificates are issued under the limited circumstances
described under "Definitive Certificates". All references in this prospectus to
actions by Certificateholders shall refer to actions taken by The Depository
Trust Company upon instructions from its Participants, and all references in
this prospectus to distributions, notices, reports and statements to
Certificateholders shall refer to distributions, notices, reports and statements
to Cede & Co., 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 the Class A Certificate Rate and will be payable to the holders of the
Class A Certificates on each distribution date, commencing [October 15, 1999].
The Class A Certificate Rate for any interest period will be the lesser of LIBOR
plus __________ and the net receivables rate.
Interest on the principal balance of the Class B Certificates will
accrue at the Class B Certificate Rate and will be payable to the holders of the
Class B Certificates on each distribution date, commencing [October 15, 1999].
The Class B Certificate Rate for any interest period will be the lesser of LIBOR
plus __________ and the net receivables rate.
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<PAGE>
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 date of the issuance of the Certificates -- to but
excluding the distribution date on which this interest is due. 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 the amount of this
unpaid interest at the Class A Certificate Rate or Class B Certificate Rate, as
applicable.
Interest payments on the Certificates will be derived solely from:
(1) Non-principal collections on the Receivables allocated to Series
1999-1 for the preceding calendar month;
(2) the amount, if any, then on deposit in the Reserve Fund;
(3) any Investment Proceeds; and
(4) Series 1999-1 Available Retained Collections to the extent of the
Required Subordination Draw Amount.
See "Allocation Percentages" and "Distribution from the Collection
Account; Reserve Fund; Principal Account" below.
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.
Principal
No principal payments will be made on the Certificates until the
distribution date in _____________, unless BCI elects not to extend the Initial
Principal Payment Date or an Early Amortization Event, as described under "Early
Amortization Events" below, occurs. If BCI elects not to extend the Initial
Principal Payment Date, principal distributions on the Certificates will begin
on that Initial Principal Payment Date, the earliest of which would be the
__________ 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 this event occurs.
During the Revolving Period, principal collections allocated to the
Certificates, subject to limitations, will either:
51
<PAGE>
(1) be deposited in the Excess Funding Account as described under
"Excess Funding Account" below;
(2) be treated as excess principal collections and be allocated to one
or more outstanding series which are in amortization, early amortization or
accumulation periods to cover shortfalls in principal payments due to the
certificateholders of any of these other series or which provide for excess
funding accounts or similar arrangements; or
(3) to the extent the excess principal collections are not needed to
cover principal shortfalls for other outstanding series, 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, if the Pool
Balance does not exceed the Required Pool Balance, be held in the Collection
Account as unallocated Principal Collections.
See "Allocation Percentages--Principal Collections for all Series" and
"Distributions from the Collection Account; Reserve Fund; Principal Account--
Principal Collections" below.
During the Controlled Accumulation Period, the Initial Amortization
Period or any Early Amortization Period, principal collections allocable to the
Certificates plus 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. Instead, in the case of the Controlled Accumulation
Period, Available Investor Principal Collections for each month will be
deposited into the Principal Account until the amount on deposit equals the
Controlled Deposit Amount, and, in the case of the Initial Amortization Period
or an Early Amortization Period, 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, first to the holders
of the Class A Certificates and then to the holders of the Class B Certificates,
until either the outstanding principal balance of both classes of the
Certificates has been reduced to zero or the Series 1999-1 Termination Date has
occurred.
The Controlled Accumulation Period will begin on ________, 200_ or a
later date determined by the servicer on the basis of the Accumulation Period
Length. The Controlled Accumulation Period will continue for one, two, three
or four months and for each of the months, principal collections
allocated to the Certificates will be deposited into the Principal Account, in
an amount sufficient, when combined with the deposits in all other months, to
pay the Class A Certificates and the Class B Certificates on the Scheduled
Payment Date. During any Initial Amortization Period or Early Amortization
Period, principal collections allocable to the Certificates will be distributed
first to the Class A Certificates 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 amounts accumulated will be paid to the Holders of
the Class A Certificates on _________, which is the Scheduled Payment Date and
that a single principal payment in respect of the
52
<PAGE>
entire principal balance of the Class B Certificates will be made on the _______
distribution date. 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" in
this prospectus.
If an interest in the Receivables represented by all outstanding series
is required to be repurchased as described below under the third from the last
paragraph of "Representations and Warranties," principal payments on the
Certificates will be made on the distribution date following this repurchase.
See "--Allocation Percentages--Principal Collections for all Series" and
"--Distributions from the Collection Account; Reserve Fund; Principal Account--
Principal Collections" below.
Distributions on the Certificates will be made on each distribution date
to the holders of Certificates in whose names the Certificates were registered
which is expected to be Cede & Co. as nominee of The Depository Trust Company at
the close of business on the day preceding the relevant distribution date. If
definitive certificates are issued, distributions will be made to the holder of
Certificates in whose names the Certificates were registered on the last day of
the preceding calendar month. However, the final distribution on the
Certificates will be made only upon presentation and surrender of the
Certificates. Distributions will be made to The Depository Trust Company 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 on the _________ 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
___________ 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 __________ 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. The Initial Principal Payment
Date will not, however, be extended beyond the _______ distribution date.
In the event that BCI elects not to extend the Initial Principal Payment
Date, the Revolving Period or the Controlled Accumulation 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 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 1999-1 Termination Date and second to the holders of the
Class B Certificates 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 1999-1 Termination Date.
53
<PAGE>
BCI will cause the trustee to provide a copy of BCI's notice not to
extend the Initial Principal Payment Date to each Certificateholder, the
depositor and the Rating Agencies. The servicer will cause the trustee to mail
this 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
The Depository Trust Company is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, and a "clearing corporation" within the meaning of the UCC and a
"clearing agency" registered according to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository Trust Company was
created to hold securities for its 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 other organizations. Indirect access to The Depository Trust Company
system also is available to Indirect Participants that clear through or maintain
a custodial relationship with a Participant, either directly or indirectly
Indirect Participants.
If you are not a Participant or Indirect Participant but desire to
purchase, sell or otherwise transfer ownership of, or other interests in,
Certificates you can do so only through Participants and Indirect Participants.
In addition, you will receive all distributions of principal of and interest on
the Certificates from the trustee through The Depository Trust Company and its
Participants. Under a book-entry format, you will receive payments after the
related distribution date because, while payments are required to be forwarded
to Cede & Co., as nominee for The Depository Trust Company, on each of these
dates, The Depository Trust Company will forward these payments to its
Participants which will then be required to forward them to Indirect
Participants or to you as the owner of an interest in the Certificates. It is
anticipated that the only Certificateholder, as defined in the Pooling and
Servicing Agreement, will be Cede & Co., as nominee of The Depository Trust
Company. You will not be recognized by the trustee as Certificateholders under
the Pooling and Servicing Agreement. You will only be permitted to exercise the
rights of Certificateholders under the Pooling and Servicing Agreement
indirectly through The Depository Trust Company and its Participants, who in
turn will exercise their rights through The Depository Trust Company.
Under the rules, regulations and procedures creating and affecting The
Depository Trust Company and its operations, The Depository Trust Company 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
54
<PAGE>
to the Certificates similarly are required to make book-entry transfers and
receive and transmit distributions of principal and interest on behalf of their
respective Certificate Owners.
Because The Depository Trust Company can only act on behalf of
Participants, who in turn act on behalf of Indirect Participants and specified
banks, the ability of a Certificate Owner to pledge Certificates to persons or
entities that do not participate in The Depository Trust Company system, or
otherwise take actions in respect of the Certificates, may be limited due to the
lack of a physical certificate for the Certificates.
The Depository Trust Company has advised the depositor that neither The
Depository Trust Company nor Cede & Co. 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, The
Depository Trust Company mails an omnibus proxy to the issuer as soon as
possible after the record date. The omnibus proxy assigns Cede & Co.'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.
Cedelbank was incorporated in 1970 as a limited company under
Luxembourg law, a societe anonyme. Cedelbank is owned by a parent corporation,
Cedel International, societe anonyme, the shareholders of which are banks,
securities dealers and financial institutions. Cedel International currently has
about 100 shareholders, including U.S. financial institutions or their
subsidiaries. No single entity may own more than twenty percent of Cedel
International's stock. Cedelbank is registered as a bank in Luxembourg, and is
therefore subject to regulation by the Luxembourg Commission for the Supervision
of the Financial Sector, which supervises Luxembourg banks. Cedelbank holds
securities for its customers and facilitates the clearance and settlement of
securities transactions by electronic book-entry transfers between their
accounts. Cedelbank provides various services, including safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedelbank also deals with domestic
securities markets in over 30 countries through established depository and
custodial relationships. Cedelbank has established an electronic bridge with
Morgan Guaranty Trust as the Operator of the Euroclear System in Brussels to
facilitate settlement of trades between Cedelbank and Euroclear. Cedelbank
currently accepts over 110,000 securities issues on its books. Cedelbank's
customers are world-wide financial institutions including underwriters,
securities brokers and dealers, banks, trust companies and clearing
corporations. Cedelbank's U.S. customers are limited to securities brokers and
dealers, and banks. Currently, Cedelbank has approximately 2,000 customers
located in over 80 countries, including all major European countries.
The Euroclear System was created in 1968 to hold securities for
Participants and to clear and settle transactions between Euroclear Participants
through simultaneous electronic book-entry delivery against payment, thereby
eliminating the need for physical movement of certificates and any risk from
lack of simultaneous transfers of securities and cash. Transactions may now be
settled in any of 32 currencies, including United States dollars. The Euroclear
55
<PAGE>
System includes various other services, including securities lending and
borrowing, and interfaces with domestic markets in several countries generally
similar to the arrangements for cross-market transfers with The Depository Trust
Company described above. The Euroclear System is operated by the Euroclear
Operator, under contract with Euroclear Clearance Systems S.C., a Belgian
cooperative corporation. All operations are conducted by the Euroclear Operator,
and all Euroclear System securities clearance accounts and the Euroclear System
cash accounts are accounts with the Euroclear Operator, not Euroclear Clearance
Systems S.C. Euroclear Clearance Systems S.C. establishes policy for the
Euroclear System on behalf of Euroclear Participants, Euroclear Participants,
securities brokers and dealers, other professional financial intermediaries and
banks, including central banks. Indirect access to the Euroclear System is also
available to other firms that clear through or maintain a custodial relationship
with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. For this
reason, 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 . These terms, conditions and procedures govern transfers of securities and
cash within the Euroclear System, withdrawals of securities and cash from the
Euroclear System, and receipts of payments with respect to securities in the
Euroclear System. All securities in the Euroclear System are held on a fungible
basis without attribution of specific certificates to specific securities
clearance accounts. The Euroclear Operator acts 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 Cedelbank
or the Euroclear System will be credited to the cash accounts of Cedelbank
customers or Euroclear Participants in accordance with the relevant system's
rules and procedures, to the extent received by its Depositary. These
distributions will be subject to tax reporting in accordance with relevant
United States tax laws and regulations. See " Material Federal Income Tax
Consequences."
Cedelbank 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 Cedelbank customer or Euroclear Participant
only in accordance with its relevant rules and procedures and subject to the
ability of its depositary to effect these actions on its behalf through The
Depository Trust Company.
Holders of Certificates may hold their Certificates through The
Depository Trust Company in the United States or Cedelbank or the Euroclear
System in Europe if they are
56
<PAGE>
participants of these systems, or indirectly through organizations which are
participants in these systems.
The Certificates will initially be registered in the name of Cede &
Co., the nominee of The Depository Trust Company. Cedelbank and the Euroclear
System will hold omnibus positions on behalf of their participants through
customers' securities accounts in Cedelbank's and Euroclear's names on the books
of their respective depositaries which in turn will hold these positions in
customers' securities accounts in the depositaries' names on the books of The
Depository Trust Company. Citibank, N.A. will act as depositary for Cedelbank
and Morgan Guaranty Trust Company of New York will act as depositary for the
Euroclear System.
Transfers between Participants will occur in accordance with The
Depository Trust Company rules. Transfers between Cedel Participants and
Euroclear Participants will occur in accordance with their respective rules and
operating procedures.
Cross-market transfers between persons holding directly or indirectly
through The Depository Trust Company, on the one hand, and directly or
indirectly through Cedel Participants or Euroclear Participants, on the other,
will be effected in The Depository Trust Company in accordance with The
Depository Trust Company rules on behalf of the relevant European international
clearing system by its depositary. These cross-market transactions, however,
will require delivery of instructions to the relevant European international
clearing system by the counterparty in that system in accordance with its rules
and procedures and within its established European time deadlines. 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 The Depository Trust Company, and making or receiving payment in accordance
with normal procedures for same-day funds settlement applicable to The
Depository Trust Company. Cedel Participants and Euroclear Participants may not
deliver instructions directly to the depositaries.
Because of time zone differences, credits of securities received in
Cedelbank or the Euroclear System as a result of a transaction with a
Participant will be made during subsequent securities settlement processing and
dated the business day following The Depository Trust Company settlement date.
These credits or any transactions in these securities settled during this
processing will be reported to the relevant the Euroclear System or Cedelbank
customers on that business day. Cash received in Cedelbank or the Euroclear
System as a result of sales of securities by or through a Cedelbank customer or
Euroclear Participant to a Participant will be received with value on The
Depository Trust Company settlement date but will be available in the relevant
Cedelbank or Euroclear System cash account only as of the business day following
settlement in The Depository Trust Company. For information with respect to tax
documentation procedures relating to the Certificates, see " Material Federal
Income Tax Consequences--Foreign Investors."
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<PAGE>
Although The Depository Trust Company, Cedelbank and the Euroclear
System have agreed to the foregoing procedures in order to facilitate transfers
of Certificates among participants of The Depository Trust Company, Cedelbank
and Euroclear, they are under no obligation to perform or continue to perform
these procedures and these procedures may be discontinued at any time. For a
discussion of issues concerning global clearance, settlement and tax
documentation procedures as they relate to certificates held by The Depository
Trust Company, please see Annex III to this prospectus, which is hereby
incorporated by reference into this prospectus.
Definitive Certificates
The Certificates will be issued in fully registered, certificated form
to you or your nominees rather than to The Depository Trust Company or its
nominee, only if:
(1) the depositor advises the trustee that The Depository
Trust Company is no longer willing or able to
discharge properly its responsibilities with respect
to the Certificates and the depositor is unable to
locate a qualified successor;
(2) the depositor, at its option, advises the trustee
that it elects to terminate the book-entry system
with respect to the Certificates through The
Depository Trust Company; or
(3) 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 The
Depository Trust Company through Participants in
writing that the continuation of a book-entry system
through The Depository Trust Company, or a successor
thereto, is no longer in the best interests of those
Certificate Owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the trustee is required through The Depository Trust
Company to notify all Certificate Owners of the availability through The
Depository Trust Company of definitive certificates. Upon surrender by The
Depository Trust Company of the certificate or certificates held by it or its
nominee representing the Certificates and instructions for registration, the
trustee will issue the Certificates in the form of definitive certificates, and
after this issuance the trustee will recognize the 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 under the caption "Description of the Certificates--Book-entry
Registration" in this prospectus 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 last
day of the preceding
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<PAGE>
month. 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 that Certificate
on the final payment date at the office or agency as is specified in the notice
of final distribution to Certificateholders. The trustee will provide this
notice to registered Certificateholders not later than the fifth day of the
month of the final distribution.
Definitive Certificates will be transferable or exchangeable at the
offices of the trustee, which shall initially be Bankers Trust Company. 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 in
part to any other series of investor certificates that may be outstanding from
time to time, and the remainder will be allocated to the depositor as holder of
the BCRC Certificate evidencing the Retained Interest and to the holder,
currently the depositor, of the Variable Funding Certificate evidencing the
Variable Funding Interest.
The Retained Interest will consist of
(1) the portion thereof that will be in part subordinated from
time to time to the Certificates and, in part, to the investor
certificates of each prior series and to any additional
series, that is, on any date, the sum of the Available
Subordinated Amount and the aggregate available subordinated
amounts for all other outstanding series on that date after
giving effect to the allocations, distributions, withdrawals
and deposits to be made on that date; and
(2) 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 series, which
will not be subordinated to the Certificates.
As of the date of the issuance of the Certificates, the amount under the
foregoing clause (1) allocable to the Certificates will be no less than
$[18,643,730] and the amount under the foregoing clause (2) allocable to the
Certificates will be $12,815,560.
The Variable Funding Interest will consist of 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
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<PAGE>
Funding Certificate as of the date of the 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.
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
the Variable Funding Percentage and all Non-Principal Collections and principal
collections.
In accordance with the Pooling and Servicing Agreement, the BCRC
Certificate and the Variable Funding Certificate have been issued to the
depositor. The depositor holds the BCRC Certificate and has pledged its interest
in the Variable Funding Certificate to BCI as security for the Note issued by
the depositor to BCI as part of the consideration for the sale of the
Receivables by BCI to the depositor. Amounts allocated to the depositor with
respect to the Variable Funding Certificate or the BCRC Certificate may be
available to the depositor to pay principal and interest on the Note issued to
BCI. See "Description of the Receivables Purchase Agreement--Sale and Transfer
of Receivables."
Except after the occurrence of a Liquidation Event as described in this
prospectus under the caption "Early Amortization Events" below, 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, according to one or
more supplements thereto, the depositor may cause the trustee to issue one or
more new series. In the supplement, the depositor may specify, among other
things, with respect to the new series:
its name or designation;
its initial principal amount, or the method for calculating
this amount, and the currency in which it is denominated;
its certificate rate or the method for determining its
certificate rate;
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the payment date or dates and the date or dates from which
interest shall accrue;
the method for allocating collections to certificateholders;
the issuer and terms of any form of enhancement with respect
thereto,
the terms on which the investor certificates of that series
may be exchanged for investor certificates of a series, other
than your series, repurchased by the depositor or remarketed
to other investors;
the series termination date;
the designation of any accounts established in connection with
any series and the terms governing the operation of the
accounts;
the monthly servicing fee and the investors' servicing fee;
the number of classes of investor certificates of the series
and, if more than one class, the rights and priorities of each
class;
the extent to which the investor certificates of the series
will be issuable in temporary or permanent global form;
whether the investor certificates of this series may be issued
in bearer form and any limitations imposed thereon;
the priority of this series with respect to any other series;
whether this series will be part of a group; and
any other terms permitted by the related supplement.
The depositor may offer any series under a prospectus or other
disclosure document in transactions either registered under the Securities Act
of 1933, as amended, 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 the
depositor may specify the terms of a new series so that each series has a
scheduled amortization period, controlled amortization period or accumulation
period which may have a different length and begin on a different date than the
scheduled amortization period or accumulation period for any other series.
Further, one or more series may be in their early amortization periods,
controlled
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amortization period or accumulation periods while other series are not. Thus,
some 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.
A new series may be issued only upon the satisfaction of specified
conditions. The depositor may cause the issuance of a new series by notifying
the trustee at least five business days in advance of the applicable issuance
date. The notice shall state the designation of any series and with respect to
that series:
(1) its initial principal amount,
(2) its currency and certificate rate,
(3) the issuer of any enhancement with respect to series, and
(4) the related series issuance date.
The Pooling and Servicing Agreement further provides that the trust
will issue any series only upon delivery to it of the following:
(1) a supplement in form satisfactory to the trustee signed by the
depositor and the servicer and specifying the principal terms
of that series;
(2) any related enhancement agreement executed by each of the
parties thereto other than the trustee; and
(3) an opinion of counsel to the effect that, for federal income
and Vermont state income tax purposes.
(x) the issuance will not adversely affect the
characterization of the investor certificates of any
outstanding series or class as debt of the depositor,
(y) the issuance will not cause or constitute a taxable
event with respect to any certificateholder or the
trust, and
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(z) the investor certificates of that new series will be
characterized as debt of the depositor.
The issuance of a new series is also subject to the conditions that:
(1) 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 the
issuance will not cause an Early Amortization Event to occur,
(2) after giving effect to the issuance, the depositor 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 trust, in each case as of the series issuance date and
after giving effect to the issuance, and
(3) written notice of the proposed new issuance shall have been
given to each Rating Agency at least five business days before
the series issuance date and no Rating Agency shall have
notified the depositor, BCI or the trustee that the issuance
will result in a reduction or withdrawal of the ratings of any
outstanding series or class of investor certificates.
Upon satisfaction of all these conditions, the trust will issue the new
series.
Supplemental Certificate
The Pooling and Servicing Agreement provides that the BCRC Certificate
shall, at all times, be beneficially owned by the depositor. Upon satisfaction
of the conditions described in this paragraph, however, the depositor may
surrender the BCRC Certificate to the trustee in exchange for a newly issued
BCRC Certificate and a Supplemental Certificate. The Supplemental Certificate
is not required to be beneficially owned by the depositor and may be delivered
to or at the direction of the depositor to any entity. It is a condition to
delivery of the Supplemental Certificate that, following delivery of the
Supplemental Certificate to another entity, the depositor shall, nevertheless,
have an interest in the trust, 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 trust. Additional conditions to the delivery of a
Supplemental Certificate are that the depositor shall have given the Rating
Agencies 10 days' prior notice and the Rating Agency Condition shall have been
satisfied with respect to the exchange and that an opinion of counsel shall be
delivered to the trustee to the effect that, for federal income and Vermont
state income tax purposes, the issuance of a series will not adversely affect
the characterization of the investor certificates of any outstanding series or
class as debt of the depositor and that the issuance will not cause or
constitute a taxable event with respect to any certificateholder and the trust.
In addition, if the supplement by which the
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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 the preceding paragraph.
If a Supplemental Certificate is issued, all references in this
prospectus 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 the depositor as holder of the BCRC
Certificate shall include the depositor 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
depositor sold and assigned to the trust all of the depositor's right, title and
interest in and to the Receivables under the Eligible Accounts purchased from
BCI and the related Collateral Security as of January 1, 1994, all Receivables
created in those initial accounts after January 1, 1994 and the depositor's
interest in the related Collateral Security and in 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 issuance of the Series 1994-1 Certificates, the depositor
has six times added Additional Accounts to the trust as shown in Annex II
hereto. Annex II is hereby incorporated by reference into this prospectus.
In connection with the sale of the Receivables then existing or
subsequently arising under the Eligible Accounts sold or contributed to the
depositor by BCI and the transfer of these Receivables by the depositor to the
trust, BCI has indicated in its computer records that these Receivables and the
related Collateral Security have been transferred to the depositor and that the
depositor has transferred its interest therein to the trust. In addition, BCI
provided to the depositor, and the depositor 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 January 1, 1994 and as of the Additional Cut-Off Dates, as
applicable. BCI has retained and will not deliver to the depositor or to the
trustee any other records or agreements relating to these Receivables. Except as
set forth above, the records and agreements relating to the Receivables in these
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 these Receivables will not be stamped or marked to reflect the transfer of
these Receivables to the trust. The depositor has filed one or more financing
statements in accordance with Vermont state law to perfect the trust's interest
in these Receivables, the Collateral Security, the Receivables Purchase
Agreement and the proceeds thereof. See "Risk Factors--State and Federal Law May
Limit the Ability of the Servicer to Realize on Receivables Thus Causing
Losses on Your Certificates" and "Material Legal Aspects of the Receivables."
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As described below under "Addition of Accounts," the depositor has the
right--subject to 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 subsequently created in the
Additional Accounts and to convey to the trust the Receivables then existing or
subsequently arising in the accounts. Each Additional Account must be an
Eligible Account. In respect of any conveyance of Receivables in Additional
Accounts, the depositor will follow the procedures set forth in the preceding
paragraph, except that the computer file or microfiche or written list will show
information for these Additional Accounts as of the cutoff date for the
addition.
Representations and Warranties
The depositor may be required to add Receivables to the trust or to
remove or repurchase Receivables in designated Accounts from the trust. In
addition, the depositor may, if the conditions precedent are met, add or remove
Receivables in 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" in this prospectus
summarize the circumstances under which these actions must or may be taken and
the respective repurchase obligations of the depositor and BCI.
The depositor has made representations and warranties to the trustee
and will on the date of the issuance of the Certificates make the following
representations and warranties relating to the Accounts, the Receivables and the
Collateral Security:
as of January 1, 1994, the date of the issuance of
the Certificates 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, and on each Transfer Date, each
Additional Account is an Eligible Account,
each Receivable and all Collateral Security conveyed
to the trust on January 1, 1994 or, in the case of
Additional Accounts, on the date they are included as
Accounts, 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
with respect to each Receivable and all Collateral
Security transferred to the trust on January 1, 1994
or, in the case of Additional Accounts, on the date
they are included as Accounts, and on each Transfer
Date, all appropriate consents and governmental
authorizations required to be obtained by the
depositor in connection with the conveyance have been
duly obtained.
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If the depositor breaches any representation and warranty described
above and this breach remains uncured for 30 days or a longer period as may be
agreed to by the trustee, after the earlier to occur of the discovery of this
breach or receipt of written notice of this breach by the depositor, and this
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, that 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 the depositor on the terms and conditions set
forth in the second succeeding paragraphs below, and in the case of an Account,
that Account shall no longer be designated for inclusion in the trust.
Each of these Receivables shall be retransferred from the trust to the
depositor on or before the end of the Collection Period in which the retransfer
obligation arises, with a corresponding reduction in the Pool Balance. Unless a
Liquidation Event has occurred, in the event that this 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 distribution date, on the
date on which this retransfer to the depositor is to occur, the depositor will
be obligated to make a deposit into the Collection Account in immediately
available funds in an amount equal to the Transfer Deposit Amount. If the
Transfer Deposit Amount is not deposited, the related Receivables will not be
reassigned to the depositor and will remain part of the trust. The reassignment
of any Receivable to the depositor 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 available to
the Certificateholders or the trustee on behalf of the Certificateholders.
In the Pooling and Servicing Agreement, the depositor also makes
representations and warranties to the trustee to the effect, among other things,
that as of January 1, 1994 and each series issuance date including the date of
the issuance of the Certificates:
(1) 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 the depositor, and
(2) the Pooling and Servicing Agreement constitutes a valid sale,
transfer and assignment to the trust of all right, title and
interest of the depositor in the Receivables and the
Collateral Security, whether then existing or subsequently
created, and the proceeds thereof, under the UCC as then in
effect in the State of Vermont, which is effective on the date
of the issuance of the Certificates or as of the date Accounts
are added to the trust, if applicable.
In the event that:
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any of the representations and warranties described
in paragraph (1) above has been breached,
the representation and warranty with respect to the
Pooling and Servicing Agreement in paragraph (2)
above 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
other specific representations and warranties set
forth in the Pooling and Servicing Agreement are
breached,
and, the 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 the
depositor and the servicer, and to the trustee and the issuer or provider of any
enhancement 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 the notice, or within any longer period specified in the
notice.
This repurchase will not be required to be made, however, if at the end
of the applicable period, either each breached representation and warranty has
been satisfied in all material respects or, in the case of a breach described in
the second item above, 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 has been cured.
The portion of the price for the repurchase in respect of the
Certificates will be equal to the sum of the aggregate principal balance of the
Certificates on the distribution date on which the purchase is scheduled to be
made and the accrued and unpaid interest on the unpaid principal balance of the
Certificates at the Class A Certificate Rate or Class B Certificate Rate, as
applicable, 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 the depositor 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
that series or the Variable Funding Certificate or both. If notice is given as
provided above, the obligation of the depositor to make this deposit will
constitute the sole remedy respecting a breach of the representations and
warranties available to the investor certificateholders or the
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holder of the Variable Funding Certificate or the trustee on behalf of the
investor certificateholders.
Eligible Accounts and Eligible Receivables
An Eligible Account is:
(1) an individual financing account established by BCI or
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 under an inventory security
agreement in the ordinary course of business, and
(2) an individual line of credit or financing agreement extended
by BCI or an affiliate of BCI or by a third party 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 that obligor, which, in
each case, as of the date of determination thereof relates to
an obligor that is an Eligible Obligor and is in existence
and, after its establishment or acquisition by BCI or an
affiliate of BCI, is maintained and serviced by BCI. BCI or
its affiliates may assign or grant participation rights in,
this type of Account or any Receivable therein to any person
without affecting the 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 these 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 trust 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:
in the case of Domestic Inventory Receivables, a
dealer that is located in the United States of
America including its territories and possessions;
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
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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 a Receivable:
(1) which was originated by BCI, by an affiliate of BCI or acquired by
BCI or an affiliate of BCI, in each case in the ordinary course of business,
(2) which arose under an Account that at the time the Receivable was
transferred to the trust was an Eligible Account,
(3) which is owned by BCI at the time of sale or contribution by BCI to
the depositor,
(4) which represents the obligation of an obligor to repay an advance
made to or on behalf of that obligor, or credit extended for that 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,
(5) which in the case of:
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 , at the time of transfer to the
trust, is secured by a first priority perfected
security interest in the Eligible Product relating
thereto and,
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,
(6) which is not unenforceable as a result of any violation of
requirements of law applicable thereto and the related inventory security
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,
(7) with respect to which all consents and governmental authorizations
required to be obtained by BCI or an affiliate of BCI, or the depositor in
connection with the creation of the Receivable or the transfer thereof to the
depositor and the trust or the performance by BCI or an affiliate of BCI of the
inventory security agreement or the other floorplan financing agreement in
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the case of Domestic Inventory Receivables or the related loan agreement in the
case of Asset-Based Receivables by which the Receivable was created, have been
duly obtained, effected or given and are in full force and effect,
(8) as to which at all times following the transfer of the 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 under the Pooling and Servicing Agreement and other than
tax and other statutory liens, including liens in favor of the Pension Benefit
Guaranty Corporation, which may arise after this transfer and which relate to
affiliates of the depositor,
(9) 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 some exceptions, any proceeds thereof,
(10) which will at all times be the legal and assignable payment
obligation of the obligor relating thereto, enforceable against that obligor in
accordance with its terms, as modified or revised from time to time with the
consent of the servicer, except as enforceability may be limited by the
bankruptcy code or other applicable insolvency laws,
(11) which at the time of transfer to the trust is enforceable against
the obligor to the extent of the full principal amount of the Receivable, except
as enforceability may be limited by insolvency laws,
(12) as to which, at the time of transfer of the Receivable to the
trust, BCI or an affiliate of BCI and the depositor have satisfied all their
respective obligations under the Pooling and Servicing Agreement with respect to
the Receivable required to be satisfied at that time,
(13) as to which, at the time of transfer of the Receivable to the
trust, neither BCI or any affiliate of BCI nor the depositor 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
(14) 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.
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 that amendment is
satisfied.
It is not required or anticipated that the depositor 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
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warranties of BCI or for any other purpose. In addition, it is not anticipated
or required that the depositor 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.
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 in this section, the depositor has
the right to designate from time to time additional Eligible Accounts to be
included in the trust as Accounts. In addition, unless a Liquidation Event has
occurred, the depositor is required to designate and to add to the trust the
Receivables of additional Eligible Accounts if, as of the date for which the
following calculations are made, either:
(1) the Pool Balance is less than the Required Pool Balance or
(2) the aggregate interest in the trust represented by the BCRC
Certificate and the Variable Funding Certificate held by the depositor is less
than 2% of the aggregate amount of Receivables included in the trust.
In the case of either (1) or (2) immediately above, unless a
Liquidation Event has occurred with respect to BCI or the depositor, the
depositor under the Receivables Purchase Agreement will be required to purchase
or acquire from BCI, but BCI will have no obligation to sell to the depositor,
within 10 business days after the event described in (1) or (2) has occurred,
the Receivables arising in 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 the depositor to designate Additional
Accounts to the trust means accounts of the same type, i.e., Accounts giving
rise to Domestic Inventory Receivables or if Asset-Based Receivables have
already been added to the trust, then Accounts giving rise to either Domestic
Inventory Receivables or Asset-Based Receivables. However, at the option of the
depositor and BCI and subject to specified conditions, including satisfaction of
the Rating Agency Condition prior to the first addition of Asset-Based
Receivables, Asset-Based Receivables may be added in satisfaction of this
requirement even if the only Accounts then in the trust are Accounts containing
Domestic Inventory Receivables.
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Any designation of Additional Accounts is subject to the following
conditions, among others:
(1) each Additional Account must be an Eligible Account at the time of its
addition and with respect to Additional Accounts designated at the option of the
depositor, the Rating Agency Condition must be satisfied; provided, that the
Rating Agency Condition need not be satisfied if the conditions described in
the second succeeding paragraph following this list of conditions are satisfied;
(2) the addition of the Receivables arising in the Additional Accounts
shall not, in the reasonable belief of the depositor, cause an Early
Amortization Event to occur;
(3) the depositor shall not select the Additional Accounts in a manner that
it believes is adverse to the interests of the certificateholders or any
enhancement provider; and
(4) unless the Accounts are being added in accordance with the conditions
described in the second succeeding paragraph, the depositor shall deliver legal
opinions to the trustee and any enhancement providers indicating that the
trustee, on behalf of the trust, will have a perfected security interest in the
documents as required by the Pooling and Servicing Agreement.
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 trust, satisfaction of the Rating Agency
Condition with respect to the inclusion of Asset-Based Receivables -- have been
met, the Additional Accounts may not include Asset-Based Receivables. However,
since Additional Accounts, as well as Receivables in general arising under
Accounts subsequent to __________ 1, 1999 or arising under Additional Accounts,
may have been originated or 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 date of the issuance of the Certificates, they may not be
of the same credit quality as the Accounts and Receivables as of __________ 1,
1999.
The requirement that the Rating Agency Condition be satisfied and that
legal opinions be delivered in connection with the addition of Accounts will
not be necessary if the following conditions are met:
(1) the Additional 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,
(2) during the calendar quarter in which the addition occurs, the number of
new Accounts which have been added, after taking the proposed addition into
account, will not exceed 5% of the number of all Accounts at the end of the
preceding calendar quarter and the
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aggregate dollar amount of principal receivables in these new Accounts added
under this paragraph during the calendar quarter in which the addition occurs
shall not exceed 5% of the Pool Balance at the end of the preceding calendar
quarter, and
(3) during the 12 consecutive calendar months ending with the calendar
month in which the addition is made and including the addition, the number of
these new Accounts does not exceed 20% of the number of all Accounts at the
beginning of the 12-month period in which the addition occurs and the aggregate
dollar amount of principal receivables in these new Accounts added under this
paragraph during this 12-month period shall not exceed 20% of the Pool Balance
at the beginning of this 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 (2) and (3)
above, only those Accounts which have been added in accordance with the
conditions described in the paragraph above--not therefore, requiring
satisfaction of the Rating Agency Condition or the delivery of legal opinions--
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 in accordance with the conditions described in the paragraph above, a
legal opinion indicating that the trustee, on behalf of the trust, will have a
perfected security interest in these Accounts is to be delivered to the trustee
every six months to the extent that the addition of these Accounts have not
been covered by legal opinions previously delivered to the trustee.
Removal of Accounts and Assignment of Receivables
The depositor shall have the right at any time to designate specific
accounts from which it will stop transferring newly originated Receivables to
the trust. If the depositor specifies accounts from which Receivables will no
longer be transferred to the trust, these accounts will constitute Removed
Accounts. To cease transferring any newly originated Receivables in any Removed
Account, the depositor or the servicer on its behalf shall, among other things:
(1) at least five business days prior to the date on which the transfer of
these Receivables will cease give notice to the trustee, any enhancement
provider and each Rating Agency;
(2) on or before the fifth business day after the date on which the
transfer of these Receivables will cease, the depositor shall have furnished to
the trustee a computer file, microfiche list or other list of the Removed
Accounts, specifying for each Removed Account its number, the aggregate amount
outstanding in that Removed Account and the aggregate amount of Receivables
therein as of the day immediately preceding the date or which the transfer of
these Receivables will cease;
(3) represent and warrant that the removal of the relevant Removed Accounts
will 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;
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(4) represent and warrant that no selection procedures believed by the
depositor to be adverse to the holders of certificates of any series were
utilized in selecting the Removed Accounts;
(5) represent and warrant that the removal of the relevant 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
(6) on or before the related date on which the transfer of these
Receivables will cease, deliver to the trustee and any enhancement provider an
officers' certificate confirming the items set forth in clauses (3), (4) and (5)
above.
Under specified conditions, the Pooling and Servicing Agreement may be
amended without the consent of the Certificateholders or any Rating Agency to
permit the depositor to also remove existing Receivables in Removed Accounts,
including all amounts then held or subsequently received in respect of these
Receivables. See "Amendments."
On the fifth business day after any date on which an Account becomes an
Ineligible Account, the depositor will commence the removal of the Receivables
of this Ineligible Account from the trust by:
(1) furnishing to the trustee, any enhancement provider and the Rating
Agencies a notice specifying the date on which the removal of these Receivables
will begin and the Ineligible Accounts to be removed;
(2) on or before the fifth business day after the date on which the removal
of these Receivables will begins, furnishing to the trustee a computer file,
microfiche list or other list of the Ineligible Accounts, specifying for each
Ineligible Account its number and the aggregate amount and outstanding principal
balance of Receivables therein as of the date immediately preceding the date on
which the removal of these Receivables began; and
(3) from and after the date on which the removal of these Receivables will
begin, ceasing to transfer to the trust any Receivables arising in the
Ineligible Accounts.
With respect to the removal of Accounts under either of the two immediately
preceding paragraphs, whether this removal occurs at the option of the depositor
prior to the time that the depositor is permitted to remove existing Receivables
in Removed Accounts or upon a required removal of an Ineligible Account:
(1) from and after the applicable date on which the transfer of the
relevant Receivables ceases or the removal of the relevant Receivables begins,
as applicable, all principal collections in respect of each Removed Account or
Ineligible Account will be allocated first to
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the oldest outstanding principal balance of that Account, until the
Determination Date on which the outstanding principal balance of Receivables in
the Account is reduced to zero; and
(2) on each business day from and after the date on which the transfer of
the relevant Receivables ceases or the removal of the relevant Receivables
begins, as applicable until the Determination Date on which the outstanding
principal balance of Receivables in the relevant account is reduced to zero, the
depositor will allocate
to the trust, to be further allocated in accordance
with the Pooling and Servicing Agreement, Non-
Principal Collections in respect of these Accounts
based on the ratio of the amount of principal
receivables in these Accounts on that business day that
were previously sold to the trust divided by the total
amount of principal receivables in these Accounts on
that business day, and
to the depositor the remainder of the Non-Principal
Collections in respect of these Accounts on that
business day.
Upon satisfaction of the above conditions on the Determination Date on
which the outstanding principal balance of Receivables in the relevant account
is reduced to zero, the Removed Accounts or Ineligible Accounts shall be deemed
to have been removed from the trust and the depositor shall be permitted to
sell, transfer, assign, set over and otherwise convey, without recourse,
representation or warranty, all the right, title and interest in and to the
Receivables remaining and subsequently arising in the Removed Accounts or
Ineligible Accounts, all amounts received or to be received with respect thereto
and all proceeds thereof.
The depositor may at any time remove specific Receivables from the trust,
including all amounts then held or subsequently received in respect of these
Receivables, without removing any other Receivables in the related Account then
existing or subsequently arising, and shall have the right to remove the related
Collateral Security and other rights associated with these Receivables, provided
the Receivables are removed from the trust in connection with an assignment of
these Receivables to a third party in return for payment for these Receivables.
As a condition to the assignment and removal of these Receivables, the payment
shall be in an amount at least equal to the principal amount of the Receivables
to be removed plus accrued interest to the removal date. All of these payments
shall be included as collections. The depositor has agreed under the Pooling and
Servicing Agreement that this type of removal will take place only if, in the
reasonable belief of the depositor, no Early Amortization Event will occur as a
result of the removal.
The depositor also has the right to cause the trustee to remove from the
trust and reassign to the depositor Domestic Inventory Receivables originated
and transferred to the trust during the four month period commencing 16 months
prior to the relevant Origination Period that continue to be unpaid in full 450
or more days following the origination thereof, provided that the
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aggregate amount of these 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
this four month period commencing 16 months prior to the relevant Origination
Period. The depositor shall effect this removal and reassignment by depositing
in the Collection Account for application as collections on the Receivables an
amount equal to the principal amount of the Receivables to be removed plus
accrued interest to the date of the reassignment. The trust will be under no
obligation to hold any of these Receivables for the purpose of allowing the
depositor to cause a reassignment of these Receivables.
In addition to the provisions described above, the Pooling and Servicing
Agreement provides that in connection with the granting of Participation
Interests in Receivables in the trust, the depositor has 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 that interest may also be removed.
The requirements for removing an undivided interest include the requirement that
the depositor or the servicer on the depositor's behalf, represent and warrant
that the removal will 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. 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 other amounts among the 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, the Collection Account.
Funds in the Collection Account generally will be invested in 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
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The servicer has established and is required to maintain, or, cause to be
established and maintained for the life of the Certificates, an Excess Funding
Account which shall be an Eligible Deposit Account for the benefit of the
certificateholders in the name of the trustee. The Excess Funding Account is
intended to preserve for the benefit of the certificateholders principal
collections otherwise payable in respect of other series or the BCRC Certificate
during the Revolving Period and the Controlled Accumulation Period.
On each Business Day during the Revolving 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 that preceding Business Day, the servicer will
cause principal collections allocable to the Certificates to be deposited by the
servicer in the Excess Funding Account in an amount equal to the Excess Funded
Amount calculated as of the end of the preceding Business Day, minus the amount
then held in the Excess Funding Account.
On each Business Day during the Controlled Accumulation 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 that preceding Business Day, the
servicer will cause principal collections allocable to the Certificates, which
remain after making required deposits into the Principal Account, to be
deposited by the servicer in the Excess Funding Account in an amount equal to
the Excess Funding Amount 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 be calculated for each Business Day and
shall be an amount equal to the product of:
(1) the excess, if any, of the Required Pool Balance over the Pool Balance,
each as of the end of the preceding day multiplied by
(2) a fraction the numerator of which is the sum of the Required Investor
Percentage of the Adjusted Invested Amount and the Available Subordinated Amount
and the denominator of which is the aggregate of the required balances for all
series, including the Series 1999-1 Required Balance, providing for excess
funding accounts or similar arrangements.
On each Business Day during the Revolving Period or the Controlled
Accumulation 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, namely, the Required Pool Balance over the Pool Balance, 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
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amounts in the Excess Funding Account since the preceding distribution date will
be withdrawn from the Excess Funding Account and applied on the same basis as
Investor Non-Principal Collections.
Allocation Percentages
This section sets forth the procedure for calculating the Certificates'
allocable share of specified distributions and other payments made with respect
to the Receivables. Amounts not allocated to the Certificates 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:
(1) Non-Principal Collections and the Defaulted Amount will be allocated to
the Certificates based on the Floating Allocation Percentage;
(2) during the Revolving Period, principal collections will be allocated to
the Certificates based on the Floating Allocation Percentage;
(3) during the Controlled Accumulation 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
(4) Miscellaneous Payments will be allocated to the Certificates on the
basis of the Series 1999-1 Investor Allocation Percentage.
When allocating principal collections, if the sum of:
(1) the sum of the floating allocation percentages, including the Floating
Allocation Percentage, if applicable, for each series in its revolving period,
(2) the sum of the principal allocation percentages, including the
Principal Allocation Percentage, if applicable, for each series in its
amortization, accumulation or early amortization period, and
(3) the Variable Funding Percentage
exceeds 100%, then principal collections for the Collection Period will be
allocated among the series and the Variable Funding Certificate pro rata on the
basis of these allocation percentages
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after the pro rata reduction of these percentages so that the sum thereof
equals 100% for this period.
When allocating Non-Principal Collections, if the sum of:
(1) the sum of the floating allocation percentages, including the Floating
Allocation Percentage, for each series, and
(2) the Variable Funding Percentage
exceeds 100%, then Non-Principal Collections for the Collection Period will be
allocated among the series and the Variable Funding Certificate [pro rata] on
the basis of these allocation percentages after the pro rata reduction of these
percentages so that the sum thereof equals 100% for that period.
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 "Credit Support for the
Certificates--Excess Funding Account." Principal collections allocable to the
Certificates for any Collection Period with respect to the Controlled
Accumulation Period will first be allocated to make deposits up to the
Controlled Deposit Amount in the Principal Account. Principal collections
allocable to the Certificates for any Collection Period with respect to 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
Account--Principal Collections" below.
Principal collections allocable to the Certificates for any Collection
Period during the Controlled Accumulation Period remaining after the allocation
to provide for the deposit of the Controlled Deposit Amount into the Principal
Account will then be allocated to the Excess Funding Account to the extent
described above under "Credit Support for the Certificates--Excess Funding
Account." The servicer will next determine the amount of Available Investor
Principal Collections remaining after these required payments are made and the
amount of any similar excess for any other series. 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 other amounts allocated to that series.
Excess Principal Collections will generally not be used to cover investor
charge-offs for any series. If for any Collection Period a principal shortfall
occurs for one or more series of certificates, Excess Principal Collections from
other series may be available to cover some or all of the shortfall. The
determination of what constitutes a principal shortfall for a series is made on
a series by series basis. If for any distribution date the aggregate amount of
principal shortfalls for all series exceeds Excess Principal Collections, then
Excess Principal Collections
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will be allocated pro rata among the applicable series entitled to receive
monthly principal based on the relative amounts of these 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
that 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 that 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 in the Collection
Account until the Pool Balance exceeds the Required Pool Balance, at which time
this amount will be paid to the holder of the BCRC Certificate, or until an
early amortization event occurs or an accumulation or scheduled amortization
period commences for any series, after which event or commencement this amount
will be treated as a Miscellaneous Payment.
Deposits in Collection Account
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 these collections, net of the Variable Funding
Percentage of these collections and the Excess Retained Percentage of these
collections, into the Collection Account.
Notwithstanding the foregoing, for so long as
(1) BCI remains the servicer under the Pooling and Servicing Agreement,
(2) no Servicer Default has occurred and is continuing, and
(3) 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,
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
otherwise obtains confirmation that the change will not cause a
reduction or withdrawal of outstanding credit ratings on any
certificates,
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then, subject to any limitations in the confirmations referred to below in this
paragraph, BCI need not deposit collections into the Collection Account on a
daily basis but may use for its own benefit all these collections until the
business day immediately preceding the related distribution date, at which time
BCI will make these deposits in a single deposit into the Collection Account in
an amount equal to the net amount of these deposits and withdrawals which would
have been made had the conditions described in this paragraph not applied. Prior
to ceasing daily deposits as described above, BCI must deliver 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.
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 according to the terms of any series supplement to the
Pooling and Servicing Agreement or the terms of any enhancement agreement. If,
at any time prior to a distribution date, the amount of collections deposited in
the Collection Account exceeds the amount required to be deposited for that
distribution date, the servicer will be permitted to withdraw the 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, to the holder of the Variable Funding
Certificate, an amount equal to the Variable Funding Percentage of these
collections and, to the holder of BCRC Certificate, the Excess Retained
Percentage of these collections.
Daily Allocations
On any date on which collections are received during the Revolving Period,
the Controlled Accumulation Period or any Initial Amortization Period, the
servicer will allocate to Series 1999-1 an amount equal to the sum of
(1) the product of the Floating Allocation Percentage for that date
multiplied by the aggregate amount of Non-Principal Collections on that date,
and
(2) the Series 1999-1 Available Retained Collections for that date,
and of that allocation, the servicer will deposit and retain in the Collection
Account an amount equal to the lesser of
(1) the Daily Allocation on that date and
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(2) the difference between
the sum of the Monthly Interest; any Class A Carry-Over Amount
and any Class B Carry-Over Amount for the related Distribution
Date; if BCI is not the servicer, the Monthly Servicing Fee for
the current Collection Period; the sum through the deposit date
of the Floating Allocation Percentage of the Defaulted Amount,
and the amount, if any, by which the Reserve Fund Required Amount
exceeded the amount on deposit in the Reserve Fund on the
preceding Distribution Date, and
the sum of the Daily Allocations previously deposited in the
Collection Account for the current Collection Period,
and the remainder of this Daily Allocation will be retained by the servicer for
application as described in the following two paragraphs.
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
Controlled Accumulation 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 under clauses (1)
through (8) under "Distributions from the Collection Account; Reserve
Fund; Principal Account--Non-Principal Collections" below, provided that if BCI
is the servicer, BCI may make this deposit net of the Monthly Servicing Fee plus
Daily Allocations consisting of Series 1999-1 Available Retained Collections
retained by the Servicer and not used on the related distribution date as
described under "Distributions from the Collection Account; Reserve Fund;
Principal Account" below.
Limited Subordination of Retained Interest
A portion of the Retained Interest up to the Available Subordinated Amount
will be available to fund payment of principal and interest on the Certificates
in 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 Deficiency Amount which will be the amount, if any, by
which
the sum of
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(1) Monthly Interest for the distribution date,
(2) Monthly Interest accrued but not paid for prior distribution dates
plus interest thereon,
(3) the Net Servicing Fee for the distribution date,
(4) the Investor Default Amount for the distribution date, and
(5) the Series 1999-1 Investor Allocation Percentage of any Adjustment
Payment for the distribution date that has not been deposited in
the Collection Account as required under the Pooling and Servicing
Agreement,
exceeds
the sum of
(1) Investor Non-Principal Collections and Investment Proceeds for the
distribution date and
(2) the amount of funds in the Reserve Fund on the distribution date
available to fund the amount by which the amount in (1) through
(5) above exceeds the amount in (1) immediately above.
The lesser of the Deficiency Amount and the Available Subordinated Amount is the
"Required Subordination Draw Amount."
Required Subordinated Amount. The "Required Subordinated Amount" means, as of
any date of determination, the sum of
(1) the Invested Amount multiplied by the percentage equivalent of a
fraction, the numerator of which is 5.5% and the denominator of
which is the excess of 100% over 5.5% and
(2) the Incremental Subordinated Amount for the immediately preceding
distribution date or, if the date of determination is a
distribution date, for that 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 3.75% of the initial principal amount of the
Certificates plus the Incremental Subordinated Amount for
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the immediately preceding distribution date or, if the date of
determination is a distribution date, for that date;
provided further, that upon the commencement of the Initial Amortization Period
or the Controlled Accumulation Period or if an Early Amortization Event occurs,
the Required Subordinated Amount for each date of determination after this
commencement 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 Controlled Accumulation Period or the day on which the 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:
the lesser of:
(1) the Available Subordinated Amount for the preceding distribution
date, minus, with some limitations, the Required Subordination
Draw Amount for the preceding distribution date or, if the date of
determination is a distribution date, that distribution date,
minus the amount of any deposits in the Reserve Fund from Series
1999-1 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 or, if the date of determination is a
distribution date, that distribution date, minus 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 last day of the preceding
Collection Period, or in the case of the first distribution
date, the Required Subordinated Amount as of the date of the
issuance of the Certificates, 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 date of the issuance of the Certificates, 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; Principal Account--Excess Servicing," minus the Incremental
Subordinated Amount for the second preceding distribution date or
if the date of determination is a distribution date, the
preceding distribution date, plus the Incremental Subordinated
Amount for the immediately preceding distribution date, or if the
date of determination is a distribution date, that distribution
date plus the percentage equivalent of a fraction, the numerator
of which is 5.5% and the denominator of which is the excess of
100% over 5.5%, multiplied by the aggregate amount of any
increases in
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the Invested Amount resulting from any withdrawals from the Excess
Funding Account since the preceding distribution date; and
(2) the Required Subordinated Amount for that date of determination;
and
the amount of any optional increase in the Available Subordinated
Amount exercised by the depositor as described below in the final
paragraph of this section "Limited Subordination of the Retained
Interest--Available Subordinated Amount."
The Available Subordinated Amount for any date of determination during the
period from the date of the issuance of the Certificates through the first
distribution date is equal to the Required Subordinated Amount as of that date
of determination, which will equal at least $[18,643,730] on the date of the
issuance of the Certificates.
If the Available Subordinated Amount for any distribution date is less than
the Required Subordinated Amount for that 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 these
increases may not exceed an amount equal to 1% of the initial principal amount
of the Certificates -- at the time this Early Amortization Event would otherwise
occur, thus preventing or delaying the occurrence of this Early Amortization
Event.
Distributions from the Collection Account; Reserve Fund; Principal Account
Non-Principal Collections. On each distribution date, the trustee will apply
Investor Non-Principal Collections and Investment Proceeds for that distribution
date to make the following distributions in the following order of priority:
(1) an amount equal to Class A Monthly Interest for that distribution date,
plus the amount of any Class A Monthly Interest previously due but not
distributed on a prior distribution date, plus, 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;
(2) an amount equal to Class B Monthly Interest for that distribution date,
plus the amount of any Class B Monthly Interest previously due but not
distributed on a prior distribution date, plus, 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;
(3) an amount equal to the Net Servicing Fee for that distribution date
shall be distributed to the servicer, unless this amount has been deducted from
amounts that would otherwise be deposited to the Collection Account as described
above under "Deposits in
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Collection Account" or waived as described under "Servicing Compensation and
Payment of Expenses" below;
(4) an amount shall be deposited in the Reserve Fund equal to the amount,
if any, by which the Reserve Fund Required Amount for that distribution date
exceeds the amount on deposit in the Reserve Fund after giving effect to any
withdrawal therefrom on that distribution date;
(5) an amount equal to the Investor Default Amount, if any, for that
distribution date shall be treated as a portion of Available Investor Principal
Collections for that distribution date and shall be allocated by the trustee in
the manner described under "Principal Collections" below;
(6) an amount equal to the remainder of the Monthly Servicing Fee for that,
distribution date, if any, due but not paid to the servicer shall be paid to the
servicer, unless this amount has been deducted from amounts that would otherwise
be deposited to the Collection Account as described above under "Deposits in
Collection Account" or waived as described under "Servicing Compensation and
Payment of Expenses" below;
(7) any Class A Carry-Over Amount for that 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;
(8) any Class B Carry-Over Amount for that 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 holders of the Class B
Certificates; and
(9) the balance, if any, shall constitute Excess Servicing and shall be
allocated by the trustee in the manner described under "Excess Servicing" below.
If the Investor Non-Principal Collections and Investment Proceeds are
not sufficient to make the distributions required by clauses (1), (2), (3) and
(5), the trustee shall withdraw funds from the Reserve Fund and apply these
funds to complete, to the extent available, the distributions in accordance with
clauses (1), (2), (3) and (5) in the numerical order thereof.
If there is a Deficiency Amount for that distribution date, the servicer
will apply or cause the trustee to apply the aggregate amount of Series 1999-1
Available Retained Collections for the related Collection Period on that
distribution date, but only up to the Required Subordination Draw Amount, to
make the distributions required by clauses (1), (2), (3) and (5) above that have
not been made through the application of funds from the Reserve Fund as
described in the preceding paragraph. Any of the Series 1999-1 Available
Retained Collections remaining after the application thereof in accordance with
the preceding sentence shall be treated as a portion of the Available Investor
Principal Collections, but only up to the amount of unpaid Adjustment
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Payments allocated to the Certificates. 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.
Reserve Fund. The Reserve Fund, which shall be an Eligible Deposit Account
will be established and maintained in the name of the trustee for the benefit of
the Certificateholders. The depositor will make an initial deposit into the
Reserve Fund on the date of the issuance of the Certificates in an amount
no less than $[1,601,695]. If, after giving effect to the allocations,
distributions and deposits in the Reserve Fund described in this prospectus
under the caption "Non-Principal Collections," the amount in the Reserve Fund
is less than the Reserve Fund Required Amount for that distribution date, the
trustee shall deposit any remaining Series 1999-1 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. 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 that distribution date, the trustee shall
deposit the remaining Series 1999-1 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 this
Excess Reserve Fund Required Amount.
Excess Servicing. On each distribution date, the trustee will allocate Excess
Servicing with respect to the Collection Period immediately preceding that
distribution date, in the following order of priority:
(1) an amount equal to the aggregate amount of Investor Charge-Offs which
have not been previously reimbursed, after giving effect to the allocation on
that distribution date of the Series 1999-1 Investor Allocation Percentage of
Miscellaneous Payments with respect to that distribution date, will be included
in Available Investor Principal Collections for that distribution date;
(2) 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
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(3) 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 Account. The Principal Account, which shall be an Eligible Deposit
Account will be established and maintained in the name of the trustee for the
benefit of the Series 1999-1 Certificateholders. Funds on deposit in the
Principal Account will be invested at the direction of the servicer in Eligible
Investments. 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 Principal Account. After the payment in full of
the aggregate principal balance of the Certificates, any funds remaining on
deposit in the Principal Account will be paid to the holder of the BCRC
Certificate.
Principal Collections. The trustee will apply Available Investor Principal
Collections as follows:
(1) 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 that 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";
(2) for each distribution date with respect to the Controlled Accumulation
Period:
if the distribution date is not the Scheduled Payment Date;
an amount equal to the Controlled Deposit Amount will be
deposited into the Principal Account; and
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
the balance, if any, will be allocated to Excess Principal
Collections; and
if the distribution date is the Scheduled Payment Date,
then 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
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the balance, if any, will be allocated to Excess Principal
Collections; and
(3) for each distribution date with respect to any Initial Amortization
Period or Early Amortization Period:
an amount equal to Monthly Principal for that 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
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
1999-1 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 1999-1
Termination Date.
Available Investor Principal Collections for any distribution date means
the sum of
(1) the product of the Floating Allocation Percentage, with respect to the
Revolving Period, or the Principal Allocation Percentage, with respect to the
Controlled Accumulation Period, any Initial Amortization Period or any Early
Amortization Period, for the related Collection Period multiplied by principal
collections for the related Collection Period,
(2) the amount, if any, of Investor Non-Principal Collections, funds in the
Reserve Fund and Series 1999-1 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,
(3) the Series 1999-1 Investor Allocation Percentage of Miscellaneous
Payments for that distribution date,
(4) Excess Principal Collections, if any, from other series allocated to
the Certificates,
(5) 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,
(6) on the Series 1999-1 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", and
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(7) with respect to the Scheduled Payment Date, any Initial Amortization
Period or any Early Amortization Period, any funds on deposit in the Principal
Account.
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 Controlled Accumulation 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 these floating allocation percentages and
principal allocation percentages.
Discount Option
The Pooling and Servicing Agreement provides that the depositor 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 the designation
that otherwise would be treated as principal collections to be treated as
Non-Principal Collections. The depositor must provide 10 days' prior written
notice to the servicer, the trustee and each Rating Agency of any of these
designations, and these designations will become effective on the date specified
therein only if an officer's certificate is delivered to the trustee to the
effect that in the reasonable belief of the depositor the relevant designation
would not result in an Early Amortization Event or have a materially adverse
effect on the certificateholders and if the Rating Agency Condition shall have
been satisfied.
Defaulted Receivables and Recoveries
Defaulted Receivables on any distribution date are:
(1) all Receivables other than Receivables that were Ineligible
Receivables at the time of transfer to the trust that were charged
off as uncollectible in the preceding Collection Period;
(2) prior to payment in full of the Series 1997-1 certificates, all
Receivables originally secured by a security interest in a related
Eligible Product which have not been paid in full for more than 60 days
after the sale of the related Eligible Product, and subsequent to the
payment in full of the Series 1997-1 Certificates, all Receivables
originally secured by a security interest in a related Eligible Product
which have not been paid in full for more than 90 days after the sale
of the related Eligible Product;
(3) prior to payment in full of the Series 1997-1 certificates, all
Receivables in an Account in which interest in the amount of $150 or
more has been delinquent for 90 days or more, and
(4) all Receivables which, although they were Eligible Receivables when
transferred to the trust, arose in an Account which has become an
Ineligible Account since
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this transfer and which were not Eligible Receivables for any six
consecutive distribution dates after this 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 not less
than zero, equal to the aggregate principal amount of Receivables that became
Defaulted Receivables during the preceding Collection Period less the full
amount of any Defaulted Receivables subject to retransfer from the trust to the
depositor or to purchase by the servicer for that Collection Period . If,
however, specified events of bankruptcy, insolvency, or receivership have
occurred with respect to either of the depositor or the servicer or if a
Liquidation Event has occurred, the Defaulted Amount will not be reduced for
those Defaulted Receivables retransferred from the trust or purchased by the
servicer. 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 the Defaulted Amount for that
Collection Period multiplied by the Floating Allocation Percentage for that
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.
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 that Receivable was
created in respect of a product which was refused or returned by an Obligor, the
amount of this 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 this deficiency up to the amount of this
adjustment into the Collection Account in immediately available funds on the day
on which this 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 this Deficiency Amount over any
remaining Available Subordinated Amount on the related Determination Date, but
not by more than the Investor Default Amount for that distribution date. 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 subsequently be increased on any
distribution date, but not by an amount in excess of the aggregate Investor
Charge-Offs, by the sum of the Series 1999-1 Investor Allocation Percentage of
Miscellaneous Payments for that distribution date plus the amount of Excess
Servicing allocated and available for that purpose as described above.
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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, the depositor will have the option, subject to
specified 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 that 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 this repurchase and any Class A
Carry-Over Amount or Class B Carry-Over Amount for that 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 the depositor exercises this option. Following
any deposit of this type, 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 the depositor fails for any
reason to deposit this purchase price, payments will continue to be allocated to
the Certificates as described above under "Distributions from the Collection
Account; Reserve Fund; Principal Account."
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 as
Excess Principal Collection or to the BCRC Certificate but instead will be
allocated to the Certificates monthly on each distribution date, except as
described below in this section.
An Early Amortization Event refers to any of the following events:
1. a failure by the depositor to convey Receivables in Additional
Accounts to the trust within five business days after the day on which it is
required to convey these Receivables under the Pooling and Servicing Agreement;
2. failure on the part of the depositor, the servicer or BCI, as
applicable:
(a) 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 this payment or deposit is required to be made, which
failure is not cured within five business days after notice
from the trustee of this failure;
(b) with respect to any series, to deliver a distribution date
Statement within ten business days after notice from the
trustee of this failure;
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(c) to duly comply with, observe or perform in any material
respect the covenant of the depositor not to create any lien,
other than tax and other statutory liens, including liens in
favor of the Pension Benefit Guaranty Corporation, and some
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 this 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 this period in
accordance with the provisions of the Pooling and Servicing
Agreement; or
(d) 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
this failure, requiring the same to be remedied, shall have
been given to the depositor by the trustee or any enhancement
provider;
3. any representation or warranty made by the depositor in the Pooling
and Servicing Agreement or any information required to be given by the depositor
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 any
longer period as may be specified in the notice, of this failure, requiring the
same to be remedied, shall have been given to the depositor 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 the
depositor 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 the depositor 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 the depositor has repurchased the related Receivables or all of
these Receivables, if applicable, during this period in accordance with the
provisions of the Pooling and Servicing Agreement;
4. the occurrence of specified 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;
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5. the depositor or the trust becomes an investment company within the
meaning of the Investment Company Act of 1940, as amended;
6. 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 that distribution date;
7. 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 that distribution date;
8. any Servicer Default occurs;
9. any Class A Carry-Over Amount or Class B Carry-Over Amount, as
applicable, is outstanding on six consecutive distribution dates;
10. the ratio, expressed as a percentage, of the average for each month
of the net losses on the Receivables in the trust, that is, 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 consecutive calendar months to the average of the month-end
Pool Balances for that three-month period, exceeds 5% on an annualized basis;
provided, that this clause (10) may be revised or waived without the consent of
the Certificateholders if the Rating Agency Condition is satisfied;
11. the average percentage obtained by dividing the aggregate principal
collections for a Collection Period by the average daily Pool Balance for that
Collection Period:
(a) with respect to the three Collection Periods included in the
period from January through March of any calendar year is less
than 12% and
(b) with respect to any other three consecutive Collection Periods
is less than 14%,
provided, that this clause (11) may be revised or waived without the consent of
the Certificateholders if the Rating Agency Condition is satisfied;
12. the failure to pay the outstanding principal amount of the Class A
Certificates on the _______ distribution date or the failure to pay the
outstanding principal amount of the Class B Certificates on the _______
distribution date;
13. a Liquidation Event occurs; or
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14. 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 that distribution date.
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 this 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.
If an Early Amortization Period results from the failure by the
depositor to convey Receivables in Additional Accounts to the trust as described
in clause (1) above during the Revolving Period and no other Early Amortization
Event has occurred, the Early Amortization Period resulting from this 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 (1) above. An Early Amortization Event
would no longer be deemed to exist as described in clause (1) 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 of 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 the depositor violates its
covenant set forth in clause 2(c) above, and this violation becomes an "Early
Amortization Event" as described in clause 2(c) above, on the day of the
Liquidation Event or Early Amortization Event occurring because of this
violation, as applicable, the depositor will immediately cease to transfer
Receivables to the trust and promptly give notice to the trustee of this
Liquidation Event or Early Amortization Event occurring because of this
violation, as applicable. Furthermore, under the terms of the Pooling and
Servicing Agreement, within 15 days following an insolvency event with respect
to the depositor or an Early Amortization Event as described in the preceding
sentence as a result of the occurrence of a violation set forth in 2(c) above,
the trustee will publish a notice of the insolvency event or Early Amortization
Event occurring because of this 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 other outstanding
series, or, with respect to any series with two or more classes, the
certificates of each of these classes, 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.
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In the event of any sale, liquidation or disposition of this type, 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 these 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 2(c)
above, the trustee will not sell the Receivables upon an Early Amortization
Event occurring because of this 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 the day following the
distribution date on which the aggregate of the invested amounts for all series
is zero and _________. 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 1999-1 Termination
Date. In the event that the Invested Amount is greater than zero on the Series
1999-1 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 this sale will be paid pro rata to Certificateholders as of
the Series 1999-1 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.
Indemnification
The Pooling and Servicing Agreement provides that 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 the servicer will indemnify
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
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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
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 case of this type, the trust, the trustee, and its
officers, directors, employees and agents will not be so indemnified if these
acts or omissions constitute, or the actual or threatened action, proceeding or
claim arises out of, or the 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 the depositor 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 action taken by the trustee at the request of the
certificateholders to the extent, in the case of the servicer, the trustee is
fully indemnified by these certificateholders or other beneficiaries with
respect to this action 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
indemnification of this type 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 in this section and with other specified exceptions, neither the servicer
nor the depositor 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, in accordance with the Pooling and Servicing Agreement or
otherwise. However, neither the servicer nor the depositor will be protected
against any liability which would otherwise be imposed by reason of their
willful misfeasance, bad faith or gross negligence.
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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 legal
action which it may deem necessary or desirable for the benefit of the trust.
Collection and Other Servicing Procedures
Under 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 these 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 some 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 these duties to third parties in
accordance with the terms of the Pooling and Servicing Agreement, provided that
no delegation of this sort will relieve BCI of its responsibilities as servicer
with respect to these duties.
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 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 the depositor
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:
(1) 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;
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(2) it will do nothing to impair the rights of the beneficiaries of the
trust in the Receivables or in the Certificates; and
(3) 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 this noncompliance has not been
cured within 30 days after this notice, or any 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 that Receivable or all Receivables in that Account, as applicable. This
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 that Receivable or Receivables plus accrued and unpaid interest
thereon. The amount of this deposit shall be deemed a Transfer Deposit Amount.
The purchase by the servicer constitutes the sole remedy available to
certificateholders if the relevant covenant or warranty of the servicer is not
satisfied and the 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
servicing fee payable in arrears on each distribution date on or prior to the
earlier to occur of __________ or the day after the distribution date on which
the aggregate of the invested amounts for all series is zero. The servicing fee
equals the aggregate of the monthly servicing fees specified in the supplements
to the Pooling and Servicing Agreement executed in connection with each series.
The Net Servicing Fee for this series will be payable in the priority set forth
above in "Description of the Certificates--Distribution from the Collection
Account; Reserve Fund; Principal Account" and will be equal to one-twelfth of
the product of 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% multiplied by 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 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; Principal
Account." 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
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servicer solely to the extent amounts are available for distribution therefor in
accordance with the terms of the Series 1999-1 Supplement among BCI, the
depositor and the trustee.
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
that distribution date shall be deemed to be zero.
The servicer will pay from its servicing compensation specified
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.
Matters Regarding the Servicer
The servicer may not resign from its obligations and duties under the
Pooling and Servicing Agreement, except upon determination that these duties are
no longer permissible under applicable law. No resignation under these
circumstances 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. 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 the 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
transfer of the servicer rights and obligations to a new servicer, the trustee
will review any bids obtained from potential servicers meeting the 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 of these 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.
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A Servicer Default refers to any of the following events:
(1) failure by the servicer to make any payment, transfer or deposit
into the trust, or into any account created for a series of certificates, 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 this failure;
(2) 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 60 days after written notice to it; provided, however, that a Servicer
Default shall not be deemed to have occurred if the depositor or the servicer
shall have repurchased the related Receivables or, if applicable, all the
Receivables during this period in accordance with the terms and provisions of
the Pooling and Servicing Agreement or 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;
(3) any representation, warranty or certification made by the servicer
in the Pooling and Servicing Agreement or in any certificate delivered under 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 the depositor
shall have repurchased the related Receivables or, if applicable, all the
Receivables during this period in accordance with the provisions of the Pooling
and Servicing Agreement; or
(4) the occurrence of an event of bankruptcy, insolvency or
receivership with respect to the servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to under clause (1) 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 this delay or failure referred to under clauses (2) or (3)
for a period of up to 60 business days, shall not constitute a Servicer Default
if this delay or failure or continuance was caused by an act of God or other
similar occurrence. Upon the occurrence of any event of this nature, 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 the depositor prompt notice of this failure or delay by it,
together with a description
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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 occurring after the commencement of the
Controlled Accumulation Period, an Initial Amortization Period or an Early
Amortization Period, the trustee will forward or cause to be forwarded to each
Certificateholder of record -- which is expected to be only Cede & Co., as
nominee for The Depository Trust Company, unless definitive certificates are
issued -- a 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:
(1) the aggregate amount of principal paid or distributed on the
Certificates and the aggregate amount of interest paid or distributed on the
Certificates on that distribution date;
(2) the average for the Deposit Dates in the relevant Collection Period
of Floating Allocation Percentage and the Principal Allocation Percentage;
(3) the Investor Default Amount for that distribution date;
(4) the Required Subordination Draw Amount, if any, for that
distribution date;
(5) the amount of the Investor Charge-Offs and the amounts of
reimbursements thereof for the preceding Collection Period;
(6) 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;
(7) the Pool Balance;
(8) the outstanding principal amount of Class A Certificates and Class
B Certificates after giving effect to distributions on that date;
(9) the applicable Class A Certificate Rate and Class B Certificate
Rate;
(10) the amount of the Monthly Servicing Fee for the preceding
Collection Period;
(11) a fraction expressed as a package calculated to eleven decimal
places, the numerator of which shall be the Invested Amount and the denominator
of which shall be the Adjusted Invested Amount as of that distribution date,
determined after taking into account any reduction in the Invested Amount which
will occur on that distribution date;
(12) the Available Subordinated Amount for that distribution date;
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(13) the Reserve Fund balance for that distribution date;
(14) the Excess Funding Account balance;
(15) the Collection Account balance with respect to that distribution
date;
(16) the Principal Account balance and
(17) whether an Early Amortization Event has occurred or whether BCI
has elected to not extend the Initial Principal Payment Date.
On or before January 31 of each calendar year, beginning with January
31, 2000, 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 only Cede & Co., as nominee for The Depository
Trust Company, 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 that calendar year, together
with information required to be provided by an issuer of indebtedness under the
Internal Revenue Code of 1986 for that preceding calendar year or the applicable
portion thereof during which this person was a Certificateholder, together with
any 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 & Co., as nominee for The Depository Trust
Company, Certificate Owners will receive tax and other information from
Participants and Indirect Participants rather than from the trustee. See
"Material 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 the depositor, to furnish a report relating to specified 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 of these obligations, specifying the
nature and status of the default.
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Copies of all statements, certificates and reports furnished to the
trustee may be obtained by any Certificateholder, which is expected to be Cede &
Co., as nominee for The Depository Trust Company, 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 the
depositor, the servicer, the trustee and BCI if BCI is not then the servicer,
without additional consent, so long as this 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 the depositor,
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 Amendment
No. 1 to the Pooling and Servicing Agreement to allow for the removal of
existing Receivables in Removed Accounts, including all amounts then held or
subsequently received in respect of these Receivables, if, at the time of this
amendment, these provisions will be consistent with sale treatment of the
Receivables by the depositor 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 the
depositor, 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 the 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 amendment of this sort, however, may:
(1) 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,
(2) change the definition or the manner of calculating interest on any
certificate,
(3) reduce the amount available under any enhancement,
(4) adversely affect the rating of any series or class by any Rating
Agency which rated that series or class or
(5) reduce the percentage of the unpaid principal balance of
certificates the holders of which are required to consent to any amendment,
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without, in the case of (1), (2), (3) or (5) the consent of each affected
certificateholder or the Variable Funding Certificate, as applicable and, in the
case of (4), the consent of the holders of certificates of the relevant series
or class evidencing not less than 66 2/3% of the aggregate unpaid principal
amount of the certificates of that 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 the 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 these 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 & Co., as nominee of
The Depository Trust Company, 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 the depositor 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 the depositor, 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 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 these
appointments, all rights, powers, duties and obligations shall be conferred or
imposed upon the trustee and the separate trustee or co-trustee jointly, or, in
any jurisdiction in which the trustee shall be incompetent or unqualified to
perform specified acts, singly upon the separate trustee or co-trustee, who
shall exercise and perform these rights, powers, duties and obligations solely
at the direction of the trustee.
The trustee may resign at any time, in which event the depositor 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 trustee under the
Pooling and Servicing Agreement or if the trustee
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becomes insolvent. In these 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."
Description of the Receivables Purchase Agreement
The Receivables transferred and to be transferred to the trust have
been and will be acquired by the depositor from BCI in accordance with the
Receivables Purchase Agreement, dated as of January 1, 1994, between BCI, as
seller, and the depositor, as purchaser, and as amended by Amendment Number 1
dated as of January 1, 1997 and as otherwise supplemented or amended from time
to time, filed as an exhibit to the registration statement of which this
prospectus is a part. The Receivables Purchase Agreement provides that it is
governed by New York law. The following discussion represents a summary of
relevant terms of the Receivables Purchase Agreement relating to the sale or
contribution of the Receivables to the depositor 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 specified exhibits or schedules, will be made available
by the trustee upon written request.
Sale and Transfer of Receivables
Under the Receivables Purchase Agreement, BCI has sold and transferred
to the depositor 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 January 1, 1994 and from time to
time has sold and transferred and will sell or contribute and transfer to the
depositor Domestic Inventory Receivables created after January 1, 1994 including
the related Collateral Security with respect to the Accounts and Additional
Accounts and 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 the depositor in exchange for the net
cash proceeds received by the depositor 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 the
depositor in the Reserve Fund and a promissory note issued by the depositor 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
these Receivables plus accrued and unpaid interest thereon on the date of
transfer, less, if applicable, the amount of principal and interest allocable
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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 the Receivables, less, if applicable, the amount of principal and
interest allocable to any Participation Interest. With respect to Receivables
which are sold to the depositor, the principal amount of the Note will be
increased from time to time in connection with the sale of additional
Receivables by BCI to the depositor for inclusion in the trust in accordance
with the Receivables Purchase Agreement to the extent the purchase price for
these Receivables is not paid in cash by the depositor.
As security for the Note, the depositor has pledged to BCI the Variable
Funding Certificate held by the depositor. Principal and interest payable on the
Note may be paid by the depositor from time to time out of monies available to
the depositor from any source, including through the depositor'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 the
depositor 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 the excess, if any, of the Pool
Balance over the Required Pool Balance plus the Retained Interest exceeds the
Available Subordinated Amount will be subordinate to the prior indefeasible
payment in full of the investor certificates. In addition to the sale of
Receivables by BCI to the depositor, BCI may transfer the Receivables to the
depositor as a capital contribution. When Receivables are transferred by
contribution, the depositor will not be required to pay cash to BCI or to
increase the amount of the Note as consideration for these Receivables.
In connection with the sale or contribution of the Receivables to the
depositor, BCI will indicate in its computer files that the Receivables have
been transferred to the depositor, and that the depositor has transferred its
interest therein to the trust. In addition, BCI will provide to the depositor
and the trustee a computer file or microfiche or written list containing a true
and complete list of all Accounts, identifying the balances of the Receivables
as of January 1, 1994 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 this 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--State and Federal Law May Limit the Abilities of the Servicer
to Realize on Receivables Thus Causing Losses on Your Certificates" and
"Material Legal Aspects of the Receivables--Transfer of Receivables and
Certificates."
Representations and Warranties
BCI makes representations and warranties to the depositor to the effect
that, among other things, as of the date of the issuance of the Certificates 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.
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BCI also makes representations and warranties to the depositor relating
to the Receivables to the effect that, among other things, as of January 1,
1994, the date of the issuance of the Certificates 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 as of the date they are
considered Accounts, each of these Additional Accounts 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 the depositor accept retransfer
of Receivables from the trust under the Pooling and Servicing Agreement, then
BCI shall, unless a Liquidation Event has occurred, repurchase these Receivables
from the depositor. The purchase price for these 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 this retransfer.
BCI also makes representations and warranties to the depositor to the
effect, among other things, that as of January 1, 1994, the date of the issuance
of the Certificates and each series issuance date the Receivables Purchase
Agreement constitutes a legal, valid and binding obligation of BCI and the
Receivables Purchase Agreement constitutes a valid sale to the depositor of all
right, title and interest of BCI in and to the Receivables, whether then
existing or subsequently created in the Accounts, the Collateral Security and,
with some 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 the depositor under the Pooling and Servicing Agreement to
repurchase an interest in Receivables from the trust, BCI will be obligated to
repurchase this interest retransferred to the depositor for the amount which the
depositor was required to pay to the trust in connection with this retransfer.
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, except for specified tax and governmental and
other statutory liens, in the Receivables being transferred to the depositor to
any other person; provided that, the depositor may remove Receivables from the
trust for the purpose of assigning or selling these 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 the depositor for any
loss, liability or expense incurred by the depositor in connection with a breach
by BCI of some of its representations, warranties or covenants contained in the
Receivables Purchase Agreement.
In addition, BCI has expressly acknowledged and consented to the
depositor's assignment of its rights relating to the Receivables under the
Pooling and Servicing Agreement to the trustee.
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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 this proceeding either is
voluntary or is involuntary and, in the case of an involuntary proceeding, this
involuntary proceeding is not dismissed within 60 days of its institution, BCI
will immediately cease to sell or transfer Receivables to the depositor and will
promptly give notice of this event to the depositor and the trustee.
Material Legal Aspects of the Receivables
Transfer of Receivables and Certificates
In connection with any Receivables sold or contributed and assigned by
BCI to the depositor, BCI represents and warrants that the transfer constitutes
a valid transfer and assignment to the depositor 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 the depositor a valid, subsisting and
enforceable first priority perfected ownership interest in the Receivables
transferred to the depositor. BCI also represents and warrants with respect to
any Receivables subsequently created in the Accounts or Additional Accounts
transferred to the depositor that there exists in favor of the depositor a
valid, subsisting and enforceable first priority perfected ownership interest in
all of these Receivables subsequently created in these Accounts or Additional
Accounts on and after their creation. For a discussion of the depositor's rights
arising from these representations and warranties not being satisfied, see
"Description of the Certificates--Representations and Warranties."
Each of BCI and the depositor 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, in the case of
Receivables that are deemed to be accounts, file an appropriate financing
statement or statements and, 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 the depositor to
perfect the interests of the depositor and the trust, respectively, in the
Receivables. Continuation statements will be filed as required to continue the
perfection of these interests. The Receivables will not be stamped to indicate
the interest of the depositor 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 the depositor represents and warrants in the Pooling and
Servicing Agreement, that except for specified liens permitted by the Pooling
and Servicing Agreement each these 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
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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
some circumstances, still be secured by the proceeds of these 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 limited circumstances under the UCC and applicable federal
law in which prior or subsequent transferees of Receivables could have an
interest in these 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 in the ordinary course of that
purchaser's business may, under some circumstances, for instance, 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 the depositor and the trust therein, as described in
the second preceding paragraph above, could support a claim by a subsequent
purchaser of the Receivables that this purchaser acted without notice of any
claim by the depositor or the trust with respect to the Receivables. A tax or
other government lien or non-consensual lien on property of BCI or the depositor
arising prior to the time a Receivable is conveyed to the trust may also have
priority over the interest of the trust in that Receivable.
Under the Receivables Purchase Agreement, in connection with any
Receivables sold or contributed and assigned by BCI to the depositor, BCI
warrants to the depositor 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 any
Participation Interests. Under the Pooling and Servicing Agreement, the
depositor 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 any Participation Interests. Each of BCI and the depositor 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 the depositor and the
trust and except
for tax and other statutory liens including liens in favor of the
Pension Benefit Guaranty Corporation and
that the depositor 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."
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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 these collections. In the event of this type of
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.
The depositor has represented and warranted to the trustee that the
transfer of the Receivables on January 1, 1994 constitutes, and the transfer of
the depositor'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 the depositor in and to the
Receivables, including any additional Receivables subsequently created in the
Accounts, and in any Additional Accounts, except for specified tax and
governmental liens and claims, all monies due or to become due thereon and, with
some exceptions, the proceeds thereof which is effective as to each Receivable
upon the transfer thereof to the trust.
Tax and other statutory liabilities, like 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 of these
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 these 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 the depositor, 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 some
circumstances, could be substantial, in the amount of payments to
Certificateholders could result.
Matters Related to Unfunded Receivables
Receivables are created on the books of BCI and sold to the depositor
and assigned to the trust as early as the day products are shipped by the
manufacturer, importer or distributor to the dealer; however, BCI usually does
not pay the manufacturer, importer or distributor for the product for a period
of time after this shipment. If BCI were to become insolvent or for any other
reason did not or was not able to pay the manufacturer for a product, it may not
be possible to collect the unfunded receivables from the dealer. In addition,
the manufacturer, importer or distributor might be able to delay or prevent the
trust from receiving payments otherwise owing to the trust with respect to these
receivables. See "The Floorplan and Asset-Based Financing Business--Creation of
the Receivables."
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Material Matters Relating to Bankruptcy
In connection with any Receivables sold or contributed and assigned by
BCI to the depositor under the Receivables Purchase Agreement, BCI warrants to
the depositor in the Receivables Purchase Agreement that the sale of these
Receivables by it to the depositor is a valid sale of these Receivables. In
addition, BCI and the depositor have agreed to treat the transfer of Receivables
by BCI to the depositor under the Receivables Purchase Agreement as a sale of
the Receivables to the depositor, and BCI has or will take all actions that are
required under Vermont law to perfect the depositor'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 the depositor under the Receivables Purchase Agreement should be
recharacterized as a pledge of these Receivables to secure a borrowing by BCI,
then delays in payments of collections of Receivables to the depositor could
occur or, should the court rule in favor of that trustee, debtor in possession
or creditor, reductions, which, in some circumstances, could be substantial, in
the amount of these payments could result.
In addition, if BCI were to become a debtor in a bankruptcy case and a
creditor or bankruptcy trustee of this debtor or this debtor itself were to
request a court to order that BCI should be substantively consolidated with the
depositor, delays in payments on the Receivables and, accordingly, the
Certificates could result. Should the bankruptcy court rule in favor of that
creditor, bankruptcy trustee or this debtor, reductions, which, in some
circumstances could be substantial, in the amount of these payments could
result.
The depositor represents and warrants to the trustee in connection with
the transfer of any Receivables to the trust that the transfer of these
Receivables to the trust and of the depositor's right to additional Receivables
will constitute a valid transfer and assignment to the trust of all right,
title and interest of the depositor in and to the Receivables, including any
additional Receivables subsequently created, except for specified tax and
government liens and claims, all monies due or to become due thereon and,
with some exceptions, the proceeds thereof which is effective as to each
Receivable upon the transfer thereof to the trust.
The depositor's certificate of incorporation provides that the
depositor is required to have two independent directors and that it shall not
file a voluntary application for relief under the United States bankruptcy code
without the affirmative vote of its two independent directors. Under the Pooling
and Servicing Agreement, BCI, the servicer and any enhancement provider covenant
that they will not at any time institute against the depositor any bankruptcy,
reorganization or other proceedings under any federal or state bankruptcy or
similar law. In addition, other steps have been taken to avoid the depositor's
becoming a debtor in a bankruptcy case. Notwithstanding these steps, if the
depositor were to become a debtor in a bankruptcy case, and a bankruptcy trustee
for the depositor or the depositor as debtor in possession or a creditor of the
depositor were to take the position that the transfer of the Receivables from
the depositor 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 that trustee, debtor in possession or creditor,
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<PAGE>
reductions, which, in some circumstances, could be substantial, in the amount of
these payments could result.
The depositor does not intend to file, and BCI has agreed that it will
not cause the depositor to file, a voluntary or involuntary petition for relief
under the United States bankruptcy code or any similar applicable state law with
respect to the depositor so long as the depositor 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 the depositor to file this type of petition and permit
BCI as creditor of the depositor, on account of the Note issued by the depositor
to BCI as partial consideration for the transfer of the Receivables to the
depositor and on account of the related pledge of the Variable Funding
Certificate as security for the Note, to commence an involuntary petition
against the depositor.
If BCI or the depositor were to become a debtor in a bankruptcy case
causing an Early Amortization Event to occur, then, according to the Pooling and
Servicing Agreement and the Receivables Purchase Agreement, new Receivables
would no longer be transferred to the depositor by BCI and, according to the
Pooling and Servicing Agreement, only collections on Receivables theretofore
sold to the depositor 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 these circumstances, the servicer is obligated
to allocate all principal collections on Receivables to the oldest principal
balance first. If this allocation method were to be altered by the bankruptcy
court, the rate of payment on the Certificates might be adversely affected.
The occurrence of specified 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 this 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.
Material Federal Income Tax Consequences
The following is a discussion of material 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. Both types of changes could adversely affect
the tax consequences described in this section. The discussion does not address
all of the tax consequences that may be relevant to a particular
Certificateholder in light of its own circumstances. Further, the following
specific categories of Certificateholders may be subject to special tax rules
and limitations which are not discussed in this section: dealers or trades in
securities, financial institutional, life-insurance companies, tax-exempt
entities, United States holders that have a principal place of business outside
the United States, United States holders whose functional currency is not the
United States dollar, United States holders who hold the Certificates as part of
a straddle, hedge, conversion, synthetic security or constructive sale
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transaction or specified United States alien holders. It is suggested that
prospective purchasers 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
This section sets forth the federal income tax opinions of Morgan,
Lewis & Bockius LLP, special U.S. tax counsel to the depositor 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, is of the opinion that, for federal
income tax purposes, the Certificates will be characterized as indebtedness of
the depositor secured by the Receivables, and the trust will be treated as a
mere security device and will not be subject to tax. The 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 the depositor and some or all
classes of Certificateholders, or a publicly traded partnership taxable as a
corporation in which the depositor owns common stock and some or all classes of
Certificateholders own preferred stock.
Because the depositor 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 will be adequately secured by the
Receivables, and other collateral to be held by the trust, Morgan, Lewis &
Bockius LLP is of the opinion that the IRS would not prevail in any attempt to
characterize the Certificates as other than indebtedness. Accordingly, the
transaction will not be treated as a sale of receivables for United States
federal income tax prepaid, although it will be treated as a sale of the
Receivables for financial accounting 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. This partnership would not be subject to federal income tax if the
trust were treated as a partnership, other than a publicly traded partnership
taxable as a corporation. 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 the
depositor and the Certificateholders treated as partners, in accordance with
their respective ownership of the interests of the 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 the depositor. 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.
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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
publicly traded partnership taxable as a corporation. In that event the trust
would be subject to federal income tax at corporate rates on the taxable income
that the trust derives from the Receivables. This 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, may
be 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 the
depositor secured by the Receivables. The depositor and the Certificateholders
have agreed to treat the Certificates as indebtedness for federal income tax
purposes and neither the trustee nor the depositor will comply with the
reporting requirements applicable to corporations, publicly traded partnerships
or partnerships.
Taxation of Interest Income to Certificateholders
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, other than payments of discount, will be a return of capital to the
extent of the Certificateholder's basis in the Certificate allocable to those
payments.
Original Issue Discount.
It is not anticipated that the Certificates will be issued with
original issue discount. 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 having original issue
discount. A holder of a Certificate having original issue discount must include
original issue discount 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 original issue discount 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
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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 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. As indicated
above, the IRS may take the position that some of the interest on a certificate
is "qualified stated interest."
A Certificateholder must include in gross income for any taxable year
the sum of the "daily portions" of the original issue discount that accrue 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
original issue discount that accrues on each Certificate during each "accrual
period," which in general is the period corresponding to the period between
distribution dates. The original issue discount accruing during any accrual
period is divided by the number of days in the period to determine the daily
portion of original issue discount for each day in the period. The amount of
original issue discount 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 original issue discount
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 Internal Revenue Code of 1986. 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 Internal
Revenue Code of 1986.
Sale or Exchange of Certificates
Upon a sale of a Certificate, a Certificateholder 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 original
issue discount 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. 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.
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Foreign Investors
A Certificateholder that is 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, the depositor. 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 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 signed by the non-U.S. Certificateholder under penalties of perjury,
that certifies that the non-U.S. Certificateholder is not a U.S. Person and that
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 last U.S. Person in the chain of
payment prior to payment to a non-U.S. Certificateholder 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 other financial institutions,
the organization or institution may provide a signed statement to the last U.S.
Person in the chain of payment prior to payment to a non-U.S. Certificateholder.
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.
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, in the case of a Certificateholder that is an
individual, the non-U.S. Certificateholder is not present in the United States
for 183 days or more during the taxable year in which the retirement or
disposition occurs or satisfies a "substantial presence" test for that
particular year, and, in the case of gain representing accrued interest, the
conditions described in the preceding paragraph for exemption from withholding
are satisfied. Specific 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 the depositor.
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
would be subject to U.S. federal income tax, including the branch profits tax,
on its net income from the partnership. Further, specific 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.
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Information Reporting and Backup Withholding
Interest, including original issue discount, 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% rate. Information
reporting and backup withholding generally do not apply to corporations and
other exempt recipients, which may be required to establish their exempt status.
Backup withholding 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 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.
It is recommended that all investors consult their own tax advisers regarding
the Federal, State, Local or Foreign Income or Estate Tax Consequences of the
Purchase, Ownership and Disposition of the Certificates.
ERISA Considerations
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 requirements of Title I of the Employee Retirement Income
Security Act of 1974 or that is described in Section 497(e)(1) of the Internal
Revenue Code of 1986, or by or for the account of any entity whose underlying
assets include any assets subject to laws by reason of investment in that
entity. By accepting and holding any Certificate, the holder of the Certificate
will be deemed to have represented and warranted that it is not an entity
described above, and that its acquisition and holding of the Certificate is in
compliance with the foregoing restrictions.
Underwriting
Subject to the terms and conditions of the Underwriting Agreement among
the depositor, BCI and the underwriters named below relating to the
Certificates, 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
of Class A of Class B
Underwriter Certificates Certificates
- ---------------------------------------------------- ----------------------------- ---------------------------
<S> <C> <C>
J.P. Morgan Securities Inc.........................
[Underwriter].......................................
----------------------------- ---------------------------
</TABLE>
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<TABLE>
<CAPTION>
Principal Amount Principal Amount
of Class A of Class B
Underwriter Certificates Certificates
- ---------------------------------------------------- ----------------------------- ---------------------------
<S> <C> <C>
Total...............................................
============================= ===========================
</TABLE>
The depositor has been advised that the underwriters propose initially
to offer the Certificates to the public at the offering prices set forth below.
The depositor has been advised that the underwriters propose initially to offer
the Certificates to specified dealers at these offering prices less a selling
concession not to exceed the percentage of the Certificate denomination set
forth below, and that the underwriters may allow and these dealers may reallow a
reallowance discount not to exceed the percentage of the Certificate
denomination set forth below:
<TABLE>
<CAPTION>
Underwriting Selling Reallowance
Class of Certificate Price to Public Discount Concession Discount
- -------------------- --------------- -------- ---------- --------
<S> <C> <C> <C> <C>
Class A Certificates............. % % % %
Class B Certificates............. % % % %
</TABLE>
After the initial public offering, the public offering price, these
concessions and this discount may be changed.
The depositor has been advised by each underwriter that it intends to
make a market in the Certificates, but no underwriter has any obligation to do
so. There can be no assurance that a secondary market for the Certificates, or
any particular Class thereof, will develop or, if it does develop, that it will
continue or that the secondary market will provide sufficient liquidity to
Certificateholders.
Until the distribution of the Certificates is completed, rules of the
Securities and Exchange Commission may limit the ability of the underwriters and
specified selling group members to bid for and purchase the Certificates. As an
exception to these rules, the underwriters are permitted to engage in specified
transactions that stabilize the price of the Certificates. These transactions
consist of bids or purchases for the purpose of pegging, fixing or maintaining
the price of the Certificates.
In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of these purchases.
Neither the depositor not any of the underwriters makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above in this section may have on the prices of the
Certificates. In addition, neither the depositor nor any of the
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underwriters makes any representation that the underwriters will engage in these
transactions or that these transactions, once commenced, will not be
discontinued without notice.
The depositor has agreed to indemnify the underwriters against, or make
contributions to the underwriters with respect to, specified liabilities,
including liabilities under the Securities Act of 1933, as amended. There is no
limitation on the obligation to indemnify for the depositor's liabilities.
Legal Matters
Specified 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. Specified
federal income tax matters will be passed upon for the depositor and the trust
by Morgan, Lewis & Bockius LLP, New York, New York.
Where You Can Find More Information
We have filed a registration statement under the Securities Act of
1933, as amended, with the Securities and Exchange Commission with respect to
the Certificates offered by 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 Securities and Exchange Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549, and the Securities and
Exchange 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 Securities and Exchange Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, the Securities
and Exchange 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 Securities and Exchange 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., as nominee of The Depository Trust
Company and registered holder of the Certificates. These reports may be
available to beneficial owners of Certificates in accordance with the
regulations and procedures of The Depository Trust Company. See "Description of
the Certificates--Reports" and "--Evidence as to Compliance."
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These reports will not constitute financial statements prepared in
accordance with generally accepted accounting principles.
The trust will file with the Securities and Exchange Commission those
periodic reports with respect to the trust as are required under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission thereunder.
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ANNEX I
PRIOR SERIES
The Certificates will be the fifth series to be issued by the trust. The
table below summarizes some of the principal characteristics of the Series
1996-1 Certificates, the series 1997-1 Certificates and the Series 1997-2
Certificates, issued by the trust and outstanding. "LIBOR," as used below in
connection with the Series 1997-1 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 1997-1 Certificates and "Net
Receivables Rate," as used below in connection with the Series 1997-1
Certificates shall have the meaning set forth in the supplement relating to the
Series 1997-1 Certificates.
<TABLE>
<S> <C>
SERIES 1996-1
Initial Principal Amount...............................................................................$100,000,000
Principal Amount as of December 31, 1998...............................................................$120,000,000
Controlled Amortization Commencement Date............................................................ December 1999
Class A Certificate Rate......................................................................Commercial Paper Rate
Series 1996-1 Termination Date.....................................................................November 3, 2000
Series 1996-1 Issuance Date............................................................................May 14, 1996
Series Servicing Fee Rate........................................................................................2%
Initial Available Subordinated Amount...................................................................$23,616,900
SERIES 1997-1
Initial Principal Amount...............................................................................$427,125,000
Principal Amount as of December 31, 1998...............................................................$427,125,000
Controlled Amortization Commencement Date.............................................................November 2001
Class A Interest Rate.........................Lesser of (a) One month LIBOR plus 0.12% and (b) Net Receivables Rate
Class B Interest Rate.........................Lesser of (a) one month LIBOR plus 0.33% and (b) Net Receivables Rate
Series 1997-1 Termination Date.......................................................................April 15, 2004
Series Issuance Date...............................................................................January 23, 1997
Series Servicing Fee Rate........................................................................................2%
Initial Available Subordination Amount..................................................................$24,859,127
SERIES 1997-2
Initial Principal Amount................................................................................$50,000,000
Principal Amount as of December 31, 1998...............................................................$100,000,000
Controlled Amortization Commencement Date.............................................................December 2000
Class A Certificate Rate......................................................................Commercial Paper Rate
Series 1997-2 Termination Date..........................................................................May 3, 2001
Series 1997-2 Issuance Date.......................................................................December 12, 1997
Series Servicing Fee Rate........................................................................................2%
Initial Available Subordinated Amount....................................................................$2,000,000
</TABLE>
1
<PAGE>
ANNEX II
Receivables in Additional Accounts Conveyed to the trust by the depositor
<TABLE>
<CAPTION>
Principal Amount
Date Receivables of Receivables in
Assignment Transferred Relevant Number Additional
Number to Trust Cut-Off Date of Accounts Accounts
-------- -------- ------------ ----------- --------
<S> <C> <C> <C> <C>
1 Sept. 30, 1994 Sept. 26, 1994 277 $ 28,569,849
2 Jan. 30, 1996 Jan. 18, 1996 610 $ 86,817,128
3 Oct. 31, 1997 Oct. 22, 1997 51 $ 30,132,722
4 Feb. 26, 1998 Jan. 1, 1998 832 $ 98,371,236
5 Oct. 16, 1998 Aug. 28, 1998 457 $ 92,037,386
6 Mar. 19, 1999 Mar. 2, 1999 311 $126,143,143
</TABLE>
2
<PAGE>
ANNEX III
Global Clearance, Settlement and Tax Documentation Procedures
Except in limited circumstances, the globally offered Certificates will
be available only in book-entry form. Investors in the globally offered
Certificates may hold them through any of The Depository Trust Company,
Cedelbank or Euroclear. The globally offered Certificates 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 globally offered
Certificates through Cedelbank 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 globally offered
Certificates through The Depository Trust Company 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 Cedelbank or Euroclear and The
Depository Trust Company Participants holding Certificates will be effected on a
delivery-against- payment basis through the respective Depositaries of Cedelbank
and Euroclear, in the capacity of Depositaries and as The Depository Trust
Company Participants.
Non-U.S. holders of globally offered Certificates will be subject to
U.S. withholding taxes unless these holders meet specific requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
Initial Settlement
All globally offered Certificates will be held in book-entry form by The
Depository Trust Company in the name of Cede & Co. as nominee of The Depository
Trust Company. Investors' interests in the globally offered Certificates will be
represented through financial institutions acting on their behalf as direct and
indirect Participants in The Depository Trust Company. As a result, Cedelbank
and Euroclear will hold positions on behalf of their participants through their
respective Depositaries, which in turn will hold these positions in accounts as
The Depository Trust Company Participants.
Investors electing to hold their globally offered Certificates through
The Depository Trust Company 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.
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<PAGE>
Investors electing to hold their globally offered Certificates through
Cedelbank 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. Globally offered Certificates
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 The Depository Trust Company Participants. Secondary
market trading between The Depository Trust Company Participants will be settled
using the procedures applicable to prior asset- backed certificates issues in
same-day funds.
Trading between Cedelbank and/or Euroclear Participants. Secondary
market trading between Cedelbank Participants or Euroclear Participants will be
settled using the procedures applicable to conventional eurobonds in same-day
funds.
Trading between The Depository Trust Company seller and Cedelbank or
Euroclear purchaser. When globally offered Certificates are to be transferred
from the account of The Depository Trust Company Participant to the account of a
Cedelbank Participant or a Euroclear Participant, the purchaser will send
instructions to Cedelbank or Euroclear through a Cedelbank Participant or
Euroclear Participant at least one business day prior to settlement. Cedelbank
or Euroclear will instruct the respective Depositary, as the case may be, to
receive the globally offered Certificates against payment. Payment will include
interest accrued on the globally offered Certificates 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 Depository Trust Company Participant's account
against delivery of the globally offered Certificates. After settlement has been
completed, the globally offered Certificates will be credited to the respective
clearing system and by the clearing system, in accordance with its usual
procedures, to the Cedelbank 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 globally offered Certificates
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 Cedelbank or Euroclear cash debt will be
valued instead as of the actual settlement date.
Cedelbank 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 Cedelbank or
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<PAGE>
Euroclear. Under this approach, they may take on credit exposure to Cedelbank or
Euroclear until the globally offered Certificates are credited to their accounts
one day later.
As an alternative, if Cedelbank or Euroclear has extended a line of
credit to them, Cedelbank 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, Cedelbank Participants or Euroclear
Participants purchasing globally offered Certificates would incur overdraft
charges for one day, assuming they cleared the overdraft when the globally
offered Certificates were credited to their accounts. However, interest on the
globally offered Certificates would accrue from the value date. Therefore, in
many cases the investment income on the globally offered Certificates earned
during that one-day period may substantially reduce or offset the amount of
these overdraft charges, although this result will depend on each Cedelbank
Participant's or Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, The
Depository Trust Company Participants can employ their usual procedures for
sending globally offered Certificates to the respective Depositary for the
benefit of Cedelbank Participants or Euroclear Participants. The sale proceeds
will be available to The Depository Trust Company seller on the settlement date.
Thus, to The Depository Trust Company Participant a cross-market transaction
will settle no differently than a trade between two The Depository Trust Company
Participants.
Trading between Cedelbank or Euroclear seller and The Depository Trust
Company purchaser. Due to time zone differences in their favor, Cedelbank
Participants and Euroclear Participants may employ their customary procedures
for transactions in which globally offered Certificates are to be transferred by
the respective clearing system, through the respective Depositary, to The
Depository Trust Company Participant. The seller will send instructions to
Cedelbank or Euroclear through a Cedelbank Participant or Euroclear Participant
at least one business day prior to settlement. In these cases, Cedelbank or
Euroclear will instruct the respective Depositary, as appropriate, to deliver
the globally offered Certificates to The Depository Trust Company Participant's
account against payment. Payment will include interest accrued on the globally
offered Certificates 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 Cedelbank
Participant or Euroclear Participant the following day, and receipt of the cash
proceeds in the Cedelbank 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 Cedelbank 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 Cedelbank Participant's or
Euroclear Participant's account would instead be valued as of the actual
settlement date.
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<PAGE>
Finally, day traders that use Cedelbank or Euroclear and that purchase
globally offered Certificates from The Depository Trust Company Participants for
delivery to Cedelbank 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:
(1) borrowing through Cedelbank or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedelbank or Euroclear
accounts) in accordance with the clearing system's customary procedures;
(2) borrowing the globally offered Certificates in the U.S. from The
Depository Trust Company Participant no later than one day prior to settlement,
which would give the globally offered Certificates sufficient time to be
reflected in their Cedelbank or Euroclear account in order to settle the sale
side of the trade; or
(3) staggering the value dates for the buy and sell sides of the trade
so that the value date for the purchase from The Depository Trust Company
Participant is at least one day prior to the value date for the sale to the
Cedelbank Participant or Euroclear Participant.
Material U.S. Federal Income Tax Documentation Requirements
A beneficial owner of globally offered Certificates holding securities
through Cedelbank or Euroclear (or through The Depository Trust Company 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
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 that beneficial owner and the U.S. entity required to
withhold tax complies with applicable certification requirements and that
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 globally
offered Certificates 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 this 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).
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<PAGE>
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
a citizen or resident of the United States,
a corporation or partnership organized in or under the laws of
the United States, any state thereof, or any political
subdivision of either (including the District of Columbia), or
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 globally offered
Certificates. Investors are advised to consult their own tax advisors for
specific tax advice concerning their holding and disposing of the globally
offered Certificates.
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.
7
<PAGE>
GLOSSARY
"ACCOUNTS" means the accounts designated to the trust and identified in
the computer file or microfish or written list delivered to the Trustee on the
date of issuance of the first series of certificates under the Pooling and
Servicing Agreement plus all Additional Accounts less any accounts which have
been renewed from the trust.
"ACCUMULATION PERIOD COMMENCEMENT DATE" shall mean _______, 200_, if
the Accumulation Period Length is four months; _______, 200_, if the
Accumulation Period Length is three months; _______, 200_, if the Accumulation
Period Length is two months; _______, 200_, if the Accumulation Period Length
is one month; provided, however, if the Accumulation Period Length has been
determined to be less than six months and, after this determination, any
outstanding series enters into an early amortization period, the Accumulation
Period Commencement Date shall be the earlier of the date that this outstanding
series entered into its early amortization period and the Accumulation Period
Commencement Date, as previously determined.
"ACCUMULATION PERIOD LENGTH" means the one, two, three, four, five or
six month(s) period, determined on __________, and shall be calculated as the
product, rounded upwards to the nearest integer, of [four] multiplied by a
fraction, the numerator of which is the Invested Amount as of _____________,
after giving effect to all changes therein on that date, and the denominator of
which is the sum of this Invested Amount and the invested amounts as of
_____________, after giving effect to all changes therein on that date, of all
other outstanding series whose respective revolving periods are not scheduled to
end before the last day of the ___________ Collection Period.
"ACCUMULATION SHORTFALL" means, for any Monthly Period, the amount by
which the Controlled Deposit Amount for all preceding Distribution Dates exceeds
the amount deposited in the Principal Account for the preceding Monthly Period.
"ADDITIONAL ACCOUNTS" shall mean any accounts designated by the
depositor to be included in the trust in addition to those designated at the
time of this first series of certificates.
"ADDITIONAL CUT-OFF DATE" shall mean the date as of which additional
accounts are identified and selected to be included as Additional Accounts.
"ADJUSTED INVESTED AMOUNT" means the initial principal amount of the
Certificates plus the amount of any withdrawals from the Excess Funding Account
in connection with an increase in Receivables in the trust since the date of the
issuance of the certificates minus the amount of any additions to the Excess
Funding Account in connection with a reduction in the Receivables in the trust
since the date of the issuance of the certificates.
<PAGE>
"ADJUSTMENT DATE" shall mean for the purpose of calculating LIBOR the
second day on which dealings in deposits in United States dollars are transacted
in the London interbank market preceding the first day of the related Interest
Period.
"ADJUSTMENT PAYMENT" shall be an amount payable by the depositor for
deposit into the Collection Account if the Servicer adjusts downward the
outstanding principal balance of any Eligible Receivable because of a rebate,
billing error, refund or credit adjustment to an obligor, or because that
Receivable was created in respect of a product which was refused or returned
by an obligor, the amount of this adjustment will be deducted from the Pool
Balance; if the adjustment reduces 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, the amount of the payment will be an amount equal to
the deficiency up to the amount of the adjustment.
"ASSET-BASED RECEIVABLES" shall mean the Receivables resulting from
extensions of credit made by BCI, an affiliate of BCI or another lender and
acquired by BCI or one of its affiliates to dealers to finance working capital
needs and to manufacturers and distributors to finance production, manufacturing
and inventory of consumer, recreational and commercial products.
"AVAILABLE INVESTOR PRINCIPAL COLLECTIONS" for any Distribution Date
means the sum of
(1) the product of the Floating Allocation Percentage, with respect to
the Revolving Period, or the Principal Allocation Percentage, with respect to
the Controlled Accumulation Period, any Initial Amortization Period or any Early
Amortization Period, for the related Collection Period multiplied by principal
collections for the related Collection Period,
(2) the amount, if any, of Investor Non-Principal Collections, funds in
the Reserve Fund and Series 1999-1 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,
(3) the Series 1999-1 Investor Allocation Percentage of Miscellaneous
Payments for that Distribution Date,
(4) Excess Principal Collections, if any, from other series allocated
to the Certificates,
(5) 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,
(6) on the Series 1999-1 Termination Date, any funds remaining in the
Reserve Fund, after the application of funds in the Reserve Fund to cover
shortfalls in Non-Principal Collections, and
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<PAGE>
(7) with respect to the Scheduled Payment Date, any Initial
Amortization Period or any Early Amortization Period, any funds on deposit in
the Principal Account.
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 Controlled Accumulation 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 these floating allocation percentages and
principal allocation percentages.
"AVAILABLE RETAINED COLLECTIONS" for any Deposit Date means the sum of
the Available Retained Non-Principal Collections for that date and the Available
Retained Principal Collections for that date; provided, however, that the
Available Retained Collections will be zero for any Collection Period for which
the Available Subordinated Amount is zero for the Distribution Date occurring in
that Collection Period.
"AVAILABLE RETAINED NON-PRINCIPAL COLLECTIONS" for any Deposit Date
means an amount equal to the product of the excess of the Retained Percentage
for the related Deposit Date over the Excess Retained Percentage for this
Deposit Date multiplied by Non-Principal Collections for that date.
"AVAILABLE RETAINED PRINCIPAL COLLECTIONS" for any Deposit Date means
an amount equal to the product of the excess of the Retained Percentage for this
Deposit Date over the Excess Retained Percentage for this Deposit Date and
principal collections for that date.
"AVAILABLE SUBORDINATED AMOUNT" for any date of determination after the
first Distribution Date means an amount equal to the sum of:
the lesser of:
(1) the Available Subordinated Amount for the preceding
Distribution Date, minus, with certain limitations, the
Required Subordination Draw Amount for the preceding
Distribution Date or, if the date of determination is a
Distribution Date, that Distribution Date, minus the amount of
any deposits in the Reserve Fund from Series 1999-1 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 or, if the date of determination is a Distribution Date,
that Distribution Date, minus 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 last day of the
preceding Collection Period
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<PAGE>
and the denominator of which is the Pool Balance as of the
last day of the preceding Collection Period, plus the
aggregate amount of Excess Servicing paid to the holder of the
BCRC Certificate on the previous Distribution Date, minus the
Incremental Subordinated Amount for the second preceding
Distribution Date or if the date of determination is a
Distribution Date, the preceding Distribution Date, plus the
Incremental Subordinated Amount for the immediately preceding
Distribution Date, or if the date of determination is a
Distribution Date, that Distribution Date plus [5.82]% of 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
(2) the Required Subordinated Amount for that date of
determination; and
the amount of any optional increase in the Available
Subordinated Amount exercised by the depositor as described in
the prospectus under "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 date of the issuance of the Certificates through the first
Distribution Date is equal to the Required Subordinated Amount as of that date
of determination, which will equal at least $_________ on the date of the
issuance of the Certificates.
"BCI" shall mean Bombardier Capital Inc., a Massachusetts corporation.
"BCI DOMESTIC INVENTORY PORTFOLIO" shall mean the accounts, whether or
not they would be Eligible Accounts and whether or not they have been added to
the Trust generating receivables as a result of extensions of credit and
advances made to dealers of consumer, recreational and commercial products which
dealers are located in the United States.
"BCRC CERTIFICATE" means the certificate held by the depositor and
representing the Retained Interest.
"BUSINESS DAY" shall mean any day other than (a) a Saturday or 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.
"CERTIFICATE OWNER" shall mean a beneficial owner of a Certificate.
"CERTIFICATE RATE" shall mean the Class A Certificate Rate or the Class
B Certificate Rate, as the context requires.
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<PAGE>
"CERTIFICATEHOLDER" shall mean The Depository Trust Company, acting
upon the instructions of its Participants, with respect to the taking of
actions, and Cede & Co. with respect to the receipt of distributions, notices,
reports and statements.
"CERTIFICATES" shall mean the Class A Certificates and the Class B
Certificates, collectively.
"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 Class A Monthly Interest for that 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 the actual Class A Monthly
Interest for that Distribution Date.
"CLASS A CERTIFICATE RATE" shall mean the per-annum rate at which
interest accrues on the principal balance of the Class A Certificates and shall
be equal to the lesser of LIBOR plus ____% and the Net Receivables Rate.
"CLASS A CERTIFICATES" shall mean the floating rate, Class A
asset-backed certificates, Series 1999-1, issued by the trust.
"CLASS A MONTHLY INTEREST" for any Distribution Date means an amount
equal to the product of
the actual number of days elapsed in the related Interest Period divided
by 360 days and
the product of
(1) the Class A Certificate Rate and
(2) 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 date of the
issuance of the certificates, after giving effect to any
payments of principal on the Class A Certificates on that
preceding Distribution Date.
"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 Class B Monthly Interest for that 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 the actual Class B Monthly
Interest for that Distribution Date;
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<PAGE>
"CLASS B CERTIFICATE RATE" shall mean the per-annum rate at which
interest accrues on the principal balance of the Class B Certificates and shall
be equal to the lesser of LIBOR plus ____% and the Net Receivables Rate.
"CLASS B CERTIFICATES" shall mean the floating rate, Class B
asset-backed certificates, Series 1999-1, issued by the trust.
"CLASS B MONTHLY INTEREST" for any Distribution Date means an amount
equal to the product of
the actual number of days elapsed in the related Interest Period
divided by 360 days and
the product of
(1) the Class B Certificate Rate and
(2) 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 date of the issuance
of the certificates, after giving effect to any payments of
principal on the Class B Certificates on that preceding
Distribution Date.
"COLLATERAL SECURITY" shall mean the security granted by the obligor to
secure payment of the Receivables.
"COLLECTION ACCOUNT" shall mean the Eligible Deposit Account
established and maintained by the Servicer for the benefit of the
Certificateholders in the name of the Trustee and designated as the "Collection
Account.".
"COLLECTION PERIOD" shall mean the preceding calendar month.
"CONTROLLED ACCUMULATION AMOUNT" means for any Distribution Date an
amount sufficient together with a similar amount to be deposited on other
Distribution Dates in the Controlled Accumulation Period to amortize the
Invested Amount given the Accumulation Period Length.
"CONTROLLED ACCUMULATION PERIOD" means, unless an Early Amortization
Event has occurred or an Initial Amortization Period has begun, the period
commencing on the Accumulation Period Commencement Date and ending upon the
earliest to occur of:
(1) the commencement of the Early Amortization Period or any Initial
Amortization Period,
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<PAGE>
(2) payment of the full Invested Amount, and
(3) the Series 1999-1 Termination Date.
"CONTROLLED DEPOSIT AMOUNT" means, for any Monthly Period, the sum of
the Controlled Accumulation Amount for that Monthly Period plus the Accumulation
Shortfall for the related Monthly Period.
"DAILY ALLOCATION" shall mean for any Deposit Date:
(1) the product of the Floating Allocation Percentage for that date
multiplied by the aggregate amount of Non-Principal Collections on that date,
plus
(2) the Series 1999-1 Available Retained Collections for that date.
"DEFAULTED AMOUNT" for any Collection Period will be an amount which
shall not be less than zero equal to the aggregate principal amount of principal
Receivables that became Defaulted Receivables during the preceding Collection
Period less the full amount of the Defaulted Receivables which are subject to
retransfer from the trust to the depositor or purchased by the Servicer for that
Collection Period unless certain events of bankruptcy, insolvency, or
receivership have occurred with respect to either of the depositor or the
Servicer or unless a Liquidation Event has occurred, in which event the
Defaulted Amount will not be reduced for those Defaulted Receivables.
"DEFAULTED RECEIVABLES" prior to the date the Series 1997-1
Certificates are paid in full, on any Distribution Date are, without
duplication:
(1) 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,
(2) all Receivables originally secured by a security interest in a
related Eligible Product which have not been paid in full for
more than 60 days after the sale of the related Eligible
Product,
(3) all Receivables in an Account in which interest in the amount
of $150 or more has been delinquent for 90 days or more, and
(4) 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
this Account became an Ineligible Account;
and on or after the date the Series 1997-1 Certificates are paid if full,
Defaulted Receivables are, without duplication:
(1) all Receivables, other than Receivables that were designated
as Ineligible Receivables at the time of transfer to the trust
which were charged off by the Servicer as uncollectible in
respect of the immediately preceding Collection Period,
(2) all Receivables originally secured by a security interest in a
related Eligible Product which have not been paid in full for
more than 90 days after the sale of the related Eligible
Product, and
(3) 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
this Account became an Ineligible Account.
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<PAGE>
Receivables are not Defaulted Receivables merely because they become Ineligible
Receivables.
"DEFICIENCY AMOUNT" shall mean for each Distribution Date, the amount,
if any, by which
the sum of
(1) Monthly Interest for the Distribution Date,
(2) Monthly Interest accrued but not paid with respect to prior
Distribution Dates and interest thereon,
(3) the Net Servicing Fee for the Distribution Date,
(4) the Investor Default Amount for the Distribution Date, and
(5) the Series 1999-1 Investor Allocation Percentage of any
Adjustment Payment for the Distribution Date that has not been
deposited in the Collection Account as required under the
Pooling and Servicing Agreement, exceeds
the sum of
(1) Investor Non-Principal Collections and Investment Proceeds for
such Distribution Date and
(2) if the amounts of Investor Non-Principal Collections and
Investment Proceeds are not sufficient to cover all amounts
described above in (1) through (5) of this definition, the
amount of funds in the Reserve Fund on such Distribution Date
available to fund the remaining amounts.
"DEPOSIT DATE" shall mean any date on which the Servicer receives
collections.
"DEPOSITARY" shall mean either Citibank, N.A. in its capacity as
depositary for Cedelbank or Morgan Guaranty Trust Company of New York in its
capacity as depositary for the Euroclear System; "DEPOSITARIES" shall mean these
two entities in those capacities, collectively.
"DESIGNATED MANUFACTURER OVERCONCENTRATIONS" on any Distribution Date
means the excess of 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 trust on the last day of the
Collection Period immediately preceding that Distribution Date over 45% of the
Pool Balance on the last day of that immediately preceding Collection Period
where the "Designated Manufacturer" is collectively Bombardier Inc. and its
subsidiaries; provided, however, that this percentage and the entities included
as Designated Manufacturer may be
8
<PAGE>
adjusted from time to time without the consent of the Certificateholders, if the
Rating Agency Condition is satisfied.
"DETERMINATION DATE" shall mean, with respect to any Distribution Date,
the day that is two business days prior to that Distribution Date.
"DISTRIBUTION DATE" shall mean the 15th day of each month, or if this
day is not a business day, on the next succeeding business day, commencing
[[month] 15, 1999].
"DISTRIBUTION DATE STATEMENT" means the monthly statement prepared by
the Servicer setting forth information with respect to the Certificates.
"DOMESTIC INVENTORY RECEIVABLES" shall mean Receivables arising from
extensions of credit and advances made by BCI, an affiliate of BCI or another
lender and acquired by BCI or one of its affiliates to dealers of consumer,
recreational and commercial products which dealers are located in the United
States.
"EARLY AMORTIZATION EVENT" shall mean:
(1) a failure by the depositor to convey Receivables in Additional
Accounts to the trust within five business days after the day on which it is
required to convey these Receivables under the Pooling and Servicing Agreement;
(2) failure on the part of the depositor, the servicer or BCI, as
applicable:
(a) 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 this payment or
deposit is required to be made, which failure is not
cured within five business days after notice from the
trustee of this failure;
(b) with respect to any series, to deliver a distribution
date Statement within ten business days after notice
from the trustee of this failure;
(c) to duly comply with, observe or perform in any material
respect the covenant of the depositor not to create any
lien, other than tax and other statutory liens,
including liens in favor of the Pension Benefit
Guaranty Corporation, and some 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 this 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 this period in accordance with the provisions of
the Pooling and Servicing Agreement; or
(d) 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 this
failure, requiring the same to be remedied, shall have
been given to the depositor by the trustee or any
enhancement provider;
(3) any representation or warranty made by the depositor in the Pooling
and Servicing Agreement or any information required to be given by the depositor
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 any
longer period as may be specified in the notice, of this failure, requiring the
same to be remedied, shall have been given to the depositor 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 the
depositor 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 the depositor 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 the depositor has repurchased the related Receivables or all of
these Receivables, if applicable, during this period in accordance with the
provisions of the Pooling and Servicing Agreement;
(4) the occurrence of specified 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;
(5) the depositor or the trust becomes an investment company within the
meaning of the Investment Company Act of 1940, as amended;
(6) 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 that distribution date;
(7) 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 that distribution date;
(8) any Servicer Default occurs;
(9) any Class A Carry-Over Amount or Class B Carry-Over Amount, as
applicable, is outstanding on six consecutive distribution dates;
(10) the ratio, expressed as a percentage, of the average for each
month of the net losses on the Receivables in the trust, that is, 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 consecutive calendar months to the average
of the month-end Pool Balances for that three-month period, exceeds 5% on an
annualized basis; provided, that this clause (10) may be revised or waived
without the consent of the Certificateholders if the Rating Agency Condition is
satisfied;
(11) the average percentage obtained by dividing the aggregate
principal collections for a Collection Period by the average daily Pool Balance
for that Collection Period:
(a) with respect to the three Collection Periods included in
the period from January through March of any calendar
year is less than 12% and
(b) with respect to any other three consecutive Collection
Periods is less than 14%,
provided, that this clause (11) may be revised or waived without the consent of
the Certificateholders if the Rating Agency Condition is satisfied;
(12) the failure to pay the outstanding principal amount of the Class A
Certificates on the _______ distribution date or the failure to pay the
outstanding principal amount of the Class B Certificates on the _______
distribution date;
(13) a Liquidation Event occurs; or
(14) 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 that distribution date.
"EARLY AMORTIZATION PERIOD" shall mean the period beginning as of the
day an Early Amortization Event occurs.
"ELIGIBLE ACCOUNT" shall mean:
(1) each individual financing account established by BCI or 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, in the ordinary course of business, and
(2) 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 that obligor, it which, in
each case, as of the date of determination thereof relates to an obligor that is
an "Eligible Obligor" and is in existence and, after its establishment or
acquisition by BCI or an affiliate of BCI, is maintained and serviced by BCI.
BCI (or its affiliates) may assign or grant participation rights in, an Account
or any Receivable therein to any person without affecting the Account's status
as an Eligible Account.
"ELIGIBLE DEPOSIT ACCOUNT" shall mean either (1) a segregated account
with the corporate trust department of the Trustee or 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 has either 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
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<PAGE>
Agency to the Trustee or 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 is a
member of the FDIC or (2) a segregated trust account with the corporate trust
department of the Trustee, 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, being a member of FDIC and having corporate
trust powers and acting as trustee for funds deposited in that account, so long
as any of the securities of that depository institution or trust company has a
credit rating from each Rating Agency in one of its generic rating categories
which signifies investment grade.
"ELIGIBLE INVESTMENTS" shall mean:
(1) obligations of or fully guaranteed by the United States,
(2) 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 this type of obligation the rating of which is based
on the credit of a person or entity other than that 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,
(3) 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,
(4) demand deposits, time deposits and certificates of deposit which
are fully insured by the FDIC,
(5) bankers' acceptances issued by any depository institution or trust
company described in (2) above,
(6) investments in money market funds which have the highest rating
from, or have otherwise been approved in writing by, any individual Rating
Agency,
(7) 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
10
<PAGE>
(8) other investments acceptable to any individual Rating Agency as
being consistent with the then-current rating of the Certificates.
"ELIGIBLE OBLIGOR" shall mean:
in the case of Domestic Inventory Receivables, a dealer that is
located in the United States of America (including its territories
and possessions),
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
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.
"ELIGIBLE PRODUCTS" shall mean consumer, recreational and commercial
products, including, but not limited to, boats, motors 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 these products.
"ELIGIBLE RECEIVABLE" shall mean each Receivable:
(1) which was originated by BCI, by an affiliate of BCI or acquired by
BCI or an affiliate of BCI in each case in the ordinary course of business,
(2) which arose under an Account that at the time the Receivable was
transferred to the trust was an Eligible Account,
(3) which is owned by BCI at the time of sale or contribution by BCI to
the depositor,
(4) which represents the obligation of an obligor to repay an advance
made to or on behalf of that obligor, or credit extended for that 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,
(5) which in the case of:
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
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<PAGE>
sold or 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,
Asset-Based Receivables, 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.
(6) which is not unenforceable as a result of any violation of
requirements of law applicable thereto and the related inventory security
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,
(7) with respect to which all consents and governmental authorizations
required to be obtained by BCI or an affiliate of BCI or the depositor in
connection with the creation of the Receivable or the transfer thereof to the
depositor and the trust or the performance by BCI or an affiliate of BCI of the
inventory security agreement in the case of Domestic Inventory Receivables or
the related loan agreement in the case of Asset-Based Receivables pursuant to
which the Receivable was created, have been duly obtained, effected or given and
are in full force and effect,
(8) as to which at all times following the transfer of the 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 after this transfer and
which relate to affiliates of the depositor,
(9) 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,
(10) which will at all times be the legal and assignable payment
obligation of the obligor relating thereto, enforceable against that obligor in
accordance with its terms, as modified or revised from time to time with the
consent of the Servicer, except as enforceability may be limited by the
bankruptcy code or other applicable insolvency laws,
(11) which at the time of transfer to the trust is enforceable against
the obligor to the extent of the full principal amount of the Receivable, except
as such enforceability may be limited by the bankruptcy code or other applicable
insolvency laws,
12
<PAGE>
(12) as to which, at the time of transfer of the Receivable to the
trust, BCI or an affiliate of BCI and the depositor have satisfied all their
respective obligations under the Pooling and Servicing Agreement with respect to
the Receivable required to be satisfied at that time,
(13) as to which, at the time of transfer of the Receivable to the
trust, neither BCI or any affiliate of BCI nor the depositor 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
(14) 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;
This definition may be adjusted from time to time without the consent of the
Certificateholders if the Rating Agency Condition is satisfied.
"EUROCLEAR OPERATOR" shall mean the Brussels, Belgium office of Morgan
Guaranty Trust Company of New York or any successor entity thereto.
"EUROCLEAR PARTICIPANTS" shall mean participants of the Euroclear
system.
"EXCESS FUNDED AMOUNT" shall be calculated for each Business Day and
shall be an amount equal to the product of:
(1) the excess, if any, of the Required Pool Balance over the Pool
Balance, each as of the end of the preceding day multiplied by
(2) a fraction the numerator of which is the sum of the Required
Investor Percentage of the Adjusted Invested Amount and the Available
Subordinated Amount and the denominator of which is the aggregate of the
required balances for all series including the Series 1999-1 Required Balance
providing for excess funding accounts or similar arrangements.
"EXCESS FUNDING ACCOUNT" shall be an Eligible Account established and
maintained for the life of the Certificates for the benefit of
Certificateholders in the name of the Trustee and designated as the "Excess
Funding Account."
"EXCESS PRINCIPAL COLLECTIONS" shall mean, for Series 1999-1, the
amount of Available Investor Principal Collections remaining after all payments
required to be made from Available Investor Principal Collections have been paid
and for any other series, the amount of any similar excess for any other series.
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<PAGE>
"EXCESS RESERVE FUND REQUIRED AMOUNT" for any Distribution Date with
respect to an Early Amortization Period, means an amount equal to the greater of
5% of the initial principal amount of the Certificates and the excess of the
Required Pool Balance (after giving effect to any changes thereto on that
Distribution Date) over the Pool Balance (after giving effect to changes thereto
on that Distribution Date); provided that it shall in no event exceed the
Available Subordinated Amount for that Distribution Date.
"EXCESS RETAINED PERCENTAGE" for any date of determination, the
Retained Percentage for that date minus the percentage equivalent of a fraction,
the numerator of which is equal to the sum of the Available Subordinated Amount
and the aggregate available subordinated amounts for all other outstanding
series 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.
"EXCESS SERVICING" for any Distribution Date means the amount available
pursuant to clause (9) under "Description of the Certificates -- Distribution
from the Collection Account; Reserve Fund; Principal Account" in this
Prospectus.
"FLOATING ALLOCATION PERCENTAGE" means the percentage, which shall
never exceed 100%, obtained 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 that 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
_________, 1999 -- giving pro forma effect as of the _________, 1999 to the
issuance of the Certificates.
"HOLDERS" shall mean the holders of the definitive certificates, if
any, issued by the Trustee.
"INCREMENTAL SUBORDINATED AMOUNT" on any Distribution Date will equal
the product of 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 date of the
issuance of the Certificates and the Available Subordinated Amount for that
Distribution Date, calculated without subtracting or adding the Incremental
Subordinated Amount for that Distribution Date as described in clause (1) of the
definition of Available Subordinated Amount or clause (2) of the definition of
Required Subordinated Amount, and the denominator of which is the Pool Balance
on such last day multiplied by the [sum of, without duplication, the Obligor
Overconcentrations, the Manufacturer Overconcentrations, the Designated
Manufacturer Overcentrations and the Industry Overconcentrations on that
Distribution Date.]
"INDIRECT PARTICIPANTS" shall mean those entities such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly.
"INDUSTRY OVERCONCENTRATIONS" on any Distribution Date means the excess
of
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<PAGE>
(1) 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,
that is, 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
that Distribution Date over
(2) an amount equal to __% of the Pool Balance on the last day of
that immediately preceding Collection Period; provided,
however, that with respect to each industry specified below,
the percentage in clause (2) of this definition shall be
deemed to equal the percentage set forth opposite that
industry:
<TABLE>
<CAPTION>
Industry Percentage
-------- ----------
<S> <C>
Marine Products....................................... 45%
Manufactured Housing.................................. 45%
Recreational Vehicles................................. 20%
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.
"INELIGIBLE ACCOUNT" shall mean any Account which is not an Eligible
Account.
"INELIGIBLE RECEIVABLE" shall mean any Receivable that is not an
Eligible Receivable.
"INITIAL AMORTIZATION PERIOD" shall mean the period during which
principal is distributed to the Certificateholders as a result of BCI's election
not to extend the Initial Principal Payment Date.
"INITIAL PRINCIPAL PAYMENT DATE" shall mean the Distribution Date no
earlier than the _______ Distribution Date and no later than the _______
Distribution Date, on which principal will begin to be paid to the
Certificateholder if BCI elects not to extend the Revolving Period or the
Controlled Accumulation Period, as applicable.
"INTEREST PERIOD" shall mean, with respect to any Distribution Date,
the period from and including the previous Distribution Date -- or, in the case
of the first Distribution Date, from and including the date of the issuance of
the certificates -- to but excluding that Distribution Date.
"INVESTED AMOUNT" means for any date an amount equal to the Adjusted
Invested Amount of the Certificates, minus the amount, without duplication, of
principal payments --
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<PAGE>
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 that date minus the excess, if any, of the aggregate
amount of Investor Charge-Offs for all Distribution Dates preceding that date
over the aggregate amount of any reimbursements of Investor Charge-Offs for all
Distribution Dates preceding that date.
"INVESTMENT PROCEEDS" for any Distribution Date means an amount equal
to the sum of all interest and other investment earnings, net of losses and
investment expenses, on funds on deposit in the Reserve Fund, the Excess Funding
Account and the Principal Account plus the Series 1999-1 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.
"INVESTOR CHARGE-OFF" shall occur if the Available Subordinated Amount
is reduced to zero, and on any Distribution Date the Deficiency Amount is
greater than zero and shall mean an amount equal to the excess of this
Deficiency Amount over any remaining Available Subordinated Amount on the
related Determination Date, but shall not exceed the Investor Default Amount for
that Distribution Date.
"INVESTOR DEFAULT AMOUNT" shall mean the portion of the Defaulted
Amount allocated to the Certificates.
"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 in the Prospectus under the caption
"Description of the Certificates -- Allocation Percentages -- Allocation to the
Certificates" and "Allocation of Collections; Deposits in Collection Account;
Limited Subordination of the Retained Interest."
"LIBOR" shall mean, with respect to any Interest Period, an interest
rate based on the offered rates for deposits in United States dollars having a
maturity of one month commencing on the related Adjustment Date which appears on
the Telerate Page 3750 as of 11:00 A.M., London time, on the date of
calculation. If this rate does not appear on Telerate Page 3750, LIBOR with
respect to the relevant Interest Period will be determined at approximately
11:00 A.M., London time, on that 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 Trustee or by a party selected by the
depositor and acceptable to the Trustee, to prime banks in the London interbank
market for a period equal to one month 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 that market at that time. The principal London office of each of
those banks will be requested to provide a quotation of its rate. If at least
two of these quotations are provided, LIBOR will be the arithmetic mean --
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 these quotations. If
fewer than two quotations
16
<PAGE>
are provided, LIBOR with respect to this 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 that Adjustment Date by three
major banks in New York, New York for loans in United States dollars to leading
European banks having a maturity of one month 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 that market at that 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.
"LIQUIDATION EVENT" shall mean events of bankruptcy, insolvency or
receivership relating to BCI or the depositor.
"MANUFACTURER OVERCONCENTRATIONS" on any Distribution Date means the
excess of 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 in the trust on
the last day of the Collection Period immediately preceding that Distribution
Date over [15]% of the Pool Balance on the last day of that immediately
preceding Collection Period; provided, however, that this percentage may be
adjusted from time to time without the consent of the Certificateholders, if the
Rating Agency Condition is satisfied.
"MISCELLANEOUS PAYMENTS" for any Collection Period means the sum of
Adjustment Payments and Transfer Deposit Amounts on deposit in the Collection
Account on the related Distribution Date received with respect to that
Collection Period and any amounts not paid to the holder of the BCRC Certificate
because the Pool Balance does not exceed the Required Pool Balance and which are
available to be treated as Miscellaneous Payments as of the Distribution Date
following that Collection Period as described in the Prospectus under the
caption "Principal Collections for all Series."
"MONTHLY INTEREST" for any Distribution Date means the sum of the Class
A Monthly Interest and the Class B Monthly Interest with respect to that
Distribution Date.
"MONTHLY PRINCIPAL" with respect to any Distribution Date relating to
any Initial Amortization Period or Early Amortization Period will equal
Available Investor Principal Collections for that Distribution Date; provided,
however, that Monthly Principal will not exceed the applicable outstanding
principal balances of the Class A and Class B Certificates, respectively.
MONTHLY SERVICING FEE" will generally be equal to one-twelfth of the
product of 2% or 3% if BCI is not the Servicer or, for any Distribution Date
in respect of which the Monthly Servicing Fee has been waived, 0% multiplied
by 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 $_________.
17
<PAGE>
"NET RECEIVABLES RATE" shall mean, for any Adjustment Date, the
weighted average of the interest rates borne by the Receivables included in the
trust for the preceding Collection Period less, if BCI is the Servicer, [2]%,
or, if BCI is not the Servicer, [3]%.
"NET SERVICING FEE" will generally be equal to one-twelfth of the
product of 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% multiplied by 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 $_________.
"NON-PRINCIPAL COLLECTIONS" means collections of interest and other
non-principal charges, including amounts recovered with respect to Defaulted
Receivables and insurance proceeds, with respect to the Receivables.
"NON-U.S. CERTIFICATEHOLDER" is 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.
"NOTE" shall mean the promissory note issued by the depositor in favor
of BCI in connection with the purchase of Receivables by the depositor from BCI.
"OBLIGOR OVERCONCENTRATIONS" on any Distribution Date means, with
respect to any Account, the excess of the aggregate principal amount of Eligible
Receivables in that Account on the last day of the Collection Period immediately
preceding that Distribution Date over [2]% of the Pool Balance with respect to
any obligor with respect to the six largest Accounts in the trust calculated on
the basis of the amount of Principal Receivables in that Account and [1.5]% of
the Pool Balance with respect to all other obligors, in each case on the last
day of that immediately preceding Collection Period. The percentages set forth
in this description of Obligor Overconcentrations and the manner of determining
to which obligors the [2]% rate applies may be adjusted from time to time
without the consent of the Certificateholders if the Rating Agency Condition is
satisfied.
"ORIGINATION PERIOD" shall mean each four-month period commencing June
1, October 1, and February 1 of each year.
"PARTICIPANTS" shall mean the organizations for which The Depository
Trust Company holds securities to facilitate the clearance and settlement of
securities transactions among themselves.
"PARTICIPATION INTEREST" means an undivided interest in any of the
Receivables and Collateral Security not owned by the trust.
18
<PAGE>
"POOL BALANCE" shall mean the aggregate principal balances of the
Receivables that are Eligible Receivables.
"POOLING AND SERVICING AGREEMENT" shall mean the Pooling and Servicing
Agreement, dated as of January 1, 1994, as supplemented by the respective
supplements relating to prior series of investor certificates and to the
Certificates and the Variable Funding Certificates, and as amended by Amendment
Number 1 dated as of January 1, 1997, by Amendment Number 2 dated as of October
__, 1999 and by Amendment Number 3 dated as of October __, 1999 and as further
supplemented and amended from time to time.
"PRINCIPAL ACCOUNT" shall be an Eligible Account established and
maintained for the life of the Certificates for the benefit of
Certificateholders in the name of the Trustee and designated as the "Principal
Account."
"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 by the Pool Balance as of the close of business on the
business day preceding the day of calculation.
"RATING AGENCY" means with respect to any series, the rating agencies
which have been requested to rate that series by the depositor.
"RATING AGENCY CONDITION" shall mean, with respect to any action, if
the terms of the Pooling and Servicing Agreement or any supplement including
the Series 1999-1 Supplement among BCI, the depositor and the trustee 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 this requirement or if no advance notice is required or no specific time
is stated for the notice, the Rating Agencies have received written notice of
the proposed action at least 10 days prior to the proposed effective date of
the action and either:
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 the 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
each Rating Agency shall have confirmed in writing to the
depositor, the servicer or the trustee that the 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.
"RECEIVABLES" means the receivables existing in or arising in the
Accounts.
"RECEIVABLES PURCHASE AGREEMENT" shall mean the Receivables Purchase
Agreement, dated as of January 1, 1994, between BCI, as seller, and the
depositor, as purchaser, and as
19
<PAGE>
amended by Amendment Number 1 dated as of January 1, 1997 and as otherwise
supplemented or amended from time to time.
"REMOVAL NOTICE" shall mean the notice given by the depositor 5
business days prior to the date on which Receivables in the Removed Accounts
shall cease to be transferred to the trust.
"REMOVED ACCOUNTS" shall mean any Accounts from which the depositor has
ceased to transfer newly originated Receivables to the trust and any Ineligible
Account which has been removed from the trust.
"REQUIRED INVESTOR PERCENTAGE" shall mean, with respect to the
Certificates, 104%; provided, however, that the depositor 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.
"REQUIRED POOL BALANCE" for any date shall mean an amount calculated as
of the end of any business day equal to:
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
the sum of the Available Subordinated Amount and the aggregate
available subordinated amounts for all other outstanding series as
of the end of that business day; minus
any amount on deposit in any reserve fund on that date, except
that, for Series 1997-1 and Series 1999-1, the amount for this
clause will equal the excess of the applicable reserve fund
required amount over the amount on deposit in the applicable
reserve fund.
"REQUIRED SUBORDINATED AMOUNT" means, as of any date of determination,
the sum of
(1) [5.82]% of the Invested Amount and
(2) the Incremental Subordinated Amount for the immediately
preceding Distribution Date or, if the date of determination
is a Distribution Date, for that 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 [3.75]% of the initial principal
amount of the Certificates plus the Incremental Subordinated
Amount for
20
<PAGE>
the immediately preceding Distribution Date or, if the date of
determination is a Distribution Date, for that date;
provided further, that upon the commencement of the Initial Amortization Period
or the Controlled Accumulation Period or if an Early Amortization Event occurs,
the Required Subordinated Amount for each date of determination after this
commencement 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 Controlled Accumulation Period or the day on which the Early Amortization
Event occurs.
"REQUIRED SUBORDINATION DRAW AMOUNT" shall mean the lesser of the
Deficiency Amount and the Available Subordinated Amount.
"RESERVE FUND" shall be an Eligible Account established and maintained
for the life of the Certificates for the benefit of Certificateholders in the
name of the Trustee and designated as the "Series 1999-1 Reserve Fund."
"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 that Distribution Date, after giving effect to any reduction
thereof on such Distribution Date.
"RETAINED INTEREST" shall mean the ownership interest in the trust
retained by the depositor and which is that portion of the trust not represented
by or allocated to the investors or the Variable Funding Interest.
"RETAINED PERCENTAGE" for any date of determination, means 100% minus
(1) when used with respect to Non-Principal Collections, the sum
of
the aggregate of the floating allocation percentages for each
outstanding series including the Certificates and
the Variable Funding Percentage for the date of determination
and
(2) when used with respect to principal collections, the sum of
the aggregate of the floating allocation percentages for each
outstanding series including the Certificates, if applicable
in its revolving period,
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
21
<PAGE>
the Variable Funding Percentage for this date of
determination, but in each case the Retained Percentage shall
not be less than 0%.
"REVOLVING PERIOD" shall mean the period beginning on ________, 1999
and ending on the earliest of:
(1) the Accumulation Period Commencement Date;
(2) the date the Trustee mails notice to the Certificateholders that
BCI has elected not to extend the Initial Principal Payment Date; and
(3) the business day immediately preceding the day on which an Early
Amortization Event occurs.
"SAU" means, with respect to a Receivable, that if that such Receivable
was originally secured by a security interest in an Eligible Product, that
Eligible Product has been sold and that Receivable has not been paid in full.
"SCHEDULED PAYMENT DATE" means the ____________ Distribution Date.
"SERIES 1999-1 AVAILABLE RETAINED COLLECTIONS" means, for any Deposit
Date, an amount equal to the product of the Available Retained Collections for
that day multiplied by a fraction, the numerator of which is the Available
Subordinated Amount and the denominator of which is the sum of the Available
Subordinated Amount and the aggregate available subordinated amounts for all
other outstanding series, in each case on that day.
"SERIES 1999-1 INVESTOR ALLOCATION PERCENTAGE" means, for any
Collection Period, the percentage obtained by dividing the Invested Amount as of
the last business day preceding that Collection Period by the sum of the
Invested Amount and the invested amounts for all other outstanding series on
that day.
"SERIES 1999-1 REQUIRED BALANCE" shall mean, with respect to any date,
the sum of the Required Investor Percentage of the Adjusted Invested Amount and
the Available Subordinated Amount.
"SERIES 1999-1 TERMINATION DATE" shall mean the earlier to occur of the
date on which the outstanding principal balance of each class of the
Certificates has been reduced to zero or the _________ Distribution Date.
"SERVICER" shall mean the servicer of the Receivables pursuant to the
Pooling and Servicing Agreement, initially BCI.
"SERVICER DEFAULT" refers to any of the following events:
22
<PAGE>
(1) failure by the Servicer to make any payment, transfer or deposit
into the trust, or into any account created for a series of certificates 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 this failure;
(2) 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 60 days after written notice to it; provided, however, that a Servicer
Default shall not be deemed to have occurred if the depositor or the Servicer
shall have repurchased the related Receivables or, if applicable, all the
Receivables during this period in accordance with the terms and provisions of
the Pooling and Servicing Agreement or 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;
(3) 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 the
depositor shall have repurchased the related Receivables or, if applicable, all
the Receivables during this period in accordance with the provisions of the
Pooling and Servicing Agreement; or
(4) 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 (1) 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 this delay or failure) referred to under clauses (2) or (3)
for a period of up to 60 business days, shall not constitute a Servicer Default
if this delay or failure or continuance was caused by an act of God or other
similar occurrence.
"SUPPLEMENTAL CERTIFICATE" shall mean a certificate issued in exchange
for a portion of the BCRC Certificate.
23
<PAGE>
"TELERATE PAGE 3750" shall mean the display page currently so
designated on the Dow Jones Telerate Service, or any other page as may replace
that page on that service for the purpose of displaying comparable rates or
prices.
"TERMS AND CONDITIONS" shall mean the Terms and Conditions Governing
Use of the Euroclear System and the related Operating Procedures of the
Euroclear System and applicable Belgian law.
"TRANSFER DATE" shall mean each business day on which Receivables are
created in the Eligible Accounts provided that such date is prior to the
earliest of the day following the Distribution Date on which the aggregate
invested amounts for all series is zero, the day on which a Liquidation Event
occurs or the day on which an Early Amortization Event occurs as a result of
the violation by the depositor of 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.
"TRANSFER DEPOSIT AMOUNT" shall mean the amount by which the Pool
Balance would be less than the Required Pool Balance as a result of the
reduction in the Pool Balance due to the retransfer of Receivables from the
trust to the depositor.
"TRUSTEE" shall mean Bankers Trust Company or any successor appointed
as trustee under the Pooling and Servicing Agreement.
"VARIABLE FUNDING CERTIFICATE" means the certificate representing the
Variable Funding Interest.
"VARIABLE FUNDING INTEREST" shall mean the excess, if any, of the Pool
Balance over the Required Pool Balance.
"VARIABLE FUNDING PERCENTAGE" for any date of determination, means a
percentage (which percentage shall never be less than 0% nor more than 100%)
equal to the excess, if any, of the Pool Balance over the Required Pool Balance
as of that day divided by the Pool Balance as of the close of business on the
day preceding that 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 excess, if
any, of the Pool Balance over the Required Pool Balance as of the last day
immediately preceding the date of this 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.
24
<PAGE>
$320,339,000
Bombardier Receivables Master Trust I
Floating Rate Asset Backed Certificates,
Class A
Class B
Series 1999-1
[Bombardier Capital Logo]
Bombardier Credit Receivables Corporation
Depositor
Bombardier Capital Inc.
Servicer
---------------------------
PROSPECTUS
---------------------------
J.P. Morgan & Co. [Underwriter]
You should rely on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information.
We are not offering these Certificates in any state where the offer is
not permitted.
We represent the accuracy of the information in this prospectus only as
of the date stated on its cover.
Dealers will be required to deliver a prospectus when acting as
underwriters of these Certificates and with respect to their unsold allotments
or subscriptions. In addition, all dealers selling these Certificates will
deliver a prospectus until__________.
____________, 1999
<PAGE>
PART II
Information Not Required in Prospectus
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses in connection with the offering of the Certificates being
registered hereunder, other than underwriting discounts and commissions are
estimated as follows:
<TABLE>
<S> <C>
SEC Registration Fee................................................... $ *
Printing and Engraving................................................. $
Legal Fees and Expenses................................................ $
Trustee Fees and Expenses.............................................. $
Blue Sky Fees and Expenses............................................. $
Rating Agency Fees..................................................... $
Accounting Fees and Expenses........................................... $
Miscellaneous.......................................................... $
----------
Total......................................................... $
==========
</TABLE>
- -----------------------
* Actual
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VII 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 and 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 Delaware corporations 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 two Series of asset backed certificates in
transactions exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) of the Securities Act. On May 14, 1996, the Registrant
sold by private placement to an institutional investor $100,000,000 initial
principal amount of Class A Certificates, Series 1996-1. On December 12, 1997,
the Registrant sold by private placement to an institutional investor
$50,000,000 initial principal amount of Class A Certificates, Series 1997-2.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<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 Amendment No. 1 to Pooling and Servicing Agreement
4.3 Amendment No. 2 to Pooling and Servicing Agreement*
4.4 Amendment No. 3 to the Pooling and Servicing Agreement*
4.5 Form of Series 1999-1 Supplement*
4.6 Variable Funding Supplement
4.7 Amendment No. 1 to Variable Funding Supplement*
4.8 Receivables Purchase Agreement
4.9 Amendment No. 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)
23.2 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 8.1)
24.1 Power of Attorney (included on Page II-4)**
</TABLE>
- ---------
* To be filed by amendment.
** 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 a registration statement in reliance upon Rule 430A and
contained in the 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 and 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 and Co-Registrant have each duly caused Amendment No. 2 to this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the town of Colchester, State of Vermont, on the 14th day of
October, 1999.
BOMBARDIER CREDIT RECEIVABLES CORPORATION
By /s/ George W. Calver
-------------------------------------
Name: George W. Calver
Title: President
BOMBARDIER CAPITAL INC., as Servicer
on behalf of the Trust
By /s/ George W. Calver
-------------------------------------
Name: George W. Calver
Title: President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 2 to Registration Statement has been signed by the following
persons for Bombardier Credit Receivables Corporation in the capacities
indicated, on the day of October, 1999.
<TABLE>
<CAPTION>
Signatures Title
---------- -----
<S> <C>
/s/ George W. Calver
- ------------------------------------------- President (Principal Executive Officer)
George W. Calver
/s/ James Dolan
- ------------------------------------------- Treasurer (Principal Financial and Accounting
James Dolan Officer)
- ------------------------------------------- Director
Pierre-Andre Roy
R. William Crowe*
- ------------------------------------------- Director
R. William Crowe
Blaine Filthaut*
- ------------------------------------------- Director
Blaine Filthaut
- ------------------------------------------- Director
Frank C. Killackey
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C>
Margaret L. Montgomery*
- ------------------------------------------- Director
Margaret L. Montgomery
- ------------------------------------------- Director
Helen C. Rowan
Donald L. Rushford*
- ------------------------------------------- Director
Donald L. Rushford
*BY: /s/ George W. Calver
- -------------------------------------------
George W. Calver
Attorney-in-Fact
</TABLE>
Note: Power of Attorney appointing George Calver 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.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints George W. Calver and James Dolan, and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for and in his or her own name, place
and stead, in any and all capacities to sign any or all amendments (including
post-effective amendments) to this Registration Statement and any or all other
documents in connection therewith, and to file the same, with all exhibits
thereto, with the Securities and Exchange Commission, granting unto each said
attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection with
such matters, as fully to all intents and purposes as he or she might or could
do in person, and hereby ratifying and confirming all that each said attorney-
in-fact and agent or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 2 to Registration Statement has been signed by the following
persons for Bombardier Capital Inc., as Servicer on behalf of the Trust in the
capacities indicated, on the day of October 1999.
<TABLE>
<CAPTION>
Signatures Title
---------- -----
<S> <C>
/s/ George W. Calver President (Principal Executive Officer)
- -------------------------------------------
George W. Calver
/s/ James Dolan Treasurer (Principal Financial and Accounting
- ------------------------------------------- Officer)
James Dolan
/s/ Pierre-Andre Roy
- ------------------------------------------- Director
Pierre-Andre Roy
/s/ R. William Crowe
- ------------------------------------------- Director
R. William Crowe
/s/ Blaine Filthaut
- ------------------------------------------- Director
Blaine Filthaut
/s/ Frank C. Killackey
- ------------------------------------------- Director
Frank C. Killackey
/s/ Helen C. Rowan
- ------------------------------------------- Director
Helen C. Rowan
</TABLE>
II-4
STATEMENT OF DIFFERENCES
------------------------
The registered trademark symbol shall be expressed as.................. 'r'
The section symbol shall be expressed as............................... 'SS'
<PAGE>
EXECUTION COPY
================================================================================
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>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
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
</TABLE>
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<TABLE>
<S> <C> <C>
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
</TABLE>
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<TABLE>
<S> <C> <C>
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
</TABLE>
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<TABLE>
<S> <C> <C>
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
</TABLE>
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<TABLE>
<S> <C> <C>
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
</TABLE>
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<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
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
<CAPTION>
SCHEDULES
<S> <C>
Schedule 1 List of Accounts
Schedule 2 Collection Account Information
</TABLE>
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>
'SS' 1.01
"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.
2
<PAGE>
'SS' 1.01
"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>
'SS' 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>
'SS' 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>
'SS' 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.
"Early Amortization Event" shall have the meaning specified in
Section 9.01
6
<PAGE>
'SS' 1.01
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 depository institution or trust company shall
have a credit rating from each Rating Agency in one
7
<PAGE>
'SS' 1.01
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;
(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;
8
<PAGE>
'SS' 1.01
(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;
(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);
9
<PAGE>
'SS' 1.01
(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;
(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
10
<PAGE>
'SS' 1.01
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 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.
11
<PAGE>
'SS' 1.01
"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.
"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
12
<PAGE>
'SS' 1.01
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.
"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.
13
<PAGE>
'SS' 1.01
"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.
"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
14
<PAGE>
'SS' 1.01
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.
"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.
15
<PAGE>
'SS' 1.01
"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.
"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.
16
<PAGE>
'SS' 1.01
"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;
(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;
17
<PAGE>
'SS' 1.01
(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.
"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
18
<PAGE>
'SS' 1.01
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.
"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.
19
<PAGE>
'SS' 1.01
"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 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
20
<PAGE>
'SS' 1.01
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.
"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.
21
<PAGE>
'SS' 1.01
"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.
"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.
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<PAGE>
'SS' 1.01
"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 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.
23
<PAGE>
'SS' 1.02
(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 femi nine 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 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
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'SS' 2.01
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 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
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<PAGE>
'SS' 2.01
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 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
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'SS' 2.03
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.
(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
27
<PAGE>
'SS' 2.03
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.
(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
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<PAGE>
'SS' 2.03
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 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'
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<PAGE>
'SS' 2.03
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 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.
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'SS' 2.04
(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.
(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,
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'SS' 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 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
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<PAGE>
'SS' 2.04
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 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
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'SS' 2.05
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;
(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;
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<PAGE>
'SS' 2.05
(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 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
35
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'SS' 2.06
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 with which would have a materially
adverse effect on the interests of the Beneficiaries.
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<PAGE>
'SS' 2.06
(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;
(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
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'SS' 2.06
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 Agencies at least ten (10) days'
prior notice and the Rating Agency Condition shall have been satisfied
with respect thereto.
38
<PAGE>
'SS' 2.06
(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.
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
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<PAGE>
'SS' 2.07
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
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.
40
<PAGE>
'SS' 2.07
(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
(v) on each Business Day from and after the Removal
Commencement Date
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<PAGE>
'SS' 2.08
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.
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<PAGE>
'SS' 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
43
<PAGE>
'SS' 3.01
delinquency of any Receivable and to the extent permitted under and in
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>
'SS' 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
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'SS' 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.
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'SS' 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, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist
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'SS' 3.03
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 instruments of transfer or assignment and take such other
actions as shall be reasonably requested by the Servicer to
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'SS' 3.03
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.
SECTION 3.07. Tax Treatment. The Depositor has entered into this
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'SS' 3.07
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.
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'SS' 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
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'SS' 4.02
possess all right, title and interest in all funds from time to time on deposit
in, and all 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
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'SS' 4.03
as (i) BCI remains the Servicer hereunder, (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 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
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'SS' 4.03
in the related Supplement or Supplements.
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
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'SS' 5.01
applicable Supplement.
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
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'SS' 6.02
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 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;
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'SS' 6.03
(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 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
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'SS' 6.03
(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.
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
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'SS' 6.04
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.
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
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'SS' 6.04
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.
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
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'SS' 6.04
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.
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
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'SS' 6.05
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 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
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'SS' 6.07
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 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.
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'SS' 6.08
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 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,
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'SS' 6.11
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 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
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'SS' 6.11
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.
(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
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'SS' 6.12
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 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.
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'SS' 6.12
(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 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
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'SS' 7.02
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, 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
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this Agreement. Any indemnification under this Article VII shall survive the
termination of this Agreement.
ARTICLE VIII
Other Matters Relating
to the Servicer
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,
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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 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
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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.
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.
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ARTICLE IX
Early Amortization Events
SECTION 9.01. Early Amortization Events. If any one of the
following events shall occur:
(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
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'SS' 9.01
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 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
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'SS' 9.01
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 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
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'SS' 9.02
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 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
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'SS' 10.01
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;
(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
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'SS' 10.01
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
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
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'SS' 10.01
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.
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
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'SS' 10.02
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 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
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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 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.
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(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.
(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
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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;
(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
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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 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
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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 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
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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 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.
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(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.
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;
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(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, 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
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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,
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
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(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.
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,
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'SS' 12.02
(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 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
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'SS' 12.02
(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 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
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'SS' 13.01
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:
(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
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'SS' 13.01
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
Certificateholder 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 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
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'SS' 13.02
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 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
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'SS' 13.03
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 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
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'SS' 13.06
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.
(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
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'SS' 13.09
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 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
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'SS' 13.15
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.
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
_______________________________
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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
_______________________________
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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.
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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
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<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 or more new Series, which will represent fractional undivided
interests in certain of the Trust
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<PAGE>
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 written instrument of transfer in
form satisfactory to the Trustee or the Transfer Agent and
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<PAGE>
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 assigned to the Trust pursuant to
this Assignment for the benefit of the Certificateholders and
B-2
<PAGE>
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;
(e) Selection Procedures. No selection procedures reasonably believed
by the Depositor to be adverse to the interests of the Beneficiaries were
utilized in selecting
B-3
<PAGE>
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;
(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
B-4
<PAGE>
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.
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:
B-5
<PAGE>
(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
C-1
<PAGE>
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."]
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
administrative 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: ____________________(1) [Morgan Guaranty Trust Company of 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
F-2-1
<PAGE>
AND SERVICING AGREEMENT REFERRED TO 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,
its possessions and
F-3-1
<PAGE>
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: _______________(1) By: ________________________________
As, or as agent for, the beneficial
owner(s) of the interest in the
Certificates to which this certificate
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 schedule D in such offices, and the filing of
continuation statements, no filing or other action
- --------
(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>
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
H-1-1
<PAGE>
the Removal Date, the Depositor shall furnish to the Trustee, any 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 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
H-1-2
<PAGE>
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 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
H-1-3
<PAGE>
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 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
H-2-1
<PAGE>
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 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
H-2-2
<PAGE>
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 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>
EXECUTION COPY
- --------------------------------------------------------------------------------
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
<TABLE>
<CAPTION>
Page
----
ARTICLE I
Definitions
<S> <C> <C>
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
SECTION 2.03. Amendment to Sections of the Definition of Eligible
Receivables................................................................. 3
ARTICLE III
Delayed Amendments to Definitions
SECTION 3.01. Effective Date.............................................................. 5
SECTION 3.02. Amendments.................................................................. 5
ARTICLE IV
Current Amendments Relating to Conveyance of Receivables
and Representations and Warranties of the Depositor
SECTION 4.01. Amendment Relating to Receivables Removed from the Trust.................... 14
SECTION 4.02. Amendment Relating to Record of Accounts.................................... 15
SECTION 4.03. Amendment Relating to Representation Concerning Security
Interests................................................................... 15
ARTICLE V
Current Amendments Relating to Addition of Accounts
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
SECTION 5.01. Covenant Not to Add Other Account Receivables............................... 15
ARTICLE VI
Delayed Amendment Relating to Addition of Accounts.
SECTION 6.01. Amendment of Provisions Relating to Additional Accounts..................... 16
SECTION 6.02. Amendments Relating to Permitted Liens and Activities of
the Depositor............................................................... 20
ARTICLE VII
Current Amendment to Covenants Concerning
Activities of the Depositor
SECTION 7.01. Amendments Relating to Depositor Covenants.................................. 21
ARTICLE VIII
Delayed Amendment Relating to Discount Option
SECTION 8.01. Amendment of Provision Relating to Discount Option.......................... 22
ARTICLE IX
Current Amendment Relating to Removal of Accounts
SECTION 9.01. Amendment Relating to Removal of Accounts................................... 22
SECTION 9.02. Amendment Relating to Removal of Ineligible Accounts........................ 24
ARTICLE X
Delayed Amendments Relating to Removal of
Participation Interests and Receivables
SECTION 10.01. Amendment Relating to Removal of Participation Interests.................... 24
SECTION 10.02. Removal of Receivables for Assignment to Third Parties and
Removal of Aged Receivables................................................. 26
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
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<S> <C> <C>
ARTICLE XI
Delayed Amendment Relating to
Servicing of the Receivables
SECTION 11.01. Amendment relating to Charge-Offs........................................... 27
SECTION 11.02. Amendment Relating to Delegation of Servicing Functions..................... 27
SECTION 11.03. Amendment Relating to Representation Relating to Liens...................... 27
ARTICLE XII
Current Amendment Relating to Allocation of Collections
SECTION 12.01. Amendment Relating to the Allocation of Collections......................... 28
ARTICLE XIII
Delayed Amendments Relating to Collections
SECTION 13.01. Amendment of Provisions Relating to Collections............................. 29
SECTION 13.02. Provisions Relating to Allocation Among Series.............................. 30
ARTICLE XIV
Delayed Amendment Relating to Delegation
SECTION 14.01. Amendment Relating to Delegation............................................ 31
ARTICLE XV
Current Amendments Relating to Amendments
SECTION 15.01. Current Amendment Relating to Amendments Procedures......................... 31
ARTICLE XVI
Delayed Amendments Relating to Amendment Procedures
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 16.01. Amendment Relating to Amendment Procedures.................................. 32
SECTION 16.02. Amendment Relating to Rating Agency Condition............................... 33
ARTICLE XVII
Current Amendments Relating to Exhibits
SECTION 17.01. Amendments to Exhibit H-1................................................... 33
SECTION 17.02. Amendments to Exhibit H-2................................................... 33
ARTICLE XVIII
Delayed Amendments Relating to Exhibits
SECTION 18.01. Amendments to Exhibit A..................................................... 34
SECTION 18.02. Amendments to Exhibit C..................................................... 35
SECTION 18.03. Amendments to Exhibit G-2................................................... 35
ARTICLE XIX
Miscellaneous
SECTION 19.01. Current Amendment Relating to Place of Business and
Notice...................................................................... 36
SECTION 19.02. Counterparts................................................................ 36
SECTION 19.03. Headings.................................................................... 36
</TABLE>
iv
<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 on 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, V, VII, IX, XII, XV, XVII and XIX shall be on 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 Articles of this Amendment shall be on the date after the Series 1994-1
Final Payment Date.
<PAGE>
"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.
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 on the date 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, in each case, as of the Effective Date
applicable to this Article as stated in Section 2.01 above.
"Account" shall mean each Initial Account and, from and after
the related Addition Date, each Additional Account. The Term "Account" shall
not, after the applicable Removal Termination Date, apply to any Removed
Accounts or Ineligible Accounts reassigned or assigned to the Depositor or the
Servicer in accordance with the terms of this Agreement provided that Accounts
which are being removed under the provisions of Section 2.07 or Section 2.08
shall continue to be included as Accounts until the Removal Termination Date
with respect to such Accounts.
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"Designated Balance" shall have the meaning specified in
Section 2.07(b)(vii) hereof.
"Origination Period" shall mean a four-month period commencing
June 1, October 1 or February 1.
"Rating Agency Condition" shall mean, with respect to any
action, if the terms of the Agreement or any 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) hereof.
"Removal Termination Date" shall have the meaning specified in
Section 2.07(b) or 2.08(b) 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) in effect from
time to time (including as supplemented, amended, modified or replaced from time
to time) relating to Eligible Products which have been financed with advances
giving rise to 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. Amendment to Sections of the Definition of
Eligible Receivables. The definition of Eligible Receivable contained in 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 by revising subsections (b) and (c) of such definition to
read in their entirety as follows:
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(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;
In addition, the definition of Eligible Receivable 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 by revising
the proviso at the end of such definition to read in its entirety as follows:
provided, however, that "Eligible Receivables" shall not include any
Domestic Inventory Receivables (i) that have not been paid in full
within 491 days following the origination thereof, subject, however, to
the limitation that, for the period from January 23, 1997 through May
31, 1998, with respect to Domestic Inventory Receivables included in
the Pool Balance on January 23, 1997, no more than 10% of the aggregate
principal balance of such Domestic Inventory Receivables will be
excluded from Eligible Receivables pursuant to this proviso, and
subject further to the limitation that, with respect to each
Origination Period commencing on or after June 1, 1998, 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; (ii) 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
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, (iii) 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 (iv) 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.
SECTION 2.04. 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 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) which the Servicer has determined to be uncollectible, (y) all
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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 in the ordinary
course of business with an Obligor pursuant to an Inventory Security Agreement
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 Period with respect to
which the Available Subordinated Amount is zero for the Distribution Date
occurring in such Collection Period.
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"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 a 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 for any reason, the security interest with respect to
such Receivable shall no longer be part of the Collateral Security held by the
Trust.
"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 shall also
include amounts received by BCRC in connection with the sale, assignment or
transfer of Receivables to a third-party lender pursuant to Section 2.12.
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 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
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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, for 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, 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 any Receivables therein may have been assigned to a third party or
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
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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,
motors 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 (z) 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;
(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
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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;
(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 related loan agreement pursuant to which the Account was
created 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 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 related loan agreement 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;
(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
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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, to the
limitation that, for the period from January 23, 1997 through May 31,
1998, with respect to Domestic Inventory Receivables included in the
Pool Balance on January 23, 1997, no more than 10% of the aggregate
principal balance of such Domestic Inventory Receivables will be
excluded from Eligible Receivables pursuant to this proviso, and
subject further to the limitation that, with respect to each
Origination Period commencing on or after June 1, 1998, 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;
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.
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"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 or in the case of Receivables which have been removed from the Trust
pursuant to Section 2.12 for purposes of the sale, assignment or transfer to a
third-party lender 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 and with respect to which the Servicer has
given notice to each Rating Agency describing such subordinate security interest
and the dollar amounts secured thereby, shall not be deemed to constitute a
Lien.
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"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 (i) 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.
"Participation Agreement" shall mean an agreement pursuant to
which BCI or an Affiliate of BCI or BCRC, 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 or BCRC, as applicable, except that BCI or such Affiliate of
BCI will retain the servicing rights with respect to such credit arrangement;
provided that the form of such agreement pursuant to which such undivided
interest has been or will be conveyed to a lender has been submitted to the
Rating Agencies and the Depositor, the Servicer or the Trustee shall have
received a letter from each Rating Agency confirming that use of an agreement in
such form shall not result in a reduction or withdrawal of any rating of any
Series or Class with respect to which it is a Rating Agency. An agreement
pursuant to which an interest described above in this definition is conveyed 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 so long
as the condition referred to above with respect to the Rating Agencies regarding
the form of such agreement is satisfied prior to the designation of the Account
to be included in the Trust. A Participation Agreement may be entered into with
respect to an Account which is included in the Trust provided the Participation
Interest is removed from the Trust in accordance with the terms of Section 2.11
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.
"Participation Interest Removal Date" shall have the meaning
specified in Section 2.11 of this Agreement.
"Participation Removal Notice" shall have the meaning
specified in Section 2.11 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
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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 or in
Ineligible 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. If a Participation Interest exists in respect of any of
such Defaulted Receivables, any amounts described in this definition of
"Recoveries" which are allocable to such Participation Interest shall not be
included as "Recoveries."
"Removed Participation Interest" shall have the meaning
specified in Section 2.11 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, plus (ii) the Pool Available
Subordinated Amount at the end of such Business 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 calculated as provided in the Supplement pursuant
to which such reserve fund was created.
"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%.
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"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 for such day divided by the
Pool Balance as of the close of business on the immediately 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 Conveyance of Receivables
--------------------------------------------------------
and Representations and Warranties of the Depositor
---------------------------------------------------
SECTION 4.01. Amendment Relating to Receivables Removed from
the Trust. The second sentence of Section 2.01 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:
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 Beneficiaries, all of its
right, title and interest in, to and under the Receivables in
each such Eligible Account (other than any (x) Receivables
created in a Removed Account or Ineligible Account after the
applicable Removal Commencement Date as provided in Section
2.07 or 2.08 or (y) Participation Interests in Receivables in
such Eligible Account that have been transferred to third
parties) 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).
SECTION 4.02. Amendment Relating to Record of Accounts.
Section 2.03 (i) 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:
(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
Termination Date, in the case of Removed Accounts and
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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 or the applicable Additional
Cut-Off Date 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 or such Removal Termination Date, as
the case may be.
SECTION 4.03. Amendment Relating to Representation Concerning
Security Interests. Section 2.04 (a) (vii) 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:
(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 and each
Asset-Based Receivable is at the time of transfer to the Trust
secured by a first priority perfected security interest in
accounts, goods, work in process, raw materials, component
parts or other rights or assets of the Obligor;
ARTICLE V
Current Amendments Relating to Addition of Accounts
---------------------------------------------------
SECTION 5.01. 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.
SECTION 5.02. Amendment Relating to Contribution of
Receivables to the Depositor. In Section 2.05 (a) of the Original Agreement, the
provision which reads "the Depositor shall be required to purchase from BCI
under the Receivables Purchase Agreement (but BCI shall have no obligation to
sell to BCRC)" 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 as follows:
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).
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ARTICLE VI
Delayed Amendment Relating to Addition of Accounts.
SECTION 6.01. 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 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
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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 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 (C) 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;
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(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
(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
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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.
(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 three 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 on the applicable Addition Dates pursuant to the Automatic
Addition Condition since the time of delivery of the immediately
preceding Opinion of Counsel delivered under this Section 2.05
provided, that if such opinion has previously been delivered, the
Opinion of Counsel required periodically hereby, may be a bring-down
opinion rather than in the form of Exhibit G-2; and provided further,
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.
(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 6.02. Amendments Relating to Permitted Liens and
Activities of the Depositor. Section 2.06(a), 2.06(c) 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 of Receivables,
the Collateral Security and other associated rights removed from the
Trust in accordance with the provisions of Section 2.12 of this
Agreement and (v) tax and certain other statutory liens (including
liens in favor of the Pension Benefit Guaranty Corporation),
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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 may be necessary or desirable to preserve
the Trust's perfected security interest in the Receivables.
Section 2.06 (c) is amended to read:
(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 Asset-Based Receivables will
be deemed to be received by BCI upon receipt by such Affiliates.
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;
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ARTICLE VII
Current Amendment to Covenants Concerning Activities of the Depositor
SECTION 7.01. 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 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 VIII
Delayed Amendment Relating to Discount Option
SECTION 8.01. Amendment of Provision Relating to Discount
Option. Section 2.10 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:
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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 IX
Current Amendment Relating to Removal of Accounts
SECTION 9.01. Amendment Relating to Removal of Accounts.
Section 2.07 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 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 the Trust in
the manner prescribed in subsection (b) of this Section 2.07.
(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:
(i) 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 and the Accounts to be removed
(the "Removed Accounts");
(ii) from and after such Removal Commencement 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 shall not, in the reasonable belief of the
Depositor (or the Servicer on behalf of the
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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
Removed 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 Commencement
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) 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");
(viii) from and after the Removal Commencement Date
with respect to any Removed Account to be removed, allocate
Principal Collections in 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
(ix) 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.
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(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 H-1 hereto (the "Reassignment").
SECTION 9.02. Amendment Relating to Removal of Ineligible
Accounts. Subsection 2.08(b)(ii) of Section 2.08 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:
(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 (iv) and (v) of this Section 2.08(b);
ARTICLE X
Delayed Amendments Relating to Removal of Participation Interests
and Receivables
SECTION 10.01. 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 2.11 which shall read in
its entirety, as follows:
SECTION 2.11. Removal of Participation Interests. (a) Subject
to the terms and conditions of this Section 2.11, the Depositor shall
have the right to require the reassignment to it or its designee of an
undivided interest in designated Receivables (and the related
Collateral Security and other rights associated therewith) from the
Trust for the purpose of conveying such undivided interest in the form
of a Participation Interest (a "Removed Participation Interest") to a
third party.
(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
date on which removal of the Removed Participation Interest
will occur (a "Participation Interest Removal Date"), furnish
to the Trustee, any Enhancement Providers and the Rating
Agencies a written notice (the "Participation Removal Notice")
specifying the Participation Interest Removal Date;
(ii) represent and warrant that the removal of any
such Participation Interest on any Participation Interest
Removal Date shall not, in the reasonable belief of the
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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 or Receivables from which the Participation Interest
is 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 Participation Interest
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 Interest 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 exists or with respect to which
such Removed Participation Interest has been granted, (y) as
of the date of the Participation Removal Notice, the aggregate
amount of Principal Receivables outstanding in the Account
from which the Removed Participation Interest is 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 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 2.11, 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 Interest Removal Date, the Removed
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 has not been removed shall continue as "Receivables."
SECTION 10.02. 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 2.12 which shall read in its entirety, as follows:
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SECTION 2.12. 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 (and the related
Collateral Security and other rights associated therewith) from the
Trust if such Receivables either:
(i) are removed for the purpose of selling, assigning
or transferring directly or indirectly such Receivables to a
lender other than BCRC, BCI or an Affiliate of BCI (a
"third-party lender"); 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 (A) at any time during the
period from January 23, 1997 through May 31, 1998, are
Domestic Inventory Receivables which were included in the Pool
Balance on January 23, 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 23, 1997 and (B) 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 the
commencement of such Origination 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 the commencement of such
Origination Period.
(b) Each removal of Receivables pursuant to this Section 2.12
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 at least 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 2.12 if, in
the reasonable belief of the Depositor, such removal would cause an
Early Amortization Event to occur.
(d) The Depositor's right to remove aged Receivables as
described in clause (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.
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ARTICLE XI
Delayed Amendment Relating to Servicing of the Receivables
SECTION 11.01. Amendment relating to Charge-Offs. The first
sentence of Section 3.01(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 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.
SECTION 11.02. Amendment Relating to Delegation of Servicing
Functions. Section 3.01(a)(v) and all of the following provisions through the
end of such Section 3.01(a) are 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 11.03. Amendment Relating to Representation Relating
to Liens. Section 3.03 (a) (xi) is hereby amended, effective on the day after
the Series 1994-1 Final Payment Date, to read, in its entirety, as follows:
(xi) Negative Pledge. Except for the conveyances
under the Receivables Purchase Agreement and under this
Agreement and encumbrances, sales, assignments, 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,
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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, upon and after the Effective Date of the amendment
set forth in Article XIII of this Amendment, follow subsection (e) of such
Section 4.03. 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 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 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.
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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 Article 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 contrary, unless otherwise stated in any
Supplement, the
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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.
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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 on 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 Certif icate) 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 Providers, any Rating Agency, or any other person,
amend Section 2.07 hereof to conform to the terms of such section as
set forth in the Agreement prior to the amendment thereof by
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Amendment Number 1 to the Pooling and Servicing Agreement dated as of
January 1, 1997 (and make any other conforming changes to other
applicable provisions of the Agreement and any Exhibit hereto which
were amended to conform to the Amendment made to Section 2.07 by such
Amendment Number 1); provided that as a condition to such amendment,
BCI shall deliver to the Trustee a written statement to the effect that
at the time of such amendment the terms of Section 2.07 (as so amended)
will, under generally accepted accounting principles, be consistent
with sale treatment afforded the transfer of 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 materially adversely 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,
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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.
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
Current Amendments Relating to Exhibits
SECTION 17.01. Amendments to Exhibit H-1. Exhibit H-1 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 set forth in Exhibit A to this Amendment.
SECTION 17.02. Amendments to Exhibit H-2. Paragraph 6 in
Exhibit H-2 to 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:
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 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.
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ARTICLE XVIII
Delayed Amendments Relating to Exhibits
SECTION 18.01. 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 18.01, 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 which loans are made or acquired
by BCI or an Affiliate of BCI 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.
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 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.
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SECTION 18.02. 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 18.02.
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 18.03. 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 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 to 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 this
Exhibit G-2.
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ARTICLE XIX
Miscellaneous
SECTION 19.01. Current Amendment Relating to 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 19.02. 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 19.03. Headings. The headings herein are for purposes
of reference only and shall not otherwise affect the meaning or interpretation
or any provision hereof.
SECTION 19.04. 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 19.05. 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.
36
<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 23, 1997.
BOMBARDIER CREDIT RECEIVABLES
CORPORATION, Depositor
By: /s/ Blaine Filthaut
-------------------------------------
Name: Blaine Filthaut
Title: Vice President and Treasurer
By: /s/ Andrew Baranowsky
-------------------------------------
Name: Andrew Baranowsky
Title: Assistant Treasurer
BOMBARDIER CAPITAL INC., Servicer
By: /s/ Blaine Filthaut
-------------------------------------
Name: Blaine Filthaut
Title: Vice President and Treasurer
By: /s/ Andrew Baranowsky
-------------------------------------
Name: Andrew Baranowsky
Title: Assistant Treasurer
BANKERS TRUST COMPANY, Trustee
By: /s/ Lillian K. Peros
-----------------------------------
Name: Lillian K. Peros
----------------------------
Title: Asst. Vice President
----------------------------
37
<PAGE>
EXHIBIT A
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.
H-1-1
<PAGE>
2. Notice of Removed Accounts. (a) Not less than five 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 which removal of the Receivables of one or more Accounts
will begin, 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 written list of the Removed Accounts, specifying for
each Removed Account as of the day immediately preceding the Removal
Commencement Date its number and the aggregate amount outstanding in such
Removed Account and the aggregate outstanding principal balance 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 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 Removed
Accounts designated hereby, 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 Removed
Accounts and all proceeds thereof (as defined in Section 9-306 of the UCC as in
effect in the State of Vermont and Recoveries) related 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 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 Commencement Date:
H-1-2
<PAGE>
(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 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
Commencement 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 Commencement Date to the Trustee,
any Agent and any Enhancement Providers an Officers' Certificate certifying that
(i) as of the Removal Commencement 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,
created from time to time on and after the Removal Commencement Date 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
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
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,
H-1-3
<PAGE>
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 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 4.6
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
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
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
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....................................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>
i
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<TABLE>
<CAPTION>
<S> <C>
ARTICLE VII
Miscellaneous Provisions
SECTION 7.01. Ratification of Agreement...........................................................................7
SECTION 7.02. Counterparts........................................................................................7
SECTION 7.03. Governing Law.......................................................................................7
EXHIBITS
Exhibit A Form of Variable Funding Certificate
Exhibit B Form of Distribution Date Statement
</TABLE>
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.
"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,
1
<PAGE>
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.
(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".
2
<PAGE>
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.
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
3
<PAGE>
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.
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.
4
<PAGE>
(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.
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
5
<PAGE>
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 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
6
<PAGE>
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 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
7
<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.
8
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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
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
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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 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.
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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.
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EXECUTION COPY
================================================================================
BOMBARDIER CREDIT RECEIVABLES CORPORATION
Purchaser
and
BOMBARDIER CAPITAL INC.
Seller
RECEIVABLES PURCHASE AGREEMENT
Dated as of January 1, 1994
================================================================================
1
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Table of Contents
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ARTICLE I
Definitions
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
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SECTION 3.02. Servicing Compensation........................................................................ 13
ARTICLE IV
Rights of Certificateholders and
Allocation and Application of Collections
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
</TABLE>
ii
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SECTION 8.03. Limited Recourse.............................................................................. 17
SECTION 8.04. No Petition................................................................................... 18
SECTION 8.05. GOVERNING LAW................................................................................. 18
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>
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EXHIBITS AND SCHEDULES
<TABLE>
<S> <C>
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
</TABLE>
iv
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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".
<PAGE>
(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.
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.
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<PAGE>
(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 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
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<PAGE>
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.
(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
4
<PAGE>
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.
(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
5
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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 Servicing 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:
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(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.
(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
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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.
(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
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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;
(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
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(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 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
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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.
(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
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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
(vii) on or before the fifth Business Day after the Removal
Date, furnish to the
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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
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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 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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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.
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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 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.
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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 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
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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.
(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
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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 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
19
<PAGE>
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.
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.
20
<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
21
<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 and
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<PAGE>
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 Assignment, will it have been made
insolvent, nor is it aware of any pending
A-3
<PAGE>
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
Assignment 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.
(d) Officers' Certificate. The Seller shall have delivered
to the Purchaser an
A-5
<PAGE>
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
D-1-1
<PAGE>
prior to the 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 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>
EXECUTION COPY
================================================================================
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
<TABLE>
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ARTICLE I
Definitions
<S> <C> <C>
SECTION 1.01. Cross Reference to Definitions in the Pooling and Servicing
Agreement.....................................................................2
SECTION 1.02. Current Amendment to Add Defined Terms....................................................2
SECTION 1.03. Terms Confined to this Amendment..........................................................2
SECTION 1.04. Effective Dates...........................................................................3
ARTICLE II
Current Amendments Relating to Conveyance of Receivables
SECTION 2.01. General Amendment Relating to Contribution of Receivables.................................3
SECTION 2.02. Amendment Relating to Exclusion of Receivables in Accounts
Removed from the Trust........................................................4
SECTION 2.03. Amendment Relating to Purchase Price......................................................4
SECTION 2.04. Amendment Relating to Record of Accounts..................................................5
ARTICLE III
Amendments Relating to Representations and
Warranties and Removal of Accounts and Receivables
SECTION 3.01. Current Amendment to Representations and Warranties of the Seller
Relating to the Seller and the Agreement......................................5
SECTION 3.02. Delayed Amendment to Representations and Warranties of the Seller
Relating to the Receivables...................................................6
SECTION 3.03. Current Amendment Relating to Removal of Accounts.........................................6
SECTION 3.04. Delayed Amendment Relating to Removal of Participation
Interests....................................................................8
SECTION 3.05. Delayed Amendment Relating to Removal of Receivables for
Assignment to a Third Party..................................................9
ARTICLE IV
Delayed Amendments Relating to the Addition of Accounts
SECTION 4.01. Amendments Relating to the Automatic Addition of Accounts................................11
</TABLE>
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<TABLE>
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Page
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ARTICLE V
Delayed Amendments Relating to Covenants of the Seller
<S> <C> <C>
SECTION 5.01. Amendments Relating to Liens.............................................................11
SECTION 5.02. Amendments Relating to Delivery of Collections...........................................12
ARTICLE VI
Delayed Amendment Relating to Repurchase Agreements
SECTION 6.01. Addition of Provision Relating to Repurchase Agreements..................................12
ARTICLE VII
Current Amendment Relating to Amendments
SECTION 7.01. Amendment to Provisions Relating to Amendment of the
Receivables Purchase Agreement...............................................13
SECTION 7.02. Amendment to Provisions Relating to Consent of Enhancement Provider
to Amendment of the Receivables Purchase Agreement.............................14
SECTION 7.03. Amendments to Exhibit D-2................................................................14
ARTICLE VIII
Current Amendments to Exhibits
SECTION 8.01. Amendments to Exhibit A..................................................................15
SECTION 8.02. Amendments to Exhibit D-1................................................................15
ARTICLE IX
Miscellaneous
SECTION 9.01. Counterparts.............................................................................16
SECTION 9.02. Headings.................................................................................16
</TABLE>
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 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
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 to Pooling and Servicing
Agreement 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:
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<PAGE>
ARTICLE I
Definitions
SECTION 1.01. Cross Reference to Definitions in the Pooling
and Servicing Agreement. Except to the extent the context clearly indicates
otherwise, 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 Agreement, including the Amendment to Pooling and Servicing Agreement,
and in the Original Receivables Purchase Agreement together with any subsequent
amendments thereto.
SECTION 1.02. Current Amendment to Add Defined Terms. Article
I of the Original Receivables Purchase 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 by the addition of Section 1.03
which shall read, in its entirety, as follows:
SECTION 1.03. Certain Terms Defined. Whenever used in this
Receivables Purchase Agreement, the following words shall have the following
meanings:
"Minimum Equity Amount" shall mean, as of any date of
determination, the sum of (i) the product of (A) 0.045 and (B) the aggregate
amount of Principal Receivables held by the Trust on the immediately preceding
Distribution Date and (ii) the sum, without duplication, of (A) the Obligor
Overconcentrations, (B) the Manufacturer Overconcentrations and (C) the Industry
Overconcentrations (each as defined in the Series 1997-1 Supplement and
calculated as of the immediately preceding Distribution Date).
"Series 1997-1 Supplement" shall mean that Supplement dated as
of January 1, 1997 which sets forth the terms of a Series of Investor
Certificates designated as Series 1997-1.
SECTION 1.03. 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 Purchase Agreement set forth herein which are specified
herein as having an Effective Date on 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
2
<PAGE>
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 after 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 1.04. 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 Conveyance of Receivables
SECTION 2.01. General Amendment Relating to Contribution of
Receivables. The Original Receivables Purchase Agreement (including the Exhibits
thereto) is hereby amended and supplemented 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 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 and the Exhibits thereto refer only to
the sale of Receivables, wherever in the Original Receivables Purchase Agreement
or any Exhibit thereto there is a reference to a sale of Receivables by the
Seller to the Purchaser or the purchase of Receivables from the Seller, such
provision shall also be applicable to and shall provide for the transfer of
Receivables in the form of a contribution.
SECTION 2.02. Amendment Relating to Exclusion of Receivables
in Accounts Removed from the Trust. The second sentence of Section 2.01 of the
Original Receivables Purchase 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:
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 (x)
Receivables created in a Removed Account or Ineligible
3
<PAGE>
Account after the applicable Removal Commencement Date as provided in
Section 2.07 or 2.08 of the Pooling and Servicing Agreement or (y)
Participation Interests in Receivables in such Accounts that have been
transferred to third parties) 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 constitutes an absolute
conveyance; provided, however, that to the extent that notwithstanding
the intent of the parties, the Receivables are held to continue to be
property of the Seller, then this Agreement shall be deemed to be and
hereby is a security agreement within the meaning of Article 9 of the
UCC.
SECTION 2.03. Amendment Relating to Purchase Price. Section
2.01 (e) of the Original Receivables Purchase 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:
(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 (less, if then applicable, the amount of principal and
interest allocable to any Participation Interest) 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 (less, if
then applicable, the amount of principal and interest allocable to any
Participation Interest) 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 (less,
if then applicable, the amount of principal and interest allocable to
any Participation Interest) 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 (less, if then applicable, the amount of principal and
interest allocable to any Participation Interest). The consideration
paid with respect to transfers of Receivables hereunder subsequent to
the Closing Date may be paid, at the election of Purchaser, (a) in
cash, (b) by means of increasing the principal amount of the BCRC Note,
(c) by means of capital contributed by the Seller to the Purchaser in
the form of a contribution of such Receivables, or (d) any combination
of the foregoing; provided, however, that in no event shall the
principal amount of the BCRC Note be increased in connection with any
such transfer if, after giving effect to such increase, the equity of
the Purchaser (determined in accordance with generally accepted
accounting principles) would be less than the Minimum Equity Amount.
SECTION 2.04. Amendment Relating to Record of Accounts.
Section 2.02 (i) of the Original Receivables Purchase 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:
(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,
4
<PAGE>
as of the applicable Removal Termination Date, in the case of Removed
Accounts and 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 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 or such Removal Termination Date, as the case may be.
ARTICLE III
Amendments Relating to Representations and
Warranties and Removal of Accounts and 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
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:
(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 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 on 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, has been and 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 and each Asset-Based Receivable
conveyed to the Trust is at the time of such conveyance
secured by a first priority perfected security interest in
accounts, goods, work in progress, raw materials, component
parts or other rights or assets of the Obligor except to the
extent of Liens permitted by Section 2.06(a) of the Pooling
and Servicing Agreement.
5
<PAGE>
SECTION 3.03. Current Amendment Relating to Removal of
Accounts.Section 2.06 of the Original Receivables Purchase 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 2.06. Removal of Accounts. (a) If the
Depositor elects to exercise its right pursuant to Section 2.07 of the
Pooling and Servicing Agreement to cease transferring newly originated
Receivables to certain Accounts, 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 reacquire and remove such
Receivables from the operation of this Agreement in the manner
prescribed in Subsection (b) below, and on the related Removal
Termination Date, under Section 2.07(c) of the Pooling and Servicing
Agreement with respect to such Accounts, 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 and the
Receivables arising therein, 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 (the "Removal Commencement
Date") transferring to the Trust newly originated Receivables
in one or more Accounts which Accounts are specified in such
notice (the "Removed Accounts");
(ii) from and after such Removal Commencement 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 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 reasonably 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 Commencement
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
6
<PAGE>
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) 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 Termination 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 3.04. Delayed Amendment Relating to Removal of
Participation Interests. The Original Receivables Purchase Agreement is hereby
amended, effective on 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 undivided interest in a Receivable or in
Receivables (and the related Collateral Security and other rights
associated therewith) is removed from the Trust pursuant to Section
2.11 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.
(b) To accept such offer and remove undivided 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
date on which removal of the Participation Interest (the
"Removed Participation Interest") will occur (a "Participation
Interest Removal Date"), furnish to the Trustee, any
Enhancement Providers and the Rating Agencies a written notice
(the "Participation Removal Notice") specifying the date of
such Participation Interest Removal Date;
(ii) represent and warrant that the removal of any
such Participation 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 (or the Servicer
on its behalf) to be adverse to the interests of the
7
<PAGE>
Beneficiaries were utilized in selecting the Accounts or the
Receivables from which the Participation Interest is 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 Participation Interest
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 Interest 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 exists or with respect to which
such Removed Participation Interest has been granted, (y) as
of the date of the Participation Removal Notice, the aggregate
amount of Principal Receivables outstanding in the Account
from which the Removed Participation Interest is 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 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 2.09, 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 undivided interests in such Account
which have not been removed shall continue as "Receivables" subject to
the terms hereof and of the Trust.
SECTION 3.05. Delayed Amendment Relating to Removal of
Receivables for Assignment to a Third Party. The Original Receivables Purchase
Agreement is hereby amended, effective on 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.
(a) On each date on which a Receivable or Receivables are
withdrawn from the Trust (the "Removal Date") pursuant to Section
2.12(a)(i) 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 (and the related Collateral
Security and other rights associated therewith) from the operation of
this Agreement in the manner prescribed in subsection (b) below:
8
<PAGE>
(b) To accept such offer and remove such 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 outstanding
principal balance 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) and (v) of Section 2.04 (b) and Section 2.04 (d) of
the Original Receivables Purchase Agreement are hereby amended, effective on the
day after the Series 1994-1 Final Payment Date, to read in their entirety,
respectively, as follows:
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(b)(v) is hereby amended to read:
(v) (A) No selection procedures reasonably 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;
ARTICLE V
Delayed Amendments Relating to Covenants of the Seller
SECTION 5.01. Amendments Relating to Liens. Section 2.05(a) of
the Original Receivables Purchase Agreement is hereby amended, effective on the
day after the Series 1994-1 Final Payment Date, to read in its entirety, as
follows:
9
<PAGE>
(a) No Liens. Except for (i) the conveyances hereunder, (ii)
any Participation Interest 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.
SECTION 5.02. Amendments Relating to Delivery of Collections.
Section 2.05(d) of the Original Receivables Purchase Agreement is hereby
amended, effective on the day after the Series 1994-1 Final Payment Date, to
read in its entirety, as follows:
(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 Asset-Based Receivables
shall be deemed to be received by the Seller upon receipt by such
Affiliates.
ARTICLE VI
Delayed Amendment Relating to Repurchase Agreements
SECTION 6.01. Addition of Provision Relating to Repurchase
Agreements. The following new section shall, effective on the day after the
Series 1994-1 Final Payment Date, be added to Article II of the Receivables
Purchase Agreement:
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 only 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
10
<PAGE>
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 or a Participation Interest therein have been repurchased
or otherwise removed from the Trust and from this Agreement, to the
extent such Repurchase Agreement related to such removed Receivable or
Removed Participation Interest (and any related Collateral Security or
other associated rights), provided the Receivable or Removed
Participation Interest 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 or Removed Participation Interest (and any related
Collateral Security or other associated rights), 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 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 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 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) such amendment 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
materially adversely affect any other Series of Certificates and (ii)
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, without the consent of
any of the Certificateholders, any Enhancement Providers, any Rating
Agency or any other Person, amend Section 2.06 of this Agreement, at
any time, to conform to the terms of such Section as set forth in this
Agreement prior to the amendment thereof contained in Amendment Number
1 dated as of January 1, 1997 to the Receivables Purchase Agreement
(and make any other conforming changes to other applicable provisions
of this Receivables Purchase Agreement and any Exhibits hereto
11
<PAGE>
which were amended to conform to the amendments made to Section 2.06 by
such Amendment Number 1) if Section 2.07 of the Pooling and Servicing
Agreement is amended to conform to the terms of such section as set
forth in the Pooling and Servicing Agreement prior to the amendments
contained in Amendment Number 1 dated as of January 1, 1997 to the
Pooling and Servicing Agreement.
SECTION 7.02. Amendment to Provisions Relating to Consent of
Enhancement Provider to Amendment of the Receivables Purchase Agreement. Section
8.01(e) of the Original Receivables Purchase 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:
(e) Notwithstanding anything in this Section 8.01 to the
contrary, (except for amendments referred to in the last sentence of
Section 8.01(a) of this Agreement for which amendments no consent of
any Enhancement Provider shall be required) 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 7.03. Amendments to Exhibit D-2. Paragraph 6 in
Exhibit D-2 to the Original Receivables Purchase 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:
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 created from time to time until the Removal
Termination Date, have been satisfied, and (ii) 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.
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 on the
date 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:
12
<PAGE>
(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 on the
date of execution and delivery of this Amendment by all of the parties hereto as
specified on the signature page hereto to read in its entirety as set forth in
Exhibit A to this Amendment.
SECTION 8.03. Amendments to Exhibit D-2. Exhibit D-2 to the
Original Receivables Agreement is hereby amended, effective on the date of
execution and 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 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, 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.
13
<PAGE>
ARTICLE IX
Miscellaneous
SECTION 9.01. 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 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.
14
<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 23, 1997.
BOMBARDIER CREDIT RECEIVABLES
CORPORATION, Purchaser
By: /s/ Blaine Filthaut
-------------------------------------
Name: Blaine Filthaut
Title: Vice President and Treasurer
By: /s/ Andrew Baranowsky
-------------------------------------
Name: Andrew Baranowsky
Title: Assistant Treasurer
BOMBARDIER CAPITAL INC., Seller
By: /s/ Blaine Filthaut
-------------------------------------
Name: Blaine Filthaut
Title: Vice President and Treasurer
By: /s/ Andrew Baranowsky
-------------------------------------
Name: Andrew Baranowsky
Title: Assistant Treasurer
15
<PAGE>
EXHIBIT A
TO AMENDMENT No. 1
TO RECEIVABLES
PURCHASE AGREEMENT
EXHIBIT D-1
TO RECEIVABLES PURCHASE AGREEMENT
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 "Receivables 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 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 Receivables Purchase Agreement and
used herein shall have such defined meanings when used herein, unless otherwise
defined herein.
A-1-1
<PAGE>
"Removal Date" shall mean, with respect to the Removed
Accounts designated hereby, _________ __, ____.
2. Notice of Removed Accounts. (a) Not less than five Business
Days prior to the Removal Commencement Date, the Seller shall furnish to the
Purchaser, the Trustee, any Enhancement Providers and the Rating Agencies a
written notice specifying the date on which removal of the Receivables of one or
more Accounts will begin, 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 written list of the Removed Accounts, specifying for
each Removed Account as of the day immediately preceding the Removal
Commencement Date, its number and the aggregate amount outstanding in such
Removed Account and the aggregate outstanding principal balance 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 Commencement Date and shall
amend Schedule 1 to the 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 Removed Accounts
designated hereby 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 Removed Accounts and all
proceeds thereof (as defined in Section 9-306 of the UCC as in effect in the
State of Vermont and Recoveries) related 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
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 Commencement Date:
A-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. No selection procedures reasonably
believed by the Seller to be adverse to the interests of the
Beneficiaries were utilized in selecting the Accounts to be removed;
and
(d) True and Complete List. The list of Removed 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 2.06 of the Receivables Purchaser 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, the Trustee, any Agent, and any Enhancement Providers an
Officers' Certificate certifying that (i) as of the Removal Commencement Date,
all requirements set forth in Section 2.06 of the Receivables Purchase Agreement
for removing such Accounts and reconveying the Receivables of such Removed
Accounts and the Collateral Security with respect thereto, created from time to
time on and after the Removal Commencement Date until the termination of the
Trust, have been satisfied, and (ii) 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 and 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 Receivables Purchase 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.
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.
A-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:
------------------------
A-1-4
<PAGE>
Exhibit 5.1
October 14, 1999
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. 333-77091)
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 $300,000,000 principal amount of Floating Rate Class A Asset Backed
Certificates, Series 1999-1 (the "Class A Certificates") and $20,339,000
principal amount of Floating Rate Class B Asset Backed Certificates Series
1999-1 (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") between the Company, the Servicer and
J.P. Morgan & Company.
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 No. 1 thereto
("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 1999-1 Supplement to the
Pooling and Servicing Agreement (the "Supplement").
<PAGE>
October 14, 1999
Page 2
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") (the "Registration
Statement") and (ii) the forms of the Pooling and Servicing Agreement, the
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.
<PAGE>
October 14, 1999
Page 3
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.
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
October 14, 1999
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. 333-77091)
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 and 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. 333-77091), 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
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October 14, 1999
Page 2
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 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
"Material 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 "Material 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
1999-1 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 "Material 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
