<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 2000
REGISTRATION NO. 333-77091
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
AMENDMENT NO. 4
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)
-------------------
PIERRE LORTIE
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 3050 K STREET, N.W.
NEW YORK, NEW YORK 10178 WASHINGTON, D.C. 20007
(212) 309-6183 (202) 339-8400
</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
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE* OFFERING PRICE* FEE
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset Backed Certificates....................... $400,000,000.00 100% $400,000,000.00 $105,600.00**
=====================================================================================================================
</TABLE>
* Estimated solely for purposes of determining the registration fee pursuant to
Rule 457 under the Securities Act of 1933.
** Of which $278.00 was previously paid.
-------------------
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>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED WITHOUT THE DELIVERY OF A FINAL PROSPECTUS SUPPLEMENT
AND ACCOMPANYING PROSPECTUS. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED SEPTEMBER 19, 2000
PROSPECTUS
BOMBARDIER RECEIVABLES MASTER TRUST I
ISSUER [LOGO]
$374,600,000 FLOATING RATE CLASS A ASSET BACKED CERTIFICATES, SERIES 2000-1
$25,400,000 FLOATING RATE CLASS B ASSET BACKED CERTIFICATES, SERIES 2000-1
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 11.
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............. $374,600,000 $25,400,000 $400,000,000
Certificate rate...... One-Month One-Month
Libor + % Libor + %
annually annually
Price to public per
certificate......... % % $
Underwriting discounts
and commissions per
certificate......... % % $
Proceeds to depositor
per certificate..... % % $
First interest payment
date................ Oct. 16, 2000 Oct. 16, 2000
</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 -- Interest.' The price
to public will include any accrued interest at the applicable certificate rate
from , 2000. The proceeds are calculated before deducting
expenses payable by the depositor which are estimated to be $825,000.
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. CHASE SECURITIES INC.
The date of this Prospectus is , 2000.
<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>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUMMARY.......................................... 5
RISK FACTORS................................................ 11
CAPITALIZED TERMS........................................... 19
FORWARD LOOKING STATEMENTS.................................. 19
ORIGINATION OF RECEIVABLES.................................. 19
THE DEPOSITOR AND THE TRUST................................. 20
The Depositor........................................... 20
The Trust............................................... 21
USE OF PROCEEDS............................................. 22
THE FLOORPLAN AND ASSET-BASED FINANCING BUSINESS............ 23
General................................................. 23
Creation of the Receivables............................. 25
Credit Underwriting Process and Security................ 26
Payment Terms........................................... 29
Billing and Collection Procedures....................... 30
Revenue Experience...................................... 30
Relationship with Manufacturers, Importers and
Distributors........................................... 31
Monitoring.............................................. 32
Collection Activity..................................... 33
Participation Arrangements.............................. 34
THE ACCOUNTS................................................ 35
General................................................. 35
Historical Size......................................... 38
Size of Portfolio....................................... 38
Delinquency............................................. 39
Loss Experience......................................... 39
MANAGEMENT DISCUSSION AND ANALYSIS.......................... 40
Product Mix............................................. 41
Aging Experience........................................ 43
Geographic Distribution................................. 43
BOMBARDIER CAPITAL INC...................................... 44
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS............... 45
DESCRIPTION OF THE CERTIFICATES............................. 47
General................................................. 47
Interest................................................ 47
Principal............................................... 48
Book-entry Registration................................. 50
Definitive Certificates................................. 55
Retained Interest and Variable Funding Certificate...... 56
New Issuances........................................... 57
Supplemental Certificate................................ 59
Conveyance of Receivables and Collateral Security....... 60
Representations and Warranties.......................... 61
Eligible Accounts and Eligible Receivables.............. 64
Ineligible Receivables.................................. 67
Addition of Accounts.................................... 67
Removal of Accounts and Assignment of Receivables....... 69
Credit Support for the Certificates; Collection Account
and Excess Funding Account............................. 72
Allocation Percentages.................................. 74
Deposits in Collection Account.......................... 76
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Daily Allocations....................................... 77
Limited Subordination of Retained Interest.............. 78
Distributions from the Collection Account; Reserve Fund;
Principal Account...................................... 80
Discount Option......................................... 84
Defaulted Receivables and Recoveries.................... 85
Investor Charge-Offs.................................... 86
Optional Repurchase..................................... 86
Early Amortization Events............................... 87
Termination............................................. 90
Indemnification......................................... 91
Collection and Other Servicing Procedures............... 92
Servicer Covenants...................................... 93
Servicing Compensation and Payment of Expenses.......... 94
Matters Regarding the Servicer.......................... 95
Servicer Default........................................ 95
Reports................................................. 96
Evidence as to Compliance............................... 98
Amendments.............................................. 98
List of Certificateholders.............................. 99
The Trustee............................................. 99
DESCRIPTION OF THE RECEIVABLES PURCHASE AGREEMENT........... 100
Sale and Transfer of Receivables........................ 100
Representations and Warranties.......................... 102
Covenants............................................... 102
Termination............................................. 103
MATERIAL LEGAL ASPECTS OF THE RECEIVABLES................... 104
Transfer of Receivables and Certificates................ 104
Matters Related to Unfunded Receivables................. 106
Material Matters Relating to Bankruptcy................. 106
MATERIAL FEDERAL INCOME TAX CONSEQUENCES.................... 108
Characterization of the Certificates and the Trust...... 109
Possible Characterization of the Trust as a
Partnership............................................ 109
Possible Characterization of the Trust as a
Corporation............................................ 110
Taxation of Interest Income to Certificateholders....... 110
Sale or Exchange of Certificates........................ 111
Foreign Investors....................................... 112
Information Reporting and Backup Withholding............ 113
State and Local Taxation................................ 113
ERISA CONSIDERATIONS........................................ 113
UNDERWRITING................................................ 113
LEGAL MATTERS............................................... 115
WHERE YOU CAN FIND MORE INFORMATION......................... 115
REPORTS TO CERTIFICATEHOLDERS............................... 115
GLOSSARY.................................................... 116
ANNEX I -- PRIOR SERIES
ANNEX II -- RECEIVABLES IN ADDITIONAL ACCOUNTS CONVEYED TO
THE TRUST
ANNEX III -- GLOBAL CLEARANCE, SETTLEMENT AND TAX
DOCUMENTATION PROCEDURES
</TABLE>
4
<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 2000-1
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 2000-1 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>
Certificate rate: One-Month One-Month
Libor + % Libor + %
annually annually
Ratings
(S&P/Moody's): AAA/Aaa A/A'pp'2
First interest
payment date: Oct. 16, 2000 Oct. 16, 2000
Scheduled principal
payment date: September 2003 September 2003
Distribution Date Distribution Date
Legal final
payment date: September 2005 September 2005
Distribution Date Distribution Date
</TABLE>
The certificate rate of the Series 2000-1 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 2000-1
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 under which the dealers receive funds to purchase or
finance consumer, recreational and commercial product inventory; the
receivables include those 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 accounts which are not eligible,
receivables removed
5
<PAGE>
from the trust from time to time and any undivided interest in the receivables
that has been transferred to a third party;
an assignment of Bombardier Credit Receivables Corporation's rights and
remedies concerning the receivables under the receivables purchase agreement;
all funds collected or to be collected on 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 provided for a series -- the Series 2000-1 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 2000-1 Certificates,
investor certificates of other series, the certificate held by the depositor and
representing an interest which is partially subordinated to various certificates
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
will be outstanding as of the date of issuance of the certificates. Bombardier
Credit Receivables Corporation has summarized information concerning the
outstanding prior series in Annex I to this prospectus. Annex I is 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 or, if the 15th day is not a business day for New York banks,
distributions will occur on the next business day. The first interest
distribution is scheduled to be made on October 16, 2000.
6
<PAGE>
PAYMENT OF PRINCIPAL ON YOUR CERTIFICATES
The type of period your certificates are in will determine the method used for
allocating collections of receivables and the timing of principal payments to
you.
From the issuance date to the distribution date in September 2003, unless
another period begins during this time, you will not receive principal
payments on your certificates.
From the June 2003 distribution date, or a later date determined by the
servicer, until the amount on deposit is sufficient to pay the principal
amount on your certificates unless another period begins before or during this
time, a controlled portion of the monthly principal collections allocable to
your certificates will be deposited into the principal account.
If specified triggering events occur concerning the trust assets, the servicer
or Bombardier Credit Receivables Corporation you will receive each month all
principal collections allocated to your certificates until your certificates
are paid in full. See 'Description of the Certificates -- Early Amortization
Events' for a discussion of these triggers.
ALLOCATIONS OF COLLECTIONS OF RECEIVABLES AND DEFAULTED RECEIVABLES
Varying percentages of collections and receivables in default allocable to the
trust for each calendar month will be allocated to Series 2000-1. See
'Description of the Certificates -- Allocation Percentages.'
Collections and receivables in default not allocated to the Series 2000-1
Certificates will be allocated to the other certificates issued by the trust.
Non-principal collections and receivables in default at all times and principal
collections for periods when principal is not being paid or accumulated will be
allocated to the Series 2000-1 Certificates daily based on a floating
percentage. Generally, this percentage for any calender month is the percentage,
which will never exceed 100%, obtained by dividing the principal amount of the
Series 2000-1 Certificates as of each day by the total principal amount of
receivables in the trust as of that day.
Principal collections allocable to the Series 2000-1 Certificates and not
necessary for any deposit or payment for the Series 2000-1 Certificates will be
allocated to other certificates issued by the trust in exchange for the
allocation to the Series 2000-1 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.'
If principal is being paid or accumulated, principal collections generally will
be allocated to the Series 2000-1 Certificates based on the percentage obtained
by dividing the principal amount of the Series 2000-1 Certificates on the last
day when they were not being paid or accumulated 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.'
7
<PAGE>
INTEREST PAYMENTS
You will receive interest monthly on each distribution date, commencing October
16, 2000. The certificates will accrue interest from and including one
distribution date to but excluding the next, distribution date. In the case of
the first distribution date, interest will accrue beginning on , 2000
to but excluding October 16, 2000. Interest will be calculated based on the
actual number of days elapsed during the related interest period and a 360-day
year.
<TABLE>
<S> <C>
Subject to a variable
cap, the class A
certificate rate will
equal: One-Month Libor + %
annually
Subject to a variable
cap, the class B
certificate rate will
equal: One-Month Libor + %
annually
</TABLE>
The certificate rate for each class of certificates will be subject to a cap
based upon the interest rates on the receivables less the rate of the servicing
fee. You may be reimbursed for any reduction in the amount of interest you would
otherwise have been owed but for 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 2000-1 Certificates will be derived solely from
collections other than principal collections for the related calendar month, any
amount on deposit in the reserve fund, investment proceeds, if any, and 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 September 2003 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 equal to the full principal amount of the class B certificates on
the September 2003 distribution date.
The Series 2000-1 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 2000-1 Certificates will be made
not later than the September 2005 distribution date.
In addition, on the first distribution date following the monthly period in
which an early amortization event occurs, 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 2000-1 Certificates as described under 'Description of Certificates --
Credit Support for the Certificates -- Excess Funding Account.'
8
<PAGE>
REALLOCATION OF EXCESS PRINCIPAL COLLECTIONS
Principal collections and other amounts that are allocated to the Series 2000-1
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 period to the extent they are not needed to
make payment for 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 on the
Series 2000-1 Certificates and the monthly servicing fee described below. See
'Description of the Certificates -- Retained Interest and Variable Funding
Certificate.'
If collections other than principal collections, investment proceeds, amounts in
the reserve fund and other amounts allocable to the Series 2000-1 Certificates
for any monthly period are not sufficient to cover:
the interest payable on the Series 2000-1 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 2000-1 Certificates of defaults on the
receivables; and
any amounts required to be paid by Bombardier Credit Receivables Corporation
as a result of adjustments to the balances of the receivables,
then a portion of the collections allocated to the interest represented by a
certificate held by the depositor and representing the retained interest 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 investor certificates.
A portion of the amounts allocated to our interests is, however, subordinated
and, if needed will be diverted to make payments on the investors' certificates.
It is expected that this subordinated amount for the October 16, 2000
distribution date will be no less than $23,280,423. This 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 portion of our interest available to make payments
on the Series 2000-1 Certificates may be increased at our option. See
'Description of the Certificates -- Limited Subordination of the Retained
Interest.'
Reserve Fund: A reserve fund will be established and maintained in the name of
the trustee for the benefit of the Series 2000-1 Certificates. On the date the
certificates are issued, Bombardier Credit Receivables Corporation will deposit
in the reserve fund an amount no less than $2,000,000 plus an amount to be used
to pay interest on the certificates on the first distribution date.
9
<PAGE>
Any amounts on deposit in the reserve fund will be withdrawn to make payments of
interest on the Series 2000-1 Certificates and the net servicing fee for the
Series 2000-1 Certificates and to cover the amount of defaults allocated to the
Series 2000-1 Certificates if non-principal collections and investment proceeds
are not sufficient. 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
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 2000-1 Certificates will not be offered unless they receive the
ratings indicated on page 5 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 Your Certificates.'
10
<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. See 'Material Legal
Aspects of the Receivables -- Material Matters Relating to Bankruptcy.'
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
11
<PAGE>
receivables. This could cause 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
If specified triggering events occur concerning the trust assets, the
servicer or Bombardier Credit Receivables Corporation you will receive each
month all principal collections allocable to your certificates until your
certificates are paid in full. This 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, according to 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.' We cannot
assure you 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 depends on when the dealers pay Bombardier Capital
Inc., the certificates may not be fully paid by the September 2003 distribution
date. 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 your receiving principal sooner than you
expect.
STATE AND FEDERAL LAW MAY LIMIT THE ABILITY 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.'
12
<PAGE>
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 CERTIFICATES
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 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 pay Bombardier Capital Inc. amounts
owed for products that it has sold, the related receivables will no longer be
secured by those products.
If receivables that are not created by inventory security agreements 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 dealer. In the event that these receivables are secured by
assets that are subsequently sold by the dealer, the same issues discussed above
about receivables created by inventory security agreements may exist.
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,
receivables not created by inventory security agreements may be added to the
trust. Consequently, we cannot assure you 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 the percentage of receivables in Bombardier Capital Inc.'s
portfolio of receivables described in this prospectus that are delinquent will
not exceed by more than 5% the percentage of receivables in Bombardier Capital
Inc.'s portfolio that were delinquent at the date of the most recent information
described in this prospectus.
13
<PAGE>
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 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
for the part of its receivables portfolio that is not floorplan receivables, and
very limited delinquency, default and loss experience about that part of its
receivables portfolio that is not floorplan receivables, no historical
information with respect to those receivables 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 of these additional accounts may be different from
the accounts currently held by the trust. We cannot assure you that the
performance characteristics of the portfolio of 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 FAIL TO SELL PRODUCTS
SECURING RECEIVABLES CAUSING LOSSES ON RECEIVABLES AND THUS YOUR CERTIFICATES OR
ACCELERATING PAYMENTS OF PRINCIPAL TO YOU
Payment of the receivables created by inventory security agreements largely
depends upon the retail sale of the related products. Generation of new
receivables depends 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 receivables could
decrease, adversely affecting payment rates on the receivables and the
generation of new 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 on
the related receivables could be adversely affected, thus increasing the risk of
loss on your certificates.
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
Neither Bombardier Credit Receivables Corporation nor Bombardier Capital
Inc. or any affiliate thereof is obligated to make any payments on 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
14
<PAGE>
Credit Receivables Corporation or Bombardier Capital Inc. of representations and
warranties, as described below 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 depends entirely upon Bombardier Capital Inc. for the
generation of new receivables. The ability of Bombardier Capital Inc. to
generate receivables in turn mostly depends on sales of eligible products as
well as competition from other lenders. We therefore cannot assure you 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 portion of the
interest in the trust retained by us 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. If problems develop
with the receivables, such as an increase in losses on the receivables or if
there are problems with the collection and transfer of the receivables to the
trust, it is possible that you may not receive the full amount of interest and
principal that you would otherwise receive. See 'Description of the
Certificates -- Limited Subordination of the Retained Interest.'
SUBORDINATION INCREASES RISK OF LOSS ON CLASS B CERTIFICATES
Principal will be distributed on the class B certificates only after all
principal payments on the class A certificates are made. Investor charge-offs
will reduce the amounts available to make principal payments on the class B
certificates before any reductions of this type will be suffered by the class A
certificates. As a result of this subordination, you may receive payments of
principal and interest on your class B certificates later than you expect or you
may not receive the full amount of principal and interest on your class B
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
Any funds 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 on the same amount of receivables.
Accordingly, during any
15
<PAGE>
period during which funds are on deposit in the excess funding account, these
funds will reduce the amount of 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.
We cannot assure you that previously issued series or the issuance of any
future series might not adversely affect the timing or amount of payments
received by you. See 'Description of the Certificates -- New Issuances.'
Furthermore, principal collections from other series may be reallocated to
your certificates during a period when principal is paid or accumulated on your
certificates, which may shorten the maturity of your certificates. We may issue
an additional series without 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 (1) the lesser of the net receivables rate and one-month Libor plus %
annually, for class A certificates, or (2) the lesser of the net receivables
rate and one-month Libor plus % annually, 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 reduce the rate of interest
that would otherwise be paid on your certificates.
16
<PAGE>
The receivables currently in the trust 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, 2000, from - 0.5% 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 on any of the receivables. Furthermore, as
of April 30, 2000, approximately 1.32% 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 net receivables
rate and the rate on your certificates if 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
We cannot issue the class A certificates unless they are rated 'AAA' or the
equivalent or the class B certificates unless they are 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 interest we
retain in the trust that is subordinate to your certificates 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 on 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.
We cannot assure you 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 & Co., the nominee for The Depository Trust
Company and will not be registered in your name or the name of 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,
Clearstream Banking,
17
<PAGE>
societe anonyme, the 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 Clearstream Banking, 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
your certificates.
GEOGRAPHIC CONCENTRATION MAY CREATE ADDITIONAL RISKS OF LOSS ON YOUR
CERTIFICATES
As of April 30, 2000, approximately 9.86%, 8.12%, 7.72%, 6.98%, 6.35%, 4.47%
and 4.32% of the obligors under the receivables by aggregate principal balance
as of the cut-off date were located in the States of Florida, Texas, North
Carolina, Georgia, California, South Carolina and Arizona, 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.
18
<PAGE>
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 Bombardier Capital Inc. for
advances made by Bombardier Capital Inc. 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 Bombardier Capital Inc. In addition to dealer
floorplan financing originated directly by Bombardier Capital Inc., Bombardier
Capital Inc. also acquires dealer floorplan accounts and the related receivables
originated by affiliates of Bombardier Capital Inc. or by nonaffiliated
entities. Bombardier Capital Inc. 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 Bombardier Capital Inc. 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. Bombardier Capital Inc. expects that
it will, from time to time, select additional accounts and sell or contribute
the receivables in the additional accounts to the depositor.
Bombardier Capital Inc. 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
19
<PAGE>
purchase agreement permits Bombardier Capital Inc. 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 Bombardier Capital Inc. 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 Bombardier
Capital Inc. 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 Bombardier Capital Inc. 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, we
cannot assure you 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 Bombardier
Capital Inc. 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 its subsidiaries including Bombardier
Corporation and Bombardier Capital Inc., 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 for any of these liabilities. However, the
existence of a claim against the depositor
20
<PAGE>
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 a
pooling and servicing agreement dated as of January 1, 1994. The pooling and
servicing agreement was amended by Amendment Number 1 dated as of January 1,
1997, by Amendment Number 2 dated as of October 13, 1999 and by Amendment Number
3 dated as of October 13, 1999. The depositor conveys 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 -- which
is 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 any
Account which is not an Eligible Account 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;
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
for any series issued by the trust; and
21
<PAGE>
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.
The holders of the Series 2000-1 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 2000-1 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 2000-1 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 Bombardier Capital Inc. under the
promissory note issued by the depositor in favor of Bombardier Capital Inc. or
to purchase receivables from Bombardier Capital Inc. and to provide for
amortization of a portion of the principal amount of the Series 1996-1
Certificates or the Series 1997-2 Certificates. Bombardier Capital Inc. will use
the related proceeds to reduce commercial paper borrowings and for general
corporate purposes.
22
<PAGE>
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, Bombardier Capital Inc. expects to provide
financing to additional dealers, and directly to manufacturers and distributors.
In addition, Bombardier Capital Inc. 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
Bombardier Capital Inc. or an affiliate of Bombardier Capital Inc. 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 Bombardier
Capital Inc. 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.
23
<PAGE>
Bombardier Capital Inc. services the Domestic Inventory Receivables, and
expects to service the Asset-Based Receivables, through its executive offices in
Colchester, Vermont.
No selection procedures believed by Bombardier Capital Inc. 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 products financed by
Bombardier Capital Inc. 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.
For Domestic Inventory Receivables, Bombardier Capital Inc. 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 Bombardier Capital Inc. available to its
dealers. Bombardier Capital Inc. has, however, in the past entered into, and may
in the future enter into, captive financing arrangements with manufacturers,
importers or distributors where Bombardier Capital Inc. is made the primary
source of financing for the relevant manufacturer's, importer's or distributor's
dealers. In some cases, Bombardier Capital Inc. has in the past offered, and it
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, 2000, the loans in the Bombardier Capital Inc. Domestic
Inventory Portfolio were outstanding to 4,239 obligors. As of April 30, 2000, no
single obligor represented more than 3% of the Bombardier Capital Inc. Domestic
Inventory Portfolio or 2.34% of the receivables in the trust.
Bombardier Capital Inc. 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 Bombardier Capital Inc. 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;
24
<PAGE>
(3) manufactured housing;
(4) recreational vehicles, trailers and campers and specialty vehicles; and
(5) other recreational and consumer products not manufactured by Bombardier
Inc.
Bombardier Capital Inc. 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,
2000, Bombardier Capital Inc. was providing inventory financing to approximately
4,239 dealers located throughout the United States for products sold by
approximately 680 manufacturers and distributors. Bombardier Capital Inc.
expects to expand the type of products for which it provides domestic inventory
financing in the future. As of April 30, 2000, approximately 20.48% based on
outstanding receivables or 23.47% based on financing volume for the one year
period ended April 30, 2000 of the Domestic Inventory Receivables in the
Bombardier Capital Inc. Domestic Inventory Portfolio were attributable to
products manufactured by Bombardier Inc. or its subsidiaries.
Asset-Based Receivables
We generally expect that Asset-Based Receivables that may be sold to the
trust would arise from asset-based revolving credit facilities provided to
dealers, manufacturers and distributors and would be denominated in U.S.
dollars.
We expect that the products for which Bombardier Capital Inc. will provide
dealer, manufacturer or distributor financing giving rise to Asset-Based
Receivables will be varied. Generally Asset-Based Receivables would be expected
to involve Bombardier Capital Inc. 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
Bombardier Capital Inc. typically finances 100% of the wholesale invoice
price of new inventory financed by U.S. dealers through Bombardier Capital Inc.
Receivables in respect of the inventory are generally originated concurrently
with the shipment of this inventory to the financed dealers. Bombardier Capital
Inc. generally will advance funds directly to the manufacturer, importer or
distributor on behalf of the dealer.
In most cases, although Bombardier Capital Inc. will have incurred the
obligation to make an advance, Bombardier Capital Inc. will negotiate a delay in
funding the advance for a period ranging, in most cases, from 0 to 70 days for
Eligible Products not manufactured by affiliates of Bombardier Capital Inc., and
ranging up to 30 days for Eligible Products manufactured by affiliates of
Bombardier Capital Inc., 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
25
<PAGE>
receivable on the date it is added to the trust even though it is not funded by
Bombardier Capital Inc. until a later date, namely, when Bombardier Capital Inc.
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.
Bombardier Capital Inc. and the manufacturer may also agree that Bombardier
Capital Inc. 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, Bombardier Capital Inc. provides domestic inventory financing
for new products. However, in limited circumstances, Bombardier Capital Inc.
provides financing of used or trade-in inventory acquired by dealers for whom
Bombardier Capital Inc. provides inventory financing.
Once a dealer has commenced the floorplanning of a manufacturer's,
importer's or distributor's inventory through Bombardier Capital Inc., if
requested, Bombardier Capital Inc. 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. Bombardier Capital Inc. may limit or cancel this arrangement if the
dealer fails to perform its obligations under its agreement with Bombardier
Capital Inc., if the relevant manufacturer, importer or distributor fails to
perform its obligations under its repurchase agreement, if the aggregate
outstanding amount of receivables for any one manufacturer, importer or
distributor reaches Bombardier Capital Inc.'s predetermined limit or if the
dealer or manufacturer, importer or distributor is experiencing financial
difficulties.
Asset-Based Receivables
Bombardier Capital Inc. 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
Bombardier Capital Inc.'s credit underwriting process begins with a credit
underwriting of the manufacturer, importer or distributor. Bombardier Capital
Inc. 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
26
<PAGE>
after the dealer purchases the goods financed -- to repurchase any of its goods
that were financed by Bombardier Capital Inc. and which have been repossessed by
Bombardier Capital Inc. 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, Bombardier Capital Inc. may assist the relevant
manufacturer, importer or distributor, in preparing and distributing promotional
material for the purpose of encouraging all eligible and 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 Bombardier Capital Inc.
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 Bombardier
Capital Inc.'s telemarketing department or personnel from Bombardier Capital
Inc.'s field force. If a dealer is interested in the program, an application for
financing is completed. After receipt of this application, Bombardier Capital
Inc. 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 Bombardier Capital Inc. 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 Bombardier Capital Inc. is
documented by an inventory security agreement providing for a security interest
in favor of Bombardier Capital Inc. in all inventory of the dealer which was
financed or floorplanned by Bombardier Capital Inc. The agreements also set
forth the dealer's obligations for repayment, the maintenance and security,
including insurance, of the inventory, remedies of Bombardier Capital Inc. upon
a default by the dealer and other matters relating to the dealer's inventory and
business and Bombardier Capital Inc.'s rights. The inventory security agreements
require the dealer to maintain insurance for the benefit of Bombardier Capital
Inc. on the inventory being financed by Bombardier Capital Inc. Although
Bombardier Capital Inc.'s right to the proceeds of this insurance will not be
transferred by Bombardier Capital Inc. to the depositor, or by the depositor to
the trust, Bombardier Capital Inc. has agreed under the pooling and servicing
agreement to treat the insurance proceeds received by Bombardier Capital Inc. as
collections on the related Domestic Inventory Receivables.
Bombardier Capital Inc. 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 Bombardier Capital Inc. in taking, all actions
necessary for Bombardier Capital Inc. 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
27
<PAGE>
according to a payment schedule, the inventory being financed may be sold before
the scheduled payment date of the related receivable. As a result, Bombardier
Capital Inc. would no longer hold a security interest in the sold inventory.
Bombardier Capital Inc. 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 Bombardier Capital Inc., Bombardier
Capital Inc. will re-underwrite the account.
Bombardier Capital Inc. maintains an active and ongoing relationship with
the dealers to whom it provides floorplan financing and reevaluates individual
dealers' status:
(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
Bombardier Capital Inc.
Bombardier Capital Inc. reserves the right to deny any new or increased
credit requests. At times, based upon Bombardier Capital Inc.'s relationship
with the manufacturer, importer or distributor, Bombardier Capital Inc. 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 Bombardier Capital Inc.'s management deems appropriate. See
' -- Relationship with Manufacturers, Importers and Distributors.'
Asset-Based Receivables
Bombardier Capital Inc.'s credit underwriting process for 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. For 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
for 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,
28
<PAGE>
Bombardier Capital Inc. 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 Bombardier Capital Inc.
Asset-Based Receivables will be secured by collateral of the borrower.
Security requirements will be established by Bombardier Capital Inc. at the time
of origination of the related Asset-Based Receivables.
PAYMENT TERMS
Domestic Inventory Receivables
Bombardier Capital Inc. 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.
29
<PAGE>
BILLING AND COLLECTION PROCEDURES
Domestic Inventory Receivables
A statement setting forth billing and related account information is
prepared by Bombardier Capital Inc. 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 Bombardier Capital Inc.'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 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
Bombardier Capital Inc. generally charges dealers interest at a floating
rate determined by Bombardier Capital Inc. on each business day. Bombardier
Capital Inc.'s policy is to charge a rate equal to the 'prime rate' designated
in the 'Wall Street Journal,' plus a spread generally ranging from - 0.50% 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 Bombardier Capital Inc. Domestic Inventory Portfolio and the
average prime rate as of the end of each month have been averaged for the fiscal
years ended January 31, 2000, 1999, 1998, 1997 and 1996 and for the three month
periods ended April 30, 1999 and April 30, 2000 and are set forth in the chart
below.
AVERAGE SPREAD AND PRIME RATE
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED JANUARY 31, APRIL 30,
------------------------------------------------- ---------------
2000 1999 1998 1997 1996 2000 1999
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Average Spread over Prime Rate....... 2.30% 3.27% 3.67% 3.87% 3.98% 2.24% 2.14%
Average Prime Rate................... 8.06% 8.29% 8.46% 8.25% 8.85% 8.85% 7.75%
Spread plus Prime Rate............... 10.36% 11.56% 12.13% 12.12% 12.83% 11.09% 9.89%
</TABLE>
There is seasonality in the level of outstanding accounts included in the
Bombardier Capital Inc. Domestic Inventory Portfolio and in repayments of
principal. Dealer inventory financed by Bombardier Capital Inc. 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 Bombardier
Capital Inc. Domestic
30
<PAGE>
Inventory Portfolio related to marine products and Bombardier products. See
'Maturity and Principal Payment Considerations.' The 'Average Spread over Prime
Rate' has decreased and may decrease further. This decrease is in part
attributable to increased competitive pressures from other lenders. This
decrease is in part attributable to an increase in the portion of the Bombardier
Capital Inc. Domestic Inventory Portfolio that consists of accounts related to
non-Bombardier related product. Other factors may have contributed to this
decrease and may contribute to further decreases.
RELATIONSHIP WITH MANUFACTURERS, IMPORTERS AND DISTRIBUTORS
Domestic Inventory Receivables
Bombardier Capital Inc.'s primary marketing focus is the manufacturer,
importer or distributor of the financed product. Affiliates of Bombardier
Capital Inc. 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 Bombardier
Capital Inc. These affiliate manufactured products represented in the aggregate,
as of April 30, 2000, approximately 20.48% of Bombardier Capital Inc.'s Domestic
Inventory Receivables Portfolio. With the exception of four independent
manufacturers who accounted, as of April 30, 2000, for approximately, 6.15%,
4.91%, 3.83% and 3.01%, respectively, of Bombardier Capital Inc.'s Domestic
Inventory Portfolio, no other manufacturer, importer, or distributor currently
accounts for more than 3% of Bombardier Capital Inc.'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 under a Domestic Inventory Receivable. In these cases, the
manufacturer, importer or distributor makes the interest payment to Bombardier
Capital Inc. 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
Bombardier Capital Inc. 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 Bombardier Capital Inc. is
generally equal to the unpaid loan balance for 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 Bombardier Capital Inc. However, in some cases, the
manufacturer, importer or distributor who makes a payment on a Domestic
Inventory Receivable due from a
31
<PAGE>
dealer may become subrogated to the related claims by Bombardier Capital Inc.
against the dealer and may require a transfer of Bombardier Capital Inc.'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.
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, under
the receivables purchase agreement, be assigned by Bombardier Capital Inc. to
the depositor, but not by the depositor to the trust. Bombardier Capital Inc.
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 for the Domestic Inventory Receivables, and the
depositor and Bombardier Capital Inc. agree to treat these amounts as
collections on the related receivables and to deposit all of these collections
into the trust.
Asset-Based Receivables
We do not expect that the Asset-Based Receivables will 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 Bombardier Capital Inc.'s approval
for each shipment, ship products to the dealer and receive payment for them, as
a loan to the dealer, from Bombardier Capital Inc. so long as the dealer's
Bombardier Capital Inc. 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,
Bombardier Capital Inc. 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
for 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 Bombardier Capital
Inc. field
32
<PAGE>
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;
(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, Bombardier Capital Inc.'s
management is promptly apprised of the situation.
Asset-Based Receivables
Once Bombardier Capital Inc. establishes a credit line with a borrower, it
expects to monitor the adequacy of the borrowing base on a periodic basis and
expects to perform periodic audits. In addition, Bombardier Capital Inc. 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 Bombardier Capital Inc.
Bombardier Capital Inc. Outsources Some Activities
Bombardier Capital Inc. has delegated some of its servicing and
administrative duties to third parties and Bombardier Capital Inc. may from time
to time in the future delegate all or a portion of its servicing and
administrative duties for the receivables to third parties, provided that no
delegation of this sort will relieve Bombardier Capital Inc. of its
responsibility as servicer for these duties.
COLLECTION ACTIVITY
Domestic Inventory Receivables
Bombardier Capital Inc. is responsible for all normal collection activity
for Domestic Inventory Receivables. When it has been determined that any further
collection activity will require repossession, any remaining inventory is
generally repossessed by Bombardier Capital Inc. 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 Bombardier Capital Inc. the sum of the unpaid principal amount
of the receivables for the repossessed product plus some of the costs of
repossession and less, in some circumstances, a scheduled amount determined
33
<PAGE>
according to the age of the repossessed products. The dealer, however, remains
obligated to pay Bombardier Capital Inc. 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 of a
defaulting dealer will be treated under the pooling and servicing agreement as
collections of the related receivables. Any legal action against a dealer is
generally initiated by Bombardier Capital Inc. 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. Bombardier Capital Inc. 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 Bombardier
Capital Inc. 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, Bombardier Capital
Inc. 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
Bombardier Capital Inc.'s historical charge-off policy regarding receivables
included in the Bombardier Capital Inc. Domestic Inventory Portfolio is
described under 'The Accounts -- Loss Experience.' Receivables are charged off
for the trust as described under 'Description of the Certificates -- Defaulted
Receivables and Recoveries.' Receivables will be charged-off in accordance with
Bombardier Capital Inc.'s policies in effect from time to time.
PARTICIPATION ARRANGEMENTS
From time to time Bombardier Capital Inc. may permit other financing sources
to participate in some of its financing arrangements with obligors. In these
cases, Bombardier Capital Inc. 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 with them. 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 Bombardier Capital Inc., as lender and
Bombardier Capital Inc. will be the servicer under this arrangement. In a
separate contractual arrangement with Bombardier Capital Inc., the holder of the
participation interest will agree to provide a portion of the funding for the
financing to Bombardier Capital Inc. and
34
<PAGE>
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 from the
related collateral security and other rights. Subject to the Rating Agency
Condition being satisfied for 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 Bombardier Capital Inc. to
the depositor, and in turn by the depositor to the trust, may be subject to
participation interests.
The depositor is permitted to cause the trust to transfer an undivided
interest in specified receivables, the related collateral security granted by
the related obligors 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
for the form of the documentation under which these participation interests will
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 Bombardier Capital Inc.
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 Bombardier Capital Inc. Domestic
Inventory Portfolio as provided in this prospectus. Bombardier Capital Inc. 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 Bombardier Capital Inc. Domestic
Inventory Portfolio and may in the future also consist of all or a portion of
the accounts in Bombardier Capital Inc.'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 Bombardier Capital Inc. 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 in the trust. No
selection procedures believed by Bombardier Capital Inc. to be adverse to the
holders of the series have been or will be used by Bombardier Capital Inc. 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 receivables that are
35
<PAGE>
not eligible; 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.
The Accounts under which the Domestic Inventory Receivables have been or
will be generated by Bombardier Capital Inc. or an affiliate of Bombardier
Capital Inc. are evidenced by inventory security agreements entered into by
dealers with Bombardier Capital Inc. 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 Bombardier
Capital Inc. or affiliates of Bombardier Capital Inc. 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 Bombardier Capital Inc. or an affiliate of Bombardier Capital Inc. and
the borrower and, therefore, no general form of financing agreement exists for
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, Bombardier Capital Inc. 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 under the pooling and servicing
agreement. See 'Description of the Certificates -- Addition of Accounts' and
' -- Representations and Warranties.'
Eligible Receivables in the Bombardier Capital Inc. 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 Bombardier Capital Inc., or any subservicer, which may include a
Bombardier Capital Inc. 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 about the accounts in the trust as of April 30, 2000 is set
forth in the charts below.
CREDIT LIMITS OF THE ACCOUNTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT % OF RECEIVABLES
ACCOUNTS WITH CREDIT LIMITS RANGING FROM: OF RECEIVABLES IN THE TRUST
----------------------------------------- -------------- ------------
<S> <C> <C>
$ 0 to $ 249,999.................... $ 59,144,759 5.25%
$ 250,000 to $ 499,999.................... 186,940,560 16.59
$ 500,000 to $ 999,999.................... 312,413,793 27.73
$ 1,000,000 to $15,000,000.................... 508,523,757 45.14
$15,000,001 to $48,000,000.................... 59,639,981 5.29
-------------- -----
Totals.................................... $1,126,662,850 100%
-------------- -----
-------------- -----
</TABLE>
YEAR ACCOUNTS ESTABLISHED
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT % OF RECEIVABLES
YEAR ACCOUNT ESTABLISHED: OF RECEIVABLES IN TRUST
------------------------- -------------- --------
<S> <C> <C>
1999.......................................... $ 168,413,729 14.95%
1998.......................................... 147,373,411 13.08
1997.......................................... 116,102,328 10.30
1996.......................................... 61,712,969 5.48
1995 or earlier............................... 633,060,414 56.19
-------------- -----
Totals.................................... $1,126,662,850 100%
-------------- -----
-------------- -----
</TABLE>
As of April 30, 2000:
There were approximately 3,841 Accounts which had been designated to the
trust.
Receivables in these Accounts had an aggregate principal balance of
approximately $1,159,300,000.
The average aggregate credit limit per Account was approximately $521,672.
The average principal balance of receivables per Account was approximately
$292,209.
The aggregate principal balance of receivables as a percentage of the
aggregate credit limits of these Eligible Accounts was approximately
57.86%.
All of the historical information including tables and numbers contained in
this prospectus regarding Bombardier Capital Inc. 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 Bombardier Capital Inc. In October 1991 and June
1993, pools of then non-performing receivables held by Bombardier Capital Inc.
were sold to BCI Finance Inc. In January 1993, an additional pool of non-
performing receivables held by Bombardier Capital Inc. was transferred to BCI
37
<PAGE>
Finance Inc. in exchange for receivables held by BCI Finance Inc. which had
become performing receivables.
Bombardier Capital Inc. and the depositor may designate Additional Accounts
from time to time and transfer the related receivables 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
Bombardier Capital Inc. 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 Bombardier Capital
Inc. 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.
SIZE OF PORTFOLIO
SIZE OF PORTFOLIO
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
----------------------- ----------------------------------------------------------
2000 1999 2000 1999 1998 1997 1996
---- ---- ---- ---- ---- ---- ----
(U.S. DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Outstanding Principal
Balance............ $1,380,268 $1,214,473 $1,314,882 $1,214,066 $924,279 $1,016,719 $759,700
Average Number of
Dealers............ 4,231 4,036 4,013 3,785 3,657 3,444 3,377
Average Month-End
Principal Balances
Per Dealer......... $ 330,247 $ 308,478 $ 291,602 $ 239,626 $249,580 $ 233,114 $184,898
Average Financing
Volume Per
Dealer............. $ 172,683 $ 197,671 $ 710,465 $ 573,526 $571,700 $ 673,168 $527,718
</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
financing volume per dealer in the table above represent the average of the
total financing volume per dealer for the three month periods ending April 30 or
the one year periods ending January 31. The figures for average number of
dealers for each of the fiscal years ended January 31 were calculated by taking
the
38
<PAGE>
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.
DELINQUENCY
The following table shows delinquency information for the Bombardier Capital
Inc. Domestic Inventory Portfolio as of the dates shown. On the date of the
issuance of the certificates, the percentage of receivables in the Bombardier
Capital Inc. Domestic Inventory Portfolio that are delinquent will not exceed by
more than 5% the percentage of receivables in the Bombardier Capital Inc.
Domestic Inventory Portfolio that were delinquent at the date of the most recent
information in the following table.
DELINQUENCY EXPERIENCE
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
------------------- ------------------------------------------------
2000 1999 2000 1999 1998 1997 1996
---- ---- ---- ---- ---- ---- ----
(U.S. DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Outstanding Principal $1,380.3 $1,214.4 $1,314.9 $1,214.0 $924.2 $1,016.7 $759.7
Balance...................
Delinquent Amount........... 5.1 6.2 1.8 8.8 9.8 5.0 4.8
Delinquent Amount/
Outstanding Principal
Balance................... 0.4% 0.5% 0.1% 0.7% 1.1% 0.5% 0.6%
Allowance for Credit Losses
on Bombardier Capital
Inc.'s Books.............. $ 2.8 $ 7.7 $ 4.1 $ 4.9 $ 13.2 $ 12.0 $ 9.7
Allowance/Outstanding
Principal Balance......... 0.2% 0.6% 0.31% 0.4% 1.43% 1.18% 1.3%
</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 Bombardier Capital Inc. 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 Bombardier Capital Inc. 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 table sets forth Bombardier Capital Inc.'s average principal
receivables balance and loss experience for each of the periods shown with
respect to the receivables in the Bombardier Capital Inc. Domestic Inventory
Portfolio.
39
<PAGE>
The average principal receivables balance reflects the average over the relevant
period of the principal balance in the Bombardier Capital Inc. Domestic
Inventory Portfolio at the end of each month during that period. The receivables
in Accounts designated to the trust will comprise only a portion of the entire
receivables in the Bombardier Capital Inc. Domestic Inventory Portfolio, which
also includes accounts that would be ineligible or that otherwise are not
designated to the trust. In addition, the Eligible Accounts may in the future
include accounts containing Asset-Based Receivables for which there is currently
no historical loss experience information available. As a result, actual loss
experience with respect to the Accounts designated to the trust 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.
LOSS EXPERIENCE
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
3 MONTHS ENDED
APRIL 30, YEAR ENDED JANUARY 31,
------------------- --------------------------------------------
2000 1999 2000 1999 1998 1997 1996
---- ---- ---- ---- ---- ---- ----
(U.S. DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Principal Receivables
Balance...................... $1,397.2 $1,245.0 $1,170.2 $907.0 $912.7 $802.8 $624.4
Net Losses..................... 1.6 - 0.17 5.3 12.7 1.0 1.8 7.1
Net Losses/Liquidations........ 0.24% - 0.03% 0.21% 0.61% 0.05% 0.09% 0.42%
Net Losses/Average Principal
Receivables Balance.......... 0.12% - 0.01% 0.45% 1.40% 0.11% 0.22% 1.13%
</TABLE>
When reviewing the information in the immediately preceding table, you
should be aware that prior to January 1999, Bombardier Capital Inc.'s policy was
to charge-off a receivable based upon management discretion. Beginning in 1999,
Bombardier Capital Inc.'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 Bombardier Capital Inc.'s charge-off policy
increased the Net Losses, Net Losses/Liquidations and Net Losses/Average
Principal Receivables Balance for the year ended January 31, 1999 and, to a
lesser extent, for the year ended January 31, 2000, and decreased such amounts
as Net Losses were reduced by recoveries on receivables previously included as
Net Losses. The figures set out under 'Average Principal Receivables Balance'
indicate the average of the month-end outstanding principal balances for the
three months ending April 30 or the twelve months ending January 31. 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 section
under the caption 'The Accounts -- Loss Experience', loss and recovery data were
affected by Bombardier Capital Inc.'s change in write-off policy. There can be
no
40
<PAGE>
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 Bombardier Capital Inc.'s domestic inventory financing has
increased over the last four years. The following tables detail Bombardier
Capital Inc.'s domestic inventory financing activity by outstanding aggregate
receivables and by volume based on current product categories for the Bombardier
Capital Inc. 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.
OUTSTANDING RECEIVABLES
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
JANUARY 31,
------------------------------------------------------------------------------
PRODUCT 2000 1999 1998 1997 1996
------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Bombardier
Recreational
Products............ $ 245,330,278 $ 307,690,567 $336,030,779 $ 425,913,649 $291,465,014
Marine Products other
than Bombardier
Products............ 397,296,601 315,569,409 339,873,244 329,344,956 270,099,808
Manufactured
Housing............. 376,353,368 399,859,041 130,011,993 143,944,972 119,500,029
Recreational
Vehicles............ 178,725,155 99,460,273 67,524,207 57,682,597 44,838,513
Other................ 117,177,082 91,486,875 50,839,216 59,833,013 33,823,269
-------------- -------------- ------------ -------------- ------------
Totals............ $1,314,882,483 $1,214,066,165 $924,279,439 $1,016,719,187 $759,726,633
-------------- -------------- ------------ -------------- ------------
-------------- -------------- ------------ -------------- ------------
<CAPTION>
APRIL 30,
-------------------------------
PRODUCT 2000 1999
------- ---- ----
<S> <C> <C>
Bombardier
Recreational
Products............ $ 282,659,546 $ 313,893,215
Marine Products other
than Bombardier
Products............ 400,056,584 303,411,093
Manufactured
Housing............. 389,827,214 381,568,582
Recreational
Vehicles............ 174,049,704 120,720,401
Other................ 133,675,093 94,880,707
-------------- --------------
Totals............ $1,380,268,141 $1,214,473,998
-------------- --------------
-------------- --------------
</TABLE>
41
<PAGE>
FINANCING VOLUME
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
JANUARY 31,
----------------------------------------------------------------------------------
PRODUCT 2000 1999 1998 1997 1996
------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Bombardier
Recreational
Products............ $ 668,918,238 $ 785,229,267 $ 966,826,316 $1,146,277,315 $ 837,613,268
Marine Products other
than Bombardier
Products............ 593,803,894 529,938,038 485,264,014 505,727,332 434,175,608
Manufactured
Housing............. 1,000,527,521 475,987,545 303,678,821 345,244,048 303,200,572
Recreational
Vehicles............ 317,215,775 177,719,671 134,223,576 121,753,617 100,988,542
Other................ 270,631,333 201,920,641 200,713,551 199,387,951 106,127,093
-------------- -------------- -------------- -------------- --------------
Totals............ $2,851,096,761 $2,170,795,162 $2,090,706,277 $2,318,390,263 $1,782,105,084
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
<CAPTION>
APRIL 30,
--------------------------
PRODUCT 2000 1999
------- ---- ----
<S> <C> <C>
Bombardier
Recreational
Products............ $186,140,623 $153,997,464
Marine Products other
than Bombardier
Products............ 163,848,317 133,637,955
Manufactured
Housing............. 200,774,715 379,194,432
Recreational
Vehicles............ 94,025,536 70,470,343
Other................ 85,776,819 60,499,679
------------ ------------
Totals............ $730,566,010 $797,799,872
------------ ------------
------------ ------------
</TABLE>
Bombardier Recreational Products
As a manufacturer, Bombardier Inc. is one of Bombardier Capital Inc.'s
most significant customers. Bombardier recreational products financed by
Bombardier Capital Inc. 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, 2000, Bombardier Capital Inc. provided inventory finance to
approximately 1,418 dealers for purchases of the products of approximately 300
marine manufacturers and distributors. The marine products financed by
Bombardier Capital Inc. 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 Bombardier Capital Inc. provides
inventory financing consist of single wide, 14 feet, and double wide, 28 feet,
manufactured housing units. As of April 30, 2000, Bombardier Capital Inc. was
financing approximately 784 dealers for purchases of the products of
approximately 116 manufacturers of manufactured homes. In January 1999,
Bombardier Capital Inc. 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 Bombardier Capital Inc. are primarily
motorized on-the-road recreational vehicles, pull-behind travel trailers and
campers. The specialty vehicles financed by Bombardier Capital Inc. include
horse trailers, cargo trailers, buses and specified trucks.
Other
Bombardier Capital Inc. also provides inventory financing for motorcycles
and hot tubs and is currently developing other inventory financing
opportunities. Bombardier Capital Inc. has also recently begun financing fleet
purchases by rental
42
<PAGE>
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
The following table provides the age distribution of product inventory for
all dealers in the Bombardier Capital Inc. 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
Bombardier Capital Inc. 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
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
--------------- ------------------------------------------
DAYS 2000 1999 2000 1999 1998 1997 1996
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
1-120...................... 46.05% 47.17% 50.32% 52.93% 44.34% 58.50% 61.44%
121-180...................... 15.70% 16.90% 15.65% 14.04% 14.23% 13.42% 13.92%
181-270...................... 16.42% 15.51% 11.43% 11.52% 13.30% 11.26% 9.37%
Over 270..................... 21.82% 20.42% 22.61% 21.05% 28.14% 16.83% 15.54%
</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 Bombardier Capital Inc.
Domestic Inventory Portfolio. While some of the receivables included in this
table arose under accounts that would not qualify as Eligible Accounts, the
relative geographic distribution of receivables arising under accounts that
would qualify as Eligible Accounts would be similar to the distribution
reflected in this table.
GEOGRAPHIC DISTRIBUTION
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
AS OF APRIL 30, 2000
<TABLE>
<CAPTION>
RECEIVABLES
OUTSTANDING PERCENTAGE OF PERCENTAGE OF
(U.S. DOLLARS RECEIVABLES TOTAL NUMBER NUMBER OF
STATE IN THOUSANDS) OUTSTANDING OF ACCOUNTS ACCOUNTS
----- ------------- ----------- ----------- --------
<S> <C> <C> <C> <C>
Florida................................. $ 136,128,038 9.86% 275 6.49%
Texas................................... 112,043,909 8.12 305 7.20
North Carolina.......................... 106,600,218 7.72 177 4.18
Georgia................................. 96,284,941 6.98 168 3.96
California.............................. 87,703,645 6.35 226 5.33
South Carolina.......................... 61,717,286 4.47 134 3.16
Arizona................................. 59,659,382 4.32 83 1.96
-------------- ------ ----- ------
Total............................... $1,380,268,141 100.00% 4,239 100.00%
-------------- ------ ----- ------
-------------- ------ ----- ------
</TABLE>
No state other than those listed in this table represents more than 4% of
the outstanding receivables in the Bombardier Capital Inc. Domestic Inventory
Portfolio.
See the last two paragraphs under 'General' above.
43
<PAGE>
BOMBARDIER CAPITAL INC.
Bombardier Capital Inc. 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. Bombardier Capital
Inc.'s executive office is located at 1600 Mountain View Drive, Colchester,
Vermont 05446. The telephone number of the executive office is (802) 654-8100.
Bombardier Capital Inc.'s business operations are carried on through five
divisions. As of January 31, 2000, the Inventory Finance Division and the
Commercial & Industrial Finance Division accounted for approximately 60.53% of
the managed assets of Bombardier Capital Inc. 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 Bombardier Capital Inc., 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 products and provides factoring of accounts receivable and other
financial services to affiliated Bombardier companies. In 1997, Bombardier
Capital Inc. launched its own consumer retail and manufactured housing financing
operations through its Consumer Finance Division and Mortgage Division.
Bombardier Capital Inc. operates in highly competitive markets.
As of January 31, 1998, January 31, 1999 and January 31, 2000, Bombardier
Capital Inc.'s total assets under management -- primarily financing
assets -- were approximately $2,062 million, $4,404 million and $6,271 million,
respectively, and shareholders' equity was approximately $159 million, $388
million and $630 million, respectively. For the fiscal years ended 1998, 1999
and 2000, total Bombardier Capital Inc. revenues were approximately $171
million, $271 million and $387 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, China, the Czech Republic, Finland, France, Germany, Switzerland and
the United Kingdom.
44
<PAGE>
Bombardier Inc.'s equity securities are publicly traded on 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 2000-1 Certificates is scheduled to be paid on the
September 2003 distribution date. It is possible, however, that principal on the
certificates may be paid earlier if an Early Amortization Event has occurred.
Principal on the class B certificates will not be distributable until all
principal on the class A certificates has been distributed. We expect that a
single principal payment on the class A certificates will be made on the
September 2003 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, we cannot assure you that Bombardier Capital Inc. 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
Bombardier Capital Inc. 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.
45
<PAGE>
Further, during the Controlled Accumulation 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 an 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.
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 Bombardier Capital
Inc. 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 it is calculated as the percentage equivalent of a fraction, the
numerator of which is the total of all collections of principal during the
period and the denominator of which is the average total principal balance for
this period. We cannot assure you that the rate of principal collections will be
similar to the historical experience in the table below. Because the Accounts
designated to the trust will comprise only a portion of the entire Bombardier
Capital Inc. Domestic Inventory Portfolio, which includes accounts which have
not been designated to the trust, actual monthly payment rates with respect to
the Accounts designated to the trust may be different.
MONTHLY PRINCIPAL PAYMENT RATES
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
APRIL 30, YEAR ENDED JANUARY 31,
--------------- ------------------------------------------
2000 1999 2000 1999 1998 1997 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Highest Month................ 17.68% 22.35% 30.17% 31.14% 29.48% 34.01% 35.9%
Lowest Month................. 13.54% 12.96% 11.00% 10.38% 10.99% 10.54% 11.10%
Average of the
Months in the Period....... 15.97% 16.93% 18.60% 19.32% 19.93% 21.68% 22.90%
</TABLE>
See the last paragraph under 'The Accounts -- General.'
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
46
<PAGE>
distribution date and, in the case of the class B certificates, prior to the
distribution date. See 'Description of the Certificates -- Early
Amortization Events.'
DESCRIPTION OF THE CERTIFICATES
GENERAL
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 for 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 is a summary of the material terms of the
pooling and servicing agreement and does not 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. The Series 2000-1
Certificates will be issued in two classes, class A and class B. The initial
principal balance of the class A certificates will be $374,600,000 and the
initial principal balance of the class B certificates will be $25,400,000. 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 beneficial owner of a certificate 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, starting October 16, 2000. The Class A
47
<PAGE>
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, starting October 16, 2000. The Class B
Certificate Rate for any interest period will be the lesser of Libor plus
and the Net Receivables Rate.
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. On the date
the certificates are issued, Bombardier Credit Receivables Corporation will
deposit into the reserve fund $ to be used to pay interest on the certificates
on the first distribution date. 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 your certificates will be derived solely from:
(1) collections of non-principal receivables allocated to Series 2000-1
for the preceding calendar month;
(2) the amount, if any, then on deposit in the reserve fund;
(3) any Investment Proceeds; and
(4) Series 2000-1 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 September
2003 distribution date unless an Early Amortization Event, as described under
'Early Amortization Events' below, occurs. If an Early Amortization Event
occurs, principal distributions on your certificates will begin on the
distribution date following the end of the calender month in which this event
occurs.
During the Revolving Period, principal collections allocated to the
certificates, subject to limitations, will either:
(1) be deposited in the excess funding account as described under 'Excess
Funding Account' below;
48
<PAGE>
(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 or an 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 up to the Controlled
Deposit Amount for that month, and, in the case of 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 September 2005 distribution date has occurred.
The Controlled Accumulation Period will begin on May 1, 2003 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 your 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 in full on the distribution date in September 2003,
which is the scheduled principal payment date. During an Early Amortization
Period, principal collections allocable to the certificates will be distributed
first to the class A certificates until their principal balance is reduced to
zero, and then to the class B certificates until their principal balance is
reduced to zero.
We expect that amounts accumulated in the principal account will be paid to
the holders of the class A certificates on the September 2003 distribution date,
which is the scheduled principal payment date and that a single principal
payment in respect of the entire principal balance of the class B certificates
will be made on the September 2003 distribution date. The principal of the class
A or the
49
<PAGE>
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 your
certificates will be made on the distribution date occurring or immediately
following the date of 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.
BOOK-ENTRY REGISTRATION
The certificates will be book-entry certificates and, except as described
below, beneficial owners of the certificates will not be entitled to receive a
physical certificate representing their certificate. Beneficial owners of the
certificates may elect to hold their certificates through the Depository Trust
Company in the United States, or Clearstream Banking, societe anonyme or the
Euroclear system in Europe, if they are participants in those systems, or
indirectly through organizations which clear through or maintain a custodial
relationship with a participant in those systems.
The certificates will initially be registered in the name of Cede & Co., the
nominee of The Depository Trust Company. Clearstream Banking and Euroclear will
hold omnibus positions on behalf of their participants through customers'
securities accounts in Clearstream Banking's and Euroclear's names on the books
of their respective depositaries, which in turn will hold such positions in
customers' securities accounts in the depositaries' names on the books of The
Depository Trust Company. Citibank, N.A. will act as depositary for Clearstream
Banking and The Chase Manhattan Bank will act as depositary for Euroclear.
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-
50
<PAGE>
entry changes in their accounts, 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 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.
If you are not a Participant or an entity that clears through or maintains a
custodial relationship with a Participant, but desire to purchase, sell or
otherwise transfer ownership of, or other interests in, certificates you can do
so only through Participants and entities that clear through or maintain a
custodial relationship with a Participant. In addition, you will receive all
distributions of principal of and interest on your 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 entities that clear through or maintain a custodial relationship
with a Participant, either directly or indirectly, 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.
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 an attached listing.
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
entities that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly, and with which beneficial owners of
certificates have accounts with respect 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 beneficial owners of
certificates.
51
<PAGE>
Beneficial owners of certificates who are not Participants may transfer
ownership of their certificates only through Participants and entities that
clear or maintain a custodial relationship with a Participant, by instructing
such Participant or entity to transfer their certificate, by book-entry
transfer, through The Depository Trust Company for the account of the purchaser
of such certificate, which account is maintained with the purchaser's
Participant or with an entity that clears through or maintains a custodial
relationship with a Participant. In accordance with The Depository Trust
Company's normal rules and procedures, transfers of ownership of certificates
will be executed through The Depository Trust Company, and the accounts of the
respective Participants at The Depository Trust Company will be debited and
credited. Similarly, the Participants and entities that maintain a custodial
relationship with a Participant will make debits and credits, as the case may
be, on their records on behalf of the beneficial owners of certificates who are
selling and purchasing the certificates.
Because The Depository Trust Company can only act on behalf of Participants,
who in turn act on behalf of entities that clear through or maintain a custodial
relationship with them, either directly or indirectly and specified banks, the
ability of a beneficial owner of a certificate 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 issued to the beneficial owner.
Transfers between Participants will occur in accordance with The Depository
Trust Company's rules. Transfers between participants in Clearstream Banking and
participants in Euroclear 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 participants in Clearstream Banking or Euroclear, 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 the relevant depositary; however, such cross market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterpart in such system in accordance
with its rules and procedures and within its established deadlines. The relevant
European international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to the relevant 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. Participants in Clearstream Banking and Euroclear
may not deliver instructions directly to the European depositaries.
Because of time zone differences, credits of securities received in
Clearstream Banking or Euroclear as a result of a transaction with a Participant
will be made during subsequent securities settlement processing and dated the
business day following The Depository Trust Company's settlement date. Such
credits or any
52
<PAGE>
transactions in such securities, settled during such processing, will be
reported to the relevant participants in Euroclear or Clearstream Banking on
such business day. Cash received in Clearstream Banking or Euroclear, as a
result of sales of securities by or through a participant in Clearstream Banking
or Euroclear to a Participant, will be received with value on the Depository
Trust Company settlement date but will be available in the relevant Clearstream
Banking or Euroclear 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 'Federal Income Tax
Consequences -- Foreign Investors'.
Clearstream Banking, societe anonyme, formerly known as Cedelbank, societe
anonyme, is incorporated under the laws of Luxembourg as a professional
depository. Clearstream Banking holds securities for its participating
organizations and facilitates the clearance and settlement of securities
transactions between its participants through electronic book-entry changes in
accounts of its participants, eliminating the need for physical movement of
certificates. Transactions may be settled in Clearstream Banking in any of at
least 28 currencies, including United States dollars. Clearstream Banking
provides to its participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Clearstream Banking interfaces with
domestic markets in several countries. As a professional depository, Clearstream
Banking is subject to regulation by the Luxembourg Monetary Institute.
Participants in Clearstream Banking are recognized financial institutions around
the world, including underwriters, securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. Indirect
access to Clearstream Banking is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant in Clearstream Banking, either directly or
indirectly.
The Euroclear system was created in 1968 to hold securities for participants
of Euroclear and to clear and settle transactions between its participants
through simultaneous electronic book-entry delivery against payment, 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 approximately 35 currencies, including United States dollars. The
Euroclear system includes various other services, including securities lending
and borrowing, and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with The
Depository Trust Company described above. The Euroclear system is currently
operated by the Brussels, Belgium office of Morgan Guaranty Trust Company of New
York, under contract with Euroclear Clearance Systems S.C., a Belgian
cooperative corporation. All operations are currently conducted by the Brussels,
Belgium office of Morgan Guaranty Trust Company of New York, and all Euroclear
system securities clearance accounts and the Euroclear system cash accounts are
accounts with such office, not the cooperative corporation. The cooperative
corporation establishes policy for the Euroclear system on behalf of
participants of the Euroclear system.
53
<PAGE>
Participants in the Euroclear system include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries.
Indirect access to the Euroclear system is also available to other firms that
clear through or maintain a custodial relationship with a participant in
Euroclear, either directly or indirectly.
The Brussels, Belgium office of Morgan Guaranty Trust Company of New York is
the Belgian branch of a New York banking corporation which is a member bank of
the Federal Reserve System. 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.
A new bank known as Euroclear Bank is scheduled to assume the operating and
banking functions of the Euroclear System in 2001, at which time Morgan Guaranty
Trust Company will cease to operate the Euroclear system.
Securities clearance accounts and cash accounts with the Brussels, Belgium
office of Morgan Guaranty Trust Company of New York 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 Brussels,
Belgium office of Morgan Guaranty Trust Company of New York acts only on behalf
of participants of the Euroclear system, and has no record of or relationship
with persons holding through participants in the Euroclear system.
Distributions with respect to the certificates held through Clearstream
Banking or Euroclear will be credited to the cash accounts of participants in
Clearstream Banking or Euroclear in accordance with the relevant system's rules
and procedures, to the extent received by their respective depositories. These
distributions will be subject to tax reporting in accordance with relevant
United States tax laws and regulations. See 'Material Federal Income Tax
Consequences.'
Clearstream Banking or the Brussels, Belgium office of Morgan Guaranty Trust
Company of New York, 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 participant in Clearstream Banking or Euroclear respectively 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.
Although The Depository Trust Company, Clearstream Banking and the Euroclear
system have agreed to the foregoing procedures in order to facilitate transfers
of certificates among participants of The Depository Trust Company, Clearstream
Banking 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
54
<PAGE>
Trust Company, please see Annex III to this prospectus, which is 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) we advise the trustee that The Depository Trust Company is no longer
willing or able to discharge properly its responsibilities under the
certificates and we are unable to locate a qualified successor;
(2) we, at our option, advise the trustee that we elect to terminate the
book-entry system for the certificates through The Depository Trust Company;
or
(3) after the occurrence of a Servicer Default under the pooling and
servicing agreement, beneficial owners of certificates representing not less
than 50% of the aggregate unpaid principal amount of the certificates or of
a class of 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 its successor, is no longer in the
best interests of those beneficial owners of certificates.
If any of the events described in the immediately preceding paragraph
occurs, the trustee is required through The Depository Trust Company to notify
all beneficial owners of certificates 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 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 & Co. 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.
55
<PAGE>
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 excess, if
any, of the Pool Balance over the Required Pool Balance.
The Retained Interest will consist of
(1) the undivided interest in the trusts' assets 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 your certificates, the amount under the
foregoing clause (1) allocable to the certificates will be no less than
$23,280,423 and the amount under the foregoing clause (2) allocable to the
certificates will be $16,000,000.
The interest represented by the variable funding certificate will consist of
the excess, if any, of the Pool Balance over the Required Pool Balance which
generally will fluctuate and could be eliminated if the Pool Balance is less
than the Required Pool Balance. However, upon the occurrence of an event of
bankruptcy, insolvency or receivership relating to Bombardier Capital Inc. or
the depositor, the proportionate interest in the Pool Balance represented by the
variable funding certificate as of the date of the event of bankruptcy,
insolvency or receivership relating to Bombardier Capital Inc. or the depositor
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 event of bankruptcy,
insolvency or receivership relating to Bombardier Capital Inc. or the depositor.
56
<PAGE>
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 Bombardier Capital Inc. as security for the
promissory note issued by the depositor to Bombardier Capital Inc. as part of
the consideration for the sale of the receivables by Bombardier Capital Inc. to
the depositor. Amounts allocated to the depositor for the variable funding
certificate or the BCRC Certificate may be available to the depositor to pay
principal and interest on the promissory note issued to Bombardier Capital Inc.
See 'Description of the Receivables Purchase Agreement -- Sale and Transfer of
Receivables.' Except after the occurrence of an event of bankruptcy, insolvency
or receivership relating to Bombardier Capital Inc. or the depositor 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, under one or more
supplements, the depositor may cause the trustee to issue one or more new
series. In the supplement, the depositor may specify, among other things, for
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;
the payment date or dates and the date or dates from which interest will
accrue;
the method for allocating collections to certificateholders;
the issuer and terms of any form of enhancement;
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;
57
<PAGE>
the designation of any accounts established for this 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 on the bearer certificates;
the priority of this series to any other series;
whether this series will be part of a group; and
any other terms permitted by the related supplement and the pooling and
servicing agreement.
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 under that act, 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 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 for 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 must state the designation of any series and for that series:
(1) its initial principal amount,
(2) its currency and certificate rate,
58
<PAGE>
(3) the issuer of any enhancement for that 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
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 for any
certificateholder or the trust, and
(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 must 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 will have an
interest in the pool represented by the BCRC Certificate and the
variable funding certificate equal 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, Bombardier Capital Inc. 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 must,
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
59
<PAGE>
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 total 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 for 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 for
any certificateholder or the trust. In addition, if the supplement by which the
Supplemental Certificate is issued amends any of the terms of the pooling and
servicing agreement, the supplement shall be subject to the conditions described
under the caption ' -- Amendments' below.
If any Supplemental Certificate is to be transferred or exchanged, it shall
be transferred or exchanged only upon satisfaction of the conditions described
in the preceding paragraph.
If a Supplemental Certificate is issued, all references in this prospectus
to the BCRC Certificate and distributions made on the BCRC Certificate will
include the Supplemental Certificate and distributions to be made on the
Supplemental Certificate and references to the holder of the BCRC Certificate or
to the depositor as holder of the BCRC Certificate will 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 Bombardier
Capital Inc. and the related collateral security granted by the related obligors
as of January 1, 1994, all receivables created in those initial accounts after
January 1, 1994 and the depositor's interest in the related security granted by
obligors 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 seven times designated Additional
Accounts and assigned the receivables in the Additional Accounts to the trust as
shown in Annex II. Annex II is incorporated by reference into this prospectus.
To evidence the sale or contribution of the receivables then existing or
subsequently arising under the Accounts to the depositor by Bombardier Capital
Inc. and the transfer of these receivables by the depositor to the trust,
Bombardier Capital Inc. has indicated in its computer records that these
receivables and the related security granted by the related obligors have been
transferred to the depositor and that the depositor has transferred its interest
to
60
<PAGE>
the trust. In addition, Bombardier Capital Inc. 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 in these Accounts as of
January 1, 1994 and as of the dates that Accounts were added to the trust.
Bombardier Capital Inc. has retained and will not deliver to the depositor or to
the trustee any other records or agreements for 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 Bombardier Capital Inc., and the physical
documentation for 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 under Vermont state law to perfect the trust's interest in
these receivables, the security granted by the related obligors, 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.'
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 Bombardier Capital Inc. 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 at the time of its designation to the trust. For
conveyance of receivables in Additional Accounts, the depositor will follow the
procedures described 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 Bombardier Capital
Inc.
The depositor has made representations and warranties to the trustee and
will on the date the certificates are issued make the following representations
and warranties about the Accounts, the receivables and the security granted by
the related obligors:
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
61
<PAGE>
case of Additional Accounts, as of 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 security granted by the related obligors 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
for each receivable and all security granted by the related obligors
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.
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
described in the following paragraph, and in the case of an Account, that
Account will 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 calender month in which the retransfer
obligation arises, with a corresponding reduction in the Pool Balance. Unless an
event of bankruptcy, insolvency or receivership relating to Bombardier Capital
Inc. or the depositor has occurred, if 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 amount by which the Required Pool Balance exceeds the Pool
Balance. If that 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 an amount equal to the
excess of the Required Pool Balance over the Pool Balance will be the sole
remedy for 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,
62
<PAGE>
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 security granted by the related
obligors, 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:
any of the representations and warranties described in paragraph (1) above
has been breached,
the representation and warranty about 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 ownership or
security interest in the receivables and the security granted by the
related obligors 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 an event of bankruptcy,
insolvency or receivership relating to Bombardier Capital Inc. or the depositor
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 security granted by the
related obligors, and proceeds thereof, under the Uniform Commercial Code as
then in
63
<PAGE>
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 by the breach has been cured.
The portion of the price for the repurchase of the certificates will be
equal to the sum of the total 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 Class A Monthly Interest and Class B 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 for a breach of the representations and
warranties available to the investor certificateholders or the holder of the
variable funding certificate or the trustee on behalf of the investor
certificateholders.
ELIGIBLE ACCOUNTS AND ELIGIBLE RECEIVABLES
An Eligible Account is:
(1) an individual financing account established by Bombardier Capital
Inc. or established by an affiliate of Bombardier Capital Inc. or by a third
party but which satisfies Bombardier Capital Inc.'s customary underwriting
standards and acquired by Bombardier Capital Inc. or an affiliate of
Bombardier Capital Inc., with an obligor for 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
Bombardier Capital Inc. or an affiliate of Bombardier Capital Inc. or by a
third party which satisfies Bombardier Capital Inc.'s customary underwriting
standards and acquired by Bombardier Capital Inc. or an affiliate of
Bombardier Capital Inc. 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 its eligibility is
determined is extended to an obligor that satisfies the eligibility
requirements of the pooling and servicing agreement and is in existence and,
after its establishment or acquisition by Bombardier Capital Inc. or an
affiliate of Bombardier Capital Inc., is maintained and serviced by
Bombardier Capital Inc. Bombardier Capital Inc. or its affiliates may assign
or grant participation rights in this type of Account or any of their
receivables 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
64
<PAGE>
of Bombardier Capital Inc.'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 obligor is eligible under the pooling and servicing agreement if it meets
the following requirements:
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.
An Eligible Receivable is a receivable:
(1) which was originated by Bombardier Capital Inc., by an affiliate of
Bombardier Capital Inc. or acquired by Bombardier Capital Inc. or an
affiliate of Bombardier Capital Inc., 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 Bombardier Capital Inc. at the time of sale or
contribution by Bombardier Capital Inc. 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 for
receivables that are payable under 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 related Eligible Product 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,
65
<PAGE>
(6) which is not unenforceable as a result of any violation of
requirements of law applicable to it 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 to
the agreement,
(7) for which all consents and governmental authorizations required to be
obtained by Bombardier Capital Inc. or an affiliate of Bombardier Capital
Inc., or the depositor for the creation of the receivable or its transfer to
the depositor and the trust or the performance by Bombardier Capital Inc. or
an affiliate of Bombardier Capital Inc. of the inventory security agreement
or the other floorplan financing agreement in 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 to it 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
in the receivable including, with some exceptions, any proceeds thereof,
(10) which will at all times be the legal and assignable payment
obligation of the obligor, enforceable against the 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,
Bombardier Capital Inc. or an affiliate of Bombardier Capital Inc. and the
depositor have satisfied all their obligations under the pooling and
servicing agreement for 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 Bombardier Capital Inc. or any affiliate of Bombardier Capital Inc.
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 in the receivable, and
66
<PAGE>
(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 about the receivables for the purpose of establishing the presence or
absence of defects, compliance with representations and warranties of Bombardier
Capital Inc. 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 total 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 an event of bankruptcy, insolvency
or receivership relating to Bombardier Capital Inc. or the depositor 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 an event of
bankruptcy, insolvency or receivership relating to Bombardier Capital Inc. or
the depositor has occurred, the depositor under the receivables purchase
agreement will be required to purchase or acquire from Bombardier Capital Inc.,
but Bombardier Capital Inc. 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
67
<PAGE>
the trust means accounts of the same type, in other words, 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 Bombardier Capital Inc. 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.
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 designation 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 designated in accordance with the
conditions described in the second succeeding paragraph following this list,
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
designation and, unless all necessary conditions -- including if not already
included in the trust, satisfaction of the Rating Agency Condition for 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 after September 1, 2000 or
arising under Additional Accounts, may have been originated or acquired by
Bombardier Capital Inc. 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 transferred to the trust before the date the
Series 2000-1 Certificates are issued, they may not be of the same credit
quality as the Accounts and receivables as of the date of issuance of the
certificates.
The requirement that the Rating Agency Condition be satisfied and that legal
opinions be delivered for the designation of Additional Accounts will not be
necessary if the following conditions are met:
68
<PAGE>
(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 designated, 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 total dollar amount of
principal receivables in these new Accounts designated 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 designated 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 designated 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 has the right at any time to designate specific Accounts from
which it will stop transferring newly originated receivables to the trust and,
when the principal balance of these Accounts is reduced to zero, to remove these
Accounts from 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
must, among other things:
(1) at least five business days prior to the date on which the transfer
of these receivables will stop, 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 stop, furnish to the trustee a computer
file, microfiche list or other list of the Removed Accounts, specifying for
each
69
<PAGE>
Removed Account its number, the total amount outstanding in that Removed
Account and the total amount of receivables in the Removed Account as of the
day immediately preceding the date on which the transfer of these
receivables will stop;
(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;
(4) represent and warrant that no selection procedures believed by the
depositor to be adverse to the holders of certificates of any series were
used 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 your
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 stop, deliver to the trustee and any enhancement provider
an officers' certificate confirming the representations 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
Account which is not an Eligible Account, the depositor will begin the removal
of the receivables of this 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 Accounts to be removed;
(2) on or before the fifth business day after the date on which the
removal of these receivables begins, furnishing to the trustee a computer
file, microfiche list or other list of the Accounts, specifying for each
Account which is no longer an Eligible Account its number and the total
amount and outstanding principal balance of the receivables in these
Accounts as of the date right before 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
Accounts which are no longer Eligible 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
before the time that the depositor is permitted to remove existing receivables
in
70
<PAGE>
Removed Accounts or upon a required removal of an Account which is no longer an
Eligible Account:
(1) from and after the applicable date on which the transfer of the
relevant receivables stops or the removal of the relevant receivables
begins, as applicable, all principal collections for each Removed Account or
Account which is not an Eligible Account will be allocated first to 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 stops 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 under the pooling and servicing
agreement, Non-Principal Collections for 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 for
these Accounts on that business day.
Upon satisfaction of the above conditions on the Determination Date on which
the outstanding principal balance of receivables thereof had been transferred to
the trust in the relevant Account is reduced to zero, the Removed Accounts or
Accounts which are no longer Eligible Accounts will be deemed to have been
removed from the trust and the depositor will 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 Accounts which are not
Eligible Accounts, all amounts received on these Accounts and all of their
proceeds.
The depositor may at any time remove specific receivables from the trust,
including all amounts then held or subsequently received on 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 security
granted by obligors 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
will 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
will 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.
71
<PAGE>
The depositor also has the right to cause the trustee to remove from the
trust and reassign to the depositor receivables -- and the related collateral
security -- that at any time during any four month period beginning on every
February 1, June 1 and October 1 are Domestic Inventory Receivables that were
originated and transferred to the trust during the four month period beginning
16 months before the start of the first mentioned four month period beginning on
February 1, June 1 or October 1 and that continue to be unpaid in full 450 or
more days following their origination. The total amount of these Domestic
Inventory Receivables that may be so removed and reassigned may not, however,
exceed 10% of the total principal balance of Domestic Inventory Receivables
originated and transferred to the trust during the four month period beginning
16 months earlier. The depositor will 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 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 deposition, no Early
Amortization Event will occur as a result of the removal. 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 participation interest which is to be granted to a third
party. If an interest in a receivable is removed, the security granted by the
related obligors or interest in such 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; COLLECTION ACCOUNT AND EXCESS FUNDING
ACCOUNT
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
72
<PAGE>
from the collection account for the purpose of carrying out the trustee's or the
servicer's duties under the pooling and servicing agreement.
Excess Funding Account
The 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 will 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 allocated to the certificates but otherwise payable to 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 will be calculated for each business day and will
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 Available
Subordinated Amount and 104 percent of the Adjusted Invested Amount and the
denominator of which is the aggregate of the required balances for all
series providing for excess funding accounts or similar arrangements,
including the required balance for this series, which are in their revolving
periods or, if applicable, their amortization periods. The required balance
for this series is the sum of the Available Subordinated Amount and 104
percent of the Adjusted Invested Amount. The depositor may reduce or adjust
the 104 percentage without the consent of the certificateholders if the
Rating Agency Condition is satisfied.
On each business day during the Revolving Period or the Controlled
Accumulation Period, funds on deposit in the excess funding account, including
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
73
<PAGE>
amortization, early amortization or accumulation periods to the extent that as
of the end of the preceding day, of the Pool Balance exceeds the Required Pool
Balance.
Funds on deposit in the excess funding account will be invested at the
direction of the servicer in Eligible Investments. On each distribution date,
all net investment income earned on amounts in the excess funding account since
the preceding distribution date will be withdrawn from the excess funding
account and applied on the same basis as Investor Non-Principal Collections.
ALLOCATION PERCENTAGES
This section describes the procedure for calculating the certificates'
allocable share of specified distributions and other payments made on 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 calender
month 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 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 2000-1 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 previous calender month 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 of these percentages 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
74
<PAGE>
exceeds 100%, then Non-Principal Collections for the previous calender month
will be allocated among the series and the variable funding certificate on the
basis of these allocation percentages after the pro rata reduction of these
percentages so that the sum of these percentages equals 100% for that period.
Principal Collections for all Series
Principal collections allocable to the certificates for any calender month
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 calender month during 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 calender month during 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 calender month
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 calender month 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 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
75
<PAGE>
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.
If all of the following are true:
(1) Bombardier Capital Inc. remains the servicer under the pooling and
servicing agreement,
(2) no Servicer Default has occurred and is continuing, and
(3) Bombardier Capital Inc.:
is a subsidiary of Bombardier Corporation, which shall own at
least 80% of the voting common stock of Bombardier Capital Inc.,
and Bombardier Capital Inc. 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,
then, subject to any limitations in the confirmations referred to below in this
paragraph, Bombardier Capital Inc. 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 Bombardier Capital Inc. 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, Bombardier Capital Inc. must deliver to the trustee
written confirmation from each of the Rating Agencies that the failure by
Bombardier Capital Inc. to make daily deposits will not result in a reduction or
withdrawal of the ratings of your certificates or any other outstanding series
or class of investor certificates.
In addition, for any calender month, the servicer will only be required to
deposit collections into the collection account up to the total 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
76
<PAGE>
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 or
the Controlled Accumulation Period, the servicer will allocate to Series 2000-1
an amount equal to the sum of
(1) the product of the Floating Allocation Percentage for that date
multiplied by the total amount of Non-Principal Collections on that
date, and
(2) the Series 2000-1 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
(2) the difference between
the sum of the Class A Monthly Interest and the Class B Monthly
Interest; any Class A Carry-Over Amount and any Class B Carry-
Over Amount for the related distribution date; if Bombardier
Capital Inc. is not the servicer, the Monthly Servicing Fee for
the current calender month; the sum for each day 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 calender month,
and the remainder of this Daily Allocation will be retained by the servicer for
application as described in the second following paragraph.
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 for the Revolving Period or the Controlled
Accumulation 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 calender
month over the
77
<PAGE>
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 Bombardier Capital Inc. is the servicer, Bombardier Capital Inc. may
make this deposit net of the Monthly Servicing Fee plus Daily Allocations
consisting of Series 2000-1 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 on the receivables during any particular calender month 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 in 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
(1) the sum of the Class A Monthly Interest and the Class B Monthly
Interest for the distribution date,
(2) the sum of the Class A Monthly Interest and the Class B Monthly
Interest accrued but not paid for prior distribution dates plus
interest on these amounts,
(3) the Net Servicing Fee for the distribution date,
(4) the portion of the Defaulted Amount allocated to the certificates for
the distribution date, and
(5) the Series 2000-1 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.'
78
<PAGE>
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 before the end of the Revolving Period, the
Required Subordinated Amount will 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 the immediately preceding distribution date
or, if the date of determination is a distribution date, for that date;
provided further, that upon the start of 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 before the first day
of 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 2000-1 Available Retained
Collections for the purpose of reimbursing funds withdrawn from the
reserve fund applied to cover any portion of the portion of the
Defaulted Amount allocated to the certificates 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 calender month multiplied by a
fraction, the numerator of which is the Available Subordinated Amount
as of the last day of the preceding calender month, or in the case of
the first distribution date, the Required Subordinated Amount as of
the date the certificates are issued, and the denominator of which is
the Pool Balance as of the last day of the preceding calender month,
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
79
<PAGE>
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 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 your certificates are issued through the first distribution
date will equal the Required Subordinated Amount as of that date of
determination, which will equal at least $23,280,423 on the date the
certificates are issued.
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 may elect to
increase the Available Subordinated Amount -- but the total 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;
80
<PAGE>
(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 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 from the reserve fund on that distribution date;
(5) an amount equal to the portion of the Defaulted Amount allocated to
the certificates, 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 class B
certificateholders; 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
enough to make the distributions required by clauses (1), (2), (3) and (5), the
trustee will 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 that order.
If there is a Deficiency Amount for that distribution date, the servicer
will apply or cause the trustee to apply the total amount of Series 2000-1
Available Retained Collections for the related calender month 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 2000-1 Available
Retained Collections remaining
81
<PAGE>
after application in accordance with the preceding sentence will be treated as a
portion of the Available Investor Principal Collections, but only up to the
amount of unpaid Adjustment Payments allocated to the certificates.
Reserve Fund
The reserve fund, which will 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 the certificates are issued in an amount no less than
$2,000,000 plus an amount necessary to pay interest on the certificates on the
first payment date. 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 will
deposit any remaining Series 2000-1 Available Retained Collections to the extent
of the Available Subordinated Amount for the related calender month 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 for the reserve fund. After the payment in
full of the total 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 for 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 will deposit the
remaining Series 2000-1 Available Retained Collections, to the extent of the
Available Subordinated Amount, for the related calender month 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 for
the calender month 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 2000-1 Investor Allocation
Percentage of Miscellaneous Payments for that distribution date, will be
included in Available Investor Principal Collections for that distribution
date;
(2) an amount equal to the total outstanding amounts of the Monthly
Servicing Fee which have been previously waived as described below under
'Servicing Compensation and Payment of Expenses' and not previously paid
from Excess Servicing will be distributed to the servicer; and
(3) the balance, if any, will be distributed, or made available, to the
holder of the BCRC Certificate and will also increase the Available
Subordinated Amount to the extent described in its definition.
82
<PAGE>
Principal Account
The principal account, which will be an Eligible Deposit Account, will be
established and maintained in the name of the trustee for the benefit of the
Series 2000-1 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, for the principal
account. On the first to occur of the September 2003 distribution date and the
first distribution date after the occurrence of an Early Amortization Event,
amounts in the principal account will be used to pay principal of the class A
certificates and if the class A certificates are paid in full, then to pay the
class B certificates. After the payment in full of the outstanding 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 during 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 for the Controlled Accumulation Period:
an amount equal to the Controlled Deposit Amount will be deposited
into the principal account for payment first to the class A
certificateholders and after payment in full of the class A
certificates, to the class B certificateholders, on the earlier to
occur of the distribution date in September 2003 or the first
distribution date for the Early Amortization Period; and
an amount equal to the difference, if any, between the Excess
Funded Amount and the amount then on deposit in the excess funding
account will be deposited into the excess funding account; and
the balance, if any, will be allocated to Excess Principal
Collections; and
(3) for each distribution date for any 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 September
2005 distribution date, any funds remaining in the reserve fund, after the
application of funds in the reserve fund as described above under ' -- Non-
83
<PAGE>
Principal Collections', will be treated as a portion of Available Investor
Principal Collections for the September 2005 distribution date.
Available Investor Principal Collections for any distribution date means the
sum of
(1) the product of the Floating Allocation Percentage, for the Revolving
Period, or the Principal Allocation Percentage, for the Controlled
Accumulation Period or any Early Amortization Period, for the related
calender month multiplied by principal collections for the related calender
month,
(2) the amount, if any, of Investor Non-Principal Collections, funds in
the reserve fund and Series 2000-1 Available Retained Collections allocated
to cover any portion of the Defaulted Amount allocated to the certificates
or any unpaid Adjustment Payments allocated to the certificates or to
reimburse Investor Charge-Offs,
(3) the Series 2000-1 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 Early Amortization Period began during the related calender
month, any amounts on deposit in the excess funding account, and
(6) on the September 2005 distribution date, any funds remaining in the
reserve fund, after the application of funds in the reserve fund as
described above under ' -- Non-Principal Collections'.
If the sum of the Floating Allocation Percentage during the Revolving Period
or the Principal Allocation Percentage during the Early Amortization Period 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 on 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 in the written
notice only if an officer's certificate is delivered to the trustee to the
effect that in the reasonable belief of the depositor the designation would not
result in an Early Amortization Event or have a materially adverse effect on the
certificateholders and if the Rating Agency Condition is satisfied.
84
<PAGE>
DEFAULTED RECEIVABLES AND RECOVERIES
Defaulted Receivables on any distribution date are:
(1) all receivables other than receivables that were designated as
ineligible at the time of transfer to the trust that were charged off
as uncollectible in the preceding calender month;
(2) before 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 after 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) before 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; after the payment in
full of the Series 1997-1 Certificates, receivables will not become
Defaulted Receivables due to delinquent interest payments; and
(4) all receivables which, although they were Eligible Receivables when
transferred to the trust, arose in an Account which has become an
Account which is not an Eligible Account since this transfer and
which were not Eligible Receivables for any six consecutive
distribution dates after this Account became an Account which is not
an Eligible Account.
Receivables are not Defaulted Receivables merely because they are no longer
Eligible Receivables.
The Defaulted Amount for any calender month will be an amount not less than
zero, equal to the aggregate principal amount of principal receivables that
became Defaulted Receivables during the preceding calender month 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 calender month. If, however,
an event of bankruptcy, insolvency, or receivership has occurred with respect to
either of the depositor or the servicer or if an event of bankruptcy, insolvency
or receivership relating to Bombardier Capital Inc. or the depositor 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 Bombardier Capital Inc. 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 calender month multiplied by the Floating Allocation Percentage for that
calender month will be allocated to the certificates.
If the servicer adjusts downward the outstanding principal balance of any
Eligible Receivable because of a rebate, billing error, refund, credit
adjustment or
85
<PAGE>
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 an event of bankruptcy,
insolvency or receivership relating to Bombardier Capital Inc. or the depositor
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 portion of the Defaulted Amount allocated to the
certificates for that distribution date. Any reduction in the Invested Amount
may have the effect of slowing or reducing the return of principal on your
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 2000-1 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.
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 outstanding principal balance of
the certificates on that distribution date, accrued and unpaid interest due on
those certificates together with interest on overdue Class A Monthly Interest
and the Class B 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 under 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.'
86
<PAGE>
EARLY AMORTIZATION EVENTS
Starting on the first distribution date following the calender month in
which an Early Amortization Event has occurred, principal collections allocable
to the certificates will no longer be allocated to any other series 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 Bombardier
Capital Inc., 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
amount required to be paid upon a transfer of receivables to the
depositor 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 the failure to deliver this statement;
(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 will not be deemed to have occurred if
the depositor has 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, has been given to the depositor by the
trustee or any enhancement provider;
87
<PAGE>
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 under the pooling and servicing agreement 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, has 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 security granted by the related
obligors if the pooling and servicing agreement constitutes the grant
of a security interest in the receivables and security granted by the
related obligors; except when 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 Bombardier Capital Inc. 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 security granted by obligors 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;
88
<PAGE>
11. the percentage obtained by dividing the aggregate principal
collections for a calender month by the average daily Pool Balance
for that calender month:
(a) for the three calender months included in the period from January
through March of any calendar year is less than 12% and
(b) for any other three consecutive calender months 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 and the class B certificates on the September 2003
distribution date;
13. the sum of all Eligible Investments and amounts on deposit in the
excess funding account for this series 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 those
distribution dates;
14. during any four month period starting June 1, October 1 or February 1
of any year, more than 10% of the aggregate principal amount of
Domestic Inventory Receivables that were originated and transferred
to the trust during the four month period starting sixteen months
before the four month period starting June 1, October 1 or
February 1 which is under consideration and are then owned by the
trust have not been paid in full within 491 days following the date
of origination thereof.
Immediately 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. 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 calender month 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 calender month 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.
89
<PAGE>
In addition to the consequences of an Early Amortization Event discussed
above, if an event of bankruptcy, insolvency or receivership relating to
Bombardier Capital Inc. or the depositor 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 event
of bankruptcy, insolvency or receivership relating to Bombardier Capital Inc. or
the depositor 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 event of bankruptcy,
insolvency or receivership relating to Bombardier Capital Inc. or the depositor
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.
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 your certificates in full plus accrued and
unpaid interest, certificateholders will incur a loss. 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.
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 sum of the invested amounts for all series is
zero and January 1, 2014. Upon termination of the trust, all right, title and
interest in the receivables and the security granted by obligors and other
related funds, other than amounts in
90
<PAGE>
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 September 2005 distribution date. In
the event that the Invested Amount is greater than zero on the September 2005
distribution 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
September 2005 distribution 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 on these losses, 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 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 on these losses, 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,
other than losses on receivables and amounts due on these losses;
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
will be liable, directly or indirectly, for 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 of the certificate as
provided in the pooling and servicing agreement and any applicable supplement.
91
<PAGE>
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 for this
action or for any federal, state or local income or franchise tax or any
interest or penalties on these taxes 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 will 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.
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 of the trust. Bombardier Capital Inc. has delegated some of its
servicing, collection, enforcement and administrative duties to third parties
and Bombardier Capital Inc. 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 Bombardier Capital Inc. of its responsibilities as servicer for these
duties.
Subject to compliance with all requirements of law, the servicer or
Bombardier Capital Inc. and any affiliate of Bombardier Capital Inc. 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,
92
<PAGE>
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 for 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 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;
(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 holder of the variable funding certificate in any receivable or Account,
then, unless an event of bankruptcy, insolvency or receivership relating to
Bombardier Capital Inc. or the depositor 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 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 will be automatically assigned to the
servicer.
93
<PAGE>
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 January 1, 2014 or the day after the distribution date on which the
invested amounts for all series is zero. The servicing fee equals the total of
the monthly servicing fees in the supplements to the pooling and servicing
agreement executed for each series. The Monthly Servicing Fee for your series
will be equal to one-twelfth of the product of 2%, if Bombardier Capital Inc. is
the Servicer, or 3%, if Bombardier Capital Inc. is not the Servicer multiplied
by the Invested Amount as of the last day of the second preceding calendar
month, provided that the Monthly Servicing Fee for the first distribution date
will be equal to $ . A portion of the Monthly Servicing Fee, designated as
the Net Servicing Fee, will be payable in the priority set forth above in
'Description of the Certificates -- Distribution from the Collection Account;
Reserve Fund; Principal Account'. The Net Servicing Fee will be equal to
one-twelfth of the product of 1%, if Bombardier Capital Inc. is the servicer, or
2%, if Bombardier Capital Inc. is not the servicer, or for any distribution date
for which the Monthly Servicing Fee has been waived, 0% multiplied by the
Invested Amount as of the last day of the second preceding calender month,
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 for the portion of the
Defaulted Amount allocated to the certificates 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 will 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 will be payable to the
servicer solely to the extent amounts are available to it for distribution under
the terms of the series 2000-1 supplement to the pooling and servicing
agreement.
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 waived, in which case the Monthly Servicing Fee,
including the Net Servicing Fee, for that distribution date will be zero.
The servicer will pay from its servicing compensation specified expenses
incurred in servicing the Accounts and the receivables including 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.
94
<PAGE>
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, under 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 of the receivables and
appoint a new servicer. The trustee will 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 stops acting
as servicer, all rights, authority, power and obligations of the servicer under
the pooling and servicing agreement will pass to and be vested in the trustee.
Before any transfer of the servicer's rights and obligations to a new servicer,
the trustee will review any bids obtained from potential servicers meeting the
eligibility requirements in the pooling and servicing agreement to serve as
successor servicer for servicing compensation not in excess of the Servicing
Fee. 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.
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 by 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 of this breach of covenant; provided,
however, that a Servicer Default will not be deemed to have occurred if the
depositor or the servicer has repurchased the related receivables under the
terms of the pooling and servicing agreement, or failure by the servicer
duly to observe or perform any other covenants or agreements of the servicer
in the pooling and servicing agreement, exclusive of breaches of covenants
for which the servicer repurchases the related receivables, as described
above under ' -- Servicer
95
<PAGE>
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 to
the servicer of this breach of covenant or agreement;
(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 requiring the error to be remedied 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 will not have occurred if the depositor has 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.
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 a delay or failure referred
to under clauses (2) or (3) above for a period of up to 60 business days, will
not be 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 is not relieved from using its best efforts to perform
its obligations in a timely manner under the terms of the pooling and servicing
agreement. The servicer will provide the trustee, any enhancement provider and
the depositor prompt notice of this failure or delay by it, together with a
description of its efforts to perform its obligations. In addition, the servicer
will immediately notify the trustee in writing of any Servicer Default.
REPORTS
On each distribution date after the start of the Controlled Accumulation
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
those certificates on that distribution date;
(2) the average for the dates on which the servicer receives collections
in the relevant calender month of the Floating Allocation Percentage and the
Principal Allocation Percentage;
96
<PAGE>
(3) the portion of the Defaulted Amount allocated to the certificates 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 of Investor Charge-Offs for the preceding calender month;
(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 calender
month;
(11) a fraction expressed as a percentage calculated to eleven decimal
places, the numerator of which is the Invested Amount and the denominator of
which is the Adjusted Invested Amount as of that distribution date,
determined after taking into account any reduction in the Invested Amount
that will occur on that distribution date;
(12) the Available Subordinated Amount for that distribution date;
(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.
On or before January 31 of each calendar year, beginning with January 31,
2001, the trustee will furnish 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, beneficial owners of certificates will receive
97
<PAGE>
tax and other information from Participants and entities that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly, 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 about the servicing of Bombardier
Capital Inc.'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.
Copies of all statements, certificates and reports furnished to the trustee
may be obtained by any certificateholder or any supplement, upon request in
writing delivered to the trustee.
AMENDMENTS
The pooling and servicing agreement or any supplement 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 Bombardier Capital
Inc., if Bombardier Capital Inc. is not then the servicer, without additional
consent, so long as this action will 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. 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.
The pooling and servicing agreement may also be amended by the depositor,
the servicer, the trustee and Bombardier Capital Inc., if it is 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,
98
<PAGE>
(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,
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 total 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 first paragraph of this section, 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 about
their rights under the pooling and servicing agreement.
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. Bombardier Capital Inc. and the depositor and their
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 will 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 will 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
99
<PAGE>
if the trustee ceases to be eligible to continue as trustee under the pooling
and servicing agreement or if the trustee 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 Bombardier Capital Inc. in accordance
with the receivables purchase agreement, dated as of January 1, 1994, between
Bombardier Capital Inc., 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 the material 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, Bombardier Capital Inc. 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 security granted by obligors,
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 security granted by obligors with respect to the
Accounts and Additional Accounts. Subject to satisfaction of the Rating Agency
Condition, Bombardier Capital Inc. may sell or contribute and transfer to the
depositor Asset-Based Receivables in Accounts designated for the trust.
Under the receivables purchase agreement, Bombardier Capital Inc. 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 Bombardier Capital Inc. The value of and the purchase price in the
case of sales of Eligible Receivables transferred will be deemed to equal the
principal
100
<PAGE>
amount of these receivables plus accrued and unpaid interest on these
receivables on the date of transfer, less, if applicable, the amount of
principal and interest allocable to any participation interest. The value of and
the purchase price in the case of sales for 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. The
principal amount of the promissory note issued to Bombardier Capital Inc. will
be increased from time to time in connection with the sale of additional
receivables by Bombardier Capital Inc. to the depositor for inclusion in the
trust under 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 promissory note issued to Bombardier Capital Inc., the
depositor has pledged to Bombardier Capital Inc. the variable funding
certificate held by the depositor. Principal and interest payable on the
promissory 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 promissory 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 promissory note and the holders
of the investor certificates will be claiming against a common fund, the portion
of the amounts then due under the promissory 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 Bombardier Capital Inc.
to the depositor, Bombardier Capital Inc. 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 Bombardier
Capital Inc. or to increase the amount of the promissory note as consideration
for these receivables.
In connection with the sale or contribution of the receivables to the
depositor, Bombardier Capital Inc. will indicate in its computer files that the
receivables have been transferred to the depositor, and that the depositor has
transferred its interest in the receivables to the trust. In addition,
Bombardier Capital Inc. 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 date on which such
Additional Accounts were designated to the trust. The records and agreements for
the Accounts and receivables have not been, and will not be, segregated by
Bombardier Capital Inc. from other documents and agreements for other accounts
and receivables and will not be stamped or marked to reflect the sale of the
receivables, but the computer records of Bombardier Capital Inc. have been
marked to evidence this transfer. Bombardier Capital Inc. has filed and will
file UCC financing statements for 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
101
<PAGE>
'Material Legal Aspects of the Receivables -- Transfer of Receivables and
Certificates.'
REPRESENTATIONS AND WARRANTIES
Bombardier Capital Inc. makes representations and warranties to the
depositor to the effect that, among other things, as of the date of the issuance
of the first series of 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.
Bombardier Capital Inc. also makes representations and warranties to the
depositor about the receivables to the effect that, among other things, as of
January 1, 1994, the date of the issuance of the first series of certificates
and each series issuance date, each Account is an Eligible Account and, in the
case of Additional Accounts 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 Bombardier Capital Inc. shall,
unless an event of bankruptcy, insolvency or receivership relating to Bombardier
Capital Inc. or the depositor 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
Bombardier Capital Inc. in immediately available funds on the business day
preceding the date of this retransfer.
Bombardier Capital Inc. 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 first series of certificates and each series
issuance date the receivables purchase agreement constitutes a legal, valid and
binding obligation of Bombardier Capital Inc. and the receivables purchase
agreement constitutes a valid sale to the depositor of all right, title and
interest of Bombardier Capital Inc. in and to the receivables, whether then
existing or subsequently created in the Accounts, the security granted by
obligors and, with some exceptions, the proceeds of the receivables and the
collateral security, which is effective as to each receivable upon its creation.
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,
Bombardier Capital Inc. 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
Bombardier Capital Inc. has covenanted that, except for the sale or
contribution and conveyances under the receivables purchase agreement,
Bombardier Capital Inc. 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,
102
<PAGE>
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.'
Bombardier Capital Inc. 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 Bombardier Capital Inc. of some of its
representations, warranties or covenants contained in the receivables purchase
agreement.
In addition, Bombardier Capital Inc. has expressly acknowledged and
consented to the depositor's assignment of its rights in the receivables under
the pooling and servicing agreement to the trustee.
TERMINATION
The receivables purchase agreement will terminate immediately after the
trust terminates. In addition, if Bombardier Capital Inc. 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, Bombardier Capital Inc. 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.
103
<PAGE>
MATERIAL LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES AND CERTIFICATES
In connection with any receivables sold or contributed and assigned by
Bombardier Capital Inc. to the depositor, Bombardier Capital Inc. 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. Bombardier Capital Inc. 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 Bombardier Capital Inc. 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 in the receivables. Financing statements relating to the transfer of
the receivables have been filed under the UCC as in effect in Vermont by
Bombardier Capital Inc. and the depositor to perfect the interests of the
depositor and the trust 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 Bombardier Capital Inc. 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 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, 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 obligor. However, when an Eligible Product is sold by an obligor,
Bombardier Capital Inc.'s security interest in the Eligible Product will
terminate in most instances. Therefore, if an obligor fails to remit to
Bombardier Capital Inc. amounts owed for 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
104
<PAGE>
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 for 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, 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
in the receivables. A tax or other government lien or non-consensual lien on
property of Bombardier Capital Inc. 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 Bombardier Capital Inc. to the depositor,
Bombardier Capital Inc. 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 Bombardier
Capital Inc. 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 Bombardier Capital Inc. may assign or participate
out a portion of the receivables.
See 'Floorplan and Asset-Based Financing Business -- Participation Arrangements'
and 'Description of the Certificates -- Removal of Accounts and Assignment of
Receivables.'
In addition, while Bombardier Capital Inc. is the servicer, cash collections
on the receivables may be commingled with the funds of Bombardier Capital Inc.
before each distribution date and, in the event of the bankruptcy of Bombardier
Capital Inc., 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.
105
<PAGE>
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 of the receivables which is effective as to each
receivable upon its transfer 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 Bombardier
Capital Inc., 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 for 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 Bombardier Capital Inc. 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 could be
substantial, in the amount of payments to certificateholders could result.
MATTERS RELATED TO UNFUNDED RECEIVABLES
Receivables are created on the books of Bombardier Capital Inc. 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, Bombardier
Capital Inc. usually does not pay the manufacturer, importer or distributor for
the product for a period of time after this shipment. If Bombardier Capital Inc.
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 for these receivables. See 'The Floorplan and
Asset-Based Financing Business -- Creation of the Receivables.'
MATERIAL MATTERS RELATING TO BANKRUPTCY
In connection with any receivables sold or contributed and assigned by
Bombardier Capital Inc. to the depositor under the receivables purchase
agreement, Bombardier Capital Inc. warrants to the depositor in the receivables
purchase agreement that the sale or contribution and assignment of these
receivables by it to the depositor is a valid sale or contribution and
assignment of
106
<PAGE>
these receivables. In addition, Bombardier Capital Inc. and the depositor have
agreed to treat the transfer of receivables by Bombardier Capital Inc. to the
depositor under the receivables purchase agreement as a sale or contribution and
assignment of the receivables to the depositor, and Bombardier Capital Inc. has
or will take all actions that are required under Vermont law to perfect the
depositor's ownership interest in the receivables. If Bombardier Capital Inc.
were to become a debtor in a bankruptcy case and a bankruptcy trustee for
Bombardier Capital Inc. as debtor-in-possession or a creditor of Bombardier
Capital Inc. were to take the position that the sale of receivables from
Bombardier Capital Inc. to the depositor under the receivables purchase
agreement should be recharacterized as a pledge of these receivables to secure a
borrowing by Bombardier Capital Inc., 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 Bombardier Capital Inc. 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 Bombardier Capital Inc.
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, Bombardier Capital Inc., 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. If, despite these steps, 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
107
<PAGE>
that trustee, debtor in possession or creditor, reductions, which, in some
circumstances, could be substantial, in the amount of these payments could
result.
The depositor does not intend to file, and Bombardier Capital Inc. 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 Bombardier Capital Inc. were
to become a debtor under the bankruptcy code, the applicable bankruptcy court
might hold unenforceable or invalid Bombardier Capital Inc.'s agreement not to
cause the depositor to file this type of petition and permit Bombardier Capital
Inc. as creditor of the depositor, on account of the promissory note issued by
the depositor to Bombardier Capital Inc. 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 promissory note,
to commence an involuntary petition against the depositor.
If Bombardier Capital Inc. 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 Bombardier
Capital Inc. and, according to the pooling and servicing agreement, only
collections on receivables previously 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 discussion represents the opinion of Morgan, Lewis & Bockius
LLP, special U.S. tax counsel to the depositor and the trust as to the 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 traders in securities, financial
108
<PAGE>
institutions, 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 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
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. 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 Stated
federal income tax purposes, 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
109
<PAGE>
addition, if the trust were treated as a partnership, income derived from the
partnership by a certificateholder that is a pension fund or other tax-exempt
entity treated as a partner may be treated as unrelated business taxable income.
Partnership characterization also may have adverse state and local income or
franchise tax consequences for a certificateholder.
POSSIBLE CHARACTERIZATION OF THE TRUST AS A CORPORATION
If the trust were treated in whole or in part as a partnership in which some
or all of the certificateholders were treated as partners rather than holders of
indebtedness, that deemed partnership could be classified as a 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
110
<PAGE>
certificate in a particular class is the price at which a substantial amount of
the certificates of that class are first sold to the public. The stated
redemption price at maturity of a certificate is the total of all payments on
the certificate other than 'qualified stated interest' payments. A qualified
stated interest payment 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 not '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
111
<PAGE>
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.
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
112
<PAGE>
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.
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, as amended, or that is described in Section 4975(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 these 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, Bombardier Capital Inc. 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.
113
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
OF CLASS A OF CLASS B
UNDERWRITER CERTIFICATES CERTIFICATES
----------- ------------ ------------
<S> <C> <C>
J.P. Morgan Securities Inc...........................
Chase Securities Inc.................................
---------- ----------
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.............................. % % % %
Class B.............................. % % % %
</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 nor 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 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 and Bombardier Capital Inc. have 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
underwriter's liabilities.
114
<PAGE>
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 for 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 to the registration statement. For
further information, reference is made to the registration statement and
amendments and exhibits to the registration statement, 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 and exhibits to the registration statement
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.'
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.
115
<PAGE>
GLOSSARY
'ACCOUNTS' means the accounts designated to the trust and identified in the
computer file or microfiche 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 removed
from the trust.
'ACCUMULATION PERIOD COMMENCEMENT DATE' means May 1, 2003, if the
Accumulation Period Length is four months; June 1, 2003, if the Accumulation
Period Length is three months; July 1, 2003, if the Accumulation Period Length
is two months; August 1, 2003, if the Accumulation Period Length is one month;
provided, however, if the Accumulation Period Length has been determined to be
less than four 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 a number of months, not to exceed four
nor to be less than one, determined on the first business day of May 2003 and
determined again on the first business day of June 2003 and on the first
business day of July 2003; the Accumulation Period Length shall be the number of
months derived by rounding upwards to the next integer, but not to more than
4.0, the result derived by dividing (i) $400,000,000, by (ii) the product of (x)
a fraction the numerator of which is the sum of the Invested Amount plus the
invested amounts as of such date of calculation of all other outstanding series
whose respective revolving periods are not scheduled to end before the last day
of August 2003 and the denominator of which is the Invested Amount plus the
invested amount for all other outstanding series times (y) the average amount of
principal collections for each of the most recently ended three calendar months,
provided however that the Accumulation Period Length will be fixed at 4.0 if,
as calculated on the first business day of May 2003 it equals 4.0, will be fixed
at 3.0 if, as calculated on the first business day of June 2003, it is equal to
or greater than 3.0 and will be fixed at 2.0 if, as calculated on the first
business day of July 2003 it is equal to or greater than 2.0; provided further
that on any of the dates used in this definition, the servicer may designate
an Accumulation Period Length greater than required but not to exceed four
months.
'ADDITIONAL ACCOUNTS' means any accounts designated by the depositor to be
included in the trust under the terms of the pooling and servicing agreement in
addition to those designated at the time of the first series of certificates.
'ADJUSTED INVESTED AMOUNT' means the initial principal amount of the series
2000-1 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.
116
<PAGE>
'ADJUSTMENT PAYMENT' means 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' means the receivables resulting from extensions of
credit made by Bombardier Capital Inc., an affiliate of Bombardier Capital Inc.
or another lender and acquired by Bombardier Capital Inc. 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, for the Revolving
Period, or the Principal Allocation Percentage, for the Controlled
Accumulation Period or any Early Amortization Period, for the related
calendar month multiplied by principal collections received by the servicer
during the related calendar month,
(2) the amount, if any, of Investor Non-Principal Collections, funds in
the reserve fund and Series 2000-1 Available Retained Collections allocated
to cover the portion of the Defaulted Amount allocated to the certificates,
any unpaid Adjustment Payments allocated to the certificates or to reimburse
Investor Charge-Offs,
(3) the Series 2000-1 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 Early Amortization Period began during the related calendar
month, any amounts on deposit in the excess funding account, and
(6) on the September 2005 distribution date, any funds remaining in the
reserve fund, after the application of funds in the reserve fund to cover
shortfalls in Non-Principal Collections.
If the sum of the Floating Allocation Percentage during the Revolving Period
or the Principal Allocation Percentage (during the Early Amortization Period 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
117
<PAGE>
collections will be allocated among all series pro rata on the basis of these
floating allocation percentages and principal allocation percentages.
'AVAILABLE RETAINED COLLECTIONS' for any date on which the servicer receives
collections 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
calendar month for which the Available Subordinated Amount is zero for the
distribution date occurring in that calendar month.
'AVAILABLE RETAINED NON-PRINCIPAL COLLECTIONS' for any date on which the
servicer receives collections means an amount equal to the product of the excess
of the Retained Percentage for that date over the Excess Retained Percentage for
that date and Non-Principal Collections for that date.
'AVAILABLE RETAINED PRINCIPAL COLLECTIONS' for any date on which the
servicer receives collections, means an amount equal to the product of the
excess of the Retained Percentage for that date over the Excess Retained
Percentage for that 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 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 2000-1 Available Retained Collections for
the purpose of reimbursing funds withdrawn from the reserve fund
applied to cover any portion of the Defaulted Amount allocated to the
certificates 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
calendar month multiplied by a fraction, the numerator of which is
the Available Subordinated Amount as of the last day of the preceding
calendar month and the denominator of which is the Pool Balance as of
the last day of the preceding calendar month, plus the total 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
118
<PAGE>
the amount of any optional increase in the Available Subordinated Amount
exercised by the depositor as described in the prospectus under
'Description of the Certificates -- Limited Subordination of the
Retained Interest Available Subordinated Amount.'
The Available Subordinated Amount for any date of determination during the
period from the date the certificates are issued through the first distribution
date will equal the Required Subordinated Amount as of that date of
determination, which will equal at least $23,280,423 on the date the
certificates are issued.
'BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO' means the accounts
owned by Bombardier Capital Inc., 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' means 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.
'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' means the annual rate at which interest accrues
on the principal balance of the class A certificates and will be equal to the
lesser of LIBOR plus % and the Net Receivables Rate.
'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 the certificates are issued, 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
119
<PAGE>
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.
'CLASS B CERTIFICATE RATE' means the annual rate at which interest accrues
on the principal balance of the class B certificates and will be equal to the
lesser of LIBOR plus % and the Net Receivables Rate.
'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 the certificates are issued, after giving effect
to any payments of principal on the class B certificates on that preceding
distribution date.
'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 pay the outstanding principal
balance of the certificates in full given the Accumulation Period Length.
'CONTROLLED ACCUMULATION PERIOD' means, unless an Early Amortization Event
has occurred, the period beginning on the Accumulation Period Commencement Date
and ending upon the earliest to occur of:
(1) the start of an Early Amortization Period,
(2) payment in full of the outstanding principal balance of the
certificates, and
(3) the September 2003 distribution date.
'CONTROLLED DEPOSIT AMOUNT' means, for any distribution date, the sum of the
Controlled Accumulation Amount for that distribution date plus the amount by
which the sum of the Controlled Accumulation Amounts for all prior distribution
dates exceeds the amount on deposit in the principal account.
'DAILY ALLOCATION' means for any date the servicer receives collections:
(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 2000-1 Available Retained Collections for that date.
'DEFAULTED AMOUNT' for any calendar month means an amount which is not less
than zero equal to the aggregate principal amount of principal receivables that
became Defaulted Receivables during the preceding calendar month 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 calendar month
unless certain events of bankruptcy, insolvency, or receivership have occurred
with
120
<PAGE>
respect to either of the depositor or the servicer or unless an event of
bankruptcy, insolvency or receivership relating to Bombardier Capital Inc. or
the depositor has occurred, in which event the Defaulted Amount will not be
reduced for those Defaulted Receivables.
'DEFAULTED RECEIVABLES' on any distribution date are:
(1) all receivables other than receivables that were designated as
ineligible at the time of transfer to the trust that were charged off
as uncollectible in the preceding calender month;
(2) before 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 after 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) before 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; after the payment in
full of the Series 1997-1 Certificates, receivables will not become
Defaulted Receivables due to delinquent interest payments; and
(4) all receivables which, although they were Eligible Receivables when
transferred to the trust, arose in an Account which has become an
Account which is not an Eligible Account since this transfer and
which were not Eligible Receivables for any six consecutive
distribution dates after this Account became an Account which is not
an Eligible Account.
Receivables are not Defaulted Receivables merely because they are no longer
Eligible Receivables.
'DEFICIENCY AMOUNT' means for each distribution date, the amount, if any, by
which
the sum of
(1) the sum of the Class A Monthly Interest and the Class B Monthly
Interest for the distribution date,
(2) the sum of the Class A Monthly Interest and the Class B 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 portion of the Defaulted Amount allocated to the class A
certificates and class B certificates for the distribution date, and
(5) the Series 2000-1 Investor Allocation Percentage of any Adjustment
Payment for the distribution date that has not been deposited in the
121
<PAGE>
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.
'DESIGNATED MANUFACTURER OVERCONCENTRATIONS' on any distribution date means
the excess of the total amount of Eligible Receivables created in connection
with the financing of products manufactured by Bombardier Inc. and its
subsidiaries which Eligible Receivables are in the trust on the last day of the
calendar month immediately preceding that distribution date over 45% of the Pool
Balance on the last day of that immediately preceding calendar month. This
percentage and the manufacturers included in that calculation may be adjusted
from time to time without the consent of the certificateholders, if the Rating
Agency Condition is satisfied.
'DETERMINATION DATE' means, with respect to any distribution date, the day
that is two business days prior to that distribution date.
'DOMESTIC INVENTORY RECEIVABLES' means 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.
'EARLY AMORTIZATION EVENT' means:
(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 Bombardier
Capital Inc., 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
amount required to be paid upon a transfer of receivables to the
depositor 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 the failure to deliver the statement;
122
<PAGE>
(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 will not be deemed to have occurred if
the depositor has 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 under the pooling and servicing agreement 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 security granted by the related obligor if the
pooling and servicing agreement constitutes the grant of a security interest
in the receivables and the security granted by the related obligors; except
when 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 Bombardier Capital Inc. if it is not the servicer;
123
<PAGE>
(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 security granted by obligors 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 percentage obtained by dividing the aggregate principal
collections for a calendar month by the average daily Pool Balance for that
calendar month:
(a) for the three calendar months included in the period from January
through March of any calendar year is less than 12% and
(b) for any other three consecutive calendar months 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 and the class B certificates on the September 2003 distribution
date;
(13) the sum of all Eligible Investments and amounts on deposit in the
excess funding account for this series 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 those distribution dates; or
(14) during any four month period starting June 1, October 1 or February
1 of any year, more than 10% of the aggregate principal amount of Domestic
Inventory Receivables that were originated and transferred to the trust
during the four month period starting sixteen months before the four month
period starting June 1, October 1 or February 1 which is under
124
<PAGE>
consideration and are then owned by the trust have not been paid in full
within 491 days following the date of origination thereof.
'EARLY AMORTIZATION PERIOD' means the period beginning as of the day an
Early Amortization Event occurs.
'ELIGIBLE ACCOUNT' means:
(1) each individual financing account established by Bombardier Capital
Inc. or established by an affiliate of Bombardier Capital Inc. or by a third
party -- but which satisfies Bombardier Capital Inc.'s customary
underwriting standards -- and acquired by Bombardier Capital Inc. or an
affiliate of Bombardier Capital Inc., 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
Bombardier Capital Inc. (or an affiliate of Bombardier Capital Inc.) or by a
third party -- but which satisfies Bombardier Capital Inc.'s customary
underwriting standards -- and acquired by Bombardier Capital Inc. or an
affiliate of Bombardier Capital Inc. 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 satisfies the requirements
of the pooling and servicing agreement and is in existence and, after its
establishment or acquisition by Bombardier Capital Inc. or an affiliate of
Bombardier Capital Inc., is maintained and serviced by Bombardier Capital
Inc.. Bombardier Capital Inc. (or its affiliates) may assign or grant
participation rights in, an Account or any receivable in such Account to any
person without affecting the Account's status as an Eligible Account.
'ELIGIBLE DEPOSIT ACCOUNT' means either (1) a segregated account with either
the corporate trust department of the trustee or with 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 Agency to the trustee or has 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 which at all times is a member of the FDIC or (2) a
segregated trust account with the corporate trust department of a depository
institution or trust company organized under the laws of the United States or
any one of the states thereof or the District of Columbia, or any domestic
branch of a foreign bank 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' means:
(1) obligations of or fully guaranteed by the United States,
125
<PAGE>
(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 in such investments
has a credit rating in the highest investment category from any individual
Rating Agency,
(3) commercial paper having a credit rating in the highest investment
category from any individual Rating Agency at the time of the trust's
investment or contractual commitment to invest in such paper,
(4) demand deposits, time deposits and certificates of deposit which are
fully insured by the FDIC and which are offered or insured by a financial
institution whose long-term debt is rated Baa3 or better by Moody's,
(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) repurchase obligations entered into with depository institutions or
trust companies -- acting as principal -- described in (2) above or whose
deposits are insured by the FDIC 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
(8) other investments acceptable to any individual Rating Agency as being
consistent with the then-current rating of the class A certificates and
class B certificates.
'ELIGIBLE PRODUCTS' means 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' means each receivable:
(1) which was originated by Bombardier Capital Inc., by an affiliate of
Bombardier Capital Inc. or acquired by Bombardier Capital Inc. or an
affiliate of Bombardier Capital Inc. 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,
126
<PAGE>
(3) which is owned by Bombardier Capital Inc. at the time of sale or
contribution by Bombardier Capital Inc. 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
for receivables that are payable under a repayment schedule
regardless of whether the related Eligible Products have been 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
and,
Asset-Based Receivables, at the time of transfer to the trust, is
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 to it 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
to the agreement,
(7) for which all consents and governmental authorizations required to be
obtained by Bombardier Capital Inc. or an affiliate of Bombardier Capital
Inc. or the depositor for the creation of the receivable or its transfer to
the depositor and the trust or the performance by Bombardier Capital Inc. or
an affiliate of Bombardier Capital Inc. 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 to it, 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
in the receivable, including, with certain exceptions, any proceeds thereof,
(10) which will at all times be the legal and assignable payment
obligation of the obligor, enforceable against the obligor in accordance
with
127
<PAGE>
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) as to which, at the time of transfer of the receivable to the trust,
Bombardier Capital Inc. or an affiliate of Bombardier Capital Inc. and the
depositor have satisfied all their obligations under the pooling and
servicing agreement for 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 Bombardier Capital Inc. or any affiliate of Bombardier Capital Inc.
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 in the receivable, 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 changed by amendment to the pooling and servicing
agreement from time to time without the consent of the certificateholders if the
Rating Agency Condition is satisfied.
'EXCESS FUNDED AMOUNT' will be calculated for each business day and means 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, and
(2) a fraction the numerator of which is the sum of the product of 104
percent 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 2000-1 -- providing for
excess funding accounts or similar arrangements that are in their revolving
periods or, if applicable, their amortization periods. The depositor may
reduce or adjust the percentage above without the consent of the
certificateholders if the Rating Agency Condition is satisfied.
'EXCESS PRINCIPAL COLLECTIONS' means, for Series 2000-1, 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.
'EXCESS RESERVE FUND REQUIRED AMOUNT' for any distribution date for 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 to such amount on that
distribution date -- over the Pool Balance -- after giving effect to changes to
such balance on
128
<PAGE>
that distribution date; provided that it shall in no event exceed the Available
Subordinated Amount for that distribution date.
'EXCESS RETAINED PERCENTAGE' means, 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 calendar month, by dividing an amount
equal to 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.
'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 calendar month or for the first
distribution date, the Invested Amount on the date the certificates are issued
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 that last day
multiplied by the sum of, without duplication, the Obligor Overconcentrations,
the Manufacturer Overconcentrations, the Designated Manufacturer
Overconcentrations and the Industry Overconcentrations on that distribution
date.
'INDUSTRY OVERCONCENTRATIONS' on any distribution date means the excess of
(1) the total 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 trust on the
last day of the calendar month immediately preceding that
distribution date over
(2) an amount equal to 35% of the Pool Balance on the last day of that
immediately preceding calendar month; 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:
129
<PAGE>
<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.
'INTEREST PERIOD' means, 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, minus the amount, without duplication, of principal payments --
except principal payments made from the excess funding account and any transfers
from the excess funding account to the collection account -- made on the
certificates prior to 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 2000-1 Investor Allocation Percentage
of net investment earnings credited to the collection account on the second
business day prior to the distribution date for 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 means 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 portion of the Defaulted Amount allocated to the
certificates for that distribution date.
'INVESTOR NON-PRINCIPAL COLLECTIONS' for any distribution date means the
portion of Non-Principal Collections for the related calendar month 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' means, 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 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, which appears on the display page currently
designated as 'Telerate Page 3750' on the Bridge Telerate Markets Report, or
130
<PAGE>
any other page as may replace that page on that service for the purpose of
displaying comparable rates or prices, 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 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 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 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 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 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.
'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 calendar month immediately preceding that distribution date
over 15% of the Pool Balance on the last day of that immediately preceding
calendar month; 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 calendar month means the sum of Adjustment
Payments and amounts required to be paid by the depositor in connection with a
transfer of receivables back to the depositor, in each case on deposit in the
collection account on the related distribution date received for that calendar
month 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
131
<PAGE>
following that calendar month as described in the Prospectus under the caption
'Description of the Certificates -- Allocation Percentages'.
'MONTHLY PRINCIPAL' for any distribution date relating to the Controlled
Accumulation Period or Early Amortization Period will equal Available Investor
Principal Collections for that distribution date; provided that for any
distribution date during the Controlled Accumulation Period, Monthly Principal
will not exceed the Controlled Deposit Amount; provided further, that in any
case Monthly Principal will not exceed the applicable outstanding principal
balances of the class A and class B certificates, respectively.
'MONTHLY SERVICING FEE' will be equal to one-twelfth of the product of 2% or
3% if Bombardier Capital Inc. 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 calendar month,
provided that the Monthly Servicing Fee for the first distribution date will be
equal to $ .
'NET RECEIVABLES RATE' means the weighted average of the interest rates
borne by the receivables included in the trust for the preceding calendar month
less, if Bombardier Capital Inc. is the Servicer, 2%, or, if Bombardier Capital
Inc. is not the Servicer, 3%.
'NET SERVICING FEE' will generally be equal to one-twelfth of the product of
1%, if Bombardier Capital Inc. is the servicer, or 2%, if Bombardier Capital
Inc. is not the servicer, or for any distribution date for which the Monthly
Servicing Fee has been waived, 0% multiplied by the Invested Amount as of the
last day of the second preceding calendar month, 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 citizen or resident of the United States,
a domestic partnership,
a domestic corporation,
a domestic estate or domestic trust or
any other person or entity whose income in respect of a certificate is
'effectively connected' with a United States trade or business.
'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 calendar month immediately
preceding that distribution date over 2% of the Pool Balance for any obligor of
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 for all other
obligors, in each case on the last day of that immediately preceding calendar
month. The percentages set forth in this description of Obligor
Overconcentrations and the
132
<PAGE>
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.
'PARTICIPANTS' means the organizations for which The Depository Trust
Company holds securities to facilitate the clearance and settlement of
securities transactions among themselves.
'POOL BALANCE' means the aggregate principal balances of the receivables in
the trust that are Eligible Receivables.
'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 for any series, the rating agencies which have been
requested to rate that series by the depositor.
'RATING AGENCY CONDITION' means, with respect to any action, if the terms of
the pooling and servicing agreement or any supplement, including the Series
2000-1 supplement, set forth a specific time in advance of the effectiveness of
the action that notice must be given to the Rating Agencies, notice shall have
been given in accordance with 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.
'REMOVED ACCOUNTS' means any Accounts from which the depositor has ceased to
transfer newly originated receivables to the trust and any Account which is not
an Eligible Account which has been removed from the trust.
'REQUIRED POOL BALANCE' for any date means 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 of this
series which is 104 percent, but which may be reduced -- 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
133
<PAGE>
any amount on deposit in any reserve fund on that date, except that, for
Series 1997-1 and Series 2000-1, 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 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 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 Controlled Accumulation Period or the day on which the
Early Amortization Event occurs.
'REQUIRED SUBORDINATION DRAW AMOUNT' means the lesser of the Deficiency
Amount and the Available Subordinated Amount.
'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' means 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 investor certificateholders or the interest represented by the
variable funding certificate.
'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, not in
its revolving period, and
134
<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' means the period beginning on the date the certificates
are issued and ending on the earliest of:
(1) the Accumulation Period Commencement Date; and
(2) the business day immediately preceding the day on which an Early
Amortization Event occurs.
If the Early Amortization Event resulted from the failure of the servicer to
make deposits to the trust or into any account and that event is cured and no
other Early Amortization Event has accurred and the scheduled end of the
Revolving Period has not occurred, then the Revolving Period may begin again.
'SERIES 2000-1 AVAILABLE RETAINED COLLECTIONS' means, for any date on which
the servicer receives collections, 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 2000-1 INVESTOR ALLOCATION PERCENTAGE' means, for any calendar
month, the percentage obtained by dividing the Invested Amount as of the last
business day preceding that calendar month by the sum of the Invested Amount and
the invested amounts for all other outstanding series on that day.
'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 by 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 of this breach of covenant; provided,
however, that a Servicer Default will not be deemed to have occurred if the
depositor or the servicer has repurchased the related receivables under the
terms of the pooling and servicing agreement, or failure by the servicer
duly to observe or perform any other covenants or agreements of the servicer
in the pooling and servicing agreement, exclusive of breaches of covenants
for which the servicer repurchases the related receivables, as described
under 'Description of the Certificates -- 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 to the servicer of this breach of covenant
or agreement;
(3) any representation, warranty or certification made by the servicer in
the pooling and servicing agreement or in any certificate delivered pursuant
to
135
<PAGE>
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 requiring the error to be remedied 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 will not have occurred if the depositor has 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.
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 a delay or
failure referred to under clauses (2) or (3) above for a period of up to 60
business days, will not be a Servicer Default if this delay or failure or
continuance was caused by an act of God or other similar occurrence.
'SUPPLEMENTAL CERTIFICATE' means a certificate issued in exchange for a
portion of the BCRC Certificate.
'TRANSFER DATE' means each business day on which receivables are created
in the Eligible Accounts provided that such date is prior to the earlier of
the day following the distribution date on which the aggregate invested
amounts for all series is zero, the day on which an event of bankruptcy,
insolvency or receivership relating to Bombardier Capital Inc. or the
depositor occurs.
'VARIABLE FUNDING PERCENTAGE' for any date of determination, means a
percentage (which percentage will 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 an event of
bankruptcy, insolvency or receivership relating to Bombardier Capital Inc.
or the depositor, 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 event of
bankruptcy, insolvency or receivership relating to Bombardier Capital Inc.
or the depositor; provided, further, that following an event of bankruptcy,
insolvency or receivership relating to Bombardier Capital Inc. or the
depositor, 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 event of bankruptcy, insolvency or
receivership relating to Bombardier Capital Inc. or the depositor.
136
<PAGE>
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 August 31, 2000............... $200,000,000
Controlled Amortization Commencement Date............ November 2000
Class A Certificate Rate............................. Commercial Paper Rate
Series 1996-1 Termination Date....................... November 3, 2001
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 August 31, 2000............... $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 August 31, 2000............... $200,000,000
Controlled Amortization Commencement Date............ November 2000
Class A Certificate Rate............................. Commercial Paper Rate
Series 1997-2 Termination Date....................... May 3, 2003
Series 1997-2 Issuance Date.......................... December 12, 1997
Series Servicing Fee Rate............................ 2%
Initial Available Subordinated Amount................ $2,000,000
</TABLE>
A-I-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
------ -------- ------------ ----------- --------
<C> <S> <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
7 Nov. 4, 1999 Sept. 30, 1999 392 $108,132,205
</TABLE>
A-II-1
<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,
Clearstream Banking 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 Clearstream Banking 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 Clearstream Banking or Euroclear and
The Depository Trust Company Participants holding certificates will be effected
on a delivery-against- payment basis through the respective depositaries of
Clearstream Banking 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, Clearstream
Banking 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.
Investors electing to hold their globally offered certificates through
Clearstream Banking or Euroclear accounts will follow the settlement procedures
applicable to conventional eurobonds, except that there will be no temporary
A-III-1
<PAGE>
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 Clearstream Banking and/or Euroclear participants. Secondary
market trading between Clearstream Banking 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 Clearstream Banking
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
Clearstream Banking participant or a Euroclear participant, the purchaser will
send instructions to Clearstream Banking or Euroclear through a Clearstream
Banking participant or Euroclear participant at least one business day prior to
settlement. Clearstream Banking or Euroclear will instruct their respective
depositories 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 to 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 Clearstream Banking 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 Clearstream
Banking or Euroclear cash debit will be valued instead as of the actual
settlement date.
Clearstream Banking 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 Clearstream Banking or Euroclear.
Under this approach, they may take on credit exposure to Clearstream Banking or
A-III-2
<PAGE>
Euroclear until the globally offered certificates are credited to their accounts
one day later.
As an alternative, if Clearstream Banking or Euroclear has extended a line
of credit to them, Clearsream Banking participants or Euroclear participants can
elect not to preposition funds and allow that credit line to be drawn upon to
finance settlement. Under this procedure, Clearstream Banking 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 Clearstream Banking 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 Clearstream Banking 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 Clearstream Banking or Euroclear seller and The Depository
Trust Company purchaser. Due to time zone differences in their favor,
Clearstream Banking 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 their respective
depositories, to The Depository Trust Company Participant. The seller will send
instructions to Clearstream Banking or Euroclear through a Clearstream Banking
participant or Euroclear participant at least one business day prior to
settlement. In these cases, Clearstream Banking or Euroclear will instruct
their respective depositories 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 Clearstream Banking participant or Euroclear
participant the following day, and receipt of the cash proceeds in the
Clearstream Banking 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 Clearstream Banking 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
A-III-3
<PAGE>
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 Clearstream
Banking participant's or Euroclear participant's account would instead be valued
as of the actual settlement date.
Finally, day traders that use Clearstream Banking or Euroclear and that
purchase globally offered certificates from The Depository Trust Company
Participants for delivery to Clearstream Banking 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 Clearstream Banking or Euroclear for one day (until
the purchase side of the day trade is reflected in their Clearstream Banking
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 Clearstream Banking 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
Clearstream Banking participant or Euroclear participant.
MATERIAL U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of globally offered certificates holding securities
through Clearstream Banking 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 issue 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
A-III-4
<PAGE>
Income Effectively Connected with the Conduct of a Trade or Business in the
United States).
Exemption or reduced rate for non-U.S. Persons resident in treaty countries
(Form 1001). Non-U.S. Persons that are beneficial owners of certificates
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
beneficial owner of certificates 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 beneficial owner of
globally offered certificates 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). For payments made on or after January 1,
2001, Form W-8 and Form 1001 generally must be replaced with Form W-8BEN. If
Form W-8BEN contains a taxpayer identification number, then the form generally
remains effective as long as the information on the form remains unchanged. If
Form W-8BEN does not contain a taxpayer identification number, then the form
remains effective for no longer than three calendar years. For payments made on
or after January 1, 2001, Form 4224 generally must be replaced with
Form W-8ECI. Form W-8ECI generally remains effective for three calendar years.
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.
a trust if a court within the United States is able to exercise primary
supervision of the administration of the trust, and one or more United
States fiduciaries have the authority to control all substantial decisions
of the trust.
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.
A-III-5
<PAGE>
$400,000,000
BOMBARDIER RECEIVABLES MASTER TRUST I
FLOATING RATE ASSET BACKED CERTIFICATES,
$374,600,000 CLASS A
$25,400,000 CLASS B
SERIES 2000-1
[LOGO]
BOMBARDIER CREDIT RECEIVABLES CORPORATION
DEPOSITOR
BOMBARDIER CAPITAL INC.
SERVICER
--------------------
PROSPECTUS
--------------------
J.P. MORGAN & CO. CHASE SECURITIES INC.
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 December , 2000.
September , 2000
<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*....................................... $105,600**
Printing and Engraving...................................... $ 60,000
Legal Fees and Expenses..................................... $300,000
Trustee Fees and Expenses................................... $ 20,000
Rating Agency Fees.......................................... $195,000
Accounting Fees and Expenses................................ $ 60,000
Miscellaneous............................................... $ 80,000
--------
Total................................................... $820,600
--------
--------
</TABLE>
---------
* Actual
** Of which $278.00 was previously paid.
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>
<C> <S>
1.1 -- Form of Underwriting Agreement
3.1 -- Certificate of Incorporation of the Registrant
3.2 -- Bylaws of the Registrant*
4.1 -- Pooling and Servicing Agreement*
4.2 -- 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 2000-1 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>
---------
* 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 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.4 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 19th day of
September, 2000.
BOMBARDIER CREDIT RECEIVABLES
CORPORATION
By: /s/ PIERRE LORTIE
..................................
NAME: PIERRE LORTIE
TITLE: PRESIDENT
BOMBARDIER CREDIT RECEIVABLES
CORPORATION
on behalf of the Trust
By: /s/ PIERRE LORTIE
..................................
NAME: PIERRE LORTIE
TITLE: PRESIDENT
II-3
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Pierre Lortie and Blaine H. Filthaut, 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,
Amendment No. 4 to this Registration Statement has been signed by the following
persons for Bombardier Credit Receivables Corporation in the capacities
indicated, on the 19th day of September, 2000.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
/s/ PIERRE LORTIE President (Principal Executive Officer)
.........................................
PIERRE LORTIE
/s/ BLAINE H. FILTHAUT Treasurer (Principal Financial and Accounting Officer)
.........................................
BLAINE H. FILTHAUT
/s/ PIERRE LORTIE Director
.........................................
PIERRE LORTIE
/s/ R. WILLIAM CROWE Director
.........................................
R. WILLIAM CROWE
/s/ BLAINE H. FILTHAUT Director
.........................................
BLAINE H. FILTHAUT
/s/ ANDREW L. STIDD Director
.........................................
ANDREW L. STIDD
/s/ KEVIN P. BURNS Director
.........................................
KEVIN P. BURNS
</TABLE>
II-4
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Pierre Lortie and Blaine H. Filthaut, 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,
Amendment No. 4 to this Registration Statement has been signed by the following
persons for Bombardier Credit Receivables Corporation on behalf of the Trust in
the capacities indicated, on the 19th day of September, 2000.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
/s/ PIERRE LORTIE President (Principal Executive Officer)
.........................................
PIERRE LORTIE
/s/ BLAINE H. FILTHAUT Treasurer (Principal Financial and Accounting Officer)
.........................................
BLAINE H. FILTHAUT
/s/ PIERRE LORTIE Director
.........................................
PIERRE LORTIE
/s/ R. WILLIAM CROWE Director
.........................................
R. WILLIAM CROWE
/s/ BLAINE H. FILTHAUT Director
.........................................
BLAINE H. FILTHAUT
/s/ ANDREW L. STIDD Director
.........................................
ANDREW L. STIDD
/s/ KEVIN P. BURNS Director
.........................................
KEVIN P. BURNS
</TABLE>
II-5
STATEMENT OF DIFFERENCE
The registered trademark symbol shall be expressed as....................'r'
Characters normally expressed as superscript shall be preceded by...... 'pp'
