<PAGE>
As filed with the Securities and Exchange Commission on March 28, 2000
REGISTRATION NO. 333-77091
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
AMENDMENT NO. 3
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:
Steven J. Molitor, Esq. Paul Weiffenbach, Esq.
Morgan, Lewis & Bockius LLP Orrick, Herrington & Sutcliffe LLP
101 Park Avenue 1150 18th Street, N.W.
New York, New York 10178 Washington, D.C. 20036
(212) 309-6183
--------------------
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.[ ]
--------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================================
Proposed Proposed
Title of Each Maximum Maximum Amount of
Class of Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered Registered Per Share* Price* Fee**
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset Backed Certificates..... $1,000,000 100% $1,000,000 $278.00
================================================================================================================================
</TABLE>
(*) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457 under the Securities Act of 1933.
(**) The registration fee has been previously paid.
WE HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY
BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL WE SHALL FILE A FURTHER AMENDMENT
WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER
BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH
DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
<PAGE>
PROSPECTUS
BOMBARDIER RECEIVABLES MASTER TRUST I
Issuer
$_______ FLOATING RATE CLASS A ASSET BACKED CERTIFICATES, SERIES
2000-1
$_______ 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 __.
The certificates will represent interests in a pool of receivables due
from dealers of consumer, recreational and commercial products under
financing arrangements.
<TABLE>
<CAPTION>
Class A Class B Total
<S> <C> <C> <C>
Initial Certificate
Balance $__________ $__________ $_________
Certificate rate Libor + ___% Libor + ___% _________%
Price to public $__________ $__________ $_________
Underwriting
discounts and
commissions __________% __________% $_________
Proceeds to
depositor __________% __________% $__________
First interest
payment date [Apr. 15], 2000 [Apr. 15], 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 --Distributions from the
Collection Account; Reserve Fund; Principal
Account." 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 $700,000.
<PAGE>
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
J.P. MORGAN & CO.
[UNDERWRITER]
The date of this Prospectus is __________, 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>
<S> <C>
PROSPECTUS SUMMARY............................................................................................ 5
RISK FACTORS.................................................................................................. 11
THE DEPOSITOR AND THE TRUST................................................................................... 21
The Depositor........................................................................................ 21
The Trust............................................................................................ 21
USE OF PROCEEDS............................................................................................... 24
THE FLOORPLAN AND ASSET-BASED FINANCING BUSINESS ............................................................. 24
General ............................................................................................ 24
Creation of the Receivables.......................................................................... 27
Credit Underwriting Process and Security............................................................. 28
Payment Terms........................................................................................ 31
Billing and Collection Procedures.................................................................... 32
Revenue Experience................................................................................... 32
Relationship with Manufacturers, Importers
and Distributors.............................................................................................. 33
Monitoring........................................................................................... 35
Collection Activity.................................................................................. 36
Participation Arrangements........................................................................... 38
THE ACCOUNTS.................................................................................................. 38
General ............................................................................................ 38
Historical Size...................................................................................... 42
Delinquency.......................................................................................... 43
Loss Experience...................................................................................... 44
Product Mix.......................................................................................... 46
Aging Experience.................................................................................... 50
Geographic Distribution.............................................................................. 50
BOMBARDIER CAPITAL INC........................................................................................ 52
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS................................................................. 53
DESCRIPTION OF THE CERTIFICATES............................................................................... 55
General ............................................................................................ 55
Interest ............................................................................................ 56
Principal............................................................................................ 57
Extension of Initial Principal Payment Date.......................................................... 59
Book-entry Registration.............................................................................. 60
Definitive Certificates.............................................................................. 64
Retained Interest and Variable Funding
Certificate................................................................................................... 66
New Issuances........................................................................................ 67
Supplemental Certificate............................................................................. 70
Conveyance of Receivables and Collateral
Security...................................................................................................... 71
Representations and Warranties....................................................................... 72
Eligible Accounts and Eligible Receivables........................................................... 75
Ineligible Receivables............................................................................... 79
Addition of Accounts................................................................................. 79
Removal of Accounts and Assignment of Receivables.................................................... 81
Credit Support for the Certificates.................................................................. 84
Collection Account................................................................................... 85
Excess Funding Account............................................................................... 85
Allocation Percentages............................................................................... 86
Deposits in Collection Account....................................................................... 89
Daily Allocations.................................................................................... 90
Limited Subordination of Retained Interest........................................................... 91
Distributions from the Collection Account;
Reserve Fund; Principal Account............................................................................... 94
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
Discount Option..................................................................................... 99
Defaulted Receivables and Recoveries................................................................ 100
Investor Charge-Offs................................................................................ 101
Optional Repurchase................................................................................. 101
Early Amortization Events........................................................................... 102
Termination......................................................................................... 106
Indemnification..................................................................................... 107
Collection and Other Servicing Procedures........................................................... 108
Servicer Covenants.................................................................................. 109
Servicing Compensation and Payment of
Expenses..................................................................................................... 110
Matters Regarding the Servicer...................................................................... 111
Servicer Default.................................................................................... 111
Reports ........................................................................................... 113
Evidence as to Compliance........................................................................... 114
Amendments.......................................................................................... 115
List of Certificateholders.......................................................................... 116
The Trustee......................................................................................... 117
DESCRIPTION OF THE RECEIVABLES PURCHASE AGREEMENT............................................................ 117
Sale and Transfer of Receivables.................................................................... 118
Representations and Warranties...................................................................... 119
Covenants........................................................................................... 120
Termination......................................................................................... 121
MATERIAL LEGAL ASPECTS OF THE RECEIVABLES.................................................................... 121
Transfer of Receivables and Certificates............................................................ 121
Material Matters Relating to Bankruptcy............................................................. 124
MATERIAL FEDERAL INCOME TAX CONSEQUENCES..................................................................... 126
Characterization of the Certificates and the
Trust........................................................................................................ 126
Possible Characterization of the Trust as a Partnership............................................. 127
Possible Characterization of the Trust as a Corporation............................................. 127
Taxation of Interest Income to
Certificateholders........................................................................................... 128
Sale or Exchange of Certificates.................................................................... 129
Foreign Investors................................................................................... 130
Information Reporting and Backup
Withholding.................................................................................................. 131
State and Local Taxation............................................................................ 131
UNDERWRITING................................................................................................. 131
LEGAL MATTERS................................................................................................ 133
WHERE YOU CAN FIND MORE INFORMATION.......................................................................... 133
REPORTS TO CERTIFICATEHOLDERS................................................................................ 133
</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>
Initial principal
balance: $[300,000,000] $[20,339,000]
Certificate rate: LIBOR + __% LIBOR + __%
Ratings (S&P/Moody's): AAA/Aaa _________
First interest
payment date: [Apr. 15, 2000]
[Apr. 15, 2000]
Scheduled principal
payment date: __________ _________
Legal final
payment 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 AND THAT PROVIDES DEALERS WITH THE FUNDS
to purchase or finance consumer, recreational and
commercial product inventory which have been
added to the trust and those which will be added in
the future less receivables paid or charged-off and
5
<PAGE>
excluding receivables generated in removed accounts or
accounts which are not eligible, receivables removed from the
trust from time to time and any undivided interest in the
receivables that has been transferred to a third party;
all funds collected or to be collected with respect
of the receivables;
all funds on deposit in all accounts of the trust,
including the reserve funds, the excess funding
accounts, the principal account and the collection
account;
any enhancement issued with respect to any other
series -- the Series 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 BCRC Certificate and the Variable
Funding Certificate.
Bombardier Credit Receivables Corporation may, at its option, add accounts to
the trust including accounts established in connection with the extension of
credit to dealers to finance working capital needs and to manufacturers and
distributors to finance the production, manufacturing and inventory of consumer,
recreational and commercial products. If receivables in the trust fall below
required levels, Bombardier Credit Receivables Corporation may be required to
designate additional accounts. See "The Floorplan and Asset-Based Financing
Business," "Description of the Certificates--Addition of Accounts" and
"--Removal of Accounts and Assignment of Receivables."
All new receivables arising under the designated accounts during the term of the
trust will be transferred by Bombardier Credit Receivables Corporation to the
trust. Accordingly, the aggregate amount of receivables in the trust will
fluctuate daily as new receivables are generated and as existing receivables are
collected, charged off as uncollectible or otherwise adjusted.
PRIOR SERIES AND ISSUANCE OF NEW SERIES
The trust has issued four prior series of investor certificates, three of which
are outstanding as of [___________]. Bombardier Credit Receivables Corporation
has summarized information concerning the outstanding prior series in Annex I to
this prospectus. Annex I is hereby incorporated by reference into this
prospectus. Bombardier Credit Receivables Corporation may cause the trust to
issue one or more new series of investor certificates. See "Description of the
Certificates--New Issuances."
DISTRIBUTION DATE
All distributions on your certificates will be made on the 15th day of each
month with the first interest distribution to be made on [ April 15], 2000. If
the 15th day is not a business day for New York banks, distributions will occur
on the next business day.
PAYMENT OF PRINCIPAL ON YOUR CERTIFICATES
The period your certificates are in will determine the method used for
allocating collections on receivables and the timing of principal payments to
you.
From the issuance date to [DATE] unless another periods begin, you
6
<PAGE>
will not receive principal payments on the
certificates.
From [DATE] to the date which you have
received all payments due to you, principal
collections allocable to your certificates will
be deposited into the principal account until the
amount on deposit is sufficient to pay the
principal amount on your certificates.
After the ___________
distribution date, if the
servicer elects, principal
allocable to your certificates will be paid to you on each distribution
date. See "Description of the Certificates--
Extension of Initial Principal Payment Date."
If specified triggering events occur with respect to
the trust assets, the servicer or to Bombardier
Credit Receivables Corporation you will receive
all principal allocable to your certificates. See
"Description of the Certificates--Early
Amortization Events" for a discussion of these
triggers.
Under limited circumstances one period may end and another begin. See
"Description of the Certificates--Early Amortization Events."
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 when not in a period where principal is 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
7
<PAGE>
payment with respect to 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."
INTEREST PAYMENTS
You will receive interest monthly on each distribution date, commencing [April
15], 2000. The certificates will accrue interest beginning on the preceding
distribution date to but excluding the distribution date on which this interest
is due. In the case of the first distribution date, interest will accrue
beginning on ____________, 2000 to but excluding [trust], 2000. Interest will be
calculated based on the actual number of days elapsed during the related
interest period and a 360-day year.
Subject to a variable cap,
the class A certificate
rate will equal: LIBOR + ___%
Subject to a variable cap,
the class B certificate
rate will equal: LIBOR + ___%
The trustee will calculate LIBOR as described in "Description of the
Certificates--Interest". The certificate rate for each class of certificates
will be subject to a cap based upon the interest rates on the receivables less
the rate of the servicing fee . You may be reimbursed for any reduction due to
this cap on subsequent distribution dates if funds are available. See
"Description of the Certificates -- Distributions from the Collection Account;
Reserve Fund; Principal Account."
Interest payments on the Series 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 _________ distribution date.
Bombardier Credit Receivables Corporation expects the class B certificates to
receive, after the class A certificates are reduced to zero, a principal
distribution on the _____________ distribution date.
The Series 2000-1 Certificates will receive principal earlier than expected if
the servicer elects not to extend the initial principal payment date. The first
date on which the servicer can elect not to extend is the __________
distribution date. See "Description of the Certificates--Extension of Initial
Principal Payment Date."
8
<PAGE>
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 ________ distribution date.
In addition, on the first distribution date following the monthly period in
which an early amortization event occurs or, if applicable, beginning on the
initial principal payment date, any amounts on deposit in the excess funding
account will be distributed to certificateholders. See "Description of the
Certificates--Distributions from the Collection Account; Reserve Fund; Principal
Account."
EXCESS FUNDING ACCOUNT
If the receivables in the trust are less than the required amount on the dates
described in this prospectus, a deposit to the excess funding account will be
required. Amounts in that account will be made available for payment on the
Series 2000-1 Certificates as described under "Description of
Certificates--Credit Support for the Certificates--Excess Funding Account."
REALLOCATION OF EXCESS PRINCIPAL COLLECTIONS
Principal collections and other amounts that are allocated to the Series 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 with respect to these other series, may be applied as principal
distributions or principal accumulation on your certificates. See "Description
of the Certificates--Allocation Percentages-- Principal Collections for all
Series."
CREDIT ENHANCEMENT
Retained Interest: A portion of the collections allocated to the interest in the
trust represented by the BCRC Certificate retained by Bombardier Credit
Receivables Corporation will be available to cover amounts payable with respect
to the Series 2000-1 Certificates and the monthly servicing fee described below.
See "Description of the Certificates-- Retained Interest and Variable Funding
Certificate."
If the 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 with respect to
adjustments to the balances of the receivables,
a portion of the collections allocated to the interest represented by the BCRC
Certificate will be applied to make up the deficiency.
Collections of receivables are allocated to our interest as well as to the
interests in the trust owned by you and other holders of investors'
certificates. A portion of the amounts allocated to our interests is, however,
subordinated and, if needed will be diverted to make payments on the investors'
certificates.
9
<PAGE>
It is expected that this amount for April 15, 2000 will be no less than
$[18,643,730]. This 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--Allocation of Collections; Deposits in
Collection Account; Limited Subordination of the Retained Interest;"
"--Available Subordination Amount."
Reserve Fund: A reserve fund will be established and maintained in the name of
the trustee for the benefit of the Series 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 $[1,601,695]. Any amounts on deposit
in the reserve fund will be withdrawn to make payments [of interest] on the
Series 2000-1 Certificates, and funds withdrawn from the reserve fund may be
replenished, in the circumstances described under "Description of the
Certificates--Distributions from the Collection Account; Reserve Fund; Principal
Account."
Subordination: The class A certificates have the benefit of the subordination of
the class B certificates to the extent described in this prospectus. The class A
certificates will receive payments of interest prior to any payment of interest
to the class B certificates on any distribution date. In addition, no principal
payments will be made with respect to the class B certificates until the
principal balance of the class A certificates is reduced to zero. See
"Description of the Certificates."
FEDERAL INCOME TAX CONSEQUENCES
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 4 of this prospectus.
A RATING IS NOT A RECOMMENDATION TO BUY, SELL OR HOLD SECURITIES AND EITHER
RATING AGENCY CAN REVISE OR WITHDRAW ITS RATING AT ANY TIME. IN GENERAL RATINGS
ADDRESS CREDIT RISK AND DO NOT ADDRESS THE LIKELIHOOD OF PREPAYMENT. See "Risk
Factors -- Reduction in the Certificate Rating of Your Certificates Could Have
an Adverse Effect on the Value of the Your Certificates."
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.
DELAYED FUNDING RECEIVABLES MAY NOT BE COLLECTIBLE IF BOMBARDIER CAPITAL INC.
DOES NOT PAY MANUFACTURERS THUS INCREASING THE RISK OF LOSS ON YOUR CERTIFICATES
Bombardier Credit Receivables Corporation sells to the trust
receivables in which Bombardier Capital Inc. has not yet funded its obligation
to the related manufacturer, importer or distributor. If Bombardier Capital Inc.
were to become bankrupt, Bombardier Capital Inc. might be unable to pay the
manufacturer, importer or distributor. If for this or any other reason
Bombardier Capital Inc. does not pay, the unfunded receivables may not be
collected from the dealer and a manufacturer, importer or distributor might be
able to delay or prevent receipt by the trust of payments otherwise owing to the
trust with respect to these receivables. This could cause
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a loss on your certificates. See. "The Floorplan and Asset-Based Financing
Business -- Creation of the Receivables."
The Possibility Of Bankruptcy Events Related To Bombardier Capital Inc. or
Bombardier Capital Receivables Corporation And The Uncertain Timing Of Obligor
Repayments Render The Life Of Your Certificates Uncertain And Therefore You May
Receive Principal On Dates Other Than When You Anticipate
If specified triggering events occur with respect to the trust assets,
the servicer or to Bombardier Credit Receivables Corporation you will receive
all principal allocable to your certificates. 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, in accordance with
a payment schedule. The timing of the sale of the eligible products by dealers
is uncertain. Asset-based receivables are expected to be payable as described
under "The Floorplan and Asset-Based Financing Business--Payment Terms." There
is no assurance that there will be additional receivables created under the
accounts or that any particular pattern of repayments will occur. Because
payment of principal on the certificates is dependent on obligor repayments, the
certificates may not be fully amortized on ___________. This could delay the
return of principal on your certificates thus extending their maturity and
increasing their exposure to losses in the trust. See "Description of the
Certificates--Termination."
See "Maturity and Principal Payment Considerations" and see also
"Description of the Certificates--Early Amortization Events" for a discussion of
other events which might lead to 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
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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."
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 remit amounts owed
for products that have been 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 related obligor. In the event that these
receivables are secured by assets that are subsequently sold by an obligor, the
same issues discussed above with respect to 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, asset-based receivables may be added to trust. Consequently,
there can be no assurance that accounts designated in the future will relate to
the same types of products or will be of the same credit quality as previously
designated accounts or that new product types, or other forms of security, if
any, that may secure the receivables in new accounts will provide security that
is as favorable as that provided by the
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eligible products securing the receivables currently included in the trust. On
the date of the issuance of the certificates no more than 5% of the accounts in
the trust will be different from those described in this prospectus.
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, and very limited delinquency, default and loss experience, with
respect to its receivables portfolio that are not created by inventory security
agreements, 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 with respect to these additional
accounts may be different from the accounts currently held by the trust. There
can be no assurance that the performance characteristics of the portfolio of
receivables included in the trust in the future will be similar to the
receivables currently included in the trust.
SOCIAL, ECONOMIC AND OTHER FACTORS MAY CAUSE DEALERS TO BE UNABLE TO SELL
PRODUCTS SECURING RECEIVABLES CAUSING LOSSES ON RECEIVABLES AND THUS YOUR
CERTIFICATES OR ACCELERATING PAYMENTS OF PRINCIPAL TO YOU
Payment of the receivables created by inventory security agreements is
largely dependent upon the retail sale of the related products. Generation of
new receivables is dependent upon the general level of sales of eligible
products or expected need for eligible products. The level of sales of eligible
products and the manufacturing and acquisition of eligible products may change
as the result of a variety of social and economic factors. Economic factors
include interest rates, unemployment levels, the rate of inflation and customer
perception of economic conditions generally.
The use of incentive programs like manufacturers' rebate programs may
affect sales. If any of the manufacturers, importers, or distributors of the
eligible products were temporarily or permanently no longer in their respective
businesses, the rate of sales of eligible products generating receivables could
decrease, adversely affecting payment rates with respect to 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 with respect to the related receivables could be adversely
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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 in
respect of the certificates or the receivables, other than the obligation of
Bombardier Credit Receivables Corporation or Bombardier Capital Inc. to purchase
receivables from the trust due to the failure to comply with specific covenants
or the breach by Bombardier Credit Receivables Corporation or Bombardier Capital
Inc. of representations and warranties, as described below and under
"Description of the Certificates--Representations and Warranties" and
"--Servicer Covenants," and other than affiliate support agreements relating to
receivables described under "The Floorplan and Asset-Based Financing
Business--Relationship with Manufacturers, Importers and Distributors."
However, the trust is completely dependent upon Bombardier Capital Inc.
for the generation of new receivables. The ability of Bombardier Capital Inc. to
generate receivables is in turn dependent to a large extent on the sales of
eligible products as well as competition from other financing sources. There can
therefore be no assurance that Bombardier Capital Inc. will continue to generate
receivables at the same rate as in prior years. If sufficient sales do not occur
an amortization event may occur and you could receive principal sooner than you
expect. Thus you could lose the right to future payments of interest, and might
suffer reinvestment loss in a lower interest rate environment. See "Maturity and
Principal Payment Considerations."
YOUR CERTIFICATES HAVE LIMITED CREDIT ENHANCEMENT INCREASING THE RISK OF LOSS ON
THE CERTIFICATES
Credit enhancement of the certificates will be provided by a fraction
of the 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. See "Description of
the Certificates--Allocation of Collections; Deposits in Collection Account;
Limited Subordination of the Retained Interest."
SUBORDINATION INCREASES RISK OF LOSS ON CLASS B CERTIFICATES
The distribution of principal on the class B certificates will be made
subsequent to the distribution in full of principal on the class A certificates.
Investor charge-offs will result in reductions of amounts available to
distribute principal on the class B certificates before any reductions of this
type will be incurred in respect of the class A certificates.
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ANY AMOUNTS ON DEPOSIT IN THE EXCESS FUNDING ACCOUNT WILL EARN INTEREST AT A
RATE LOWER THAN THAT OF THE RECEIVABLES INCREASING THE RISK THAT YOU WILL NOT
RECEIVE ALL PAYMENTS DUE TO YOU
Funds, if any, deposited in the excess funding account will be subject
to specified investment restrictions and, as a result, will likely earn a rate
of return lower than the interest rates borne by a comparable amount of
receivables. Accordingly, during any period during 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.
There can be no assurance that previously issued series or the issuance
of any other series from time to time hereafter might not have an impact on the
timing or amount of payments received by you. See "Description of the
Certificates--New Issuances."
Furthermore, principal collections may be available for reallocation to
the certificates during any period when principal is paid or accumulated on your
certificates from other series which may shorten the maturity of your
certificates. The issuance of an additional series does not require your
consent.
THE INTEREST RATE OF YOUR CERTIFICATES WILL BE SUBJECT TO A LIMITATION WHICH MAY
LIMIT THE INTEREST YOU RECEIVE
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For each interest period, your certificates will bear interest at a
rate equal to the lesser of the net receivables rate and LIBOR plus __%, for
class A certificates, or the net receivables rate and LIBOR plus __%, for class
B certificates. The net receivables rate is determined based upon the weighted
average interest rates borne by the receivables in the trust less 2% if
Bombardier Capital Inc. is the servicer and less 3% if Bombardier Capital Inc.
is not the servicer. Fluctuations in interest rates, particularly reductions in
the yield on the receivables in the trust or increases in LIBOR without
corresponding increases in the yield on the receivables in the trust may result
in limitations on the rate of interest paid on your certificates.
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 January 31, 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 applicable to any of the
receivables. Furthermore, as of January 31, 2000, approximately 0.46% by
principal balance of all domestic inventory receivables did not bear interest.
A reduction in interest rates on any receivables, or the inclusion of
non-interest bearing receivables in the trust, could have the effect of reducing
or possibly eliminating the positive spread, if any, between the limitation
described above and the 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
It is a condition to the issuance of the certificates that the class A
certificates be rated "AAA" or the equivalent and that the class B certificates
be rated at least "A" or the equivalent by at least one nationally recognized
rating agency. A rating is based primarily on the credit underlying the
receivables and the interest we retain in the trust that is available to you and
amounts on deposit in the reserve fund and, in the case of the class A
certificates, the subordination of the distribution of principal and interest on
the class B certificates to the prior distribution of principal and interest of
the class A certificates.
The rating addresses the likelihood of the ultimate payment of
principal and timely payment of interest on the certificates. A rating agency
does not evaluate, and a rating of the certificates does not address the
likelihood that any amounts not paid to you because of the interest rate cap on
the certificates will be paid or the likelihood of payment in full of the
outstanding principal balance of the certificates on their expected final
payment dates. A rating is not a recommendation to buy, sell or hold securities,
inasmuch as it does not comment as to the market price or suitability for a
particular investor.
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There is no assurance that a rating will remain for any given period of
time or that a rating will not be lowered or withdrawn entirely by a rating
agency if in its judgment circumstances so warrant. Any suspension, reduction or
withdrawal in the ratings assigned to the certificates would probably reduce the
market value of the certificates and may affect your ability to sell them.
BOOK-ENTRY REGISTRATION WILL LIMIT YOUR ABILITY TO EXERCISE YOUR RIGHTS AND MAY
CAUSE DELAYS IN PAYMENT AND DIFFICULTIES IN PLEDGING
Your certificates will be initially represented by one or more
certificates registered in the name of Cede & Co., the nominee for The
Depository Trust Company and will not be registered in your name or your
nominee. Because of this you will not be recognized by the trustee as a
certificateholder. Unless definitive certificates are issued, you will only be
able to exercise your rights indirectly through The Depository Trust Company,
Cedel Bank, societe anonyme, Euroclear System and their participating
organizations. See "Description of the Certificates--Book-Entry Registration"
and "--Definitive Certificates."
You may hold certificates only in book-entry form through The
Depository Trust Company, the Euroclear System or Cedel Bank, societe anonyme.
Your ability to pledge a certificate to a person that does not participate in
those systems may be limited because of the lack of a physical certificate. In
addition certificate payments will not be made directly to you. Instead, the
trustee or its paying agent will send all distributions to The Depository Trust
Company, which will then credit those distributions to the participating
organizations. Those organizations must in turn credit accounts you have either
directly or indirectly through indirect participants for you to receive your
payments. This may cause you to experience some delay in receiving payments on
the your certificates.
GEOGRAPHIC CONCENTRATION MAY CREATE ADDITIONAL RISKS OF LOSS ON YOUR
CERTIFICATES
As of January 31, 2000, approximately 10.43%, 8.58%, 8.37%, 6.13%,
5.54%, 4.83% and 4.52% 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, Arizona and South Carolina,
respectively. Consequently, losses on the receivables and resultant payments on
the offered certificates may, both generally and particularly, be affected
significantly by deterioration of economic conditions in these states. Because a
material percentage of the obligors are located in the southern states of the
United States, an economic downturn in that region may have a disproportionately
material adverse effect on the receivables and your certificates.
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YEAR 2000 READINESS DISCLOSURE: YOU COULD BE ADVERSELY AFFECTED IN ABSENCE OF
YEAR 2000 COMPLIANCE
Bombardier Capital Inc. has made efforts to identify, modify or replace
computer systems which are not year 2000 compliant and to address other related
issues associated with the change of the millennium, although there is no
assurance these efforts will be fully successful. In the event that computer
problems arise out of a failure to identify, modify or replace appropriate
systems on time, or in the event that the computer systems of Bombardier Capital
Inc., the trustee or external suppliers are not fully year 2000 compliant, the
resulting disruptions in the collection or distribution of receipts on the
receivables could materially and adversely affect the holders of the
certificates.
[With respect to the year 2000 problem, The Depository Trust Company
has informed members of the financial community that it has developed and is
implementing a program so that its systems, as they relate to the timely payment
of distributions, including principal and interest payments, to certificate
holders, book-entry deliveries, and settlement of trades within The Depository
Trust Company, continue to function appropriately on and after January 1, 2000.
This program includes a technical assessment and a remediation plan, each of
which is complete. Additionally, The Depository Trust Company's plan includes a
testing phase, which is expected to be completed within appropriate time frames.
Bombardier Credit Receivables Corporation has not independently verified the
information provided to it by The Depository Trust Company.
However, The Depository Trust Company's ability to perform properly its
services is also dependent upon other parties, including but not limited to, its
participating organizations, through which you will hold your certificates, as
well as the computer systems of third party service providers. The Depository
Trust Company has informed the financial community that it is contacting and
will continue to contact third party vendors from whom The Depository Trust
Company acquires services to:
impress upon them the importance of their services being year 2000
compliant; and
determine the extent of their efforts for year 2000
remediation, and, as appropriate, testing, of their services.
In addition, The Depository Trust Company has stated that it is in the process
of developing these contingency plans as it deems appropriate.
If problems associated with the year 2000 problem were to occur with
respect to The Depository Trust Company and the services described above,
payments to you could be delayed or otherwise adversely affected.]
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CAPITALIZED TERMS
For purposes of clarity, a number of terms used in this prospectus have
been assigned specialized definitions. These terms appear throughout this
prospectus as capitalized words and phrases. Definitions for these terms may be
found in the glossary at the back of this prospectus.
FORWARD-LOOKING STATEMENTS
In this prospectus, Bombardier Credit Receivables Corporation uses
forward-looking statements. These forward-looking statements are found in the
material, including each of the tables, set forth under "Risk Factors" and
"Maturity and Principal Payment Considerations." Forward-looking statements are
also found elsewhere in this prospectus and include words like "expects,"
"intends," "anticipates," "estimates" and other similar words. These statements
are inherently subject to a variety of risks and uncertainties. Actual results
differ materially from those we anticipate due to changes in, among other
things:
economic conditions and industry competition;
political, social and economic conditions;
the law and government regulatory initiatives; and
interest rate fluctuations.
Bombardier Credit Receivables Corporation will not update or revise any
forward-looking statements to reflect changes in its expectations or changes in
the conditions or circumstances on which the statements were originally based.
ORIGINATION OF RECEIVABLES
Bombardier Capital Inc. provides floorplan financing to dealers for
eligible products. The dealers are obligated to repay 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
receivables therein 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.
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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 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, there
can be no assurance that the activities of the depositor would not result in a
court concluding that the assets and liabilities of the
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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 with respect to any of these liabilities.
However, the existence of a claim against the depositor could permit the
claimant to subject the depositor to an involuntary proceeding under the
bankruptcy code or other insolvency law.
THE TRUST
The trust is the Bombardier Receivables Master Trust I. It was formed
under, and is administered in accordance with, the laws of the State of New York
by 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 __, 1999 and by Amendment Number
3 dated as of October __, 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 hereto
- --which is hereby incorporated by reference into this prospectus-- and all
receivables generated in the Accounts after the applicable cut-off date during
the term of the trust. The property of the trust will also include receivables
generated in Accounts added to the trust from time to time hereafter. In each
case the receivables are reduced by receivables paid or charged-off and exclude:
(1) Receivables generated in Removed Accounts after the date on which
the transfer of these receivables has ceased or receivables generated in any
Account which is not an Eligible Account after the removal of these receivables
has begun;
(2) Receivables removed from the trust; and
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(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 with respect to any series issued by the
trust; and
any letter of credit, surety bond, cash collateral account,
guaranteed rate agreement, maturity liquidity facility, tax
protection agreement, subordination, interest rate swap
agreement or other enhancement issued for the benefit of any
other series. See "Description of the Certificates--Addition
of Accounts."
The holders of the Series 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.
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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.
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."
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<PAGE>
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.
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 the 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.
With respect to 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 whereby Bombardier Capital Inc. is made the primary
source of financing for the relevant
25
<PAGE>
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 January 31, 2000, the loans in the Bombardier Capital Inc.
Domestic Inventory Portfolio were outstanding to 4,173 obligors. As of January
31, 2000, no single obligor represented more than 3% of the Bombardier Capital
Inc. Domestic Inventory Portfolio or 2.49% 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;
(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 January 31,
2000, Bombardier Capital Inc. was providing inventory financing to approximately
4,173 dealers located throughout the United States for products sold by
approximately 675 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 January 31, 2000, approximately 20.33% based on
outstanding receivables or 23.46% based on financing volume for the one year
period ended January 31, 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
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Asset-Based Receivables that may be sold to the trust would be
generally expected to arise from asset-based revolving credit facilities
provided to dealers, manufacturers and distributors and would be denominated in
U.S. dollars.
The products for which Bombardier Capital Inc. expects to provide
dealer, manufacturer or distributor financing giving rise to Asset-Based
Receivables are expected to be varied. Generally Asset-Based Receivables would
be expected to involve 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 a few days up 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 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, the products with respect to which Bombardier Capital
Inc. provides domestic inventory financing are 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.
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<PAGE>
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 with respect to 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 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.
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<PAGE>
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 with respect to 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. with respect to 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 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 reunderwrite the account.
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<PAGE>
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 with respect to
Asset-Based Receivables is expected to give consideration to a variety of
factors, including, among others, the financial condition of the borrowing
entity, its credit history and relationship with current and previous lenders
and its historical performance and trends. Upon satisfaction of credit criteria,
terms and conditions, an account would be approved for a revolving line of
credit, the size of which would be based on a variety of factors including the
need of the borrower.
Upon approval of the credit, an evaluation of the borrowing base of the
borrower would be performed and advance rates would be established based on the
type of collateral. For purposes of evaluating items like finished goods
inventory, work-in-process, raw materials, component parts and real estate, an
independent appraisal may be obtained and used in connection with establishing
advance rates. With respect to accounts receivable, eligibility criteria,
typically excluding items past due in excess of, or aged over, a specific number
of days from invoice date, would be established, and concentration limits would
be set with respect to the individual items within the receivables base. Next,
an advance rate on eligible receivables would be determined based on a review of
historical and projected data, giving consideration to factors like credit loss
experience, dilution, contingent sales and aged items. The intended result of
the above analyses would be to set eligibility criteria and advance rates so
that, upon any necessary collateral liquidation, Bombardier Capital Inc. would
fully recover any principal dollars advanced on the revolving line of credit.
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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.
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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
0.5% 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 are set
forth in the chart below.
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AVERAGE SPREAD AND PRIME RATE
<TABLE>
<CAPTION>
Year Ended January 31
--------------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
Average Spread
over Prime Rate 2.30% 3.27% 3.67% 3.87% 3.98%
Average Prime Rate 8.06% 8.29% 8.46% 8.25% 8.85%
Spread plus Prime Rate 10.36% 11.56% 12.13% 12.12% 12.83%
Rate
</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 Inventory Portfolio related to marine products and
Bombardier products. See "Maturity and Principal Payment Considerations."
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 January 31, 2000, approximately 20.33% of Bombardier Capital Inc.'s
Domestic Inventory Receivables Portfolio. With the exception of five independent
manufacturers who accounted, as of January 31, 2000, for approximately, 6.63%,
4.80%, 3.84% and 3.04%, respectively, of Bombardier Capital Inc.'s Domestic
Inventory Portfolio, no
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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 with respect to 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 with respect to the repossessed goods
plus specified costs of repossession less in some circumstances, a scheduled
amount determined according to the age of the repossessed goods. In some cases,
manufacturers, importers and distributors are also subject to recourse
agreements which obligate the manufacturer, importer or distributor to
repurchase the receivables in the event of a dealer default. The obligations of
the manufacturer, importer or distributor do not relieve the dealers of any of
their obligations to Bombardier Capital Inc. However, in some cases, the
manufacturer, importer or distributor who makes a payment with respect to a
Domestic Inventory Receivable due from a dealer may become subrogated to the
related claims by 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, in
accordance with 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
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depositor under these agreements with manufacturers, importers and distributors
with respect to 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.
Asset-Based Receivables are not expected to be supported by any
commitment from a manufacturer, importer or distributor to repurchase any
financed products.
MONITORING
Domestic Inventory Receivables.
Once the dealer credit line is established, the relevant manufacturer,
importer or distributor may, after obtaining Bombardier Capital Inc.'s approval
for each shipment, ship products to the dealer and receive payment therefor, 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
with respect to that dealer. Audits may be conducted as infrequently as once per
year. The audits are intended to ensure that the dealers are paying for
floorplanned products as they are sold. The inspections are performed by
Bombardier Capital Inc. field representatives or outside inspection service
personnel who have been specially trained to audit the inventory of dealers. The
field audit may include:
(1) check the actual inventory;
(2) inspect products for signs of use or excessive wear and tear;
(3) spot check dealer sales orders with respect to manufactured
housing related receivables and spot check contracts pending
with respect to other receivables;
(4) complete condition reports on product that is materially worn
or damaged;
(5) inspect the dealer's place of business and report unusual
conditions;
(6) attempt collection for principal as needed; and
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(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, Bombardier Capital Inc. 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 with respect to the receivables to third parties, provided
that no delegation of this sort shall relieve Bombardier Capital Inc. of its
responsibility as servicer with respect to these duties.
COLLECTION ACTIVITY
Domestic Inventory Receivables.
Bombardier Capital Inc. is responsible for all normal collection
activity with respect to Domestic Inventory Receivables. When it has been
determined that any further collection activity will require repossession, any
remaining inventory is generally repossessed by 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 with respect to the repossessed product plus
some of the costs of repossession and less, in some circumstances, a scheduled
amount determined according to the age of the repossessed products. The dealer,
however, remains obligated to pay 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 with respect to a defaulting dealer will be treated under the pooling
and servicing
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<PAGE>
agreement as collections in respect 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
with respect to 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.
37
<PAGE>
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 therewith. Any undivided interest in receivables held by a
participant is not part of the trust's assets and does not provide credit
support to your certificates. The documentation for the underlying line of
credit will remain in the name of 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 will have the right to receive a
portion of the payments received on account of principal, interest and other
fees and charges due from the obligor and with respect to the related collateral
security and other rights. Subject to the Rating Agency Condition being
satisfied with respect to the form of the documentation under which
participation interests are to be granted, the receivables, related collateral
security and other associated rights to be sold by 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
with respect to the form of the documentation under which these participation
interests are to be granted. These interests are no longer part of the trust.
The depositor has caused interests in some receivables to be transferred to it
from the trust and the depositor has transferred these interests to 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.
38
<PAGE>
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 ineligible; 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 with
respect to the Asset-Based Receivables.
Under the pooling and servicing agreement, the depositor has the right,
subject to specified conditions, and in some circumstances is obligated, to
designate from time to time additional qualifying accounts to be included as
Accounts and to convey to the trust the receivables of these Additional
Accounts, including receivables created after this designation. These accounts
must meet the eligibility criteria to
39
<PAGE>
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 in accordance with 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."
Information with respect to the accounts in the trust as of January 31,
2000 is set forth in the charts below. On the date of the issuance of the
certificates no more than 5% of the accounts in the trust will be different from
those described in this prospectus.
CREDIT LIMITS OF THE ACCOUNTS
<TABLE>
<CAPTION>
Accounts with Credit Limits Principal Amount of % of Receivables in
Ranging From: Receivables the Trust
--------------------------- ------------------- --------------------
<S> <C> <C>
$0 to $249,999 $68,807,322 6.06%
$250,000 to $499,999 $189,728,591 16.71%
$500,000 to $999,999 $292,104,372 25.72%
$1,000,000 to $15,000,000 $500,172,600 44.04%
$15,000,001 to $48,000,000 $84,789,235 7.47%
</TABLE>
40
<PAGE>
<TABLE>
<S> <C> <C>
-------------------------------------------------------------------------
Totals $1,135,602,121 100%
=========================================================================
</TABLE>
YEAR ACCOUNTS ESTABLISHED
<TABLE>
<CAPTION>
Year Account Principal Amount of % of Receivables
Established: Receivables in Trust
------------- ------------------- -----------------
<S> <C> <C>
1999 $164,080,288 14.45%
1998 $147,088,676 12.95%
1997 $117,497,317 10.35%
1996 $63,400,370 5.58%
1995 or earlier $643,535,470 56.67%
-----------------------------------------------
Totals $1,135,602,121 100%
===============================================
</TABLE>
As of January 31, 2000:
There were approximately 3851 Accounts which had been designated to the
trust.
Receivables in these Accounts had an aggregate principal balance of
approximately $1,180,600,000.
The average aggregate credit limit per Account was approximately
$541,829.
The average principal balance of receivables per Account was
approximately $293,148.
o The aggregate principal balance of receivables as a percentage of the
aggregate credit limits of these Eligible Accounts was approximately 56.58%.
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 Finance Inc. in exchange for receivables held by BCI
Finance Inc. which had become performing receivables.
41
<PAGE>
Bombardier Capital Inc. and the depositor may designate Additional
Accounts from time to time and transfer the receivables arising therein to the
trust. As a result, the actual composition of the receivables by business line
represented by the trust's assets is expected to change over time. In addition,
due to the variability and uncertainty with respect to the rates at which
receivables in the trust are created, paid or otherwise reduced, the information
set forth in "Historical Size", "Delinquency", "Loss Experience", "Product Mix",
"Aging Experience" and "Geographic Distribution" below may vary significantly
over time.
HISTORICAL SIZE
The Accounts comprise only a portion of the entire receivables in the
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
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.
42
<PAGE>
SIZE OF PORTFOLIO
SIZE OF PORTFOLIO
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
January 31,
----------------------------------------------------------------------------------
2000 1999 1998 1997 1996
----------------------------------------------------------------------------------
(U.S. Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Outstanding Principal
Balance......................
1,314,882 1,214,066 924,279 1,016,719 759,700
---------
Average
Number of Dealers............ 4,013 3,785 3,657 3,444 3,377
-----
Average
Month-End Principal
Balances Per Dealer.......... 291,602 239,626 249,580 233,114 184,898
------- --------- ------- -------- ---------
Average Financing
Volume Per Dealer............ 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 number of
dealers for each of the fiscal years ended January 31 were calculated by taking
the average of the number of dealers at the beginning and end of that fiscal
year. The figures for average 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 one year periods ending January 31.
DELINQUENCY
43
<PAGE>
The following table shows delinquency information for the Bombardier
Capital Inc. Domestic Inventory Portfolio as of the dates shown.
DELINQUENCY EXPERIENCE
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
January 31,
------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------
(U.S. Dollars in Millions)
<S> <C> <C> <C> <C> <C>
Outstanding Principal Balance................ $1,314.9 $1,214.0 $924.2 $1,016.7 $759.7
Delinquent Amount ........................... $1.76 $8.84 $9.84 $4.97 $4.8
Delinquent Amount/Outstanding Principal
Balance...................................... 0.1% 0.7% 1.1% 0.5% 0.6%
Allowance for Credit Losses on Losses on
Bombardier Capital Inc.'s Books.............. $4.102 $4.85 $13.22 $12.0 $9.7
Allowance/Outstanding Principal Balance...... 0.31% 0.4% 1.43% 1.18% 1.3%
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 tables set 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. 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 Eligible Accounts will comprise only a portion of the entire
receivables
44
<PAGE>
in the Bombardier Capital Inc. Domestic Inventory Portfolio, which also includes
accounts that would be ineligible. In addition, the Eligible Accounts may also
in the future comprise all or a portion of the receivables in the Asset-Based
Receivables portfolio for which there is currently no historical loss experience
information available. As a result, actual loss experience with respect to the
Eligible Accounts may be different. There can be no assurance that the loss
experience for the receivables in the future will be similar to the historical
experience set forth in the table below.
LOSS EXPERIENCE
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
</TABLE>
<TABLE>
<CAPTION>
Year Ended January 31,
-------------------------------------------------------------------
2000 1999 1998 1997 1996
-------------------------------------------------------------------
(U.S. Dollars in Millions)
<S> <C> <C> <C> <C> <C>
Average Principal Receivables
Balance..................................... $1,170.2 $907.0 $912.7 $802.8 $624.4
Net Losses.................................. $ 5.3 $ 12.7 $ 1.0 $ 1.8 $ 7.1
Net Losses/Liquidations..................... 0.21% 0.61% 0.05% 0.09% 0.42%
Net Losses/Average Principal
Receivables Balance......................... 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 1999. The figures set out under "Average
Principal Receivables Balance" indicate the average of the month-end outstanding
principal balances for the twelve months ending on the last day of the period.
The figures representing net losses in any period were derived by reducing gross
losses by recoveries for that period. Recoveries include recoveries from
collateral security in addition to the products.
See the last two paragraphs under "General" above.
MANAGEMENT DISCUSSION AND ANALYSIS
45
<PAGE>
Management believes that portfolio losses and delinquencies have not deviated
significantly over recent years. As noted in the preceding paragraph, loss and
recovery data were affected by Bombardier Capital Inc.'s change in write-off
policy. There can be no assurance that the delinquency and loss experience on
the portfolio will remain consistent with past performance. In particular, a
change in the current economic conditions could have a material adverse effect
on the assets in the trust. See "Risk Factors--Social, Economic and Other
Factors May Cause Dealers To Be Unable To Sell Products Securing Receivables
Causing Losses On Receivables And Thus Your Certificates or Accelerating
Payments of Principal To You." Some of the asset types in the trust may be more
sensitive to recessive cycles than others. For example, if an economic recession
occurs, consumers are less likely to buy high-end recreational products. This
would cause dealers to have difficulty selling the high-end recreational
products that secure receivables. In addition, unexpected events may cause an
increase in delinquencies and losses. For example, an increase in the
delinquency experience occurred in the first half of 1998 because of the adverse
effect on several California dealers of a ban on the use of personal watercraft
on some waterways.
As may be observed from the average spread over prime data, the spread over
prime has decreased. This is known as rate compression and may adversely affect
the yield on the portfolio. Rate compression has occurred in part due to
increased price competition and consolidation in the wholesale finance industry
which can be expected to continue.
PRODUCT MIX
The level of Bombardier Capital Inc.'s domestic inventory financing has
increased over the last four years. The following table details 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.
46
<PAGE>
OUTSTANDING RECEIVABLES
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
January 31,
--------------------------------------------------------------------------------------
Product 2000 1999 1998 1997 1996
- ---------------------------------------------------------------- --------------------------------------------------
<S> <C> <C> <C> <C> <C>
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 $ 339,344,956 $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.......... $1,314,82,483 $1,214,066,165 $ 924,279,439 $1,016,719,187 $759,726,633
==================================================================================
</TABLE>
FINANCING VOLUME
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
January 31,
------------------------------------------------------------------------------------------------
Product 2000 1999 1998 1997 1996
- ---------------------- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
</TABLE>
47
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Manufactured
Housing .............. $1,000,527,521 $ 475,987,545 $ 303,678,821 $ 345,244,048 $ 303,200,572
Recreational
Vehicles.............. $ 317,215,75 $ 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
============================================================================================
</TABLE>
48
<PAGE>
Bombardier Recreational Products
As a manufacturer, Bombardier Inc. is one of the 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 January 31, 2000, Bombardier Capital Inc. provided inventory
finance to approximately 1,393 dealers for purchases of the products of
approximately 298 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 January 31, 2000, Bombardier Capital
Inc. was financing approximately 768 dealers for purchases of the products of
approximately 114 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
49
<PAGE>
Capital Inc. has also recently begun financing fleet purchases by rental car
dealers and has instituted a program to finance fleet purchases of previously
rented vehicles by specified used car dealers. To date, management has elected
not to include these assets in the trust.
See the last two paragraphs under "General" above.
AGING EXPERIENCE
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>
January 31,
--------------------------------------------------------------------------------
Days 2000 1999 1998 1997 1996
- ------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1-120.................... 50.32% 52.93% 44.34% 58.50% 61.44%
121-180.................. 15.65% 14.04% 14.23% 13.42% 13.92%
181-270.................. 11.43% 11.52% 13.30% 11.26% 9.37%
Over 270................. 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.
50
<PAGE>
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
<TABLE>
<CAPTION>
Receivables Percentage of Percentage of
Outstanding (U.S. Receivables Total Number Number of
State Dollars in Thousands) Outstanding of Accounts Accounts
----- --------------------- -------------- ------------ --------------
<S> <C> <C> <C> <C>
Florida................... 137,137,234.74 10.43% 255 6.11%
Texas..................... 112,778,749.65 8.58% 314 7.52%
North Carolina............ 110,041,937.57 8.37% 179 4.29%
Georgia................... 80,541,796.88 6.13% 160 3.83%
California................ 72,905,618.18 5.54% 209 5.01%
Arizona.................. 63,469,740.59 4.83% 81 1.94%
South Carolina............ 59,367,998.12 4.52% 127 3.04%
</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.
51
<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 at January 31, 2000, the Inventory Finance Division and the
Commercial & Industrial Finance Division accounted for approximately 62.30% 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. Bombardier Capital Inc.
has entered new market segments by launching its own consumer retail and
manufactured housing financing operations through its Consumer Finance Division
and Mortgage Division. In addition, Bombardier Capital Inc. has begun providing
commercial leasing services relating to computer and telecommunications hardware
and software and related equipment through its Technology Management and Finance
Division. Bombardier Capital Inc. operates in highly competitive markets.
As of January 31, 1997, January 31, 1998 and January 31, 1999,
Bombardier Capital Inc.'s total assets under management -- primarily financing
assets -- were approximately $1,539 million, $2,062 million and $4,404 million,
respectively, and shareholders' equity was approximately $139 million, $159
million and $388 million, respectively. For the fiscal years ended 1997, 1998
and 1999, total Bombardier Capital Inc. revenues were approximately $110
million, $171 million and $280 million, respectively.
Bombardier Inc. is a Canadian corporation which, directly and through
its subsidiaries, is engaged in design, development, manufacture and marketing
in the aerospace, recreational products and transportation equipment industries.
In addition, Bombardier Inc. and its subsidiaries offer support, maintenance and
training services, as well as operations management in the public and private
sectors. Through various subsidiaries, Bombardier Inc. is engaged in
52
<PAGE>
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.
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 _______ distribution date. It is possible, however, that principal on the
certificates may be paid earlier if an Early Amortization Event has occurred or
if Bombardier Capital Inc. elects not to extend the Initial Principal Payment
Date. Principal with respect to the class B certificates will not be
distributable until all principal with respect to the class A certificates has
been distributed. It is expected that a single principal payment in respect of
the class A certificates will be made on the _______ distribution date and that
a single principal payment in respect of the class B certificates will also be
made on this date, but the principal of the class A or the class B certificates
may be paid earlier or, depending on the actual payment rate on the receivables,
later, as described in this section.
The majority of Domestic Inventory Receivables are payable upon the
retail sale of the related Eligible Product and therefore, the timing of these
payments is uncertain.
In addition, there is no assurance that 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
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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.
Further, during the Controlled Accumulation Period or any Initial
Amortization Period or Early Amortization Period, a decline in the rate at which
additional receivables are generated may have the effect of reducing the rate of
principal distributions on the certificates, thus extending the maturity of the
certificates and increasing their exposure to losses in the trust.
Alternatively, the issuance of other series may result in the allocation of
Excess Principal Collections from these other series to the certificates during
any Initial Amortization Period or Early Amortization Period, which may shorten
the maturity of the certificates. See "Description of the
Certificates--Interest" and "--Principal" and "The Floorplan and Asset- Based
Financing Business."
Following the exhaustion of coverage provided by the Available
Subordinated Amount, the yield to maturity on the certificates will be more
sensitive to the rate and timing of Defaulted Receivables. For a description of
Investor Charge-Offs, see "Description of the Certificates--Investor
Charge-Offs."
Domestic Inventory Receivables arise through financing arrangements
related to Eligible Products.
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 calculated as the percentage equivalent of a
fraction, the numerator of which is the aggregate of all collections of
principal during the period and the denominator of which is the average
aggregate principal balance for this period. There can be no assurance that the
rate of principal collections will be similar to the historical experience set
forth in the table below. Because the Accounts designated to the trust will
comprise only a portion of the entire Bombardier Capital Inc. Domestic Inventory
Portfolio, which includes accounts
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which have not been designated to the trust, actual monthly payment rates with
respect to the Eligible Accounts may be different.
MONTHLY PRINCIPAL PAYMENT RATES
BOMBARDIER CAPITAL INC. DOMESTIC INVENTORY PORTFOLIO
<TABLE>
<CAPTION>
Year Ended January 31,
--------------------------------------------------------------------------
2000 1999 1998 1997 1996
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Highest Month.................... 30.17% 31.14% 29.48% 34.01% 35.9%
Lowest Month..................... 11.00% 10.38% 10.99% 10.54% 11.1%
Average of the
Months in the Period............. 18.60% 19.32% 19.33% 21.68% 22.9%
</TABLE>
See the last paragraph under "The Accounts--General."
Because Bombardier Capital Inc. may cause an Initial Amortization
Period to commence on any Initial Principal Payment Date and because the
occurrence of an Early Amortization Event would initiate an Early Amortization
Period, the final distribution of principal on the certificates may be made, in
the case of the class A certificates, prior to the _______ distribution date
and, in the case of the class B certificates, prior to the _______ distribution
date. See "Description of the Certificates--Early Amortization Events" and
"--Extension of Initial Principal Payment Date.
DESCRIPTION OF THE CERTIFICATES
GENERAL
The certificates will be issued in accordance with the pooling and
servicing agreement filed as an exhibit to the registration statement of which
this prospectus is a part, as supplemented by the respective supplements
relating to prior series of investor certificates and to the certificates and
the Variable Funding Certificate. The pooling and servicing agreement provides
that it is governed by New York law. The following discussion represents a
summary of the material terms of the pooling and servicing agreement and does
not purport to provide a complete description. For further information, owners
and prospective
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owners of certificates are advised to examine the pooling and servicing
agreement, copies of which, without specified exhibits or schedules, will be
made available by the trustee upon written request.
The certificates will evidence undivided beneficial ownership interests
in the receivables representing the right to receive from the trust, upon terms
as further described in this section, funds up to, but not in excess of, the
amounts required to make payments of interest on and principal of the
certificates under the pooling and servicing agreement and the Series 2000-1
supplement to 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 $[300,000,000] and the
initial principal balance of the class B certificates will be $[20,339,000]. The
certificates will initially be represented by two or more certificates
registered in the name of the nominee of The Depository Trust Company.
The certificates will be available for purchase in minimum
denominations of $1,000 and integral multiples thereof in book-entry form. The
depositor has been informed by The Depository Trust Company that its nominee
will be Cede & Co. Accordingly, Cede & Co. is expected to be the holder of
record of the certificates. No 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, commencing [ March 15, 2000].
The Class A Certificate Rate for any interest period will be the lesser of LIBOR
plus __________ and the net receivables rate.
Interest on the principal balance of the class B certificates will
accrue at the Class B Certificate Rate and will be payable to the holders of the
class B certificates on each distribution date, commencing [ March 15, 2000].
The Class B Certificate Rate for any interest period will be the lesser of LIBOR
plus __________ and the net receivables rate.
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Interest due on a distribution date will accrue from and including the
preceding distribution date -- or, in the case of the first distribution date,
from and including the date of the issuance of the certificates -- to but
excluding the distribution date on which this interest is due. Interest due for
any distribution date will be calculated on the basis of the actual number of
days elapsed during the related Interest Period and a 360-day year. Interest due
but not paid on any distribution date will be due on the next distribution date
together with, to the extent lawfully payable, interest on the amount of this
unpaid interest at the Class A Certificate Rate or Class B Certificate Rate, as
applicable.
Interest payments on the certificates will be derived solely from:
(1) Non-principal collections on the receivables allocated to
Series 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 f irst in respect of the class A certificates and then to the
class B certificates, in each case up to the accrued and unpaid interest
thereon.
PRINCIPAL
No principal payments will be made on the certificates until the
distribution date in _____________, unless Bombardier Capital Inc. elects not to
extend the Initial Principal Payment Date or an Early Amortization Event, as
described under "Early Amortization Events" below, occurs. If Bombardier Capital
Inc. elects not to extend the Initial Principal Payment Date, principal
distributions on the certificates will begin on that Initial Principal Payment
Date, the earliest of which would be the __________ distribution date. If an
Early Amortization Event occurs, principal distributions on the certificates
will begin on the distribution date following the end of the calender month in
which this event occurs.
During the Revolving Period, principal collections allocated to the
certificates, subject to limitations, will either:
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(1) be deposited in the excess funding account as described under
"Excess Funding Account" below;
(2) be treated as excess principal collections and be allocated to one
or more outstanding series which are in amortization, early amortization or
accumulation periods to cover shortfalls in principal payments due to the
certificateholders of any of these other series or which provide for excess
funding accounts or similar arrangements; or
(3) to the extent the excess principal collections are not needed to
cover principal shortfalls for other outstanding series, either be paid or made
available to the holder of the BCRC Certificate to maintain at a constant level
the interest in the trust represented by the certificates, or, if the Pool
Balance does not exceed the Required Pool Balance, be held in [the collection
account as unallocated Principal Collections].
See "Allocation Percentages--Principal Collections for all Series" and
"Distributions from the Collection Account; Reserve Fund; Principal
Account--Principal Collections" below.
During the Controlled Accumulation Period, the Initial Amortization
Period or any Early Amortization Period, principal collections allocable to the
certificates plus other amounts comprising Available Investor Principal
Collections will no longer be deposited in the excess funding account or
allocated to another outstanding series or paid or made available to the holder
of the BCRC Certificate. Instead, in the case of the Controlled Accumulation
Period, Available Investor Principal Collections for each month will be
deposited into the principal account until the amount on deposit equals the
Controlled Deposit Amount, and, in the case of the Initial Amortization Period
or an Early Amortization Period, will be deposited, up to the amount of Monthly
Principal for the related distribution date into the collection account and
distributed to the Certificateholders as Monthly Principal, first to the holders
of the class A certificates and then to the holders of the class B certificates,
until either the outstanding principal balance of both classes of the
certificates has been reduced to zero or the __________ distribution date has
occurred.
The Controlled Accumulation Period will begin on ________, 200_ or a
later date determined by the servicer on the basis of the Accumulation Period
Length. The Controlled Accumulation Period will continue for one, two, three or
four months and for each of the months, principal collections allocated to the
certificates will be deposited into the principal account, in an amount
sufficient, when combined with the deposits in all other months, to pay the
class A certificates and the class B certificates by the distribution date in
________. During any Initial Amortization Period or Early Amortization Period,
principal collections allocable to the certificates will be distributed first to
the class A certificates until the principal balance thereof is reduced to zero,
and then
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to the class B certificates until the principal balance thereof is reduced to
zero.
It is expected that amounts accumulated will be paid to the holders of
the class A certificates on __________, which is the scheduled payment date and
that a single principal payment in respect of the entire principal balance of
the class B certificates will be made on the _______ distribution date. The
principal of the class A or the class B certificates may be paid earlier or,
depending on the actual payment rate on the receivables, later, as described
under "Maturity and Principal Payment Considerations" in this prospectus.
If an interest in the receivables represented by all outstanding series
is required to be repurchased as described below under the third from the last
paragraph of "Representations and Warranties," principal payments on the
certificates will be made on the distribution date following this repurchase.
See "--Allocation Percentages--Principal Collections for all Series"
and "--Distributions from the Collection Account; Reserve Fund; Principal
Account--Principal Collections" below.
Distributions on the certificates will be made on each distribution
date to the holders of certificates in whose names the certificates were
registered which is expected to be Cede & Co. as nominee of The Depository Trust
Company at the close of business on the day preceding the relevant distribution
date. If definitive certificates are issued, distributions will be made to the
holder of certificates in whose names the certificates were registered on the
last day of the preceding calendar month. However, the final distribution on the
certificates will be made only upon presentation and surrender of the
certificates. Distributions will be made to The Depository Trust Company in
immediately available funds.
EXTENSION OF INITIAL PRINCIPAL PAYMENT DATE
Unless an Early Amortization Event occurs, principal with respect to
the class A certificates is expected to be paid on the _________ distribution
date and principal with respect to the class B certificates is expected to be
paid, concurrently with the final distribution on the class A certificates, on
the ___________ distribution date; provided, however, that the
Certificateholders will receive payments of principal earlier if Bombardier
Capital Inc. elects not to extend the Initial Principal Payment Date. The first
Initial Principal Payment Date will be the __________ distribution date, but
will successively and automatically be extended to the next distribution date
after the then-current Initial Principal Payment Date unless Bombardier Capital
Inc. elects not to so extend. The Initial Principal Payment Date will not,
however, be extended beyond the _______ distribution date.
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In the event that Bombardier Capital Inc. elects not to extend the
Initial Principal Payment Date, the Revolving Period or the Controlled
Accumulation Period, as applicable, will end and the Available Investor
Principal Collections for each distribution date commencing on the Initial
Principal Payment Date will be paid first, to the Class A Certificateholders
until the earlier of the date on which the outstanding principal balance of the
class A certificates has been reduced to zero or the ________ distribution date
and second to the holders of the class B certificates until the earlier of the
date on which the outstanding principal balance of the class B certificates has
been reduced to zero or the _________ distribution date.
Bombardier Capital Inc. will cause the trustee to provide a copy of
Bombardier Capital Inc.'s notice not to extend the Initial Principal Payment
Date to each Certificateholder, the depositor and the Rating Agencies. The
servicer will cause the trustee to mail this notice no later than the fifth
business day following the distribution date prior to the effective Initial
Principal Payment Date on which principal payments will commence.
BOOK-ENTRY REGISTRATION
The Depository Trust Company is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, and a "clearing corporation" within the meaning of the UCC and a
"clearing agency" registered according to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository Trust Company was
created to hold securities for its Participants and facilitate the clearance and
settlement of securities transactions between Participants through electronic
book-entry changes in their accounts, thereby eliminating the need for physical
movement of certificates. Participants include the underwriters, securities
brokers and dealers, banks, trust companies and clearing corporations and may
include other organizations. Indirect access to The Depository Trust Company
system also is available to 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 the certificates from the trustee
through The Depository Trust Company and its Participants. Under a book-entry
format, you will receive payments after the related distribution date because,
while payments are required to be forwarded to Cede & Co., as nominee for The
Depository Trust Company, on each of these dates, The Depository Trust Company
will forward these payments to its Participants which will then be required to
forward them to entities that clear through or maintain a custodial relationship
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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.
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.
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 for the certificates.
The Depository Trust Company has advised the depositor that neither The
Depository Trust Company nor Cede & Co. will consent or vote with respect to any
action permitted to be taken by the Certificateholders under the pooling and
servicing agreement or any other agreement. Under its usual procedures, The
Depository Trust Company mails an omnibus proxy to the issuer as soon as
possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those Participants to whose accounts the
certificates are credited on the record date, identified in a listing attached
thereto.
Cedelbank was incorporated in 1970 as a limited company under
Luxembourg law, a societe anonyme. Cedelbank is owned by a parent corporation,
Cedel International, societe anonyme, the shareholders of which are banks,
securities dealers and financial institutions. Cedel International currently has
about 100 shareholders, including U.S. financial institutions or their
subsidiaries. No single entity may own more than twenty percent of Cedel
International's
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stock. Cedelbank is registered as a bank in Luxembourg, and is therefore subject
to regulation by the Luxembourg Commission for the Supervision of the Financial
Sector, which supervises Luxembourg banks. Cedelbank holds securities for its
customers and facilitates the clearance and settlement of securities
transactions by electronic book-entry transfers between their accounts.
Cedelbank provides various services, including safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. Cedelbank also deals with domestic securities markets in
over 30 countries through established depository and custodial relationships.
Cedelbank has established an electronic bridge with Morgan Guaranty Trust as the
Operator of the Euroclear System in Brussels to facilitate settlement of trades
between Cedelbank and Euroclear. Cedelbank currently accepts over 110,000
securities issues on its books. Cedelbank's customers are world-wide financial
institutions including underwriters, securities brokers and dealers, banks,
trust companies and clearing corporations. Cedelbank's U.S. customers are
limited to securities brokers and dealers, and banks. Currently, Cedelbank has
approximately 2,000 customers located in over 80 countries, including all major
European countries.
The Euroclear System was created in 1968 to hold securities for
Participants and to clear and settle transactions between participants of the
Euroclear system through simultaneous electronic book-entry delivery against
payment, thereby eliminating the need for physical movement of certificates and
any risk from lack of simultaneous transfers of securities and cash.
Transactions may now be settled in any of 32 currencies, including United States
dollars. The Euroclear System includes various other services, including
securities lending and borrowing, and interfaces with domestic markets in
several countries generally similar to the arrangements for cross-market
transfers with The Depository Trust Company described above. The Euroclear
System is operated by the 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 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 the such office, not Euroclear Clearance Systems S.C. Euroclear
Clearance Systems S.C. establishes policy for the Euroclear System on behalf of
participants of the Euroclear system, securities brokers and dealers, other
professional financial intermediaries and banks, including central banks.
Indirect access to the Euroclear System is also available to other firms that
clear through or maintain a custodial relationship with a Euroclear Participant,
either directly or indirectly.
The 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.
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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 of the Euroclear system.
Distributions with respect to the certificates held through Cedelbank
or the Euroclear System will be credited to the cash accounts of Cedelbank
customers or participants of the Euroclear system in accordance with the
relevant system's rules and procedures, to the extent received by either
Citibank, N.A. in its capacity as depositary for Cedelbank or Morgan Guaranty
Trust Company of New York in its capacity as depositary for the Euroclear
System. These distributions will be subject to tax reporting in accordance with
relevant United States tax laws and regulations. See "Material Federal Income
Tax Consequences."
Cedelbank or the 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 Cedelbank customer or Euroclear Participant only in accordance with its
relevant rules and procedures and subject to the ability of its depositary to
effect these actions on its behalf through The Depository Trust Company.
Holders of certificates may hold them through The Depository Trust
Company in the United States or Cedelbank or the Euroclear System in Europe if
they are participants of these systems, or indirectly through organizations
which are participants in these systems.
The certificates will initially be registered in the name of Cede &
Co., the nominee of The Depository Trust Company. Cedelbank and the Euroclear
System will hold omnibus positions on behalf of their participants through
customers' securities accounts in Cedelbank's and Euroclear's names on the books
of their respective depositaries which in turn will hold these positions in
customers' securities accounts in the depositaries' names on the books of The
Depository Trust Company. Citibank, N.A. will act as depositary for Cedelbank
and Morgan Guaranty Trust Company of New York will act as depositary for the
Euroclear System.
Transfers between Participants will occur in accordance with The
Depository Trust Company rules. Transfers between Cedel Participants and
participants of the Euroclear
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system will occur in accordance with their respective rules and operating
procedures.
Cross-market transfers between persons holding directly or indirectly
through The Depository Trust Company, on the one hand, and directly or
indirectly through Cedel Participants or participants of the Euroclear system,
on the other, will be effected in The Depository Trust Company in accordance
with The Depository Trust Company rules on behalf of the relevant European
international clearing system by its depositary. These cross-market
transactions, however, will require delivery of instructions to the relevant
European international clearing system by the counterparty in that system in
accordance with its rules and procedures and within its established European
time deadlines. The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its
depositary to take action to effect final settlement on its behalf by delivering
or receiving securities in The Depository Trust Company, and making or receiving
payment in accordance with normal procedures for same-day funds settlement
applicable to The Depository Trust Company. Cedel Participants and participants
of the Euroclear system may not deliver instructions directly to the
depositaries.
Because of time zone differences, credits of securities received in
Cedelbank or the Euroclear System as a result of a transaction with a
Participant will be made during subsequent securities settlement processing and
dated the business day following The Depository Trust Company settlement date.
These credits or any transactions in these securities settled during this
processing will be reported to the relevant the Euroclear System or Cedelbank
customers on that business day. Cash received in Cedelbank or the Euroclear
System as a result of sales of securities by or through a Cedelbank customer or
Euroclear Participant to a Participant will be received with value on The
Depository Trust Company settlement date but will be available in the relevant
Cedelbank or Euroclear System cash account only as of the business day following
settlement in The Depository Trust Company. For information with respect to tax
documentation procedures relating to the certificates, see "Material Federal
Income Tax Consequences--Foreign Investors."
Although The Depository Trust Company, Cedelbank and the Euroclear
System have agreed to the foregoing procedures in order to facilitate transfers
of certificates among participants of The Depository Trust Company, Cedelbank
and Euroclear, they are under no obligation to perform or continue to perform
these procedures and these procedures may be discontinued at any time. For a
discussion of issues concerning global clearance, settlement and tax
documentation procedures as they relate to certificates held by The Depository
Trust Company, please see Annex III to this prospectus, which is hereby
incorporated by reference into this prospectus.
DEFINITIVE CERTIFICATES
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The certificates will be issued in fully registered, certificated form
to you or your nominees rather than to The Depository Trust Company or its
nominee, only if:
(1) the depositor advises the trustee that The Depository Trust
Company is no longer willing or able to discharge properly its
responsibilities with respect to the certificates and the
depositor is unable to locate a qualified successor;
(2) the depositor, at its option, advises the trustee that it
elects to terminate the book-entry system with respect to the
certificates through The Depository Trust Company; or
(3) after the occurrence of a Servicer Default under the pooling
and servicing agreement, beneficial owners of certificates
representing not less than 50% of the aggregate unpaid
principal amount of the certificates or of a class of the
certificates advise the trustee and The Depository Trust
Company through Participants in writing that the continuation
of a book-entry system through The Depository Trust Company,
or a successor thereto, is no longer in the best interests of
those beneficial owners of certificates.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the trustee is required through The Depository Trust
Company to notify all 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 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.
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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 portion thereof that will be in part subordinated from
time to time to the certificates and, in part, to the investor
certificates of each prior series and to any additional
series, that is, on any date, the sum of the Available
Subordinated Amount and the aggregate available subordinated
amounts for all other outstanding series on that date after
giving effect to the allocations, distributions, withdrawals
and deposits to be made on that date; and
(2) with respect to each series on any date of determination,
a percentage, which in the case of the certificates will
initially be [4]%, of the related adjusted invested amount,
including the Adjusted Invested Amount, of each series, which
will not be subordinated to the certificates.
As of the date of the issuance of the certificates, the amount under the
foregoing clause (1) allocable to the certificates will be no less than
$[18,643,730] and the amount under the foregoing clause (2) allocable to the
certificates will be $12,815,560.
The 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 as the Pool
Balance fluctuates relative to 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
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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.
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 with respect to 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, according to one or
more supplements thereto, the depositor may cause the trustee to issue one or
more new series. In the supplement, the depositor may specify, among other
things, with respect to the new series:
its name or designation;
its initial principal amount, or the method for calculating
this amount, and the currency in which it is denominated;
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its certificate rate or the method for determining its
certificate rate;
the payment date or dates and the date or dates from which
interest shall accrue;
the method for allocating collections to certificateholders;
the issuer and terms of any form of enhancement with respect
thereto,
the terms on which the investor certificates of that series
may be exchanged for investor certificates of a series other
than your series, repurchased by the depositor or remarketed
to other investors;
the series termination date;
the designation of any accounts established in connection with
any series and the terms governing the operation of the
accounts;
the monthly servicing fee and the investors' servicing fee;
the number of classes of investor certificates of the series
and, if more than one class, the rights and priorities of each
class;
the extent to which the investor certificates of the series
will be issuable in temporary or permanent global form;
whether the investor certificates of this series may be issued
in bearer form and any limitations imposed thereon;
the priority of this series with respect to any other series;
whether this series will be part of a group; and
any other terms permitted by the related supplement.
The depositor may offer any series under a prospectus or other
disclosure document in transactions either registered under the Securities Act
of 1933, as amended, or exempt from registration thereunder, directly or through
the underwriters or one or more other underwriters or placement agents. There is
no limit to the number of investor certificates that may be issued under the
pooling and servicing agreement.
As stated above, the pooling and servicing agreement provides that the
depositor may specify the terms of a new series so that each series has a
scheduled amortization period, controlled amortization period or accumulation
period which may
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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 with respect
to each series, or a particular class within a series. In addition, the
depositor has the option under the pooling and servicing agreement to vary
between series, or classes within a series, the terms upon which a series, or
classes within a series, may be repurchased by the depositor.
A new series may be issued only upon the satisfaction of specified
conditions. The depositor may cause the issuance of a new series by notifying
the trustee at least five business days in advance of the applicable issuance
date. The notice shall state the designation of any series and with respect to
that series:
(1) its initial principal amount,
(2) its currency and certificate rate,
(3) the issuer of any enhancement with respect to series, and
(4) the related series issuance date.
The pooling and servicing agreement further provides that the trust
will issue any series only upon delivery to it of the following:
(1) a supplement in form satisfactory to the trustee signed by the
depositor and the servicer and specifying the principal terms
of that series;
(2) any related enhancement agreement executed by each of the
parties thereto other than the trustee; and
(3) an opinion of counsel to the effect that, for federal income
and Vermont state income tax purposes.
(x) the issuance will not adversely affect the
characterization of the investor certificates of any
outstanding series or class as debt of the depositor,
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(y) the issuance will not cause or constitute a taxable
event with respect to 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 shall have delivered to the trustee and any
enhancement provider a certificate of a vice president or more
senior officer, dated the related series issuance date, to the
effect that the depositor reasonably believes that the
issuance will not cause an Early Amortization Event to occur,
(2) after giving effect to the issuance, the depositor shall have
an interest in the pool represented by the BCRC Certificate
and the Variable Funding Certificate equal in the aggregate to
at least 2% of the aggregate amount of receivables included in
the trust, in each case as of the series issuance date and
after giving effect to the issuance, and
(3) written notice of the proposed new issuance shall have been
given to each Rating Agency at least five business days before
the series issuance date and no Rating Agency shall have
notified the depositor, 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
shall, at all times, be beneficially owned by the depositor. Upon satisfaction
of the conditions described in this paragraph, however, the depositor may
surrender the BCRC Certificate to the trustee in exchange for a newly issued
BCRC Certificate and a Supplemental Certificate. The Supplemental Certificate is
not required to be beneficially owned by the depositor and may be delivered to
or at the direction of the depositor to any entity. It is a condition to
delivery of the Supplemental Certificate that, following delivery of the
Supplemental Certificate to another entity, the depositor shall, nevertheless,
have an interest in the trust, represented by the remaining BCRC Certificate and
the Variable Funding Certificate, equal to at least 2% of the aggregate amount
of receivables included in the trust. Additional conditions to the delivery of a
Supplemental Certificate are that the depositor shall have given the Rating
Agencies 10 days' prior notice and the Rating Agency Condition shall have been
satisfied with respect to the exchange and that an opinion of counsel shall be
delivered to the trustee to the effect that, for federal income and Vermont
state income tax purposes, the
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issuance of a series will not adversely affect the characterization of the
investor certificates of any outstanding series or class as debt of the
depositor and that the issuance will not cause or constitute a taxable event
with respect to any certificateholder and the trust. In addition, if the
supplement by which the Supplemental Certificate is issued amends any of the
terms of the pooling and servicing agreement, the supplement shall be subject to
the conditions described under the caption "Amendments" below.
If any Supplemental Certificate is to be transferred or exchanged, it
shall be transferred or exchanged only upon satisfaction of the conditions set
forth in the preceding paragraph.
If a Supplemental Certificate is issued, all references in this
prospectus to the BCRC Certificate and distributions made with respect to the
BCRC Certificate shall include the Supplemental Certificate and distributions to
be made with respect to the Supplemental Certificate and references to the
holder of the BCRC Certificate or to the depositor as holder of the BCRC
Certificate shall include the depositor and the holder of the Supplemental
Certificate.
CONVEYANCE OF RECEIVABLES AND COLLATERAL SECURITY
On the date of the issuance of the Series 1994-1 Certificates, the
depositor sold and assigned to the trust all of the depositor's right, title and
interest in and to the receivables under the Eligible Accounts purchased from
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 added Additional
Accounts to the trust as shown in Annex II hereto. Annex II is hereby
incorporated by reference into this prospectus.
In connection with the sale of the receivables then existing or
subsequently arising under the Eligible Accounts sold or contributed to the
depositor by 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 therein to 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 therein as of January 1, 1994 and as of the dates that Accounts were
considered added to the trust, as applicable. Bombardier Capital Inc. has
retained and will not deliver to the depositor or to the trustee any other
records or agreements relating to these receivables. Except as set forth above,
the records and agreements
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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 relating to these receivables will
not be stamped or marked to reflect the transfer of these receivables to the
trust. The depositor has filed one or more financing statements in accordance
with Vermont state law to perfect the trust's interest in these receivables, the
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. In respect of any conveyance of receivables in
Additional Accounts, the depositor will follow the procedures set forth in the
preceding paragraph, except that the computer file or microfiche or written list
will show information for these Additional Accounts as of the cutoff date for
the addition.
REPRESENTATIONS AND WARRANTIES
The depositor may be required to add receivables to the trust or to
remove or repurchase receivables in designated Accounts from the trust. In
addition, the depositor may, if the conditions precedent are met, add or remove
receivables in designated Accounts to or from the trust. The following
paragraphs as well as those set forth under the captions "Addition of Accounts"
and "Removal of Accounts and Assignment of Receivables" in this prospectus
summarize the circumstances under which these actions must or may be taken and
the respective repurchase obligations of the depositor and Bombardier Capital
Inc.
The depositor has made representations and warranties to the trustee
and will on the date of the issuance of the certificates make the following
representations and warranties relating to the Accounts, the receivables and the
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 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,
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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
with respect to 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 set
forth in the second succeeding paragraphs below, and in the case of an Account,
that Account shall no longer be designated for inclusion in the trust.
Each of these receivables shall be retransferred from the trust to the
depositor on or before the end of the 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, in the event that this deduction would cause
the Pool Balance to be less than the Required Pool Balance on the preceding
Determination Date, after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the related distribution date, on the
date on which this retransfer to the depositor is to occur, the depositor will
be obligated to make a deposit into the collection account in immediately
available funds in an amount equal to the 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 respecting any breach of the representations and
warranties described in the preceding paragraph available to the
Certificateholders or the trustee on behalf of the Certificateholders.
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In the pooling and servicing agreement, the depositor also makes
representations and warranties to the trustee to the effect, among other things,
that as of January 1, 1994 and each series issuance date including the date of
the issuance of the certificates:
(1) it is duly incorporated and in good standing and has the
authority to consummate the transactions contemplated by the
pooling and servicing agreement and the pooling and servicing
agreement -- or in the case of Additional Accounts, the
related assignment -- constitutes a valid, binding and
enforceable agreement of the depositor, and
(2) the pooling and servicing agreement constitutes a valid sale,
transfer and assignment to the trust of all right, title and
interest of the depositor in the receivables and the 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 with respect to the
pooling and servicing agreement in paragraph (2)
above has been breached and the pooling and servicing
agreement does not constitute the grant of a
perfected security interest in the receivables and
the 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
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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 effect in the State of Vermont, and any material adverse effect on the
interest in the receivables represented by each outstanding series or the
Variable Funding Certificate or both, as applicable, caused thereby has been
cured.
The portion of the price for the repurchase in respect of the
certificates will be equal to the sum of the aggregate principal balance of the
certificates on the distribution date on which the purchase is scheduled to be
made and the accrued and unpaid interest on the unpaid principal balance of the
certificates at the Class A Certificate Rate or Class B Certificate Rate, as
applicable, plus any Class A Carry-Over Amount or Class B Carry-Over Amount,
together with interest on overdue 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 respecting a
breach of the representations and warranties available to the investor
certificateholders or the holder of the Variable Funding Certificate or the
trustee on behalf of 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 with respect to
Eligible Products under an inventory security agreement in the
ordinary course of business, and
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(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 of determination thereof relates to an obligor
meeting the requirements under 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 receivable therein to any person
without affecting the Account's status as an Eligible Account.
See "Removal of Accounts and Assignment of Receivables" below
and "The Floorplan and Asset-Based Financing
Business--Participation Arrangements."
Payments received on account of receivables arising in Accounts in
which a third-party has a participation interest are allocated to the trust only
to the extent of 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:
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(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 with respect to receivables that
are payable in accordance with a repayment schedule
regardless of whether the related Eligible Products
have been sold, at the time of transfer to the trust,
is secured by a first priority perfected security
interest in the Eligible Product relating thereto
and,
Asset-Based Receivables included in the trust, the
obligations with respect thereto at the time of
transfer to the trust are secured by a first priority
perfected security interest in goods, accounts, work
in process, raw materials, component parts or other
rights or assets of the obligor,
(6) which is not unenforceable as a result of any violation of
requirements of law applicable thereto and the related inventory security
agreement in the case of Domestic Inventory Receivables or the related loan
agreement in the case of Asset-Based Receivables is not unenforceable as a
result of any violation of requirements of law applicable to any party thereto,
(7) with respect to which all consents and governmental authorizations
required to be obtained by Bombardier Capital Inc. or an affiliate of Bombardier
Capital Inc., or the depositor in connection with the creation of the receivable
or the transfer thereof to the depositor and the trust or the performance by
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,
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(8) as to which at all times following the transfer of the receivable
to the trust, the trust will have good and marketable title thereto free and
clear of all liens arising prior to the transfer or arising at any time, other
than liens permitted under the pooling and servicing agreement and other than
tax and other statutory liens, including liens in favor of the Pension Benefit
Guaranty Corporation, which may arise after this transfer and which relate to
affiliates of the depositor,
(9) which has been the subject of a valid transfer and assignment from
the depositor to the trust of all the depositor's right, title and interest
therein including, with some exceptions, any proceeds thereof,
(10) which will at all times be the legal and assignable payment
obligation of the obligor relating thereto, enforceable against that obligor in
accordance with its terms, as modified or revised from time to time with the
consent of the servicer, except as enforceability may be limited by the
bankruptcy code or other applicable insolvency laws,
(11) which at the time of transfer to the trust is enforceable against
the obligor to the extent of the full principal amount of the receivable, except
as enforceability may be limited by insolvency laws,
(12) as to which, at the time of transfer of the receivable to the
trust, Bombardier Capital Inc. or an affiliate of Bombardier Capital Inc. and
the depositor have satisfied all their respective obligations under the pooling
and servicing agreement with respect to the receivable required to be satisfied
at that time,
(13) as to which, at the time of transfer of the receivable to the
trust, neither 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 therein, and
(14) which constitutes either an "account" or "chattel paper" as
defined in Article 9 of the UCC as then in effect in the State of Vermont.
The foregoing definition of Eligible Receivables may be changed by amendment to
the pooling and servicing agreement without the consent of the
Certificateholders if the Rating Agency Condition for that amendment is
satisfied.
It is not required or anticipated that the depositor or the trustee
will make any initial or periodic general examination of the receivables or any
records relating to the receivables for the purpose of establishing the presence
or absence of defects, compliance with representations and warranties of
Bombardier Capital Inc. or for any
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other purpose. In addition, it is not anticipated or required that the depositor
or the trustee will make any initial or periodic general examination of the
servicer for the purpose of establishing the compliance by the servicer with its
representations or warranties, the observation of its obligations under the
pooling and servicing agreement or for any other purpose.
INELIGIBLE RECEIVABLES
Any receivable that is not an Eligible Receivable is an ineligible
receivable. Although ineligible receivables existing or arising in Eligible
Accounts will from time to time be transferred to the trust, the Pool Balance
will for all purposes be calculated solely on the basis of the aggregate
principal balance of receivables that are Eligible Receivables.
ADDITION OF ACCOUNTS
Subject to the conditions described in this section, the depositor has
the right to designate from time to time additional Eligible Accounts to be
included in the trust as Accounts. In addition, unless 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 with respect to Bombardier Capital Inc. or the
depositor, 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 the trust means accounts of the same type, i.e., Accounts giving
rise to Domestic Inventory Receivables or if Asset-Based Receivables have
already been added to the trust, then Accounts giving rise to either Domestic
Inventory Receivables or Asset-Based
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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 addition and with respect to Additional Accounts designated at the option of
the depositor, the Rating Agency Condition must be satisfied; provided, that the
Rating Agency Condition need not be satisfied if the conditions described in the
second succeeding paragraph following this list of conditions are satisfied;
(2) the addition of the receivables arising in the Additional Accounts
shall not, in the reasonable belief of the depositor, cause an Early
Amortization Event to occur;
(3) the depositor shall not select the Additional Accounts in a manner
that it believes is adverse to the interests of the certificateholders or any
enhancement provider; and
(4) unless the Accounts are being added in accordance with the
conditions described in the second succeeding paragraph, the depositor shall
deliver legal opinions to the trustee and any enhancement providers indicating
that the trustee, on behalf of the trust, will have a perfected security
interest in the documents as required by the pooling and servicing agreement.
Each Additional Account must be an Eligible Account at the time of its
addition and, unless all necessary conditions -- including, without limitation,
if not already included in the trust, satisfaction of the Rating Agency
Condition with respect to the inclusion of Asset-Based Receivables -- have been
met, the Additional Accounts may not include Asset-Based Receivables. However,
since Additional Accounts, as well as receivables in general arising under
Accounts subsequent to __________ 1, 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 therein transferred to the trust prior to the date of the
issuance of the certificates, they may not be of the same credit quality as the
Accounts and receivables as of __________ 1, 2000.
The requirement that the Rating Agency Condition be satisfied and that
legal opinions be delivered in connection with the addition of Accounts will not
be necessary if the following conditions are met:
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(1) the Additional Accounts do not contain Asset-Based Receivables
unless Asset-Based Receivables have been previously added to the trust after
having met the Rating Agency Condition,
(2) during the calendar quarter in which the addition occurs, the
number of new Accounts which have been added, after taking the proposed addition
into account, will not exceed 5% of the number of all Accounts at the end of the
preceding calendar quarter and the aggregate dollar amount of principal
receivables in these new Accounts added under this paragraph during the calendar
quarter in which the addition occurs shall not exceed 5% of the Pool Balance at
the end of the preceding calendar quarter, and
(3) during the 12 consecutive calendar months ending with the calendar
month in which the addition is made and including the addition, the number of
these new Accounts does not exceed 20% of the number of all Accounts at the
beginning of the 12-month period in which the addition occurs and the aggregate
dollar amount of principal receivables in these new Accounts added under this
paragraph during this 12-month period shall not exceed 20% of the Pool Balance
at the beginning of this 12-month period.
When determining the amount of Accounts and principal receivables which
have been added to the trust for purposes of the tests set forth in (2) and (3)
above, only those Accounts which have been added in accordance with the
conditions described in the paragraph above--not therefore, requiring
satisfaction of the Rating Agency Condition or the delivery of legal
opinions--will be taken into consideration. Additions made under other
provisions of the pooling and servicing agreement will not be included. If
Accounts have been added in accordance with the conditions described in the
paragraph above, a legal opinion indicating that the trustee, on behalf of the
trust, will have a perfected security interest in these Accounts is to be
delivered to the trustee every six months to the extent that the addition of
these Accounts have not been covered by legal opinions previously delivered to
the trustee.
REMOVAL OF ACCOUNTS AND ASSIGNMENT OF RECEIVABLES
The depositor shall have the right at any time to designate specific
accounts from which it will stop transferring newly originated receivables to
the trust. If the depositor specifies accounts from which receivables will no
longer be transferred to the trust, these accounts will constitute Removed
Accounts. To cease transferring any newly originated receivables in any Removed
Account, the depositor or the servicer on its behalf shall, among other things:
(1) at least five business days prior to the date on which the transfer
of these receivables will cease give notice to the trustee, any enhancement
provider and each Rating Agency;
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(2) on or before the fifth business day after the date on which the
transfer of these receivables will cease, the depositor shall have furnished to
the trustee a computer file, microfiche list or other list of the Removed
Accounts, specifying for each Removed Account its number, the aggregate amount
outstanding in that Removed Account and the aggregate amount of receivables
therein as of the day immediately preceding the date or which the transfer of
these receivables will cease;
(3) represent and warrant that the removal of the relevant Removed
Accounts will not, in the reasonable belief of the depositor, cause an Early
Amortization Event to occur or cause the Pool Balance to be less than the
Required Pool Balance;
(4) represent and warrant that no selection procedures believed by the
depositor to be adverse to the holders of certificates of any series were
utilized in selecting the Removed Accounts;
(5) represent and warrant that the removal of the relevant Removed
Accounts will not result in a reduction or withdrawal of the ratings of the
certificates or any other outstanding series or class of investor certificates
by any Rating Agency; and
(6) on or before the related date on which the transfer of these
receivables will cease, deliver to the trustee and any enhancement provider an
officers' certificate confirming the items set forth in clauses (3), (4) and (5)
above.
Under specified conditions, the pooling and servicing agreement may be
amended without the consent of the Certificateholders or any Rating Agency to
permit the depositor to also remove existing receivables in Removed Accounts,
including all amounts then held or subsequently received in respect of these
receivables. See "Amendments."
On the fifth business day after any date on which an Account becomes an
Account which is not an Eligible Account, the depositor will commence 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 will 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 aggregate amount and
outstanding principal balance of receivables therein as of the date immediately
preceding the date on which the removal of these receivables began; and
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(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 prior to the time that the depositor is permitted to remove
existing receivables in Removed Accounts or upon a required removal of an
Account which is no lonter an Eligible Account:
(1) from and after the applicable date on which the transfer of the
relevant receivables ceases or the removal of the relevant receivables begins,
as applicable, all principal collections in respect of each Removed Account or
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 ceases or the removal of the relevant receivables
begins, as applicable until the Determination Date on which the outstanding
principal balance of receivables in the relevant account is reduced to zero, the
depositor will allocate
to the trust, to be further allocated in accordance
with the pooling and servicing agreement, Non-
Principal Collections in respect of these Accounts
based on the ratio of the amount of principal
receivables in these Accounts on that business day
that were previously sold to the trust divided by the
total amount of principal receivables in these
Accounts on that business day, and
to the depositor the remainder of the Non-Principal
Collections in respect of these Accounts on that
business day.
Upon satisfaction of the above conditions on the Determination Date on
which the outstanding principal balance of receivables in the relevant account
is reduced to zero, the Removed Accounts or Accounts which are no longer
Eligible Accounts shall be deemed to have been removed from the trust and the
depositor shall be permitted to sell, transfer, assign, set over and otherwise
convey, without recourse, representation or warranty, all the right, title and
interest in and to the receivables remaining and subsequently arising in the
Removed Accounts or Accounts which are not Eligible Accounts, all amounts
received or to be received with respect thereto and all proceeds thereof.
The depositor may at any time remove specific receivables from the
trust, including all amounts then held or subsequently received in respect of
these
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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 shall be in an amount at least equal to the principal amount of the
receivables to be removed plus accrued interest to the removal date. All of
these payments shall be included as collections. The depositor has agreed under
the pooling and servicing agreement that this type of removal will take place
only if, in the reasonable belief of the depositor, no Early Amortization Event
will occur as a result of the removal.
The depositor also has the right to cause the trustee to remove from
the trust and reassign to the depositor Domestic Inventory Receivables
originated and transferred to the trust during the four month period commencing
16 months prior to February 1, June 1 and October 1 of each year, that continue
to be unpaid in full 450 or more days following the origination thereof,
provided that the aggregate amount of these Domestic Inventory Receivables that
may be so removed and reassigned shall not exceed 10% of the aggregate principal
balance of Domestic Inventory Receivables originated and transferred to the
trust during this four month period commencing 16 months prior to the relevant
February 1, June 1 or October 1. The depositor shall effect this removal and
reassignment by depositing in the collection account for application as
collections on the receivables an amount equal to the principal amount of the
receivables to be removed plus accrued interest to the date of the reassignment.
The trust will be under no obligation to hold any of these receivables for the
purpose of allowing the depositor to cause a reassignment of these receivables.
In addition to the provisions described above, the pooling and
servicing agreement provides that in connection with the granting of
participation interests in receivables in the trust, the depositor has the right
to remove from the trust the undivided interest which is to be granted to a
third party. If an interest in a receivable is removed, the 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
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The following sections summarize the structure for allocating
collections made on the receivables and other amounts among the certificates,
the other series, the Variable Funding Certificate and the BCRC Certificate.
Collection Account
The servicer has established and is required to maintain, or cause to
be established and maintained, the collection account.
Funds in the collection account generally will be invested in Eligible
Investments.
Any earnings, net of losses and investment expenses, on funds in the
collection account will be credited to the collection account. The servicer will
have the revocable power to instruct the trustee to make withdrawals and
payments from the collection account for the purpose of carrying out the
trustee's or the servicer's duties under the pooling and servicing agreement.
Excess Funding Account
The servicer has established and is required to maintain, or, cause to
be established and maintained for the life of the certificates, an excess
funding account which shall be an Eligible Deposit Account for the benefit of
the certificateholders in the name of the trustee. The excess funding account is
intended to preserve for the benefit of the certificateholders principal
collections otherwise payable in respect of other series or the BCRC Certificate
during the Revolving Period and the Controlled Accumulation Period.
On each business day during the Revolving Period, if the Pool Balance
at the end of the preceding business day was less than the Required Pool Balance
also calculated as of the end of that preceding business day, the servicer will
cause principal collections allocable to the certificates to be deposited by the
servicer in the excess funding account in an amount equal to the Excess Funded
Amount calculated as of the end of the preceding business day, minus the amount
then held in the excess funding account.
On each business day during the Controlled Accumulation Period, if the
Pool Balance at the end of the preceding business day was less than the Required
Pool Balance also calculated as of the end of that preceding business day, the
servicer will cause principal collections allocable to the certificates, which
remain after making required deposits into the principal account, to be
deposited by the servicer in the excess funding account in an amount equal to
the Excess Funding
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Amount calculated as of the end of the preceding business day, minus the amount
then held in the excess funding account.
The Excess Funded Amount shall be calculated for each business day and
shall be an amount equal to the product of:
(1) the excess, if any, of the Required Pool Balance over the Pool
Balance, each as of the end of the preceding day multiplied by
(2) a fraction the numerator of which is the sum of the 104 percent,
provided that the depositor may, reduce or otherwise adjust such percentage
without the consent of the certificateholders so long as the Rating Agency
Condition has been satisfied, 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 providing for excess funding accounts or
similar arrangements, including the required balance for this series which is
the sum of 104 percent (or as that percentage is adjusted or reducted) of the
Adjusted Invested Amount and the Available Subordinated Amount.
On each business day during the Revolving Period or the Controlled
Accumulation Period, funds on deposit in the excess funding account, including
without limitation the Excess Funded Amount, will be withdrawn and paid or made
available to the holder of the BCRC Certificate or allocated to one or more
series which are in amortization, early amortization or accumulation periods to
the extent that as of the end of the preceding day, the excess referred to the
preceding sentence, namely, the Required Pool Balance over the Pool Balance, has
been reduced or no longer exists.
Funds on deposit in the excess funding account will be invested at the
direction of the servicer in Eligible Investments. On each distribution date,
all net investment income earned on amounts in the excess funding account since
the preceding distribution date will be withdrawn from the excess funding
account and applied on the same basis as Investor Non-Principal Collections.
ALLOCATION PERCENTAGES
This section sets forth the procedure for calculating the certificates'
allocable share of specified distributions and other payments made with respect
to the receivables. Amounts not allocated to the certificates will be allocated
to other series, the Variable Funding Certificate or the BCRC Certificate.
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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, any Initial Amortization
Period and any Early Amortization Period, principal collections will be
allocated to the certificates based on the Principal Allocation Percentage; and
(4) Miscellaneous Payments will be allocated to the certificates on the
basis of the Series 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 thereof equals 100% for this period.
When allocating Non-Principal Collections, if the sum of:
(1) the sum of the floating allocation percentages, including the
Floating Allocation Percentage, for each series, and
(2) the Variable Funding Percentage
exceeds 100%, then Non-Principal Collections for the previous calender month
will be allocated among the series and the Variable Funding Certificate on the
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basis of these allocation percentages after the pro rata reduction of these
percentages so that the sum thereof equals 100% for that period.
Principal Collections for all Series
Principal collections allocable to the certificates for any 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 with respect to the Controlled Accumulation
Period will first be allocated to make deposits up to the Controlled Deposit
Amount in the principal account. Principal collections allocable to the
certificates for any calender month with respect to any Initial Amortization
Period or any Early Amortization Period will first be allocated to make required
payments of Monthly Principal on the certificates. See "Distributions from the
Collection Account; Reserve Fund; Principal Account--Principal Collections"
below.
Principal collections allocable to the certificates for any 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
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Certificate because the Pool Balance does not exceed the Required Pool Balance
will be held unallocated in the collection account until the Pool Balance
exceeds the Required Pool Balance, at which time this amount will be paid to the
holder of the BCRC Certificate, or until an early amortization event occurs or
an accumulation or scheduled amortization period commences for any series, after
which event or commencement this amount will be treated as a Miscellaneous
Payment.
DEPOSITS IN COLLECTION ACCOUNT
Except as otherwise provided in the following paragraphs, the servicer,
no later than two business days after the date of receipt of any collections on
the receivables, will deposit these collections, net of the Variable Funding
Percentage of these collections and the Excess Retained Percentage of these
collections, into the collection account.
Notwithstanding the foregoing, for so long as
(1) 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
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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 the certificates or any other outstanding series or class of
investor certificates.
In addition to and notwithstanding the foregoing, with respect to any
calender month, the servicer will only be required to deposit collections into
the collection account up to the aggregate amount of collections required to be
deposited into all series accounts or, without duplication, distributed on the
related distribution date to all investor certificateholders and to each
enhancement provider according to the terms of any series supplement to the
pooling and servicing agreement or the terms of any enhancement agreement. If,
at any time prior to a distribution date, the amount of collections deposited in
the collection account exceeds the amount required to be deposited for that
distribution date, the servicer will be permitted to withdraw the excess from
the collection account.
The requirements of the preceding paragraphs are subject to the
following exceptions. On any date on which collections are received, the
servicer may distribute or make available directly, to the holder of the
Variable Funding Certificate, an amount equal to the Variable Funding Percentage
of these collections and, to the holder of BCRC Certificate, the Excess Retained
Percentage of these collections.
DAILY ALLOCATIONS
On any date on which collections are received during the Revolving
Period, the Controlled Accumulation Period or any Initial Amortization Period,
the servicer will allocate to Series 2000-1 an amount equal to the sum of
(1) the product of the Floating Allocation Percentage for that date
multiplied by the aggregate amount of Non-Principal Collections on that date,
and
(2) the Series 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
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distribution date ; if Bombardier Capital Inc. is not
the servicer, the Monthly Servicing Fee for the
current calender month; the sum through the deposit
date of the Floating Allocation Percentage of the
Defaulted Amount, and the amount, if any, by which
the Reserve Fund Required Amount exceeded the amount
on deposit in the reserve fund on the preceding
distribution date, and
the sum of the Daily Allocations previously deposited
in the collection account for the current calender
month,
and the remainder of this Daily Allocation will be retained by the servicer for
application as described in the following two paragraphs.
During the Early Amortization Period, the entire Daily Allocation for
each date will be deposited and retained in the collection account.
On each Determination Date with respect to the Revolving Period, the
Controlled Accumulation Period or any Initial Amortization Period, the servicer
will deposit in the collection account an amount equal to the excess, if any, of
any Daily Allocation retained by the servicer and not deposited in the
collection account during the related calender month over the amounts required
to be distributed on the related distribution date under clauses (1) through (8)
under "Distributions from the Collection Account; Reserve Fund; Principal
Account--Non-Principal Collections" below, provided that if 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 with respect to 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 with respect to the
payment of principal and interest on the certificates.
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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 thereon,
(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."
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
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(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 Initial Amortization Period
or the Controlled Accumulation Period or if an Early Amortization Event occurs,
the Required Subordinated Amount for each date of determination after this
commencement will equal the Required Subordinated Amount as of the close of
business on the day preceding the first day of the Initial Amortization Period
or the Controlled Accumulation Period or the day on which the Early Amortization
Event occurs.
Available Subordinated Amount. The "Available Subordinated Amount" for any
date of determination after the first distribution date means an amount equal
to the sum of:
the lesser of:
(1) the Available Subordinated Amount for the
preceding distribution date, minus, with some
limitations, the Required Subordination Draw Amount
for the preceding distribution date or, if the date
of determination is a distribution date, that
distribution date, minus the amount of any deposits
in the reserve fund from Series 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 of the issuance of the certificates,
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
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Account--Excess Servicing," minus the Incremental
Subordinated Amount for the second preceding
distribution date or if the date of determination is
a distribution date, the preceding distribution date,
plus the Incremental Subordinated Amount for the
immediately preceding distribution date, or if the
date of determination is a distribution date, that
distribution date plus the percentage equivalent of a
fraction, the numerator of which is 5.5% and the
denominator of which is the excess of 100% over 5.5%,
multiplied by the aggregate amount of any increases
in the Invested Amount resulting from any withdrawals
from the excess funding account since the preceding
distribution date; and
(2) the Required Subordinated Amount for that date of
determination; and
the amount of any optional increase in the Available
Subordinated Amount exercised by the depositor as described
below in the final paragraph of this section "Limited
Subordination of the Retained Interest--Available Subordinated
Amount."
The Available Subordinated Amount for any date of determination during the
period from the date of the issuance of the certificates through the first
distribution date is equal to the Required Subordinated Amount as of that date
of determination, which will equal at least $[18,643,730] on the date of the
issuance of the certificates.
If the Available Subordinated Amount for any distribution date is less
than the Required Subordinated Amount for that distribution date, an Early
Amortization Event will occur. The holder of the BCRC Certificate could elect to
increase the Available Subordinated Amount -- but the aggregate amount of these
increases may not exceed an amount equal to 1% of the initial principal amount
of the certificates -- at the time this Early Amortization Event would otherwise
occur, thus preventing or delaying the occurrence of this Early Amortization
Event.
DISTRIBUTIONS FROM THE COLLECTION ACCOUNT; RESERVE FUND; PRINCIPAL ACCOUNT
Non-Principal Collections. On each distribution date, the trustee will apply
Investor Non-Principal Collections and Investment Proceeds for that distribution
date to make the following distributions in the following order of priority:
(1) an amount equal to Class A Monthly Interest for that distribution
date, plus the amount of any Class A Monthly Interest previously due but not
distributed on a prior distribution date, plus, to the extent permitted under
applicable law, interest at the Class A Certificate Rate on Class A Monthly
Interest previously due but not distributed, shall be distributed on the class A
certificates;
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(2) an amount equal to Class B Monthly Interest for that distribution
date, plus the amount of any Class B Monthly Interest previously due but not
distributed on a prior distribution date, plus, to the extent permitted under
applicable law, interest at the Class B Certificate Rate on Class B Monthly
Interest previously due but not distributed, shall be distributed on the class B
certificates;
(3) an amount equal to the Net Servicing Fee for that distribution date
shall be distributed to the servicer, unless this amount has been deducted from
amounts that would otherwise be deposited to the collection account as described
above under "Deposits in Collection Account" or waived as described under
"Servicing Compensation and Payment of Expenses" below;
(4) an amount shall be deposited in the reserve fund equal to the
amount, if any, by which the Reserve Fund Required Amount for that distribution
date exceeds the amount on deposit in the reserve fund after giving effect to
any withdrawal therefrom on that distribution date;
(5) an amount equal to the 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 holders of the class B
certificates; and
(9) the balance, if any, shall constitute Excess Servicing and shall be
allocated by the trustee in the manner described under "Excess Servicing" below.
If the Investor Non-Principal Collections and Investment Proceeds are
not sufficient to make the distributions required by clauses (1), (2), (3) and
(5), the trustee shall withdraw funds
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from the reserve fund and apply these funds to complete, to the extent
available, the distributions in accordance with clauses (1), (2), (3) and (5) in
the numerical order thereof.
If there is a Deficiency Amount for that distribution date, the
servicer will apply or cause the trustee to apply the aggregate amount of Series
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 after the application thereof in accordance with
the preceding sentence shall be treated as a portion of the Available Investor
Principal Collections, but only up to the amount of unpaid Adjustment Payments
allocated to the certificates. The holder of the BCRC Certificate may elect to
increase the Available Subordinated Amount, up to a maximum aggregate increase
equal to 1% of the initial principal amount of the certificates, in order to
avoid the occurrence of an Early Amortization Event.
Reserve Fund. The reserve fund, which shall be an Eligible Deposit
Account will be established and maintained in the name of the trustee for the
benefit of the Certificateholders. The depositor will make an initial deposit
into the reserve fund on the date of the issuance of the certificates in an
amount no less than $[1,601,695]. If, after giving effect to the allocations,
distributions and deposits in the reserve fund described in this prospectus
under the caption "Non-Principal Collections," the amount in the reserve fund is
less than the reserve fund Required Amount for that distribution date, the
trustee shall deposit any remaining Series 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 with respect to the
reserve fund. After the payment in full of the aggregate principal balance of
the certificates, any funds remaining on deposit in the reserve fund will be
paid to the holder of the BCRC Certificate.
If, for any distribution date with respect to an Early Amortization
Period, after giving effect to the allocations, distributions and deposits
described in the preceding paragraph, the amount in the reserve fund is less
than the Excess Reserve Fund Required Amount as of that distribution date, the
trustee shall deposit the remaining Series 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.
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Excess Servicing. On each distribution date, the trustee will allocate Excess
Servicing with respect to the calender month immediately preceding the calender
month of 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 with respect to that distribution date, will be included
in Available Investor Principal Collections for that distribution date;
(2) an amount equal to the aggregate outstanding amounts of the Monthly
Servicing Fee which have been previously waived as described below under
"Servicing Compensation and Payment of Expenses" will be distributed to the
servicer; and
(3) the balance, if any, shall be distributed, or made available, to
the holder of the BCRC Certificate and shall also increase the Available
Subordinated Amount to the extent described in the definition thereof.
Principal Account. The principal account, which shall be an Eligible Deposit
Account will be established and maintained in the name of the trustee for the
benefit of the Series 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, with respect to the principal account. After the payment in full of
the aggregate principal balance of the certificates, any funds remaining on
deposit in the principal account will be paid to the holder of the BCRC
Certificate.
Principal Collections. The trustee will apply Available Investor Principal
Collections as follows:
(1) on each business day, with respect to the Revolving Period, first,
to make a deposit to the excess funding account if the Pool Balance at the end
of the preceding business day was less than the Required Pool Balance for that
day, calculated as provided above under "Excess Funding Account", and, second,
to Excess Principal Collections as described above under "Allocation
Percentages--Principal Collections for all Series";
(2) for each distribution date with respect to the Controlled
Accumulation Period:
if the distribution date is not the distribution
date in ____________;
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an amount equal to the Controlled Deposit
Amount will be deposited into the principal
account; and
an amount, if any, equal to the difference
between the Excess Funding Amount and the
amount then on deposit in the excess funding
account shall be deposited into the excess
funding account; and
the balance, if any, will be allocated to
Excess Principal Collections; and
if the distribution date is the distribution date in
_________,
then first to the holders of class A
certificates until the principal amount
thereof is reduced to zero and then to
holders of the class B certificates until
the principal amount thereof is reduced to
zero; and
the balance, if any, will be allocated to
Excess Principal Collections; and
(3) for each distribution date with respect to any Initial Amortization
Period or Early Amortization Period:
an amount equal to Monthly Principal for that
distribution date will be distributed first to the
holders of class A certificates until the principal
amount thereof is reduced to zero and then to holders
of the class B certificates until the principal
amount thereof is reduced to zero; and
the balance, if any, will be allocated to Excess
Principal Collections.
In the event that the Invested Amount is greater than zero on the
_________ 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", will be treated as a portion of Available Investor
Principal Collections for the distribution date occurring on the _________
distribution date.
Available Investor Principal Collections for any distribution date
means the sum of
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(1) the product of the Floating Allocation Percentage, with respect to
the Revolving Period, or the Principal Allocation Percentage, with respect to
the Controlled Accumulation Period, any Initial Amortization Period or any Early
Amortization Period, for the related 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 of the 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 Initial Amortization Period or an Early Amortization Period
began during the related calender month, any amounts on deposit in the excess
funding account,
(6) on the ____________ 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", and
(7) with respect to the distribution date in _________, any Initial
Amortization Period or any Early Amortization Period, any funds on deposit in
the principal account.
If the sum of the Floating Allocation Percentage during the Revolving
Period or the Principal Allocation Percentage during the Early Amortization
Period, Initial Amortization Period or Controlled Accumulation Period, the
floating allocation percentages for all other outstanding series of investor
certificates in their revolving periods and the principal allocation percentages
for all other outstanding series in their amortization or early amortization
periods exceeds 100%, then the principal collections shall be allocated among
all series pro rata on the basis of these floating allocation percentages and
principal allocation percentages.
DISCOUNT OPTION
The pooling and servicing agreement provides that the depositor may at
any time designate a fixed percentage of the amount of collections in respect of
receivables arising in the Accounts on and after the date of the designation
that
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otherwise would be treated as principal collections to be treated as
Non-Principal Collections. The depositor must provide 10 days' prior written
notice to the servicer, the trustee and each Rating Agency of any of these
designations, and these designations will become effective on the date specified
therein only if an officer's certificate is delivered to the trustee to the
effect that in the reasonable belief of the depositor the relevant designation
would not result in an Early Amortization Event or have a materially adverse
effect on the certificateholders and if the Rating Agency Condition shall have
been satisfied.
DEFAULTED RECEIVABLES AND RECOVERIES
Defaulted Receivables on any distribution date are:
(1) all receivables other than receivables that were designated as
ineligible at the time of transfer to the trust that were
charged off as uncollectible in the preceding calender month;
(2) prior to payment in full of the Series 1997-1 certificates,
all receivables originally secured by a security interest in a
related Eligible Product which have not been paid in full for
more than 60 days after the sale of the related Eligible
Product, and subsequent to the payment in full of the Series
1997-1 certificates, all receivables originally secured by a
security interest in a related Eligible Product which have not
been paid in full for more than 90 days after the sale of the
related Eligible Product ;
(3) prior to payment in full of the Series 1997-1 certificates,
all receivables in an Account in which interest in the amount
of $150 or more has been delinquent for 90 days or more, and
(4) all receivables which, although they were Eligible Receivables
when transferred to the trust, arose in an Account which has
become an 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
Elibible Receivables.
The Defaulted Amount for any calender month will be an amount not less
than zero, equal to the aggregate principal amount of 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,
specified events of bankruptcy, insolvency, or receivership have occurred with
respect to either of the
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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 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 Bombadier
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 the
certificates. If the Invested Amount has been reduced by any Investor
Charge-Offs, it will subsequently be increased on any distribution date, but not
by an amount in excess of the aggregate Investor Charge-Offs, by the sum of the
Series 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
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amount of the certificates. The purchase price will be equal to the sum of the
aggregate principal balance of the certificates on that distribution date,
accrued and unpaid interest due on the certificates together with interest on
overdue 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 with
respect to the certificates, other than the right to receive the final
distribution on the certificates. In the event that the depositor fails for any
reason to deposit this purchase price, payments will continue to be allocated to
the certificates as described above under "Distributions from the Collection
Account; Reserve Fund; Principal Account."
EARLY AMORTIZATION EVENTS
Commencing on the first distribution date following the 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 this failure;
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(c) to duly comply with, observe or perform in any
material respect the covenant of the depositor not to
create any lien, other than tax and other statutory
liens, including liens in favor of the Pension
Benefit Guaranty Corporation, and some other liens
and interests permitted by the pooling and servicing
agreement, on any receivable which failure has a
material adverse effect on the holders of the
investor certificates or the holder of the Variable
Funding Certificate and which continues unremedied
for a period of 60 days after written notice of this
failure, requiring the same to be remedied, has been
given to the depositor by the trustee or any
enhancement provider; provided, however, that an
Early Amortization Event shall not be deemed to have
occurred if the depositor shall have repurchased the
related receivables or, if applicable, all the
receivables during this period in accordance with the
provisions of the pooling and servicing agreement; or
(d) to duly observe or perform in any material respect
any other of its covenants or agreements set forth in
the pooling and servicing agreement, which failure
has a materially adverse effect on the holders of the
investor certificates or the holder of the Variable
Funding Certificate and which continues unremedied
for a period of 45 days after written notice of this
failure, requiring the same to be remedied, shall
have been given to the depositor by the trustee or
any enhancement provider;
3. any representation or warranty made by the depositor in the pooling
and servicing agreement or any information required to be given by the depositor
to the trustee to identify the Accounts proves to have been incorrect in any
material respect when made or when delivered and continues to be incorrect in
any material respect for a period of 60 days after written notice, or within any
longer period as may be specified in the notice, of this failure, requiring the
same to be remedied, shall have been given to the depositor by the trustee, and
as a result the interests of the holders of the investor certificates or the
holder of the Variable Funding Certificate are materially and adversely
affected, excluding, however, any representation or warranty made by the
depositor that the pooling and servicing agreement constitutes, or the transfer
of the receivables to the trust is, a valid sale, transfer and assignment to the
trust of all right, title and interest of the depositor in the receivables and
the 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; provided, however, that an Early
Amortization Event shall not be deemed to occur thereunder if the depositor has
repurchased the related receivables or all of these receivables, if applicable,
during this
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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;
11. the average percentage obtained by dividing the aggregate principal
collections for a calender month by the average daily Pool Balance for that
calender month:
(a) with respect to the three calender months included in
the period from January through March of any calendar
year is less than 12% and
(b) with respect to any other three consecutive calender
months is less than 14%,
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provided, that this clause (11) may be revised or waived without the consent of
the Certificateholders if the Rating Agency Condition is satisfied;
12. the failure to pay the outstanding principal amount of the class A
certificates on the _______ distribution date or the failure to pay the
outstanding principal amount of the class B certificates on the _______
distribution date;
13. an event of bankruptcy, insolvency or receivership relating to
Bombardier Capital Inc. or the depositor occurs; or
14. the sum of all Eligible Investments and amounts on deposit in the
excess funding account and excess funding accounts for all other series
represents more than 50% of the total assets of the trust on each of six or more
consecutive distribution dates, after giving effect to all payments made or to
be made on that distribution date.
Upon the occurrence of any event described above, an Early Amortization
Event will be deemed to have occurred without any notice or other action on the
part of any other party immediately upon the occurrence of this event. The Early
Amortization Period will commence as of the day on which the Early Amortization
Event occurs. Monthly distributions of principal on the certificates will begin
on the first distribution date following the 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.
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
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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 the certificates in full plus accrued and
unpaid interest thereon, Certificateholders will incur a loss. Notwithstanding
the above, in the case of the violation of the covenant described in clause 2(c)
above, the trustee will not sell the receivables upon an Early Amortization
Event occurring because of this violation unless the proceeds allocable to the
certificates are sufficient to pay the aggregate unpaid principal balance of
each series of certificates in full plus accrued and unpaid interest thereon.
TERMINATION
The trust and the respective obligations and responsibilities of the
depositor, the servicer and the trustee created by the pooling and servicing
agreement will terminate on the earlier to occur of the day following the
distribution date on which the aggregate of the invested amounts for all series
is zero and _________. Upon termination of the trust, all right, title and
interest in the receivables and the security granted by obligors and other funds
related thereto, other than amounts in the collection account for the final
distribution of principal and interest to certificateholders, will be conveyed
and transferred to the depositor.
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In any event, the last payment of principal and interest on the
certificates will be due and payable no later than the ________ distribution
date. In the event that the Invested Amount is greater than zero on the
____________ 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 _________ 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 with respect thereto, and the servicer will indemnify
the trust and the trustee from and against any loss,
liability, reasonable expense, damage or injury suffered or
sustained by the trust or the trustee arising out of or based
upon the arrangement created by the pooling and servicing
agreement, including any judgment, general settlement,
reasonable attorney fees and other costs and expenses incurred
in connection with the defense of any actual or threatened
action, proceeding or claim, other than losses on receivables
and amounts due with respect thereto, and
the trustee and its officers, directors, employees and agents
from and against any loss, liability, reasonable expense,
damage or injury suffered or sustained by reason of the
acceptance of the trust by the trustee, the issuance by the
trust of the certificates or any of the other matters
contemplated in the pooling and servicing agreement or in any
supplement thereto, other than losses on receivables and
amounts due with respect thereto;
provided that, in any case of this type, the trust, the trustee, and its
officers, directors, employees and agents will not be so indemnified if these
acts or omissions constitute, or the actual or threatened action, proceeding or
claim arises out of, or the loss, liability, expense, damage or injury is caused
by, fraud, gross negligence, breach of fiduciary duty or willful misconduct by
the trustee and provided further that neither the depositor nor the servicer
shall be liable, directly or indirectly, for or in respect of any indebtedness
or obligation evidenced or created by any
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certificate, recourse as to which is limited solely to the assets of the trust
allocated for the payment thereof as provided in the pooling and servicing
agreement and any applicable supplement.
In addition, neither the servicer nor the depositor will indemnify the
trust, the trustee or the certificateholders or any other beneficiaries of the
trust for any action taken by the trustee at the request of the
certificateholders to the extent, in the case of the servicer, the trustee is
fully indemnified by these certificateholders or other beneficiaries with
respect to this action or for any federal, state or local income or franchise
tax or any interest or penalties with respect thereto required to be paid by the
trust or the certificateholders or any other beneficiaries. Furthermore, any
indemnification of this type by the depositor will only be from assets of the
depositor not pledged to third parties or otherwise encumbered as permitted
under the depositor's certificate of incorporation and will be made only after
the deposit by the depositor of any amounts required to be made in the
collection account. Any indemnification by the servicer shall not be payable
from the assets of the trust.
The pooling and servicing agreement provides that, except as described
above in this section and with other specified exceptions, neither the servicer
nor the depositor nor any of their affiliates, directors, officers, employees,
stockholders, agents, representatives or advisors will be under any liability to
the trustee or any other person for taking any action, or for refraining from
taking any action, in accordance with the pooling and servicing agreement or
otherwise. However, neither the servicer nor the depositor will be protected
against any liability which would otherwise be imposed by reason of their
willful misfeasance, bad faith or gross negligence.
In addition, the pooling and servicing agreement provides that the
servicer is not under any obligation to appear in, prosecute or defend any legal
action other than as part of the good faith performance of its servicing
obligations. The servicer may, in its sole discretion, undertake any legal
action which it may deem necessary or desirable for the benefit of the trust.
COLLECTION AND OTHER SERVICING PROCEDURES
Under the pooling and servicing agreement, the servicer is responsible
for servicing, collecting, enforcing and administering the receivables in
accordance with procedures that are customary and usual in the industry for
servicing receivables comparable to these receivables, except where the failure
to so act would not materially and adversely affect the rights of the trust or
any beneficiaries thereof. 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
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delegation of this sort will relieve Bombardier Capital Inc. of its
responsibilities as servicer with respect to 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, only if, in the servicer's reasonable judgment, no Early
Amortization Event will occur as a result of the change.
Servicing activities to be performed by the servicer include collecting
and recording payments, communicating with obligors, investigating payment
delinquencies, evaluating the increase of credit limits, and maintaining
internal records with respect to each Account. Managerial and custodial services
performed by the servicer include providing assistance in any inspections of the
documents and records relating to the Accounts and receivables by the depositor
or the trustee on behalf of the Certificateholders, maintaining the agreements,
documents and files relating to the Accounts and receivables as custodian and
providing related data processing and reporting services for holders of
certificates and on behalf of the trustee.
SERVICER COVENANTS
In the pooling and servicing agreement the servicer covenants that:
(1) it will duly satisfy all obligations on its part to be fulfilled
under or in connection with the receivables and Accounts, will maintain in
effect all qualifications required in order to service properly the receivables
and the Accounts and will comply in all material respects with all requirements
of law in connection with servicing the receivables and the Accounts, except
where the failure to do any of the foregoing would not have a material adverse
effect on the beneficiaries of the trust;
(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
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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 shall be automatically assigned to the servicer.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The servicer's compensation for its servicing activities under the
pooling and servicing agreement and reimbursement for its expenses will be a
servicing fee payable in arrears on each distribution date on or prior to the
earlier to occur of __________ or the day after the distribution date on which
the aggregate of the invested amounts for all series is zero. The servicing fee
equals the aggregate of the monthly servicing fees specified in the supplements
to the pooling and servicing agreement executed in connection with each series.
The Net Servicing Fee for this series will be payable in the priority set forth
above in "Description of the Certificates-- Distribution from the Collection
Account; Reserve Fund; Principal Account" and will be equal to one-twelfth of
the product of 1%, if Bombardier Capital Inc. is the servicer, or 2%, 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 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 with respect to any of
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 shall be paid by the holders of the Variable
Funding Certificate and the BCRC Certificate and the holders of the certificates
of other outstanding series. The Monthly Servicing Fee shall be payable to the
servicer solely to the extent amounts are available for distribution therefor in
accordance with the terms of the Series 2000-1 Supplement among Bombardier
Capital Inc., the depositor and the trustee.
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The servicer will be permitted to waive its right to receive the
Monthly Servicing Fee on any distribution date, so long as it believes that
sufficient Non-Principal Collections will be available on a future distribution
date to pay the Monthly Servicing Fee relating to the amount thereof so waived,
in which case the Monthly Servicing Fee, including the Net Servicing Fee, for
that distribution date shall be deemed to be zero.
The servicer will pay from its servicing compensation specified
expenses incurred in connection with servicing the Accounts and the receivables
including, without limitation, payment of fees and disbursements of the trustee
and independent accountants and all other fees and expenses which are not
expressly stated in the pooling and servicing agreement to be payable by the
trust or the certificateholders other than federal, state and local income and
franchise taxes, if any, of the trust or the certificateholders.
MATTERS REGARDING THE SERVICER
The servicer may not resign from its obligations and duties under the
pooling and servicing agreement, except upon determination that these duties are
no longer permissible under applicable law. No resignation under these
circumstances will become effective until the trustee or a successor to the
servicer has assumed the servicer's responsibilities and obligations under the
pooling and servicing agreement.
Any person into which, in accordance with the pooling and servicing
agreement, the servicer may be merged or consolidated or any person resulting
from any merger or consolidation to which the servicer is a party, or any person
succeeding to the business of the servicer, will be the successor to the
servicer under the pooling and servicing agreement.
SERVICER DEFAULT
In the event and during the continuance of any Servicer Default, the
trustee by written notice to the servicer, may terminate all of the rights and
obligations of the servicer, as servicer, under the pooling and servicing
agreement and in and to the receivables and the proceeds thereof and appoint a
new servicer. The trustee shall as promptly as possible appoint a successor
servicer and if no successor servicer has been appointed by the trustee and has
accepted the appointment by the time the servicer ceases to act as servicer, all
rights, authority, power and obligations of the servicer under the pooling and
servicing agreement shall pass to and be vested in the trustee. Prior to any
transfer of the servicer rights and obligations to a new servicer, the trustee
will review any bids obtained from potential servicers meeting the eligibility
requirements set forth in the pooling and servicing agreement to serve as
successor servicer for servicing compensation not in excess of the Servicing Fee
provided that if all of these bids
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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 on the part of the servicer duly to observe or perform its
covenant not to create any lien on any receivable which failure has a material
adverse effect on the certificateholders and which continues unremedied for a
period of 60 days after written notice to it; provided, however, that a Servicer
Default shall not be deemed to have occurred if the depositor or the servicer
shall have repurchased the related receivables or, if applicable, all the
receivables during this period in accordance with the terms and provisions of
the pooling and servicing agreement or any other covenants or agreements of the
servicer in the pooling and servicing agreement, exclusive of breaches of
covenants in respect of which the servicer repurchases the related receivables,
as described above under "--Servicer Covenants", which failure has a materially
adverse effect on the certificateholders or the holder of the Variable Funding
Certificate and which continues unremedied for a period of 30 days after written
notice thereof to the servicer;
(3) any representation, warranty or certification made by the servicer
in the pooling and servicing agreement or in any certificate delivered under the
pooling and servicing agreement proves to have been incorrect when made and
continues to be incorrect in any material respect for a period of 60 days after
written notice thereof has been given to the servicer by the trustee and as a
result the interests of the certificateholders or the holder of the Variable
Funding Certificate are materially and adversely affected; provided, however,
that a Servicer Default shall not be deemed to have occurred if the depositor
shall have repurchased the related receivables or, if applicable, all the
receivables during this period in accordance with the provisions of the pooling
and servicing agreement; or
(4) the occurrence of an event of bankruptcy, insolvency or
receivership with respect to the servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to under clause (1) above for a period of up to ten business days after
the applicable grace period or a delay in or failure of performance or the
continuance of any this delay or failure referred to under clauses (2) or (3)
for a period of up to 60 business days, shall not constitute a Servicer Default
if
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this delay or failure or continuance was caused by an act of God or other
similar occurrence. Upon the occurrence of any event of this nature, the
servicer shall not be relieved from using its best efforts to perform its
obligations in a timely manner in accordance with the terms of the pooling and
servicing agreement and the servicer shall provide the trustee, any enhancement
provider and the depositor prompt notice of this failure or delay by it,
together with a description of its efforts to so perform its obligations. In
addition, the servicer shall immediately notify the trustee in writing of any
Servicer Default.
REPORTS
On each distribution date occurring after the commencement of the
Controlled Accumulation Period, an Initial Amortization Period or an Early
Amortization Period, the trustee will forward or cause to be forwarded to each
Certificateholder of record -- which is expected to be only Cede & Co., as
nominee for The Depository Trust Company, unless definitive certificates are
issued -- a statement prepared by the servicer setting forth the following
information, which, where appropriate, will be stated on the basis of an
original principal amount of $1,000 per certificate:
(1) the aggregate amount of principal paid or distributed on the
certificates and the aggregate amount of interest paid or distributed on the
certificates on that distribution date;
(2) the average for the dates on which the servicer receives
collections in the relevant calender month of the Floating Allocation Percentage
and the Principal Allocation Percentage;
(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 thereof 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;
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(10) the amount of the Monthly Servicing Fee for the preceding calender
month;
(11) a fraction expressed as a package calculated to eleven decimal
places, the numerator of which shall be the Invested Amount and the denominator
of which shall be the Adjusted Invested Amount as of that distribution date,
determined after taking into account any reduction in the Invested Amount which
will occur on that distribution date;
(12) the Available Subordinated Amount for that distribution date;
(13) the reserve fund balance for that distribution date;
(14) the excess funding account balance;
(15) the collection account balance with respect to that distribution
date;
(16) the principal account balance and
(17) whether an Early Amortization Event has occurred or whether
Bombardier Capital Inc. has elected to not extend the Initial Principal Payment
Date.
On or before January 31 of each calendar year, beginning with January
31, 2001, the trustee will furnish or cause to be furnished to each person who
at any time during the preceding calendar year was a Certificateholder of
record, which is expected to be only Cede & Co., as nominee for The Depository
Trust Company, unless definitive certificates are issued, a statement prepared
by the servicer containing the information that is required to be contained in
the distribution date statement, aggregated for that calendar year, together
with information required to be provided by an issuer of indebtedness under the
Internal Revenue Code of 1986 for that preceding calendar year or the applicable
portion thereof during which this person was a Certificateholder, together with
any other customary information as is necessary to enable the Certificateholders
to prepare their tax returns. In addition, the trustee from time to time will
furnish to each Certificateholder of record information furnished by the
servicer regarding material changes in the servicing or crediting procedures
required under the pooling and servicing agreement. As long as the
Certificateholder of record is Cede & Co., as nominee for The Depository Trust
Company, beneficial owners of certificates will receive 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
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The pooling and servicing agreement provides that on or before April 30
of each calendar year the servicer will cause a firm of nationally recognized
independent public accountants, who may also render other services to the
servicer or the depositor, to furnish a report relating to specified matters in
connection with the servicing of 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, which is expected to be Cede &
Co., as nominee for The Depository Trust Company, unless definitive certificates
are issued, upon request in writing delivered to the trustee.
AMENDMENTS
The pooling and servicing agreement may be amended from time to time,
including in connection with the issuance of a Supplemental Certificate, by the
depositor, the servicer, the trustee and Bombardier Capital Inc. if Bombardier
Capital Inc. is not then the servicer, without additional consent, so long as
this action shall not, as evidenced by an opinion of counsel, adversely affect
in any material respect the interests of the certificateholders or the holder of
the Variable Funding Certificate. In addition, the pooling and servicing
agreement may be amended by the depositor, the servicer, the trustee and
Bombardier Capital Inc. if Bombardier Capital Inc. is not then the servicer to
conform the provisions regarding removal of Accounts with those in effect prior
to Amendment No. 1 to the pooling and servicing agreement to allow for the
removal of existing receivables in Removed Accounts, including all amounts then
held or subsequently received in respect of these receivables, if, at the time
of this amendment, these provisions will be consistent with sale treatment of
the receivables by the depositor under generally accepted accounting principles.
Notwithstanding the above, the trustee, with the consent on any enhancement
providers, may at any time and from time to time amend, modify or supplement the
form of distribution date statement.
The pooling and servicing agreement may also be amended by the
depositor, the servicer, the trustee and Bombardier Capital Inc., if not the
servicer, with the consent of the holder of the Variable Funding Certificate, if
it would be adversely affected by the amendment, and holders of certificates
evidencing not less than a majority of the aggregate unpaid principal amount of
the certificates of all adversely affected
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series for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the pooling and servicing agreement or of
modifying in any manner the rights of the certificateholders. No amendment of
this sort, however, may:
(1) reduce in any manner the amount of, or delay the timing of,
distributions required to be made on any certificate, including the Variable
Funding Certificate, or the deposits to be made therefor,
(2) change the definition or the manner of calculating interest on any
certificate,
(3) reduce the amount available under any enhancement,
(4) adversely affect the rating of any series or class by any Rating
Agency which rated that series or class or
(5) reduce the percentage of the unpaid principal balance of
certificates the holders of which are required to consent to any amendment,
without, in the case of (1), (2), (3) or (5) the consent of each affected
certificateholder or the Variable Funding Certificate, as applicable and, in the
case of (4), the consent of the holders of certificates of the relevant series
or class evidencing not less than 66 2/3% of the aggregate unpaid principal
amount of the certificates of that series or class. Promptly following the
execution of any amendment to the pooling and servicing agreement, other than an
amendment described in the preceding paragraph, the trustee will furnish notice
of the substance of the amendment to each certificateholder.
The pooling and servicing agreement may not be amended in any manner
which materially adversely affects the interests of any enhancement provider
without its prior consent.
LIST OF CERTIFICATEHOLDERS
Upon written request of any three or more certificateholders of record,
the trustee will afford these certificateholders access during business hours to
the current list of registered certificateholders of a series or of all series,
as applicable, for purposes of communicating with other certificateholders with
respect to their rights under the pooling and servicing agreement. It is
anticipated that the only Certificateholder will be Cede & Co., as nominee of
The Depository Trust Company, and that beneficial owners of certificates will
not be recognized by the trustee as Certificateholders for this purpose. See
"Book-Entry Registration" and "Definitive Certificates" above.
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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 respective affiliates may from time to time enter into other banking and
trustee relationships with the trustee and its affiliates. The trustee may hold
certificates in its own name and may deal with the depositor, the servicer or
any enhancement provider with the same rights it would have if it were not the
trustee. In addition, for purposes of meeting the legal requirements of local
jurisdictions, the trustee shall have the power to appoint a co-trustee or
separate trustees of all or a part of the trust. In the event of these
appointments, all rights, powers, duties and obligations shall be conferred or
imposed upon the trustee and the separate trustee or co-trustee jointly, or, in
any jurisdiction in which the trustee shall be incompetent or unqualified to
perform specified acts, singly upon the separate trustee or co-trustee, who
shall exercise and perform these rights, powers, duties and obligations solely
at the direction of the trustee.
The trustee may resign at any time, in which event the depositor will
be obligated to appoint a successor trustee. The servicer may also remove the
trustee if the trustee ceases to be eligible to continue as trustee under the
pooling and servicing agreement or if the trustee 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 relevant terms of the Receivables Purchase
Agreement relating to the sale or contribution of the receivables to the
depositor and does not purport to provide a complete description. For further
information, owners and prospective owners of
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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 and subject to satisfaction of
the Rating Agency Condition, may sell or contribute and transfer Asset-Based
Receivables in Accounts designated for the trust.
Under the Receivables Purchase Agreement, 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 amount of these receivables plus accrued and unpaid interest thereon
on the date of transfer, less, if applicable, the amount of principal and
interest allocable to any participation interest. The value of and the purchase
price in the case of sales with respect to ineligible receivables transferred
will equal the net book value of the receivables, less, if applicable, the
amount of principal and interest allocable to any participation interest. With
respect to receivables which are sold to the depositor, the principal amount of
the 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 in accordance with the
Receivables Purchase Agreement to the extent the purchase price for these
receivables is not paid in cash by the depositor.
As security for the 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
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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 aggregate 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 therein 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 added to the trust. The records and agreements relating to the Accounts and
receivables have not been, and will not be, segregated by Bombardier Capital
Inc. from other documents and agreements relating to other accounts and
receivables and will not be stamped or marked to reflect the sale of the
receivables, but the computer records of Bombardier Capital Inc. have been
marked to evidence this transfer. Bombardier Capital Inc. has filed and will
file UCC financing statements with respect to the sale or contribution of the
receivables meeting the requirements of Vermont state law. See "Risk
Factors--State and Federal Law May Limit the Abilities of the Servicer to
Realize on Receivables Thus Causing Losses on Your Certificates" and "Material
Legal Aspects of the Receivables--Transfer of Receivables and Certificates."
REPRESENTATIONS AND WARRANTIES
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 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 relating to the receivables to the effect that, among other
things, as of January 1, 1994, the date of the issuance of the certificates and
each series issuance date, each Account is an Eligible Account and, in the case
of Additional Accounts
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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 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 thereof which is effective as to each receivable upon
the creation thereof. If the breach of any of the representations and warranties
described in this paragraph results in the obligation of the depositor under the
pooling and servicing agreement to repurchase an interest in receivables from
the trust, 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, 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.
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In addition, Bombardier Capital Inc. has expressly acknowledged and
consented to the depositor's assignment of its rights relating to the
receivables under the pooling and servicing agreement to the trustee.
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.
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 therein. 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, respectively, in the receivables. Continuation statements will be filed
as required to
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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 these Domestic Inventory Receivable
included in the Pool Balance is and will be secured by a first priority
perfected security interest in the related Eligible Product and if Asset-Based
Receivables are included in the trust, the obligations with respect thereto will
be secured by a first priority perfected security interest in goods, accounts,
work in process, raw materials, component parts or other assets of the obligor.
However, when an Eligible Product is sold by an obligor, 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 with respect to Eligible Products that have been sold, the related
Domestic Inventory Receivables may no longer be secured by Eligible Products,
although they may, in some circumstances, still be secured by the proceeds of
these Eligible Products. In the event that Asset-Based Receivables are included
in the trust, the same issues discussed above with respect to Domestic Inventory
Receivables may exist with respect to Asset-Based Receivables.
There are limited circumstances under the UCC and applicable federal
law in which prior or subsequent transferees of receivables could have an
interest in these receivables with priority over the trust's interest. A
purchaser of the receivables who gives new value and takes possession of the
instruments which evidence the receivables in the ordinary course of that
purchaser's business may, under some circumstances, for instance, where the
purchaser is without notice of any adverse claim, have priority over the
interest of the trust in the receivables. The failure to stamp the receivables
to indicate the interest of the depositor and the trust therein, as described in
the second preceding paragraph above, could support a claim by a subsequent
purchaser of the receivables that this purchaser acted without notice of any
claim by the depositor or the trust with respect to the receivables. A tax or
other government lien or non-consensual lien on property of 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
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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. prior to 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.
The depositor has represented and warranted to the trustee that the
transfer of the receivables on January 1, 1994 constitutes, and the transfer of
the depositor's right to any subsequent receivables in the Accounts and in any
Additional Accounts will constitute, a valid transfer and assignment to the
trust of all right, title and interest of the depositor in and to the
receivables, including any additional receivables subsequently created in the
Accounts, and in any Additional Accounts, except for specified tax and
governmental liens and claims, all monies due or to become due thereon and, with
some exceptions, the proceeds thereof which is effective as to each receivable
upon the transfer thereof to the trust.
Tax and other statutory liabilities, like liabilities to the Pension
Benefit Guaranty Corporation relating to the underfunding of pension plans of
Bombardier Inc. or any of its subsidiaries including Bombardier Corporation and
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 with respect to these liabilities. However, the existence of a
claim against the depositor could permit the claimant to subject the depositor
to an involuntary proceeding under the bankruptcy code or other insolvency law.
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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, in some circumstances, could be substantial, in the amount of payments to
Certificateholders could result.
MATTERS RELATED TO UNFUNDED RECEIVABLES
Receivables are created on the books of 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 with respect to 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 of these receivables by it to the depositor is
a valid sale of 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 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. Notwithstanding the foregoing, 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.
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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.
Notwithstanding these steps, if the depositor were to become a debtor in a
bankruptcy case, and a bankruptcy trustee for the depositor or the depositor as
debtor in possession or a creditor of the depositor were to take the position
that the transfer of the receivables from the depositor to the trust should be
recharacterized as a pledge of the receivables, then delays in payments on the
certificates or, should the court rule in favor of that trustee, debtor in
possession or creditor, 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
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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 theretofore sold to the depositor and transferred to
the trust would be available to be applied to pay interest accruing on the
certificates and to pay the principal amount of the certificates. Under these
circumstances, the servicer is obligated to allocate all principal collections
on receivables to the oldest principal balance first. If this allocation method
were to be altered by the bankruptcy court, the rate of payment on the
certificates might be adversely affected.
The occurrence of specified events of bankruptcy, insolvency or
receivership with respect to the servicer will result in a Servicer Default,
which Servicer Default, in turn, will result in an Early Amortization Event. If
no other Servicer Default other than the commencement of this bankruptcy or
similar event exists, a bankruptcy trustee of the servicer may have the power to
prevent either the trustee or the Certificateholders from appointing a successor
servicer.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of material United States federal income
tax consequences relating to the purchase, ownership and disposition of the
certificates. This discussion is based on current law, which is subject to
retroactive or prospective change. Both types of changes could adversely affect
the tax consequences described in this section. The discussion does not address
all of the tax consequences that may be relevant to a particular
Certificateholder in light of its own circumstances. Further, the following
specific categories of Certificateholders may be subject to special tax rules
and limitations which are not discussed in this section: dealers or trades in
securities, financial 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
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This section sets forth the federal income tax opinions of Morgan,
Lewis & Bockius LLP, special U.S. tax counsel to the depositor and the trust.
Although no transaction closely comparable to the issuance of the certificates
has been the subject of any Treasury regulation, public ruling or judicial
decision, Morgan, Lewis & Bockius LLP, is of the opinion that, for federal
income tax purposes, the certificates will be characterized as indebtedness of
the depositor secured by the receivables, and the trust will be treated as a
mere security device and will not be subject to tax. The IRS could assert that
the certificates are not indebtedness but rather are an interest in the nature
of an equity interest and that the trust is not a mere component of a security
device but rather is either a partnership, between the depositor and some or all
classes of Certificateholders, or a publicly traded partnership taxable as a
corporation in which the depositor owns common stock and some or all classes of
Certificateholders own preferred stock.
Because the depositor will retain the benefits of ownership and most of
the risk of loss with respect to the receivables, and the Certificateholders
will be entitled only to the payment of a fixed return on their investments and
the repayment of those investments, which will be adequately secured by the
receivables, and other collateral to be held by the trust, Morgan, Lewis &
Bockius LLP is of the opinion that the IRS would not prevail in any attempt to
characterize the certificates as other than indebtedness. Accordingly, the
transaction will not be treated as a sale of receivables for United 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 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
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If the trust were treated in whole or in part as a partnership in which
some or all of the Certificateholders were treated as partners rather than
holders of indebtedness, that deemed partnership could be classified as a
publicly traded partnership taxable as a corporation. In that event the trust
would be subject to federal income tax at corporate rates on the taxable income
that the trust derives from the receivables. This tax would reduce the amounts
available for distribution to the Certificateholders. Cash distributions to the
Certificateholders would be treated as dividends for tax purposes to the extent
of the trust's earnings and profits and, for corporate Certificateholders, may
be eligible for the dividends-received deduction, subject to limitations.
Moreover, the amounts available for distribution to Certificateholders would be
substantially diminished by the taxes imposed on the trust.
The remainder of this section assumes that, for U.S. federal income tax
purposes, the certificates will be characterized as indebtedness of the
depositor secured by the receivables. The depositor and the Certificateholders
have agreed to treat the certificates as indebtedness for federal income tax
purposes and neither the trustee nor the depositor will comply with the
reporting requirements applicable to corporations, publicly traded partnerships
or partnerships.
TAXATION OF INTEREST INCOME TO CERTIFICATEHOLDERS
General.
Stated interest, original issue discount and market discount received
or accrued on a certificate will be ordinary income, and principal payments on a
certificate, other than payments of discount, will be a return of capital to the
extent of the Certificateholder's basis in the certificate allocable to those
payments.
Original Issue Discount.
It is not anticipated that the certificates will be issued with
original issue discount. However, because the failure to pay interest currently
on the certificates does not give rise to any remedy to compel payment, the IRS
may take the position on the basis of Treasury regulations that all of the
interest payments on the certificates should be treated as having original issue
discount. A holder of a certificate having original issue discount must include
original issue discount in ordinary income as it accrues in advance of receipt
of the cash attributable to the discount, regardless of the holder's regular
method of accounting.
The amount of original issue discount on a certificate is the excess of
its "stated redemption price at maturity" over its "issue price." The issue
price of a certificate in a particular class is the price at which a substantial
amount of the certificates of that class are first sold to the public. The
stated redemption price at maturity of a certificate is the total of all
payments on the certificate other than
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"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
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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 be subject to U.S. federal income tax, including the
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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
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certificates, the depositor has agreed to sell to the underwriters, and each
underwriter has agreed to purchase the principal amount of class A and class B
certificates set forth opposite its name below.
<TABLE>
<CAPTION>
Principal Amount Principal Amount
of Class A of Class B
Underwriter Certificates Certificates
- ---------------------------------------------------- ----------------------------- ---------------------------
<S> <C> <C>
J.P. Morgan Securities Inc.........................
[Underwriter].......................................
----------------------------- ---------------------------
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.
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In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of these purchases.
Neither the depositor not any of the underwriters makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above in this section may have on the prices of the
certificates. In addition, neither the depositor nor any of the underwriters
makes any representation that the underwriters will engage in these transactions
or that these transactions, once commenced, will not be discontinued without
notice.
The depositor has agreed to indemnify the underwriters against, or make
contributions to the underwriters with respect to, specified liabilities,
including liabilities under the Securities Act of 1933, as amended. There is no
limitation on the obligation to indemnify for the depositor's liabilities.
LEGAL MATTERS
Specified legal matters will be passed upon for the depositor and the
trust by Morgan, Lewis & Bockius LLP, New York, New York and for the
Underwriters by Orrick, Herrington & Sutcliffe LLP, Washington, D.C. Specified
federal income tax matters will be passed upon for the depositor and the trust
by Morgan, Lewis & Bockius LLP, New York, New York.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement under the Securities Act of
1933, as amended, with the Securities and Exchange Commission with respect to
the certificates offered by this prospectus. This prospectus, which forms part
of the registration statement, does not contain all of the information contained
in the registration statement and the exhibits thereto. For further information,
reference is made to the registration statement and amendments thereof and
exhibits thereto, which are available for inspection without charge at the
Public Reference Facilities maintained by the Securities and Exchange Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549, and the Securities and
Exchange Commission's regional offices at Seven World Trade Center, 13th Floor,
New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of the registration statement and
amendments thereof and exhibits thereto may be obtained from the Public
Reference Section of the Securities and Exchange Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, the Securities
and Exchange Commission maintains a public access site on the Internet through
the World Wide Web at which site reports, proxy and information statements and
other information regarding registrants, including all electronic filings, may
be viewed. The Internet address of the Securities and Exchange Commission's
World Wide Web site is http://www.sec.gov.
REPORTS TO CERTIFICATEHOLDERS
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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.
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ANNEX I
PRIOR SERIES
The certificates will be the fifth series to be issued by the trust.
The table below summarizes some of the principal characteristics of the Series
1996-1 Certificates, the Series 1997-1 Certificates and the Series 1997-2
Certificates, issued by the trust and outstanding. "LIBOR," as used below in
connection with the Series 1997-1 Certificates, shall mean the offered rates for
deposits in United States dollars having a maturity of one-month determined as
set forth in the supplement relating to the Series 1997-1 Certificates and "Net
Receivables Rate," as used below in connection with the Series 1997-1
Certificates shall have the meaning set forth in the supplement relating to the
Series 1997-1 Certificates.
<TABLE>
<S> <C>
SERIES 1996-1
Initial Principal Amount...............................................................................$100,000,000
Principal Amount as of December 31, 1999.............................................................$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 December 31, 1999.............................................................$427,125,000
Controlled Amortization Commencement Date.............................................................November 2001
Class A Interest Rate.........................Lesser of (a) One month LIBOR plus 0.12% and (b) Net Receivables Rate
Class B Interest Rate.........................Lesser of (a) one month LIBOR plus 0.33% and (b) Net Receivables Rate
Series 1997-1 Termination Date.......................................................................April 15, 2004
Series Issuance Date...............................................................................January 23, 1997
Series Servicing Fee Rate........................................................................................2%
Initial Available Subordination Amount..................................................................$24,859,127
SERIES 1997-2
Initial Principal Amount................................................................................$50,000,000
Principal Amount as of December 31, 1998.............................................................. $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>
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ANNEX II
Receivables in Additional Accounts Conveyed to the trust by the depositor
<TABLE>
<CAPTION>
Principal Amount
Date Receivables of Receivables in
Assignment Transferred Relevant Number Additional
Number to Trust Cut-Off Date of Accounts Accounts
-------- -------- ------------ ----------- --------
<S> <C> <C> <C> <C>
1 Sept. 30, 1994 Sept. 26, 1994 277 $ 28,569,849
2 Jan. 30, 1996 Jan. 18, 1996 610 $ 86,817,128
3 Oct. 31, 1997 Oct. 22, 1997 51 $ 30,132,722
4 Feb. 26, 1998 Jan. 1, 1998 832 $ 98,371,236
5 Oct. 16, 1998 Aug. 28, 1998 457 $ 92,037,386
6 Mar. 19, 1999 Mar. 2, 1999 311 $126,143,143
7 Nov. 4, 1999 Sept. 30, 1999 392 $108,132,205
</TABLE>
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ANNEX III
Global Clearance, Settlement and Tax Documentation Procedures
Except in limited circumstances, the globally offered certificates will
be available only in book-entry form. Investors in the globally offered
certificates may hold them through any of The Depository Trust Company,
Cedelbank or Euroclear. The globally offered certificates will be tradeable as
home market instruments in both the European and U.S. domestic markets. Initial
settlements and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding globally offered
certificates through Cedelbank and Euroclear will be conducted in the ordinary
way in accordance with their normal rules and operating procedures and in
accordance with conventional eurobond practice (i.e., seven calendar day
settlement).
Secondary market trading between investors holding globally offered
certificates through The Depository Trust Company will be conducted according to
the rules and procedures applicable to U.S. corporate debt obligations and prior
asset-backed certificates issues.
Secondary cross-market trading between Cedelbank or Euroclear and The
Depository Trust Company Participants holding certificates will be effected on a
delivery-against- payment basis through the respective depositaries of Cedelbank
and Euroclear, in the capacity of depositaries and as The Depository Trust
Company Participants.
Non-U.S. holders of globally offered certificates will be subject to
U.S. withholding taxes unless these holders meet specific requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
Initial Settlement
All globally offered certificates will be held in book-entry form by
The Depository Trust Company in the name of Cede & Co. as nominee of The
Depository Trust Company. Investors' interests in the globally offered
certificates will be represented through financial institutions acting on their
behalf as direct and indirect Participants in The Depository Trust Company. As a
result, Cedelbank and Euroclear will hold positions on behalf of their
participants through their respective depositaries, which in turn will hold
these positions in accounts as The Depository Trust Company Participants.
Investors electing to hold their globally offered certificates through
The Depository Trust Company will follow the settlement practices applicable to
prior asset-backed
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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
Cedelbank or Euroclear accounts will follow the settlement procedures applicable
to conventional eurobonds, except that there will be no temporary global
security and no "lock-up" or restricted period. Globally offered certificates
will be credited to the securities custody accounts on the settlement date
against payment in same-day funds.
Secondary Market Trading
Since the purchaser determines the place of delivery, it is important
to establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between The Depository Trust Company Participants. Secondary
market trading between The Depository Trust Company Participants will be settled
using the procedures applicable to prior asset- backed certificates issues in
same-day funds.
Trading between Cedelbank and/or participants of the Euroclear system.
Secondary market trading between Cedelbank Participants or participants of the
Euroclear system will be settled using the procedures applicable to conventional
eurobonds in same-day funds.
Trading between The Depository Trust Company seller and Cedelbank or
Euroclear purchaser. When globally offered certificates are to be transferred
from the account of The Depository Trust Company Participant to the account of a
Cedelbank Participant or a Euroclear Participant, the purchaser will send
instructions to Cedelbank or Euroclear through a Cedelbank Participant or
Euroclear Participant at least one business day prior to settlement. Cedelbank
or Euroclear will instruct either Citibank, N.A. in its capacity as depositary
for Cedelbank or Morgan Guaranty Trust Company of New York in its capacity as
depositary for the Euroclear System, as the case may be, to receive the globally
offered certificates against payment. Payment will include interest accrued on
the globally offered certificates from and including the last distribution date
(or if the transfer is prior to the first distribution date, the closing date)
to and excluding the settlement date, on the basis of actual days elapsed and a
year of 360 days. Payment will then be made by the respective depositary of The
Depository Trust Company Participant's account against delivery of the globally
offered certificates. After settlement has been completed, the globally offered
certificates will be credited to the respective clearing system and by the
clearing system, in accordance with its usual procedures, to the Cedelbank
Participant's or Euroclear Participant's account. The securities credit will
appear the next day (European time) and the cash debt will be back-valued to,
and the interest on the globally offered certificates will accrue from, the
value date (which would be the preceding day when settlement occurred in New
York).
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If settlement is not completed on the intended value date (i.e., the trade
fails), the Cedelbank or Euroclear cash debt will be valued instead as of the
actual settlement date.
Cedelbank Participants and participants of the Euroclear system will
need to make available to the respective clearing systems the funds necessary to
process same-day funds settlement. The most direct means of doing so is to
preposition funds for settlement, either from cash on hand or existing lines of
credit, as they would for any settlement occurring within Cedelbank or
Euroclear. Under this approach, they may take on credit exposure to Cedelbank or
Euroclear until the globally offered certificates are credited to their accounts
one day later.
As an alternative, if Cedelbank or Euroclear has extended a line of
credit to them, Cedelbank Participants or participants of the Euroclear system
can elect not to preposition funds and allow that credit line to be drawn upon
the finance settlement. Under this procedure, Cedelbank Participants or
participants of the Euroclear system purchasing globally offered certificates
would incur overdraft charges for one day, assuming they cleared the overdraft
when the globally offered certificates were credited to their accounts. However,
interest on the globally offered certificates would accrue from the value date.
Therefore, in many cases the investment income on the globally offered
certificates earned during that one-day period may substantially reduce or
offset the amount of these overdraft charges, although this result will depend
on each Cedelbank Participant's or Euroclear Participant's particular cost of
funds.
Since the settlement is taking place during New York business hours,
The Depository Trust Company Participants can employ their usual procedures for
sending globally offered certificates to the respective depositary for the
benefit of Cedelbank Participants or participants of the Euroclear system. The
sale proceeds will be available to The Depository Trust Company seller on the
settlement date. Thus, to The Depository Trust Company Participant a
cross-market transaction will settle no differently than a trade between two The
Depository Trust Company Participants.
Trading between Cedelbank or Euroclear seller and The Depository Trust
Company purchaser. Due to time zone differences in their favor, Cedelbank
Participants and participants of the Euroclear system may employ their customary
procedures for transactions in which globally offered certificates are to be
transferred by the respective clearing system, through either Citibank, N.A. in
its capacity as depositary for Cedelbank or Morgan Guaranty Trust Company of New
York in its capacity as depositary for the Euroclear System, to The Depository
Trust Company Participant. The seller will send instructions to Cedelbank or
Euroclear through a Cedelbank Participant or Euroclear Participant at least one
business day prior to settlement. In these cases, Cedelbank or Euroclear will
instruct either Citibank, N.A. in its capacity as depositary for Cedelbank or
Morgan Guaranty Trust Company of New York in its capacity as depositary for the
Euroclear System, as appropriate, to deliver the globally offered certificates
to The Depository Trust Company Participant's account against payment. Payment
will include interest
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accrued on the globally offered certificates from and including the last
distribution date (or if the transfer is prior to the first distribution date,
the closing date) to and excluding the settlement date on the basis of actual
days elapsed and a year of 360 days. The payment will then be reflected in the
account of the Cedelbank Participant or Euroclear Participant the following day,
and receipt of the cash proceeds in the Cedelbank Participant's or Euroclear
Participant's account would be back-valued to the value date (which would be the
preceding day, when settlement occurred in New York). Should the Cedelbank
Participant or Euroclear Participant have a line of credit with its respective
clearing system and elect to be in debt in anticipation of receipt of the sale
proceeds in its account, the back- valuation will extinguish any overdraft
incurred over that one-day period. If settlement is not completed on the
intended value date (i.e., the trade fails), receipt of the cash proceeds in the
Cedelbank Participant's or Euroclear Participant's account would instead be
valued as of the actual settlement date.
Finally, day traders that use Cedelbank or Euroclear and that purchase
globally offered certificates from The Depository Trust Company Participants for
delivery to Cedelbank Participants or participants of the Euroclear system
should note that these trades would automatically fail on the sale side unless
affirmative action were taken. At least three techniques should be readily
available to eliminate this potential problem:
(1) borrowing through Cedelbank or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedelbank or Euroclear
accounts) in accordance with the clearing system's customary procedures;
(2) borrowing the globally offered certificates in the U.S. from The
Depository Trust Company Participant no later than one day prior to settlement,
which would give the globally offered certificates sufficient time to be
reflected in their Cedelbank or Euroclear account in order to settle the sale
side of the trade; or
(3) staggering the value dates for the buy and sell sides of the trade
so that the value date for the purchase from The Depository Trust Company
Participant is at least one day prior to the value date for the sale to the
Cedelbank Participant or Euroclear Participant.
Material U.S. Federal Income Tax Documentation Requirements
A beneficial owner of globally offered certificates holding securities
through Cedelbank or Euroclear (or through The Depository Trust Company if the
holder has an address outside the U.S.) will be subject to the 30% U.S.
withholding tax that generally applies to payments of interest (including
original interest discount) on registered debt issued by U.S. Persons, unless
each clearing system, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business in the chain of
intermediaries between that beneficial owner and the U.S. entity required to
withhold tax complies with applicable certification requirements and that
beneficial owner takes one of the following steps to obtain an exemption or
reduced tax rate:
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Exemption for non-U.S. Persons (Form W-8). Beneficial owners of
globally offered certificates that are non-U.S. Persons generally can obtain a
complete exemption from the withholding tax by filing a signed Form W-8
(Certificate of Foreign Status). If the information shown on Form W-8 changes, a
new Form W-8 must be filed within 30 days of this change.
Exemption for non-U.S. Persons with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States, can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States).
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 a 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 a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent,
files by submitting the appropriate form to the person through whom it holds
(the clearing agency, in the case of persons holding directly on the books of
the clearing agency). Form W-8 and Form 1001 are effective for three calendar
years and Form 4224 is effective for one calendar year.
The term "U.S. Person" means
a citizen or resident of the United States,
a corporation or partnership organized in or under the laws of
the United States, any state thereof, or any political
subdivision of either (including the District of Columbia), or
an estate or trust the income of which is includible in gross
income for United States tax purposes regardless of its
source.
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This summary does not deal with all aspects of U.S. Federal income tax
withholding that may be relevant to foreign holders of the globally offered
certificates. Investors are advised to consult their own tax advisors for
specific tax advice concerning their holding and disposing of the globally
offered certificates.
The Internal Revenue Service has recently proposed new regulations that would
revise some aspects of the current system for withholding on amounts paid to
foreign persons. Under these proposed regulations, interest or original issue
discount paid or deemed paid to a nonresident alien would continue to be exempt
from United States withholding taxes (including backup withholding) provided
that the holder complies with the new certification procedures.
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GLOSSARY
"Accounts" means the accounts designated to the trust and identified in
the computer file or microfish or written list delivered to the trustee on the
date of issuance of the first series of certificates under the pooling and
servicing agreement plus all Additional Accounts less any accounts which have
been renewed from the trust.
"Accumulation Period Commencement Date" shall mean if the Accumulation
Period Length is four months; _______, 200_, if the Accumulation Period Length
is three months; _______, 200_, if the Accumulation Period Length is two months;
_______, 200_, if the Accumulation Period Length is one month; provided,
however, if the Accumulation Period Length has been determined to be less than
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 the one, two, three, four, five or
six month(s) period, determined on __________, and shall be calculated as the
product, rounded upwards to the nearest integer, of [four] multiplied by a
fraction, the numerator of which is the Invested Amount as of _____________,
after giving effect to all changes therein on that date, and the denominator of
which is the sum of this Invested Amount and the invested amounts as of
_____________, after giving effect to all changes therein on that date, of all
other outstanding series whose respective revolving periods are not scheduled to
end before the last day of the ___________ Collection Period.
"Additional Accounts" shall mean any accounts designated by the
depositor to be included in the trust in addition to those designated at the
time of this first series of certificates.
"Adjusted Invested Amount" means the initial principal amount of the
class certificates and the class B 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.
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"Adjustment Payment" shall be an amount payable by the depositor for
deposit into the collection account if the Servicer adjusts downward the
outstanding principal balance of any Eligible Receivable because of a rebate,
billing error, refund or credit adjustment to an obligor, or because that
receivable was created in respect of a product which was refused or returned by
an obligor, the amount of this adjustment will be deducted from the Pool
Balance; if the adjustment reduces the Pool Balance below the Required Pool
Balance on the immediately preceding Determination Date, after giving effect to
the allocations, distributions, withdrawals and deposits to be made on the
related Distribution Date, the amount of the payment will be an amount equal to
the deficiency up to the amount of the adjustment.
"Asset-Based Receivables" shall mean the receivables resulting from
extensions of credit made by 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, with respect to
the Revolving Period, or the Principal Allocation Percentage, with respect to
the Controlled Accumulation Period, any Initial Amortization Period or any Early
Amortization Period, for the related Collection Period multiplied by principal
collections for the related Collection Period,
(2) the amount, if any, of Investor Non-Principal Collections, funds in
the reserve fund and Series 2000-1 Available Retained Collections allocated to
cover any of the portion of the Defaulted Amount allocated to the class A
certificates and class B certificates or any unpaid Adjustment Payments
allocated to the class A certificates and class B 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 class A certificates and class B certificates,
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(5) if an Initial Amortization Period or an Early Amortization Period
began during the related Collection Period, any amounts on deposit in the excess
funding account,
(6) on the ____________ 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, and
(7) with respect to the distribution date in _________, any Initial
Amortization Period or any Early Amortization Period, any funds on deposit in
the principal account.
If the sum of the Floating Allocation Percentage during the Revolving
Period or the Principal Allocation Percentage (during the Early Amortization
Period, Initial Amortization Period or Controlled Accumulation Period), the
floating allocation percentages for all other outstanding series of investor
certificates in their revolving periods and the principal allocation percentages
for all other outstanding series in their amortization or early amortization
periods exceeds 100%, then the principal collections shall be allocated among
all series pro rata on the basis of these floating allocation percentages and
principal allocation percentages.
"Available Retained Collections" for any 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 Collection Period for which the Available Subordinated Amount is
zero for the distribution date occurring in that Collection Period.
"Available Retained Non-Principal Collections" for any date on which
the servicer receives collections means an amount equal to the product of the
excess of the Retained Percentage for the related date over the Excess Retained
Percentage for this 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 the related date over the Excess Retained
Percentage for this 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:
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(1) the Available Subordinated Amount for the preceding
distribution date, minus, with certain limitations,
the Required Subordination Draw Amount for the
preceding distribution date or, if the date of
determination is a distribution date, that
distribution date, minus the amount of any deposits
in the reserve fund from Series 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 class A certificates and
class B 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 Collection Period multiplied by
a fraction, the numerator of which is the Available
Subordinated Amount as of the last day of the
preceding Collection Period and the denominator of
which is the Pool Balance as of the last day of the
preceding Collection Period, plus the aggregate
amount of Excess Servicing paid to the holder of the
BCRC Certificate on the previous distribution date,
minus the Incremental Subordinated Amount for the
second preceding distribution date or if the date of
determination is a distribution date, the preceding
distribution date, plus the Incremental Subordinated
Amount for the immediately preceding distribution
date, or if the date of determination is a
distribution date, that distribution date plus
[5.82]% of the aggregate amount of any increases in
the Invested Amount resulting from any withdrawals
from the excess funding account since the preceding
distribution date; and
(2) the Required Subordinated Amount for that date of
determination; and
the amount of any optional increase in the Available
Subordinated Amount exercised by the depositor as described in
the prospectus under "Allocation of Collections; Deposits in
Collection Account; Limited Subordination of the Retained
Interest--Available Subordinated Amount."
The Available Subordinated Amount for any date of determination during the
period from the date of the issuance of the class A certificates and class B
certificates through the first distribution date is equal to the Required
Subordinated Amount as of that date of determination, which will equal at least
$_________ on the date of the issuance of the class A certificates and class B
certificates.
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"Bombardier Capital Inc. Domestic Inventory Portfolio" shall mean the
accounts, whether or not they would be Eligible Accounts and whether or not
they have been added to the Trust generating receivables as a result of
extensions of credit and advances made to dealers of consumer, recreational
and commercial products which dealers are located in the United States.
"BCRC Certificate" means the certificate held by the depositor and
representing the Retained Interest.
"Business Day" shall mean any day other than (a) a Saturday or Sunday
or (b) another day on which banking institutions or trust companies in the State
of New York are authorized or obligated by law, executive order or governmental
decree to be closed.
"Certificateholder" shall mean The Depository Trust Company, acting
upon the instructions of its Participants, with respect to the taking of
actions, and Cede & Co. with respect to the receipt of distributions, notices,
reports and statements.
"Class A Carry-Over Amount" for any distribution date on which the
Class A Certificate Rate is calculated on the basis of the Net Receivables Rate,
is the excess of Class A Monthly Interest for that distribution date determined
as if the Class A Certificate Rate were based on the LIBOR formula set forth in
the definition of Class A Certificate Rate over the actual Class A Monthly
Interest for that distribution date.
"Class A Certificate Rate" shall mean the per-annum rate at which
interest accrues on the principal balance of the class A certificates and shall
be equal to the lesser of LIBOR plus ____% and the Net Receivables Rate.
"Class A Monthly Interest" for any distribution date means an amount
equal to the product of
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the actual number of days elapsed in the related Interest
Period divided by 360 days and
the product of
(1) the Class A Certificate Rate and
(2) the outstanding principal balance of the class A
certificates as of the close of business on the
preceding distribution date, or for the first
distribution date, the date of the issuance of the
certificates, after giving effect to any payments of
principal on the class A certificates on that
preceding distribution date.
"Class B Carry-Over Amount" for any distribution date on which the
Class B Certificate Rate is calculated on the basis of the Net Receivables Rate,
is the excess of Class B Monthly Interest for that distribution date determined
as if the Class B Certificate Rate were based on the LIBOR formula set forth in
the definition of Class B Certificate Rate over the actual Class B Monthly
Interest for that distribution date;
"Class B Certificate Rate" shall mean the per-annum rate at which
interest accrues on the principal balance of the class B certificates and shall
be equal to the lesser of LIBOR plus ____% and the Net Receivables Rate.
"Class B Monthly Interest" for any distribution date means an
amount equal to the product of
the actual number of days elapsed in the related Interest
Period divided by 360 days and
the product of
(1) the Class B Certificate Rate and
(2) the outstanding principal balance of class B
certificates as of the close of business on the
preceding distribution date, or for the first
distribution date, the date of the issuance of the
certificates, after giving effect to any payments
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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 amortize the
Invested Amount given the Accumulation Period Length.
"Controlled Accumulation Period" means, unless an Early Amortization
Event has occurred or an Initial Amortization Period has begun, the period
commencing on the Accumulation Period Commencement Date and ending upon the
earliest to occur of:
(1) the commencement of the Early Amortization Period or any
Initial Amortization Period,
(2) payment of the full Invested Amount, and
(3) the ___________ distribution date.
"Controlled Deposit Amount" means, for any calender month, the sum of
the Controlled Accumulation Amount for that calender month plus the amount by
which the Controlled Deposit Amount for all preceding distribution dates exceeds
the amount deposited in the principal account for the preceding calender month.
"Daily Allocation" shall mean 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.
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"Defaulted Amount" for any Collection Period will be an amount which
shall not be less than zero equal to the aggregate principal amount of principal
receivables that became Defaulted Receivables during the preceding Collection
Period less the full amount of the Defaulted Receivables which are subject to
retransfer from the trust to the depositor or purchased by the Servicer for that
Collection Period unless certain events of bankruptcy, insolvency, or
receivership have occurred with respect to either of the depositor or the
Servicer or unless 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" prior to the date the Series 1997-1
Certificates are paid in full, on any distribution date are, without
duplication:
(1) all receivables, other than receivables that were designated
as ineligible at the time of transfer to the trust and
receivables which became ineligible because they were not paid
in full within 491 days after the origination thereof, which
were charged off by the Servicer as uncollectible in respect
of the immediately preceding Collection Period,
(2) all receivables originally secured by a security interest in a
related Eligible Product which have not been paid in full for
more than 60 days after the sale of the related Eligible
Product,
(3) all receivables in an Account in which interest in the amount
of $150 or more has been delinquent for 90 days or more, and
(4) all receivables which were Eligible Receivables when
transferred to the trust, which arose in an Account which
became an Account which is not an Eligible Account and which
were not Eligible Receivables for any six consecutive
distribution dates after this Account became an Account which
is not an Eligible Account;
and on or after the date the Series 1997-1 Certificates are paid if full,
Defaulted Receivables are, without duplication:
(1) all receivables, other than receivables that were designated
as ineligible at the time of transfer to the trust which were
charged off by the Servicer as uncollectible in respect of the
immediately preceding Collection Period,
(2) all receivables originally secured by a security interest in a
related Eligible Product which have not been paid in full for
more than 90 days after the sale of the related Eligible
Product, and
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(3) all receivables which were Eligible Receivables when
transferred to the trust, which arose in an Account which
became an Account which is not an Eligible Account 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 become ineligible.
"Deficiency Amount" shall mean 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 collection account as
required under the pooling and servicing agreement,
exceeds
the sum of
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(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 aggregate amount of Eligible Receivables created in
connection with the financing of products manufactured by the Designated
Manufacturer which Eligible Receivables are in the trust on the last day of the
Collection Period immediately preceding that distribution date over [ 45]% of
the Pool Balance on the last day of that immediately preceding Collection Period
where the "Designated Manufacturer" is collectively Bombardier Inc. and its
subsidiaries; provided, however, that this percentage and the entities included
as Designated Manufacturer may be adjusted from time to time without the consent
of the Certificateholders, if the Rating Agency Condition is satisfied.
"Determination Date" shall mean, with respect to any distribution
date, the day that is two business days prior to that distribution date.
"Domestic Inventory Receivables" shall mean receivables arising from
extensions of credit and advances 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 of consumer, recreational and
commercial products which dealers are located in the United States.
"Early Amortization Event" shall mean:
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(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 deposited by
the depositor upon a transfer of receivable back 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 this failure;
(c) to duly comply with, observe or perform in any
material respect the covenant of the depositor not to
create any lien, other than tax and other statutory
liens, including liens in favor of the Pension
Benefit Guaranty Corporation, and some other liens
and interests permitted by the pooling and servicing
agreement, on any receivable which failure has a
material adverse effect on the holders of the
investor certificates or the holder of the Variable
Funding Certificate and which continues unremedied
for a period of 60 days after written notice of this
failure, requiring the same to be remedied, has been
given to the depositor by the trustee or any
enhancement provider; provided, however, that an
Early Amortization Event shall not be deemed to have
occurred if the depositor shall have repurchased the
related receivables or, if applicable, all the
receivables during this period in accordance with the
provisions of the pooling and servicing agreement; or
(d) to duly observe or perform in any material respect
any other of its covenants or agreements set forth in
the pooling and servicing agreement, which failure
has a materially adverse effect on the holders of the
investor certificates or the holder of the Variable
Funding Certificate and which continues unremedied
for a period of 45 days after written notice of this
failure, requiring the same to be remedied, shall
have been given to the depositor by the trustee or
any enhancement provider;
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(3) any representation or warranty made by the depositor in the pooling
and servicing agreement or any information required to be given by the depositor
to the trustee to identify the Accounts proves to have been incorrect in any
material respect when made or when delivered and continues to be incorrect in
any material respect for a period of 60 days after written notice, or within any
longer period as may be specified in the notice, of this failure, requiring the
same to be remedied, shall have been given to the depositor by the trustee, and
as a result the interests of the holders of the investor certificates or the
holder of the Variable Funding Certificate are materially and adversely
affected, excluding, however, any representation or warranty made by the
depositor that the pooling and servicing agreement constitutes, or the transfer
of the receivables to the trust is, a valid sale, transfer and assignment to the
trust of all right, title and interest of the depositor in the receivables and
the security granted by the related obligor to secure payment if the pooling and
servicing agreement constitutes the grant of a security interest in the
Receivables and the security granted; provided, however, that an Early
Amortization Event shall not be deemed to occur thereunder if the depositor has
repurchased the related receivables or all of these receivables, if applicable,
during this period in accordance with the provisions of the pooling and
servicing agreement;
(4) the occurrence of specified events of bankruptcy, insolvency or
receivership relating to any of Bombardier Corporation, the depositor or the
servicer or 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 Collateral Security in addition to the products financed by the
receivables, recoveries from manufacturers, distributors or importers and
insurance proceeds, during any three consecutive calendar months to the
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average of the month-end Pool Balances for that three-month period, exceeds 5%
on an annualized basis; provided, that this clause (10) may be revised or waived
without the consent of the Certificateholders if the Rating Agency Condition is
satisfied;
(11) the average percentage obtained by dividing the aggregate
principal collections for a Collection Period by the average daily Pool Balance
for that Collection Period:
(a) with respect to the three Collection Periods included
in the period from January through March of any
calendar year is less than 12% and
(b) with respect to any other three consecutive
Collection Periods is less than 14%,
provided, that this clause (11) may be revised or waived without the consent of
the Certificateholders if the Rating Agency Condition is satisfied;
(12) the failure to pay the outstanding principal amount of the class A
certificates on the _______ distribution date or the failure to pay the
outstanding principal amount of the class B certificates on the _______
distribution date;
(13) an event of bankruptcy, insolvency or receivership relating to
Bombardier Capital Inc. or the depositor occurs; or
(14) the sum of all Eligible Investments and amounts on deposit in the
excess funding account and excess funding accounts for all other series
represents more than 50% of the total assets of the trust on each of six or more
consecutive distribution dates, after giving effect to all payments made or to
be made on that distribution date.
"Early Amortization Period" shall mean the period beginning as of the
day an Early Amortization Event occurs.
"Eligible Account" shall mean:
(1) each individual financing account established by 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
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(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 therein to any person without affecting the Account's status
as an Eligible Account.
"Eligible Deposit Account" shall mean either (1) a segregated account
with the corporate trust department of the trustee or a depository institution
or trust company organized under the laws of the United States of America or any
one of the states thereof, or the District of Columbia (or any domestic branch
of a foreign bank) which at all times has either a long-term unsecured debt
rating of A2 or better by Moody's and of AAA or better by Standard & Poor's or
such other rating that is acceptable to each Rating Agency, as evidenced by a
letter from such Rating Agency to the trustee or a certificate of deposit rating
of P-1 by Moody's and A-1+ by Standard & Poor's or such other rating that is
acceptable to each Rating Agency, as evidenced by a letter from such Rating
Agency to the trustee and is a member of the FDIC or (2) a segregated trust
account with the corporate trust department of the trustee, a depository
institution or trust company organized under the laws of the United States or
any one of the states thereof, or any domestic branch of a foreign bank, being a
member of FDIC and having corporate trust powers and acting as trustee for funds
deposited in that account, so long as any of the securities of that depository
institution or trust company has a credit rating from each Rating Agency in one
of its generic rating categories which signifies investment grade.
"Eligible Investments" shall mean:
(1) obligations of or fully guaranteed by the United States,
(2) demand deposits, time deposits or certificates of deposit of
depository institutions or trust companies incorporated under the laws of the
United States or any state thereof or any domestic branch of a foreign bank and
subject to supervision and examination by Federal or state banking or depository
institution authorities, the commercial paper or other short-term unsecured debt
obligations --- other than this type of obligation the rating of which is based
on the credit of a person or entity other than that depository institution or
trust company -- of which at the time of the trust's investment or contractual
commitment to invest therein has a credit rating from any individual Rating
Agency in the highest investment category granted thereby,
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(3) commercial paper at the time of the trust's investment of
contractual commitment to invest therein having a credit rating from any
individual Rating Agency in the highest investment category granted thereby,
(4) demand deposits, time deposits and certificates of deposit which
are fully insured by the FDIC,
(5) bankers' acceptances issued by any depository institution or trust
company described in (2) above,
(6) investments in money market funds which have the highest rating
from, or have otherwise been approved in writing by, any individual Rating
Agency,
(7) certain repurchase obligations entered into with depositor
institutions or trust companies with respect to securities which are direct
obligations of or obligations guaranteed by the United States or any agency or
instrumentality thereof which is backed by the full faith and credit of the
United States, and
(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" shall mean consumer, recreational and commercial
products, including, but not limited to, boats, motors and trailers,
snowmobiles, snow-grooming equipment, personal watercraft, recreational
vehicles, manufactured housing, motorcycles, lawn and garden equipment, horse
trailers, personal computers, and consumer electronics and appliances and spares
and parts relating to these products.
"Eligible Receivable" shall mean each receivable:
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(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 with respect to receivables that
are payable in accordance with 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
relating thereto and,
Asset-Based Receivables, at the time of transfer to
the trust, are secured by a first priority perfected
security interest in goods, accounts, work in
process, raw materials, component parts or other
rights or assets of the obligor.
(6) which is not unenforceable as a result of any violation of
requirements of law applicable thereto and the related inventory security
agreement in the case of Domestic Inventory Receivables or the related loan
agreement in the case of Asset-Based Receivables is not unenforceable as a
result of any violation of requirements of law applicable to any party thereto,
(7) with respect to which all consents and governmental authorizations
required to be obtained by Bombardier Capital Inc. or an affiliate of Bombardier
Capital Inc. or the depositor in connection with the creation of the receivable
or the transfer thereof to the depositor and the trust or the performance by
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,
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(8) as to which at all times following the transfer of the receivable
to the trust, the trust will have good and marketable title thereto free and
clear of all liens arising prior to the transfer or arising at any time, other
than liens permitted pursuant to the pooling and servicing agreement and other
than tax and certain other statutory liens, including liens in favor of the
Pension Benefit Guaranty Corporation, which may arise after this transfer and
which relate to affiliates of the depositor,
(9) which has been the subject of a valid transfer and assignment from
the depositor to the trust of all the depositor's right, title and interest
therein including, with certain exceptions, any proceeds thereof,
(10) which will at all times be the legal and assignable payment
obligation of the obligor relating thereto, enforceable against that obligor in
accordance with its terms, as modified or revised from time to time with the
consent of the Servicer, except as enforceability may be limited by the
bankruptcy code or other applicable insolvency laws,
(11) which at the time of transfer to the trust is enforceable against
the obligor to the extent of the full principal amount of the receivable, except
as such enforceability may be limited by the bankruptcy code or other applicable
insolvency laws,
(12) 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 respective obligations under the pooling
and servicing agreement with respect to the receivable required to be satisfied
at that time,
(13) as to which, at the time of transfer of the receivable to the
trust, neither 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 therein and
(14) which constitutes either an "account" or "chattel paper" as
defined in Article 9 of the UCC as then in effect in the State of Vermont;
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This definition may be adjusted from time to time without the consent of the
Certificateholders if the Rating Agency Condition is satisfied.
"Excess Funded Amount" shall be calculated for each Business Day and
shall be an amount equal to the product of:
(1) the excess, if any, of the Required Pool Balance over the Pool
Balance, each as of the end of the preceding day multiplied by
(2) a fraction the numerator of which is the sum of 104 percent,
provided that the depositor may, reduce or otherwise adjust such percentage
without the consent of the certificateholders so long as the Rating Agency
Condition has been satisfied, 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 Required Balance
providing for excess funding accounts or similar arrangements.
"Excess Principal Collections" shall mean, 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 with
respect to an Early Amortization Period, means an amount equal to the greater of
5% of the initial principal amount of the class A certificates and class B
certificates and the excess of the Required Pool Balance (after giving effect to
any changes thereto on that distribution date) over the Pool Balance (after
giving effect to changes thereto on that distribution date); provided that it
shall in no event exceed the Available Subordinated Amount for that distribution
date.
"Excess Retained Percentage" for any date of determination, the
Retained Percentage for that date minus the percentage equivalent of a fraction,
the numerator of which is equal to the sum of the Available Subordinated Amount
and the aggregate available subordinated amounts for all other outstanding
series as of the end of the immediately preceding day and the denominator of
which is the Pool Balance as of the end of the immediately preceding day.
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"Excess Servicing" for any distribution date means the amount available
pursuant to clause (9) under "Description of the Certificates--Distribution from
the Collection Account; Reserve Fund; Principal Account" in this Prospectus.
"Floating Allocation Percentage" means the percentage, which shall
never exceed 100%, obtained for each day in a Collection Period, by dividing the
Invested Amount as of the close of business on the preceding day by the Pool
Balance as of the close of business on that preceding day; provided, however,
that, with respect to the Collection Period in which the class A certificates
and class B certificates are issued, the Floating Allocation Percentage shall
mean the percentage obtained by dividing the Invested Amount of the class A
certificates and class B certificates by the Pool Balance on the _________, 2000
- -- giving pro forma effect as of the _________, 2000 to the issuance of the
class A certificates and class B certificates.
"Incremental Subordinated Amount" on any distribution date will equal
the product of a fraction, the numerator of which is the sum of the Invested
Amount on the last day of the immediately preceding Collection Period or with
respect to the first distribution date, the Invested Amount on the date of the
issuance of the class A certificates and class B certificates and the Available
Subordinated Amount for that distribution date, calculated without subtracting
or adding the Incremental Subordinated Amount for that distribution date as
described in clause (1) of the definition of Available Subordinated Amount or
clause (2) of the definition of Required Subordinated Amount, and the
denominator of which is the Pool Balance on such last day multiplied by [the sum
of, without duplication, the Obligor Overconcentrations, the Manufacturer
Overconcentrations, the Designated Manufacturer Overconcentrations and the
Industry Overconcentrations on that distribution date.]
"Industry Overconcentrations" on any distribution date means the
excess of
(1) the aggregate amount of Eligible Receivables created in
connection with the financing of products manufactured by
manufacturing entities that are part of the same industry,
that is, producing the same principal product, provided that
products manufactured by Bombardier Inc. and its affiliates
will not be included in the calculation of Industry
Overconcentration, which Eligible Receivables are
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in the Pool on the last day of the Collection Period
immediately preceding that distribution date over
(2) an amount equal to __% of the Pool Balance on the last day of
that immediately preceding Collection Period; provided,
however, that with respect to each industry specified below,
the percentage in clause (2) of this definition shall be
deemed to equal the percentage set forth opposite that
industry:
<TABLE>
<CAPTION>
Industry Percentage
-------- ----------
<S> <C>
Marine Products........................ 45%
Manufactured Housing................... 45%
Recreational Vehicles.................. 20%
Lawn and Garden........................ 10%
Consumer Electronics and Appliances.... 10%
</TABLE>
Some or all of the percentages specified in this description of
Industry Overconcentrations may be adjusted from time to time without the
consent of the Certificateholders, if the Rating Agency Condition is satisfied.
"Initial Amortization Period" shall mean the period during which
principal is distributed to the Certificateholders as a result of Bombardier
Capital Inc.'s election not to extend the Initial Principal Payment Date.
"Initial Principal Payment Date" shall mean the distribution date no
earlier than the _______ distribution date and no later than the _______
distribution date, on which principal will begin to be paid to the
Certificateholder if Bombardier Capital Inc. elects not to extend the Revolving
Period or the Controlled Accumulation Period, as applicable.
"Interest Period" shall mean, with respect to any distribution date,
the period from and including the previous distribution date -- or, in the case
of the first distribution date, from and including the date of the issuance of
the certificates -- to but excluding that distribution date.
"Invested Amount" means for any date an amount equal to the Adjusted
Invested Amount of the class A certificates and class B certificates, 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
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account -- made on the class A certificates and class B 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 with respect to funds held in
the collection account.
"Investor Charge-Off" shall occur if the Available Subordinated Amount
is reduced to zero, and on any distribution date the Deficiency Amount is
greater than zero and shall mean an amount equal to the excess of this
Deficiency Amount over any remaining Available Subordinated Amount on the
related Determination Date, but shall not exceed the portion of the Defaulted
Amount allocated to the class A certificates and class B certificates for that
distribution date.
"Investor Non-Principal Collections" for any distribution date means
the portion of Non-Principal Collections for the related Collection Period
allocated to the class A certificates and class B certificates as described in
the Prospectus under the caption "Description of the Certificates--Allocation
Percentages--Allocation to the Certificates" and "Allocation of Collections;
Deposits in Collection Account; Limited Subordination of the Retained Interest."
"LIBOR" shall mean, with respect to any Interest Period, an interest
rate based on the offered rates for deposits in United States dollars having a
maturity of one month , commencing on the 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 the
display page currently designated as "Telerate Page 3750" on the Dow Jones
Telerate Service, or any other page as may replace that page on that service for
the purpose of displaying comparable rates or prices, 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
163
<PAGE>
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 Collection Period immediately preceding that distribution
date over [15]% of the Pool Balance on the last day of that immediately
preceding Collection Period; provided, however, that this percentage may be
adjusted from time to time without the consent of the Certificateholders, if the
Rating Agency Condition is satisfied.
"Miscellaneous Payments" for any Collection Period means the sum of
Adjustment Payments and amounts required to be paid by the depositor in
connection with a transfer of receivables back to the depositor on deposit in
the collection account on the related distribution date received with respect to
that Collection Period and any amounts not paid to the holder of the BCRC
Certificate because the Pool Balance does not exceed the Required Pool Balance
and which are available to be treated as Miscellaneous Payments as of the
distribution date following that Collection Period as described in the
Prospectus under the caption "Principal Collections for all Series."
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<PAGE>
"Monthly Principal" with respect to any distribution date relating to
any Initial Amortization Period or Early Amortization Period will equal
Available Investor Principal Collections for that distribution date; provided,
however, that Monthly Principal will not exceed the applicable outstanding
principal balances of the class A and class B certificates, respectively.
"Monthly Servicing Fee" will generally be equal to one-twelfth of the
product of 2% or 3% if 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
Collection Period, provided that the Monthly Servicing Fee for the first
distribution date will be equal to $_________.
"Net Receivables Rate" shall mean the weighted average of the interest
rates borne by the receivables included in the trust for the preceding
Collection Period 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 in respect of
which the Monthly Servicing Fee has been waived, 0% multiplied by the Invested
Amount as of the last day of the second preceding Collection Period, provided
that the Net Servicing Fee for the first distribution date will be equal to
$_________.
"Non-Principal Collections" means collections of interest and other
non-principal charges, including amounts recovered with respect to Defaulted
Receivables and insurance proceeds, with respect to the receivables.
"non-U.S. Certificateholder" is a Certificateholder that is not (A) a
citizen or resident of the United States, (B) a domestic partnership, (C) a
domestic corporation, (D) a domestic estate or domestic trust or (E) any other
person or entity whose income in respect of a Certificate is "effectively
connected" with a United States trade or business.
"Obligor Overconcentrations" on any distribution date means, with
respect to any Account, the excess of the aggregate principal amount of Eligible
Receivables in that Account on the last day of the Collection Period immediately
preceding that distribution date over [2]% of the Pool Balance with respect to
any obligor with respect to the six largest Accounts in the trust calculated on
the basis of the amount of principal receivables in that Account and [1.5]% of
the Pool Balance with respect
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<PAGE>
to all other obligors, in each case on the last day of that immediately
preceding Collection Period. The percentages set forth in this description of
Obligor Overconcentrations and the manner of determining to which obligors the
[2]% rate applies may be adjusted from time to time without the consent of the
Certificateholders if the Rating Agency Condition is satisfied.
"Participants" shall mean the organizations for which The Depository
Trust Company holds securities to facilitate the clearance and settlement of
securities transactions among themselves.
"Pool Balance" shall mean the aggregate principal balances of the
receivables 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 with respect to any series, the rating agencies
which have been requested to rate that series by the depositor.
"Rating Agency Condition" shall mean, with respect to any action, if
the terms of the pooling and servicing agreement or any supplement including the
Series 2000-1 Supplement among Bombardier Capital Inc., the depositor and the
trustee set forth a specific time in advance of the effectiveness of the action
that notice must be given to the Rating Agencies, notice shall have been given
in accordance with this requirement or if no advance notice is required or no
specific time is stated
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<PAGE>
for the notice, the Rating Agencies have received written notice of the proposed
action at least 10 days prior to the proposed effective date of the action and
either:
as of the proposed effective date of the action, no
Rating Agency shall have notified the depositor, the
servicer or the trustee in writing that the action
will result in a reduction or withdrawal of any
rating of any outstanding series or class with
respect to which it is a Rating Agency, or
each Rating Agency shall have confirmed in writing to
the depositor, the servicer or the trustee that the
action will not result in a reduction or withdrawal
of the rating of any outstanding series or class with
respect to which it is a Rating Agency.
"Receivables Purchase Agreement" shall mean 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.
"Removed Accounts" shall mean 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 shall mean an amount calculated as
of the end of any business day equal to:
the sum of the amounts for each series
obtained by multiplying the required
investor percentages including the required
investor percentage of this series which is
104 percent, but may be reduced, by the
respective adjusted invested amounts
including the Adjusted Invested Amount plus
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<PAGE>
the sum of the Available Subordinated Amount
and the aggregate available subordinated
amounts for all other outstanding series as
of the end of that business day; minus
any amount on deposit in any reserve fund on
that date, except that, for Series 1997-1
and Series 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 class A certificates and
class B 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 Initial Amortization Period
or the Controlled Accumulation Period or if an Early Amortization Event occurs,
the Required Subordinated Amount for each date of determination after this
commencement will equal the Required Subordinated Amount as of the close of
business on the day preceding the first day of the Initial Amortization Period
or the Controlled Accumulation Period or the day on which the Early Amortization
Event occurs.
"Required Subordination Draw Amount" shall mean the lesser of the
Deficiency Amount and the Available Subordinated Amount.
"Reserve Fund Required Amount" means an amount which on any
distribution date will equal [0.50]% of the outstanding principal balance of the
class A certificates and class B certificates on that distribution date, after
giving effect to any reduction thereof on such distribution date.
168
<PAGE>
"Retained Interest" shall mean the ownership interest in the trust
retained by the depositor and which is that portion of the trust not represented
by or allocated to the investors or the 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 class A
certificates and class B 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 class A
certificates and class B certificates, if applicable
in its revolving period,
the aggregate of the principal allocation percentages
for each outstanding series including the class A
certificates and class B certificates, if applicable
in its amortization, accumulation or early
amortization period and
the Variable Funding Percentage for this date of
determination, but in each case the Retained
Percentage shall not be less than 0%.
"Revolving Period" shall mean the period beginning on ________, 2000
and ending on the earliest of:
(1) the Accumulation Period Commencement Date;
(2) the date the trustee mails notice to the Certificateholders that
Bombardier Capital Inc. has elected not to extend the Initial Principal Payment
Date; and
(3) the business day immediately preceding the day on which an Early
Amortization Event occurs.
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<PAGE>
"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
Collection Period, the percentage obtained by dividing the Invested Amount as of
the last business day preceding that Collection Period by the sum of the
Invested Amount and the invested amounts for all other outstanding series on
that day.
"Servicer Default" refers to any of the following events:
(1) failure by the Servicer to make any payment, transfer or deposit
into the trust, or into any account created for a series of certificates on or
before the date the Servicer is required to do so under the pooling and
servicing agreement, which failure is not cured within a five business day grace
period after notice from the trustee of this failure;
(2) failure on the part of the Servicer duly to observe or perform its
covenant not to create any lien on any receivable which failure has a material
adverse effect on the certificateholders and which continues unremedied for a
period of 60 days after written notice to it; provided, however, that a Servicer
Default shall not be deemed to have occurred if the depositor or the Servicer
shall have repurchased the related receivables or, if applicable, all the
receivables during this period in accordance with the terms and provisions of
the pooling and servicing agreement or any other covenants or agreements of the
Servicer in the pooling and servicing agreement, exclusive of breaches of
covenants in respect of which the Servicer repurchases the related receivables,
as described above under "--Servicer Covenants", which failure has a materially
adverse effect on the certificateholders or the holder
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<PAGE>
of the Variable Funding Certificate and which continues unremedied for a period
of 30 days after written notice thereof to the Servicer;
(3) any representation, warranty or certification made by the Servicer
in the pooling and servicing agreement or in any certificate delivered pursuant
to the pooling and servicing agreement proves to have been incorrect when made
and continues to be incorrect in any material respect for a period of 60 days
after written notice thereof has been given to the Servicer by the trustee and
as a result the interests of the certificateholders or the holder of the
Variable Funding Certificate are materially and adversely affected; provided,
however, that a Servicer Default shall not be deemed to have occurred if the
depositor shall have repurchased the related receivables or, if applicable, all
the receivables during this period in accordance with the provisions of the
pooling and servicing agreement; or
(4) the occurrence of certain events of bankruptcy, insolvency or
receivership with respect to the Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to under clause (1) above for a period of up to ten business days after
the applicable grace period or a delay in or failure of performance or the
continuance of any delay or failure referred to under clauses (2) or (3) for a
period of up to 60 business days, shall not constitute a Servicer Default if
this delay or failure or continuance was caused by an act of God or other
similar occurrence.
"Supplemental Certificate" shall mean a certificate issued in exchange
for a portion of the BCRC Certificate.
"Transfer Date" shall mean each business day on which receivables are
created in the Eligible Accounts provided that such date is prior to the
earliest of the day following the distribution date on which the aggregate
invested amounts for all series is zero , the day on which an event of
bankruptcy, insolvency or receivership relating to Bombardier Capital Inc. or
the depositor occurs or the day on which an Early Amortization Event occurs as a
result of the violation by the depositor of its covenant not to create or permit
to exist any liens on the receivables or the Collateral Security except to the
extent permitted by the pooling
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and servicing agreement.
"Variable Funding Certificate" means the certificate representing the
excess, if any, of the Pool Balance over the Required Pool Balance.
"Variable Funding Percentage" for any date of determination, means a
percentage (which percentage shall never be less than 0% nor more than 100%)
equal to the excess, if any, of the Pool Balance over the Required Pool Balance
as of that day divided by the Pool Balance as of the close of business on the
day preceding that day; provided, however, that for purposes of allocating
principal collections following the occurrence of 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.
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<PAGE>
$
BOMBARDIER RECEIVABLES MASTER TRUST I
FLOATING RATE ASSET BACKED CERTIFICATES,
CLASS A
CLASS B
SERIES 2000-1
[Bombardier Capital Logo]
BOMBARDIER CREDIT RECEIVABLES CORPORATION
DEPOSITOR
BOMBARDIER CAPITAL INC.
SERVICER
---------------------------
PROSPECTUS
---------------------------
J.P. MORGAN & CO. [UNDERWRITER]
You should rely on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information.
We are not offering these Certificates in any state where the offer
is not permitted.
We represent the accuracy of the information in this prospectus only as
of the date stated on its cover.
Dealers will be required to deliver a prospectus when acting as
underwriters of these certificates and with respect to their unsold allotments
or subscriptions. In addition, all dealers selling these certificates will
deliver a prospectus until _________.
____________, 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................................................... $ *
Printing and Engraving................................................. $
Legal Fees and Expenses................................................ $
Trustee Fees and Expenses.............................................. $
Blue Sky Fees and Expenses............................................. $
Rating Agency Fees..................................................... $
Accounting Fees and Expenses........................................... $
Miscellaneous.......................................................... $
--------
Total......................................................... $
--------
</TABLE>
- -----------------------
* Actual
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VII of the Registrant's Certificate of Incorporation provides
for indemnification of directors and officers of the Registrant to the full
extent permitted by Delaware law.
Section 145 of the Delaware General Corporation Law provides, in
substance, that Delaware corporations shall have the power, under specified
circumstances, to indemnify their directors, officers, employees and agents in
connection with actions, suits and proceedings brought against them by a third
party or in the right of the corporation, by reason of the fact that they were
or are such directors, officers, employees or agents, against expenses incurred
in any such action, suit or proceeding. The Delaware General Corporation Law
also provides that Delaware corporations may purchase insurance on behalf of any
such director, officer, employee or agent.
Bombardier Inc. has agreed to guarantee the indemnification obligations
of the Registrant with respect to each of its independent directors, subject,
however, to any conditions, limitations, or defenses which the Registrant itself
might have with respect to such indemnified obligations.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The Trust has issued two Series of asset backed certificates in
transactions exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) of the Securities Act. On May 14, 1996, the Registrant
sold by private placement to an institutional investor $100,000,000 initial
principal amount of Class A Certificates, Series 1996-1. On December 12, 1997,
the Registrant sold by private placement to an institutional investor
$50,000,000 initial principal amount of Class A Certificates, Series 1997-2.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
1.1 Form of Underwriting Agreement*
3.1 Certificate of Incorporation of the Registrant**
3.2 Bylaws of the Registrant**
4.1 Pooling and Servicing Agreement**
4.2 Amendment No. 1 to Pooling and Servicing Agreement**
4.3 Amendment No. 2 to Pooling and Servicing Agreement
4.4 Amendment No. 3 to the Pooling and Servicing Agreement
4.5 Form of Series 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>
- ---------
* To be filed by amendment.
** Previously filed.
ITEM 17. UNDERTAKINGS.
A. Insofar as indemnification for liability arising under the Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to provisions described under Item 14 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities, other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding, is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
B. The undersigned registrant hereby undertakes that:
(1) for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed
as part of a registration statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was
declared effective; and
(2) for the purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time and shall be deemed to be the initial bona fide
offering thereof.
II-2
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant and Co-Registrant have each duly caused Amendment No. 3 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 27th day of
March, 2000.
BOMBARDIER CREDIT RECEIVABLES CORPORATION
By: /s/ Pierre Lortie
-----------------------------------------
NAME: PIERRE LORTIE
TITLE: PRESIDENT
BOMBARDIER CAPITAL INC., as Servicer on
behalf of the Trust
By: /s/ Pierre Lortie
-----------------------------------------
NAME: PIERRE LORTIE
TITLE: PRESIDENT
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Pierre Lortie and Blaine 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. 3 to this Registration Statement has been signed by the following
persons for Bombardier Credit Receivables Corporation in the capacities
indicated, on the 27th day of March, 2000.
<TABLE>
<CAPTION>
Signatures Title
----------------- --------
<S> <C>
/s/ Pierre Lortie President (Principal Executive Officer)
------------------------------
Pierre Lortie
/s/ Blaine H. Filthaut Treasurer (Principal Financial and Accounting
------------------------------ Officer)
Blaine H. Filthaut
/s/ R. William Crowe Director
------------------------------
R. William Crowe
/s/ Blaine H. Filthaut Director
------------------------------
Blaine H. Filthaut
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C>
/s/ Frank C. Killackey Director
------------------------------
Frank C. Killackey
/s/ Pierre Lortie Director
------------------------------
Pierre Lortie
/s/ Margaret L. Montgomery Director
------------------------------
Margaret L. Montgomery
/s/ Helen C. Rowan Director
------------------------------
Helen C. Rowan
/s/ Donald L. Rushford Director
------------------------------
Donald L. Rushford
</TABLE>
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Pierre Lortie and Blaine 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. 3 to this Registration Statement has been signed by the following
persons for Bombardier Capital Inc., as Servicer on behalf of the Trust in the
capacities indicated, on the 27th day of March, 2000.
<TABLE>
<CAPTION>
Signatures Title
<S> <C>
/s/ Pierre Lortie President (Principal Executive Officer)
------------------------------
Pierre Lortie
/s/ Blaine H. Filthaut Treasurer (Principal Financial and Accounting
------------------------------ Officer)
Blaine H. Filthaut
/s/ R. William Crowe Director
------------------------------
R. William Crowe
/s/ Blaine H. Filthaut Director
------------------------------
Blaine H. Filthaut
/s/ Frank C. Killackey Director
------------------------------
Frank C. Killackey
/s/ Pierre Lortie Director
------------------------------
Pierre Lortie
/s/ Helen C. Rowan Director
------------------------------
Helen C. Rowan
</TABLE>
II-4
<PAGE>
Exhibit 5.1
MARCH 27, 2000
Bombardier Credit Receivables Corporation
P.O. Box 5544
Burlington, Vermont 05402
Bombardier Capital Inc.
1600 Mountain View Drive
Colchester, Vermont 05446
Re: Bombardier Receivables Master Trust I--
Registration Statement on Form S-1 filed
with the Securities and Exchange Commission
(File No. 333-77091)
Ladies and Gentlemen:
We have acted as special counsel to Bombardier Credit Receivables Corporation, a
Delaware corporation, as depositor (the "Company"), and Bombardier Capital Inc.,
a Massachusetts corporation, as servicer (the "Servicer"), in connection with
the sale of $300,000,000 principal amount of Floating Rate Class A Asset Backed
Certificates, Series 2000-1 (the "Class A Certificates") and $20,339,000
principal amount of Floating Rate Class B Asset Backed Certificates Series
2000-1 (the "Class B Certificates" and together with the Class A Certificates,
the "Certificates") to the underwriters pursuant to a certain underwriting
agreement (the "Underwriting Agreement") between the Company, the Servicer and
J.P. Morgan & Company.
Each Certificate represents an undivided interest in the Bombardier Receivables
Master Trust I (the "Trust") formed pursuant to a Pooling and Servicing
Agreement dated as of January 1, 1994, (AS AMENDED AND SUPPLEMENTED, the
"Pooling and Servicing Agreement"), among the Company, the Servicer and Bankers
Trust Company, as trustee (the "Trustee"). Each Certificate is issued pursuant
to the Series 2000-1 Supplement to the Pooling and Servicing Agreement (the
"Supplement").
<PAGE>
March 27, 2000
Page 3
In such capacity, we have examined, among other documents (i) the
above-captioned Registration Statement on Form S-1 filed by the Company with the
Securities and Exchange Commission (the "Commission") (the "Registration
Statement") and (ii) the forms of the Pooling and Servicing Agreement, the
Supplement and the Underwriting Agreement previously filed or filed herewith, as
the case may be, as exhibits to the Registration Statement.
In connection with the foregoing, we have examined originals or copies
satisfactory to us of all such corporate records, agreements, certificates,
governmental orders, permits, authorizations and other documents as we have
deemed relevant and necessary as a basis for the opinion hereinafter expressed.
In such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of all documents submitted to us as copies. As to
any facts material to such opinions, we have, to the extent that such facts were
not independently established by us, relied upon certificates of public
officials or certificates of officers or other representatives of the Company or
of the Servicer.
In giving the opinion expressed below we have also assumed: (i) the due
existence of the Trust and the Trustee; (ii) the legal right and power of the
Trustee under all applicable laws and regulations to execute, deliver and
perform the Pooling and Servicing Agreement and the Supplement (including
without limitation to execute, authenticate and deliver the Certificates); (iii)
the due authorization, execution and delivery by the Trustee of the Pooling and
Servicing Agreement and the Supplement; and (iv) the validity, binding effect
and enforceability of the Pooling and Servicing Agreement and the Supplement in
accordance with their respective terms against the Trustee.
In giving the opinion expressed below, we do not purport to be experts in, and
are not opining on, the laws of any jurisdiction other than the laws of the
State of New York, United States federal law and the General Corporation Law of
the State of Delaware.
Based on and subject to the foregoing, we are of the opinion that the
Certificates to be sold under the Registration Statement have been duly and
validly authorized by the Company and when (i) the Supplement and the Pooling
and Servicing Agreement shall have been duly executed and delivered by the
Company, the Servicer and the Trustee and (ii) the Certificates shall have been
duly issued, executed, authenticated and delivered as provided in the Pooling
and Servicing Agreement and delivered against payment therefor in accordance
with the Underwriting Agreement, the Certificates will be legally issued, fully
paid and non-assessable.
<PAGE>
March 27, 2000
Page 4
We are furnishing this letter in our capacity as special counsel to the Company
and the Servicer and this letter is not to be used, circulated, quoted or
otherwise referred to for any other purpose, except as set forth below.
We consent to the use of our name under the caption "Legal Matters" in the
Prospectus constituting a part of the Registration Statement and to the filing
of a copy of this opinion as an exhibit thereto. In giving such consent, we do
not thereby concede that we are within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Commission issued thereunder or that we are "experts"
within the meaning of such act, rules and regulations.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
Exhibit 8.1
MARCH 27, 2000
Bombardier Credit Receivables Corporation
P.O. Box 5544
Burlington, VT 05402
Bombardier Capital Inc.
1600 Mountain View Drive
Colchester, Vermont 05446
Re: Bombardier Receivables Master Trust I--
Registration Statement on Form S-1 filed
with the Securities and Exchange Commission
(File No. 333-77091)
Ladies and Gentlemen:
We have acted as special tax counsel to Bombardier Credit Receivables
Corporation, a Delaware corporation (the "Company"), in connection with the
proposed issuance by Bombardier Receivables Master Trust I, a trust formed
pursuant to the Pooling and Servicing Agreement dated as of January 1, 1994, as
heretofore and herewith amended and supplemented, among the Company, as
depositor, Bombardier Capital Inc., as servicer, and Bankers Trust Company, as
Trustee, of asset-backed certificates in a public offering being registered with
the Securities and Exchange Commission under the United States Securities Act of
1933, as amended (the "Securities Act"), pursuant to a registration statement of
the Company on Form S-1 (Registration No. 333-77091), as amended to the date
hereof (the "Registration Statement"). Capitalized terms used herein and not
otherwise defined herein have the respective meanings ascribed to them in the
Registration Statement.
In connection with the foregoing, we have examined originals or copies
satisfactory to us of all such corporate records, agreements, instruments and
other documents as we have deemed relevant and necessary as a basis for the
opinion hereinafter expressed. In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with the original documents of all documents
submitted to us as
<PAGE>
March 27, 2000
Page 3
copies. We understand and assume that (i) any agreement which we have examined
will represent the valid and binding obligation of the respective parties
thereto, enforceable in accordance with its respective terms, and the entire
agreement between the parties with respect to the subject matter thereof, (ii)
the parties to each such agreement will comply with all of their respective
covenants, agreements and undertakings contained therein, and (iii) the
transactions provided for by each such agreement will be carried out in
accordance with its terms.
Our opinion is based upon existing United States federal income tax laws,
regulations, administrative pronouncements and judicial decisions. All such
authorities are subject to change, either prospectively or retroactively. No
assurance can be provided as to the effect of any such change upon our opinion.
Based upon and subject to the foregoing, we hereby confirm AND ADOPT the opinion
referred to in the Registration Statement in the SECOND sentence under the
heading "Material Federal Income Tax Consequences - Characterization of the
Certificates and the Trust."
In giving the foregoing opinion, we express no opinion other than as to the
federal income tax law of the United States of America.
We are furnishing this letter in our capacity as special tax counsel to the
Company and this letter is not to be used, circulated, quoted or otherwise
referred to for any other purpose, except as set forth below.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and we further consent to the use of our name under the
caption "Material Federal Income Tax Consequences" in the Registration
Statement. In giving such consent, we do not thereby concede that we are within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Commission issued thereunder or that we are "experts" within the meaning of such
act, rules and regulations.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
EXHIBIT 4.3
EXECUTION COPY
================================================================================
BOMBARDIER CREDIT RECEIVABLES CORPORATION
Depositor
BOMBARDIER CAPITAL INC.
Servicer
and
BANKERS TRUST COMPANY
Trustee
Bombardier Receivables Master Trust I
AMENDMENT NUMBER 2
Dated as of October 19, 1999
to
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 1994
================================================================================
<PAGE>
Amendment Number 2 dated as of October 19, 1999 (this "Amendment") to the
Pooling and Servicing Agreement dated as of January 1, 1994, as amended by
Amendment Number 1 dated as of January 1, 1997 (as amended by Amendment Number
1, the "Agreement"), each among Bombardier Credit Receivables Corporation (the
"Depositor"), a Delaware corporation, as Depositor, Bombardier Capital Inc.
("BCI"), a Massachusetts corporation, as Servicer, and Bankers Trust Company, a
New York banking corporation, as Trustee.
WHEREAS, Section 13.01 of the Agreement provides that, under the
circumstances and subject to the conditions set forth therein, the Agreement may
be amended from time to time and, in accordance therewith, by the execution and
delivery of this Amendment, the parties hereby amend the Agreement to the extent
and on the terms set forth in this Amendment.
WHEREAS, the Depositor and BCI have entered into a Series 1997-1 Supplement
dated as of January 1, 1997 among the Depositor, BCI and Bankers Trust Company,
as Trustee (the "Series 1997-1 Supplement");
WHEREAS, the Depositor and BCI have entered into a Series 1996-1 Supplement
dated as of May 14, 1996 among the Depositor, BCI and Bankers Trust Company, as
Trustee (as amended and restated on April 16, 1997 and as thereafter amended,
the "Series 1996-1 Supplement");
WHEREAS, the Depositor and BCI have entered into a Series 1997-2 Supplement
dated as of December 10, 1997 among the Depositor, BCI and Bankers Trust
Company, as Trustee (as amended, the "Series 1997-2 Supplement"); and
WHEREAS, (i) with respect to the Series 1997-1 Supplement, an opinion of
counsel for the Depositor has been delivered to the Trustee, (ii) with respect
to the Series 1996-1 Supplement, the Administrative Agent (as defined therein)
has consented to this Amendment, and (iii) with respect to the Series 1997-2
Supplement, the Administrative Agent (as defined therein) has consented to this
Amendment.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and for the benefit of
the Certificateholders and the other Beneficiaries to the extent provided
herein:
ARTICLE I
Definitions
SECTION 1.01. Cross Reference to Definitions in Agreement. Capitalized
1
<PAGE>
terms used in this Amendment and not defined herein or amended by the terms of
this Amendment shall have the meaning assigned to such terms in the Agreement.
SECTION 1.02. Terms Confined to this Amendment. Whenever used in this
Amendment, the following words shall have the following meanings:
"Amendment" shall mean this Amendment Number 2 dated as of October 19, 1999
to the Agreement, as such Amendment Number 2 may be modified, amended and
supplemented hereafter.
"Series 1997-1 Certificates" shall mean those Certificates issued pursuant
to the Supplement to the Agreement designated as the Series 1997-1 Supplement
dated as of January 1, 1997, as modified, amended and supplemented from time to
time.
"Series 1997-1 Final Payment Date" shall mean the date on which the full
amount of the principal amount of the Series 1997-1 Certificates and all
interest accrued thereon have been paid in full.
ARTICLE II
Amendments to Definitions
SECTION 2.01. As of the Series 1997-1 Final Payment Date, the definition of
"Defaulted Receivables" shall be amended to read as follows:
"Defaulted Receivables" shall mean, for any Collection Period, without
duplication, (a) all Receivables (other than Receivables that were designated as
Ineligible Receivables at the time of transfer to the Trust) in an Account which
are charged off by the Servicer as uncollectible in respect of the immediately
preceding Collection Period, (b) all Receivables that have been SAU for more
than 90 days, and (c) all Receivables which were Eligible Receivables when
transferred to the Trust on the initial Closing Date or the related Addition
Date or on their respective Transfer Date, which arose in an Account that
thereafter became an Ineligible Account and which were not Eligible Receivables
for any six consecutive Distribution Dates (inclusive of the Distribution Date
on which such determination is being made) after such Account became an
Ineligible Account. Receivables will not be Defaulted Receivables merely because
they become Ineligible Receivables.
ARTICLE III
Miscellaneous
SECTION 3.01. Counterparts. This Amendment may be executed in two or
2
<PAGE>
more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
SECTION 3.02. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation or any
provision hereof.
SECTION 3.03. Agreement in Full Force and Effect as Amended. Except as
specifically amended or waived hereby, all of the terms and conditions of the
Agreement shall remain in full force and effect. All references to the Agreement
in any other document or instrument shall be deemed to mean such Agreement as
amended by this Amendment. This Amendment shall not constitute a novation of the
Agreement, but shall constitute an amendment thereof. The parties hereto agree
to be bound by the terms and obligations of the Agreement, as amended by this
Amendment, as though the terms and obligations of the Agreement were set forth
herein.
SECTION 3.04. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS.
3
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have caused
this Amendment to be duly executed by their respective officers as of the day
and year specified on the signature page hereof.
BOMBARDIER CREDIT RECEIVABLES
CORPORATION, Depositor
By: /s/ James Dolan
-----------------------------------
Name: James Dolan
Title: Treasurer
By: /s/ Jean O'Neill
-----------------------------------
Name: Jean O'Neill
Title: Secretary
BOMBARDIER CAPITAL INC., Servicer
By: /s/ James Dolan
-----------------------------------
Name: James Dolan
Title: Treasurer
By: /s/ Jean O'Neill
-----------------------------------
Name: Jean O'Neill
Title: Secretary
BANKERS TRUST COMPANY, Trustee
By: /s/ Franco B. Talavera
-----------------------------------
Name: Franco B. Talavera
Title: Assistant Vice President
4
<PAGE>
Consented to by:
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Administrative Agent as
defined in the Series 1996-1
Supplement, and as attorney-in-fact for
the Delaware Funding Corporation as APA
Purchaser under that Asset Purchase
Agreement dated as of May 14, 1996, as
amended
By: /s/ Janine D. Marsini
-----------------------------------
Name: Janine D. Marsini
Title: Vice President
Consented to by:
ABN AMRO BANK N.V., as Administrative
Agent
By: /s/ Therese M. Grenley
-----------------------------------
Name: Therese M. Grenley
Title: Vice President
Consented to by:
BOMBARDIER CREDIT RECEIVABLES
CORPORATION, as holder of the Variable
Funding Certificate
By: /s/ James Dolan
-----------------------------------
Name: James Dolan
Title: Treasurer
By: Jean O'Neill
-----------------------------------
Name: Jean O'Neill
Title: Secretary
5
<PAGE>
EXHIBIT 4.4
EXECUTION COPY
================================================================================
BOMBARDIER CREDIT RECEIVABLES CORPORATION
Depositor
BOMBARDIER CAPITAL INC.
Servicer
and
BANKERS TRUST COMPANY
Trustee
Bombardier Receivables Master Trust I
AMENDMENT NUMBER 3
Dated as of October 19, 1999
to
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 1994
================================================================================
<PAGE>
Amendment Number 3 dated as of October 19, 1999 (this "Amendment") to the
Pooling and Servicing Agreement dated as of January 1, 1994, as amended by
Amendment Number 1 dated as of January 1, 1997 and by Amendment Number 2 dated
as of October 19, 1999 (as amended by Amendment Number 1 and Amendment Number 2,
the "Agreement"), each among Bombardier Credit Receivables Corporation, a
Delaware corporation, as Depositor, Bombardier Capital Inc. ("BCI"), a
Massachusetts corporation, as Servicer, and Bankers Trust Company, a New York
banking corporation, as Trustee (the "Trustee").
WHEREAS, as set forth in the definition "Eligible Receivables" such
definition may be amended without complying with the terms of Section 13.01 of
the Agreement if (i) BCI delivers to the Trustee a certificate of an authorized
officer (the "Officer's Certificate") stating that, in the reasonable belief of
BCI, such amendment will not, at the date of such amendment adversely affect, in
a material way, the interest of the Certificateholders and (ii) the Rating
Agency condition is satisfied.
WHEREAS, (i) the Officer's Certificate has been delivered and evidence
thereof is attached to this Amendment and (ii) the Rating Agency condition has
been satisfied and evidence thereof is attached to this Amendment.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and for the benefit of
the Certificateholders and the other Beneficiaries to the extent provided
herein:
ARTICLE I
Definitions
SECTION 1.01. Cross Reference to Definitions in Agreement. Capitalized
terms used in this Amendment and not defined herein or amended by the terms of
this Amendment shall have the meaning assigned to such terms in the Agreement.
SECTION 1.02. Terms Confined to this Amendment. Whenever used in this
Amendment, the following words shall have the following meanings:
"Amendment" shall mean this Amendment Number 3 dated as of October 19, 1999
to the Agreement, as such Amendment Number 3 may be modified, amended and
supplemented hereafter.
ARTICLE II
Amendments to Definitions
1
<PAGE>
SECTION 2.01. As of October 19, 1999 the definition of "Eligible
Receivable" shall be amended to delete the following:
that "Eligible Receivables" shall not include any Domestic Inventory
Receivables that have not been paid in full within 491 days following the
origination thereof, subject, however, to the limitation that, for the period
from January 23, 1997 through May 31, 1998, with respect to Domestic Inventory
Receivables included in the Pool Balance on January 23, 1997, no more than 10%
of the aggregate principal balance of such Domestic Inventory Receivables will
be excluded from Eligible Receivables pursuant to this proviso, and subject
further to the limitation that, with respect to each Origination Period
commencing on or after June 1, 1998, no more than 10% of the aggregate principal
balance of Domestic Inventory Receivables originated and transferred to the
Trust during the four month period commencing 16 months prior to each
Origination Period will be excluded from Eligible Receivables pursuant to this
proviso;
provided further,
ARTICLE III
Miscellaneous
SECTION 3.01. Counterparts. This Amendment may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
SECTION 3.02. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation or any
provision hereof.
SECTION 3.03. Agreement in Full Force and Effect as Amended. Except as
specifically amended or waived hereby, all of the terms and conditions of the
Agreement shall remain in full force and effect. All references to the Agreement
in any other document or instrument shall be deemed to mean such Agreement as
amended by this Amendment. This Amendment shall not constitute a novation of the
Agreement, but shall constitute an amendment thereof. The parties hereto agree
to be bound by the terms and obligations of the Agreement, as amended by this
Amendment, as though the terms and obligations of the Agreement were set forth
herein.
SECTION 3.04. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS.
2
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have caused
this Amendment to be duly executed by their respective officers as of the day
and year specified on the signature page hereof.
BOMBARDIER CREDIT RECEIVABLES
CORPORATION, Depositor
By: /s/ James Dolan
----------------------------------
Name: James Dolan
Title: Treasurer
By: /s/ Jean O'Neill
----------------------------------
Name: Jean O'Neill
Title: Secretary
BOMBARDIER CAPITAL INC., Servicer
By: /s/ James Dolan
----------------------------------
Name: James Dolan
Title: Treasurer
By: /s/ Jean O'Neill
----------------------------------
Name: Jean O'Neill
Title: Secretary
BANKERS TRUST COMPANY, Trustee
By: /s/ Franco B. Talavera
----------------------------------
Name: Franco B. Talavera
Title: Assistant Vice President
3
<PAGE>
Consented to by:
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Administrative Agent under
that Series 1996-1 Supplement dated as
of May 14, 1996, among the Depositor,
BCI and the Trustee as amended and
restated on April 16, 1997 and as
thereafter amended and as
attorney-in-fact for the Delaware
Funding Corporation as APA Purchaser
under that Asset Purchase Agreement
dated May 14, 1996 as amended
By: /s/ Janine D. Marsini
----------------------------------
Name: Janine D. Marsini
Title: Vice President
Consented to by:
ABN AMRO BANK N.V., as Administrative
Agent
By: /s/ Therese M. Grenley
----------------------------------
Name: Therese M. Grenley
Title: Vice President
Consented to by:
BOMBARDIER CREDIT RECEIVABLES
CORPORATION, as holder of the Variable
Funding Certificate
By: /s/ James Dolan
----------------------------------
Name: James Dolan
Title: Treasurer
By: /s/ Jean O'Neill
----------------------------------
Name: Jean O'Neill
Title: Secretary
4
