<PAGE> 1
PROSPECTUS SUPPLEMENT
- ----------------------------------
(TO PROSPECTUS DATED SEPTEMBER 10, 1996)
$850,000,000
CASE EQUIPMENT LOAN TRUST 1996-B
$125,000,000 CLASS A-1 5.5625% ASSET BACKED NOTES
$362,000,000 CLASS A-2 6.25% ASSET BACKED NOTES
$329,000,000 CLASS A-3 6.65% ASSET BACKED NOTES
$34,000,000 6.95% ASSET BACKED CERTIFICATES
CASE RECEIVABLES II INC., SELLER
CASE CREDIT CORPORATION, SERVICER
------------------------
The Case Equipment Loan Trust 1996-B (the "Trust") will be formed pursuant
to a Trust Agreement, to be dated as of September 1, 1996, between Case
Receivables II Inc. (the "Seller") and Chase Manhattan Bank Delaware, as
Trustee, and will issue the Class A-1 5.5625% Asset Backed Notes (the "A-1
Notes"), the Class A-2 6.25% Asset Backed Notes (the "A-2 Notes") and the Class
A-3 6.65% Asset Backed Notes (the "A-3 Notes"; together with the A-1 Notes and
the A-2 Notes, the "Offered Notes") offered hereby. The Offered Notes will be
issued pursuant to an Indenture, to be dated as of September 1, 1996 (the
"Indenture"), between the Trust and Harris Trust and Savings Bank, as Indenture
Trustee. The Trust will also issue the 6.95% Asset Backed Certificates (the
"Certificates" and, together with the Offered Notes, the "Offered Securities")
offered hereby. The Trust will also issue $25,000,000 Class B Asset Backed Notes
(the "Initial Class B Notes"), and, in the circumstances described herein,
during the Funding Period the Trust may also issue up to $75,000,000 additional
Class B Asset Backed Notes (the "Additional Class B Notes"; the Initial Class B
Notes and the Additional Class B Notes are collectively called the "Class B
Notes"; and the Class B Notes and the Offered Notes are collectively called the
"Notes"). The Class B Notes are not offered hereby and do not constitute "Notes"
for purposes of the descriptions of the "Notes" in (and as defined in) the
Prospectus to which this Prospectus Supplement is attached. The assets of the
Trust will include a pool of fixed rate retail installment sale contracts (the
"Receivables"), secured by security interests in the agricultural and
construction equipment financed thereby, and certain monies due or received
thereunder on or after September 1, 1996 and monies on deposit in a trust
account (the "Pre-Funding Account").
(continued on following page)
------------------------
PROSPECTIVE INVESTORS SHOULD CONSIDER THE FACTORS SET FORTH UNDER "RISK
FACTORS" HEREIN ON PAGE S-16 AND ON PAGE 9 OF THE ACCOMPANYING PROSPECTUS.
THE OFFERED NOTES REPRESENT OBLIGATIONS OF, AND THE CERTIFICATES REPRESENT
BENEFICIAL INTERESTS IN, THE TRUST ONLY AND DO NOT REPRESENT OBLIGATIONS
OF OR INTERESTS IN THE SELLER, THE SERVICER OR ANY OF THEIR
RESPECTIVE AFFILIATES. NONE OF THE OFFERED NOTES, THE
CERTIFICATES OR THE RECEIVABLES ARE INSURED OR GUARANTEED BY
ANY GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT THE SELLER(1)(2)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Per A-1 Note.................................. 100% 0.125% 99.875%
- -------------------------------------------------------------------------------------------------------------
Per A-2 Note.................................. 99.96875% 0.225% 99.74375%
- -------------------------------------------------------------------------------------------------------------
Per A-3 Note.................................. 99.90625% 0.23% 99.67625%
- -------------------------------------------------------------------------------------------------------------
Per Certificate............................... 99.953125% 0.5% 99.453125%
- -------------------------------------------------------------------------------------------------------------
Total......................................... $849,562,500 $1,897,450 $847,665,050
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from September 19, 1996.
(2) Before deducting expenses, estimated to be $600,000.
------------------------
The Offered Notes and the Certificates are offered by the Underwriters when, as
and if issued and accepted by the Underwriters and subject to their right to
reject orders in whole or in part. It is expected that delivery of the Offered
Notes and the Certificates will be made in book-entry form only through the Same
Day Funds Settlement System of The Depository Trust Company on or about
September 19, 1996.
------------------------
Underwriters of the Offered Notes
MERRILL LYNCH & CO.
BA SECURITIES, INC.
CS FIRST BOSTON
FIRST CHICAGO CAPITAL MARKETS, INC.
J.P. MORGAN & CO.
NATIONSBANC CAPITAL MARKETS,
INC.
Underwriters of the Certificates
MERRILL LYNCH & CO. CS FIRST BOSTON
------------------------
The date of this Prospectus Supplement is September 12, 1996
<PAGE> 2
(continued from preceding page)
Additional fixed rate retail installment contracts (the "Subsequent
Receivables") will be purchased by the Trust from the Seller from time to time
on or before the March 1997 Payment Date with funds on deposit in the Pre-
Funding Account and the proceeds from the issuance of any Additional Class B
Notes. The Offered Notes (together with the Class B Notes) will be secured by
the assets of the Trust pursuant to the Indenture.
Interest on the Offered Notes will accrue at the respective fixed per annum
interest rate specified above for each class of Offered Notes (together with the
Class B Notes, each a "Class"). Interest on the Offered Notes will be payable on
the fifteenth day of each calendar month or, if such day is not a business day,
on the next business day (each, a "Payment Date"), commencing October 15, 1996.
Principal of the Offered Notes will be payable on each Payment Date to the
extent described herein. No principal will be paid on the A-2 Notes until the
A-1 Notes have been paid in full. No principal will be paid on the A-3 Notes or
the Class B Notes until the A-2 Notes have been paid in full. Distributions of
principal and interest on the Class B Notes will be subordinated in priority to
payments due on the Offered Notes to the extent described herein.
The Certificates represent fractional undivided interests in the Trust.
Interest, to the extent of the Pass-Through Rate of 6.95% per annum, will be
distributed to the Certificateholders on each Payment Date. Principal, to the
extent described herein, will be distributed to the Certificateholders on each
Payment Date on or following the Payment Date on which the A-2 Notes are paid in
full, except that if at any time the balance on deposit in the Spread Account is
less than the Spread Account Floor, then no principal will be distributed to the
Certificateholders until the A-3 Notes and the Class B Notes have been paid in
full. Distributions of principal and interest on the Certificates will be
subordinated in priority to payments due on the Offered Notes and the Class B
Notes to the extent described herein.
The final scheduled Payment Date for the A-1 Notes will be the September
1997 Payment Date, and the final scheduled Payment Date for the A-2 Notes, the
A-3 Notes and the Certificates (as well as the Class B Notes) will be the
September 2003 Payment Date. However, payment in full of any Class of the Notes
or of the Certificates could occur earlier than such date as described herein.
In addition, the A-3 Notes will be subject to redemption and the Certificates
will be subject to prepayment on any Payment Date after the A-1 Notes and the
A-2 Notes have been repaid in full and the Servicer exercises its option to
purchase the Receivables when the aggregate principal balance of the Receivables
has declined to 10% or less of the initial aggregate principal balance of the
Receivables purchased by the Trust. Any funds remaining in the Pre-Funding
Account at the end of the Funding Period will be applied towards the mandatory
redemption of (a) the A-1 Notes and (b) if the A-1 Notes are redeemed in full,
the A-2 Notes, in each case at a premium to the extent described herein. In the
unlikely event that the A-2 Notes are redeemed in full and there are any
remaining funds in the Pre-Funding Account, such funds will be applied towards
the redemption of the A-3 Notes and the Class B Notes and prepayment of the
Certificates (in the same proportions that would apply if such remaining funds
were a part of the Principal Distribution Amount), at a premium.
------------------------
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION ABOUT THE
OFFERING OF THE OFFERED NOTES AND THE CERTIFICATES. ADDITIONAL INFORMATION IS
CONTAINED IN THE PROSPECTUS, AND PROSPECTIVE INVESTORS ARE URGED TO READ BOTH
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF THE OFFERED
NOTES OR THE CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER HAS
RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. TO THE EXTENT ANY
STATEMENTS IN THIS PROSPECTUS SUPPLEMENT CONFLICT WITH STATEMENTS IN THE
PROSPECTUS, THE STATEMENTS IN THIS PROSPECTUS SUPPLEMENT SHALL CONTROL.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICES OF THE OFFERED NOTES
AND THE CERTIFICATES AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
Upon receipt of a request by an investor, or his or her representative,
within the period during which there is a prospectus delivery obligation, the
Underwriters will transmit or cause to be transmitted promptly, without charge,
a paper copy of this Prospectus Supplement and a Prospectus or this Prospectus
Supplement and a Prospectus encoded in an electronic format.
REPORTS TO OFFERED SECURITYHOLDERS
Unless and until Definitive Notes or Definitive Certificates are issued,
monthly unaudited reports containing information concerning the Receivables will
be prepared by the Servicer and sent on behalf of the Trust only to Cede & Co.
("Cede"), as nominee of The Depository Trust Company ("DTC") and registered
holder of the Offered Notes and the Certificates. See "Certain Information
Regarding the Offered Securities--Book-Entry Registration" and "--Reports to
Offered Securityholders" in the accompanying Prospectus (the "Prospectus"). Such
reports will not constitute financial statements prepared in accordance with
generally accepted accounting principles. The Seller, as originator of the
Trust, will file with the Securities and Exchange Commission (the "Commission")
such periodic reports as are required under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and regulations of the Commission
thereunder.
S-2
<PAGE> 3
SUMMARY OF TERMS
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere herein and in the Prospectus. Certain
capitalized terms used herein are defined elsewhere in this Prospectus
Supplement on the pages indicated in the "Index of Terms" or, to the extent not
defined herein, have the meanings assigned to such terms in the Prospectus.
Issuer..................... Case Equipment Loan Trust 1996-B (the "Trust" or
the "Issuer"), a Delaware business trust to be
formed by the Seller and the Trustee pursuant to
the Trust Agreement, to be dated as of September 1,
1996 (the "Trust Agreement") between the Seller and
the Trustee, acting thereunder not in its
individual capacity but solely as Trustee.
Seller..................... Case Receivables II Inc. (the "Seller"), a Delaware
corporation and a wholly-owned subsidiary of Case
Credit Corporation.
Servicer................... Case Credit Corporation, a Delaware corporation
(the "Servicer" or "Case Credit").
Indenture Trustee.......... Harris Trust and Savings Bank, as indenture trustee
under the Indenture (the "Indenture Trustee").
Trustee.................... Chase Manhattan Bank Delaware, as trustee under the
Trust Agreement (the "Trustee").
The Offered Notes.......... Class A-1 5.5625% Asset Backed Notes (the "A-1
Notes") in the aggregate principal amount of
$125,000,000.
Class A-2 6.25% Asset Backed Notes (the "A-2
Notes") in the aggregate principal amount of
$362,000,000.
Class A-3 6.65% Asset Backed Notes (the "A-3
Notes"; together with the A-1 Notes and A-2 Notes,
the "Offered Notes") in the aggregate principal
amount of $329,000,000.
The Offered Notes will be issued pursuant to an
Indenture, to be dated as of September 1, 1996 (the
"Indenture"), between the Issuer and the Indenture
Trustee and will be secured by the assets of the
Trust pursuant to the Indenture. Only the Offered
Notes (and not the Class B Notes) constitute
"Notes" for purposes of the descriptions of the
"Notes" in (and as defined in) the Prospectus to
which this Prospectus Supplement is attached.
The Certificates........... 6.95% Asset Backed Certificates (the
"Certificates") in the aggregate principal amount
of $34,000,000. The Seller will purchase $340,000
principal amount of the Certificates. The
Certificates represent fractional undivided
interests in the Trust and will be issued pursuant
to the Trust Agreement.
The Trust.................. The Trust will be established under the laws of the
State of Delaware by the Trust Agreement. The
activities of the Trust will be limited by the
terms of the Trust Agreement to purchasing, owning
and managing the Receivables and other activities
related thereto. The Trust property will include
(i) the Receivables and all monies (including
accrued interest) paid thereunder on or after the
applicable Cutoff Date, (ii) the Certificate
Distribution Account, the Collection Account, the
Negative Carry Account, the Note Distribution
Account, the Pre-Funding Account and the Spread
Account, (iii) security interests in the Financed
Equipment, (iv) the rights to proceeds from certain
insurance policies
S-3
<PAGE> 4
covering the Financed Equipment or the Obligors,
(v) the interest of the Seller in any proceeds from
recourse to Dealers on Receivables (but excluding
any amounts contained in Dealers' reserve
accounts), and (vi) any property acquired by the
Trust that secured a Receivable. In addition to the
Offered Securities, the Trust will also issue Class
B Asset Backed Notes in the aggregate principal
amount of $25,000,000 (the "Initial Class B
Notes"), and, in the circumstances described
herein, during the Funding Period the Trust may
also issue additional Class B Asset Backed Notes in
the aggregate principal amount of up to $75,000,000
(the "Additional Class B Notes"; the Initial Class
B Notes and the Additional Class B Notes are
collectively called the "Class B Notes"; and the
Class B Notes and the Offered Notes are
collectively called the "Notes"). The sum of the
initial principal amounts of the Initial Class B
Notes and Additional Class B Notes will not exceed
$100,000,000. The Class B Notes are not offered
hereby and do not constitute "Notes" for purposes
of the descriptions of the "Notes" in (and as
defined in) the Prospectus to which this Prospectus
Supplement is attached.
The Receivables............ The Receivables consist of retail installment sale
contracts ("Contracts") secured by new or used
agricultural or construction equipment, including
rights to receive certain payments made with
respect to such Receivables, and security interests
in the equipment financed thereby (the "Financed
Equipment"), and the proceeds thereof. On September
19, 1996 (the "Closing Date"), the Seller will
purchase Contracts (the "Purchased Contracts")
having an aggregate Contract Value (calculated for
the Standard Precomputed Receivables using a
discount rate equal to the APR of each such
Standard Precomputed Receivable and for the
Precomputed Simple Rebate Receivables using the
current balance on the Servicer's records) of
approximately $106,497,054 as of August 31, 1996
(the "Initial Cutoff Date"), from Case Credit
pursuant to a Purchase Agreement, to be dated as of
September 1, 1996 (the "Purchase Agreement"),
between Case Credit and the Seller. As of the
Initial Cutoff Date, the Seller owned Contracts
purchased from Case Credit pursuant to the
Liquidity Receivables Purchase Agreement (the
"Owned Contracts," and, together with the Purchased
Contracts, the "Initial Receivables") having an
aggregate Contract Value (calculated for the
Standard Precomputed Receivables using a discount
rate equal to the APR of each such Standard
Precomputed Receivable and for the Precomputed
Simple Rebate Receivables using the current balance
on the Servicer's records) of approximately
$359,628,465, which will be sold to the Trust. The
Seller will sell the Initial Receivables to the
Trust pursuant to a Sale and Servicing Agreement,
to be dated as of September 1, 1996 (the "Sale and
Servicing Agreement"), among the Seller, the
Servicer and the Trust. On and following the
Closing Date, pursuant to the Sale and Servicing
Agreement, the Seller will be obligated, subject
only to the availability thereof, to sell, and the
Trust will be obligated to purchase, subject to the
satisfaction of certain conditions set forth
therein, Subsequent Receivables from time to time
during the Funding Period having an aggregate
Contract Value equal to approximately $407,574,714,
such amount being equal to the amount on deposit in
the Pre-Funding Account on the Closing Date (the
"Initial Pre-Funded
S-4
<PAGE> 5
Amount"). In addition, at the Seller's option, the
Seller will have the right to sell, and the Trust
will be obligated to purchase, subject to the
satisfaction of certain conditions set forth in the
Sale and Servicing Agreement, additional Subsequent
Receivables from time to time during the Funding
Period having an aggregate Contract Value of up to
$75,000,000, the maximum permitted aggregate
original principal balance of the Additional Class
B Notes. The Seller will designate as a cutoff date
(each, a "Subsequent Cutoff Date") the date as of
which particular Subsequent Receivables are
conveyed to the Trust. It is expected that
Subsequent Receivables will be conveyed to the
Trust monthly on dates specified by the Seller
(each date on which Subsequent Receivables are
conveyed being referred to as a "Subsequent
Transfer Date") occurring during the Funding
Period. The "Subsequent Receivables" together with
the "Initial Receivables" are referred to herein as
the "Receivables". As used herein, the "Funding
Period" means the period from and including the
Closing Date until the earliest of (a) a date
selected by the Seller, which may not be earlier
than the Determination Date on which the amount on
deposit in the Pre-Funding Account (after giving
effect to any transfers therefrom in connection
with the transfer of Subsequent Receivables to the
Issuer on or before such Determination Date) is
less than $100,000, (b) the occurrence of an Event
of Default under the Indenture or a Servicer
Default under the Sale and Servicing Agreement, (c)
the occurrence of certain events of insolvency with
respect to the Seller or the Servicer or (d) the
close of business on the March 1997 Payment Date.
See "Description of the Transfer and Servicing
Agreement--Sale and Assignment of Initial
Receivables and Subsequent Receivables."
The Receivables arose and will arise from financing
provided in connection with retail sales by dealers
(the "Dealers") of new or used agricultural and
construction equipment and were purchased by Case
Credit pursuant to agreements with the Dealers or
were originated directly by retail outlets owned by
Case Corporation ("Case") and immediately assigned
to Case Credit. The Owned Contracts were sold on a
monthly basis by Case Credit to the Seller pursuant
to the Liquidity Receivables Purchase Agreement.
The Initial Receivables have been selected, and the
Subsequent Receivables will be selected, from the
portfolio of Contracts owned by the Seller based on
the criteria specified in the Sale and Servicing
Agreement. See "The Receivables Pool" below and
"The Receivables Pools" in the Prospectus. Each
Initial Receivable is a Precomputed Receivable,
including some Precomputed Simple Rebate
Receivables. As of the Initial Cutoff Date, the
weighted average annual percentage rate (the "APR")
of the Initial Receivables was approximately 8.31%,
the weighted average remaining maturity (i.e., the
period from but excluding the Initial Cutoff Date
to and including each Initial Receivable's maturity
date) of the Initial Receivables was approximately
45.12 months and the weighted average original
maturity of the Initial Receivables was
approximately 47.59 months. No Initial Receivable
has, and no Subsequent Receivable will have, a
scheduled maturity later than the date that is six
months prior to the Final Scheduled Maturity Date.
Subsequent Receivables may be originated by the
Dealers or by the retail outlets owned by Case at a
later date using credit criteria different from
S-5
<PAGE> 6
those that were applied to the Initial Receivables
and may be of a different credit quality and
seasoning. In addition, following the transfer of
Subsequent Receivables to the Trust, the
characteristics of the entire pool of Receivables
included in the Trust may vary from those of the
Initial Receivables. See "Risk Factors--The
Receivables and the Pre-Funding Account" and "The
Receivables Pool."
The "Pool Balance" at any time represents the sum
of the aggregate Contract Values of the Receivables
at the beginning of a Collection Period, after
giving effect to all payments received from
Obligors and Purchase Amounts to be remitted by the
Servicer or the Seller, as the case may be, with
respect to the preceding Collection Period and all
losses realized on Receivables liquidated during
such preceding Collection Period. The "Contract
Value" of the Receivables means generally, with
respect to any day (including the Initial Cutoff
Date), the present value of the scheduled and
unpaid payments on the Receivables discounted
monthly at an annual rate equal to (a) in the case
of the Initial Receivables, the Initial Cutoff Date
APR and (b) in the case of Subsequent Receivables,
the applicable Subsequent Cutoff Date APR. In
effect, the Contract Value of the Receivables is
generally equivalent to the aggregate principal
balance of the Receivables.
Terms of the Offered Notes:
A. Interest Payments....... The A-1 Notes will bear interest at the rate of
5.5625% per annum (the "A-1 Note Rate"); the A-2
Notes will bear interest at the rate of 6.25% per
annum (the "A-2 Note Rate"); and the A-3 Notes will
bear interest at the rate of 6.65% per annum (the
"A-3 Note Rate") (in each case calculated on the
basis of a 360-day year of twelve 30-day months).
Interest on the outstanding principal amount of the
Offered Notes will accrue from the Closing Date, or
from the most recent Payment Date on which interest
has been paid, to but excluding the following
Payment Date and will be payable on the fifteenth
day of each calendar month or, if any such date is
not a business day, on the next business day (each,
a "Payment Date"), commencing October 15, 1996 to
the holders of record of the A-1 Notes (the "A-1
Noteholders"), the holders of record of the A-2
Notes (the "A-2 Noteholders") and the holders of
record of the A-3 Notes (the "A-3 Noteholders";
together with the A-1 Noteholders and the A-2
Noteholders, the "Offered Noteholders") as of the
fourteenth day of the calendar month in which such
Payment Date will occur or, if Definitive Notes are
issued, the close of business on the last day of
the calendar month preceding the month of such
Payment Date, whether or not such day is a Business
Day (the "Record Date").
Interest payments on the Offered Notes will
generally be funded from the Total Distribution
Amount remaining after the payment of the
Administration Fee and (if neither Case Credit nor
an affiliate of Case Credit is the Servicer) the
Servicing Fee, and from amounts on deposit in the
Spread Account. If the amount of interest on the
Offered Notes payable on any Payment Date exceeds
the amounts available from these sources, the A-1
Noteholders, A-2 Noteholders and A-3 Noteholders
will receive their ratable share (based upon the
total amount of interest due to each of them) of
the amount available to be distributed in respect
of interest on the Offered Notes.
S-6
<PAGE> 7
B. Principal Payments...... Principal of the Offered Notes will be payable on
each Payment Date in an amount calculated as a
percentage of the Principal Distribution Amount for
such Payment Date to the extent of funds available
therefor as described herein. The Principal
Distribution Amount for a Payment Date will be
based upon the decrease in the sum of the Contract
Value of the Receivables (including the decrease
resulting from losses in respect of principal of
the Receivables) and the amount on deposit in the
Pre-Funding Account during the related Collection
Period. "Collection Period" means, with respect to
any Payment Date, the period from and including the
end of the previous Collection Period (or, if for
the first Payment Date, the day after the Initial
Cutoff Date) to but excluding the sixth day of the
calendar month in which the Payment Date occurs.
See "Description of the Transfer and Servicing
Agreements --Distributions."
On each Payment Date before the Payment Date on
which the A-1 Notes have been paid in full,
principal of the A-1 Notes will be payable in an
amount equal to 100% of the Principal Distribution
Amount. On each Payment Date on and after the
Payment Date on which the A-1 Notes have been paid
(or provided for) in full, principal of the A-2
Notes will be payable, until the A-2 Notes have
been paid in full, in an amount equal to 100% of
the Principal Distribution Amount (less any portion
of the Principal Distribution Amount applied on
such Payment Date to reduce the outstanding
principal amount of the A-1 Notes to zero). On each
Payment Date on and after the Payment Date on which
the A-2 Notes have been paid (or provided for) in
full (the "A-2 Repayment Date"), principal of the
A-3 Notes will be payable, until the A-3 Notes have
been paid in full, in an amount equal to the A-3
Noteholders' Principal Distributable Amount for
such Payment Date. The A-3 Noteholders' Principal
Distributable Amount generally will be based on the
A-3 Percentage of the Noteholders' Principal
Distribution Amount. The A-3 Percentage will
generally equal the percentage equivalent of a
fraction the numerator of which is the outstanding
principal amount of the A-3 Notes and the
denominator of which is the aggregate outstanding
principal amount of the A-3 Notes and the Class B
Notes, as determined on the A-2 Repayment Date. The
Noteholders' Principal Distribution Amount for each
Payment Date on and after the A-2 Repayment Date
will generally equal the Noteholders' Percentage
(i.e., 96%) of the Principal Distribution Amount
for that Payment Date. However, if at any time the
balance on deposit in the Spread Account is less
than the Spread Account Floor, then (a) the A-3
Percentage will increase to 100% until the A-3
Notes have been paid in full and (b) the
Noteholders' Principal Distribution Amount will
increase to 100% of the Principal Distribution
Amount until the A-3 Notes and the Class B Notes
have been paid in full. The effect of these changes
would be to apply the entire Principal Distribution
Amount on each Payment Date: first, to the
repayment of the A-3 Notes until they have been
paid in full; second, to the repayment of the Class
B Notes until they have been paid in full; and,
third, to the repayment of the Certificates. See
"Description of the Transfer and Servicing
Agreements--Distributions."
In addition, on or after the July 1997 Payment
Date, certain amounts from the Spread Account may
be paid to the Offered Noteholders (as well as the
Class B Noteholders) as an accelerated payment of
principal,
S-7
<PAGE> 8
any such accelerated payment to be made in the same
manner and sequence as other principal payments on
the Notes. See "Description of the Transfer and
Servicing Agreements--Spread Account."
The outstanding principal amount, if any, of the
A-1 Notes will be payable in full on the September
1997 Payment Date (the "A-1 Note Final Scheduled
Maturity Date"), and the outstanding principal
amount, if any, of the A-2 Notes and the A-3 Notes
will be payable in full on the September 2003
Payment Date (the "Final Scheduled Maturity Date"),
in each case from funds available therefor. After
an Event of Default and acceleration of the Offered
Notes (and, if any Offered Notes remain
outstanding, on and after the Final Scheduled
Maturity Date), principal payments will be made
ratably to all Offered Noteholders. Principal
payments on the Offered Notes will generally be
derived from the Total Distribution Amount
remaining after the payment of the Administration
Fee, the Servicing Fee (if neither Case Credit nor
any of its affiliates is the Servicer) and the
Offered Noteholders' Interest Distributable Amount
and from amounts on deposit in the Spread Account.
However, if on any Payment Date on which any
Offered Notes are outstanding the amount on deposit
in the Spread Account is less than 1.50% of the
Pool Balance as of the end of the preceding
Collection Period, then funds will be withdrawn
from the Spread Account only to the extent needed
to pay the interest due on the Offered Notes, the
Class B Notes and the Certificates, and no funds
from the Spread Account will be applied on such
Payment Date to pay principal of the Offered Notes,
the Class B Notes or the Certificates. See
"Description of the Transfer and Servicing
Agreements--Distributions" and "--Spread Account."
C. Optional Redemption..... The A-3 Notes will be prepaid in whole, but not in
part, at the A-3 Note Redemption Price on the
Payment Date after the A-1 Notes and the A-2 Notes
have been paid in full on which the Servicer
exercises its option to purchase the Receivables.
The Servicer may purchase the Receivables from the
Trust when the Pool Balance declines to 10% or less
of the Initial Pool Balance. The redemption price
for the A-3 Notes (the "A-3 Note Redemption Price")
will equal the unpaid principal balance of the A-3
Notes, plus accrued and unpaid interest thereon.
The "Initial Pool Balance" will equal the sum of
(i) the Pool Balance as of the Initial Cutoff Date
plus (ii) the aggregate Contract Value of all
Subsequent Receivables sold to the Issuer as of
their respective Subsequent Cutoff Dates.
D. Mandatory Redemption.... On the Payment Date on or immediately following the
last day of the Funding Period, any funds remaining
in the Pre-Funding Account (after giving effect to
the purchase of all Subsequent Receivables,
including any such purchase on such date) will be
applied to redeem the A-1 Notes then outstanding in
whole or in part, and if the A-1 Notes are redeemed
in whole, any such funds remaining will be applied
to redeem the A-2 Notes in whole or in part (each,
a "Mandatory Redemption"). The aggregate principal
amount of the A-1 Notes to be redeemed will equal
the lesser of (a) the remaining Pre-Funded Amount
and (b) the full outstanding principal amount of
the A-1 Notes. The aggregate principal amount of
the A-2 Notes to be redeemed will equal the lesser
of (a) the remaining Pre-Funded Amount, after
giving effect to the
S-8
<PAGE> 9
redemption of A-1 Notes in full, and (b) the full
outstanding principal amount of the A-2 Notes.
In the unlikely event that the A-2 Notes are
redeemed in full and there are any remaining funds
in the Pre-Funding Account, such funds will be
applied towards the redemption of the A-3 Notes,
the Class B Notes and the Certificates (in the same
proportions that would apply if such remaining
funds were a part of the Principal Distribution
Amount).
A limited recourse mandatory prepayment premium
(the "Noteholders' Prepayment Premium") will be
payable by the Trust to the A-1 Noteholders if the
aggregate principal amount of A-1 Notes to be
redeemed pursuant to a Mandatory Redemption exceeds
$100,000 and to the A-2 Noteholders (and the A-3
Noteholders) if any portion of the A-2 Notes (or
the A-3 Notes) is redeemed in a Mandatory
Redemption. The Noteholders' Prepayment Premium, if
any, with respect to the A-1 Notes will equal the
excess, if any, discounted as described below, of
(i) the amount of interest that would have accrued
on the principal amount of the A-1 Notes that is
being redeemed (the "A-1 Note Redemption Amount")
at the A-1 Note Rate during the period commencing
on and including the Payment Date on which the A-1
Note Redemption Amount is required to be
distributed to the A-1 Noteholders to but excluding
March 17, 1997 over (ii) the amount of interest
that would have accrued on the A-1 Note Redemption
Amount over the same period at a per annum rate of
interest equal to the bond equivalent yield to
maturity on the Determination Date preceding such
Payment Date on the 6.625% United States Treasury
Note due March 31, 1997. Such excess will be
discounted on a monthly basis to a present value on
such Payment Date at the applicable yield described
in clause (ii) above. The Noteholders' Prepayment
Premium, if any, with respect to the A-2 Notes and
the A-3 Notes will be calculated in the same
manner, but substituting (w) the principal amount
of the A-2 Notes (or the A-3 Notes) that is being
redeemed for the A-1 Note Redemption Amount, (x)
the A-2 Note Rate (or the A-3 Note Rate) for the
A-1 Note Rate, (y) the date October 31, 1997 (or
June 30, 1999, in the case of the A-3 Notes) for
the date March 17, 1997 and (z) the 5.625% United
States Treasury Note due October 31, 1997 (or the
6.75% United States Treasury Note due June 30,
1999, in the case of the A-3 Notes) for the
reference Treasury Note referred to above.
The Trust's obligation to pay the Noteholders'
Prepayment Premium will be limited to funds that
are received from the Seller under the Sale and
Servicing Agreement as liquidated damages for the
failure to deliver Subsequent Receivables. No other
assets of the Trust will be available for the
purpose of making such payment. If the aggregate
Noteholders' Prepayment Premium exceeds the amount
available, the A-1 Noteholders and A-2 Noteholders
(and, if applicable, the A-3 Noteholders) will
receive their ratable share (based upon the total
amount of Noteholders' Prepayment Premium due to
each of them) of the amount available to be
distributed in respect of the Noteholders'
Prepayment Premium.
S-9
<PAGE> 10
Terms of the Certificates:
A. Pass-Through Rate....... 6.95% per annum, payable monthly at one-twelfth of
the annual rate.
B. Interest................ On each Payment Date, the Trustee will distribute
pro rata to each Person in whose name a Certificate
is registered (the "Certificateholders" and,
together with the Offered Noteholders, the "Offered
Securityholders") as of the Record Date with
respect to such Payment Date interest at the
Pass-Through Rate on the Certificate Balance as of
the last day of the preceding Collection Period
(or, in the case of the First Payment Date, as of
the Closing Date) generally to the extent of funds
available following payment of the Servicing Fee
(if Case Credit or an affiliate of Case Credit is
not the Servicer), the Administration Fee and
distributions in respect of the Offered Notes and
the Class B Notes from the Collection Account and
the Spread Account.
Interest for a Payment Date will accrue from and
including the most recent Payment Date on which
interest has been paid (or, in the case of the
first Payment Date, from the Closing Date) to but
excluding such current Payment Date and will be
calculated on the basis of a 360-day year of twelve
30-day months.
C. Principal............... On each Payment Date on or after the A-2 Repayment
Date, principal of the Certificates will be payable
in an amount generally equal to the
Certificateholders' Principal Distributable Amount
for such Payment Date. Such payment will be made
only to the extent of funds available therefor
following payment of the Servicing Fee (if Case
Credit or an affiliate of Case Credit is not the
Servicer), the Administration Fee and distributions
in respect of interest and principal on the Offered
Notes and the Class B Notes and interest on the
Certificates. The Certificateholders' Principal
Distributable Amount for each Payment Date on and
after the A-2 Repayment Date generally will be
based on the Certificateholders' Percentage (i.e.,
4%) of the Principal Distribution Amount, which for
any Payment Date will be based upon the decrease in
the sum of the Contract Value of the Receivables
(including the decrease resulting from losses in
respect of principal of the Receivables) and the
amount on deposit in the Pre-Funding Account during
the related Collection Period. However, if at any
time the balance on deposit in the Spread Account
is less than the Spread Account Floor, then no
further distributions of principal will be made on
the Certificates until the Notes have been paid in
full. See "Description of the Transfer and
Servicing Agreements--Distributions."
The outstanding principal amount, if any, of the
Certificates will be payable in full on the Final
Scheduled Maturity Date.
D. Optional Purchase....... On any Payment Date on which the Servicer exercises
its option to purchase the Receivables, which can
occur after the Pool Balance declines to 10% or
less of the Initial Pool Balance, the
Certificateholders will receive an amount in
respect of the Certificates equal to the
Certificate Balance together with accrued interest
at the Pass-Through Rate and the Certificates will
be retired. See "Description of the
Certificates--Optional Purchase."
E. Mandatory Repurchase.... The Certificates will be prepaid, in part, on the
Payment Date on or immediately following the last
day of the Funding Period in the unlikely
S-10
<PAGE> 11
event that the remaining Pre-Funded Amount (after
giving effect to the purchase of all Subsequent
Receivables, including any such purchase on such
date) exceeds the aggregate outstanding principal
amount of the A-1 Notes and the A-2 Notes (a
"Mandatory Repurchase"). The portion of the
remaining Pre-Funded Amount applied to prepay the
Certificates will be the same proportion that would
be distributable to the Certificateholders if such
amount were a part of the Principal Distribution
Amount.
A limited recourse mandatory prepayment premium
(the "Certificateholders' Prepayment Premium" and,
together with the Noteholders' Prepayment Premium,
the "Prepayment Premium") will be payable by the
Trust to the Certificateholders if any portion of
the principal amount of the Certificates is
repurchased pursuant to a Mandatory Repurchase. The
Certificateholders' Prepayment Premium will equal
the excess, if any, discounted as described below,
of (i) the amount of interest that would accrue on
the aggregate principal balance of the Certificates
that is being prepaid (the "Certificate Prepayment
Amount") at the Pass-Through Rate during the period
commencing on and including the Payment Date on
which such Certificate Prepayment Amount is
required to be distributed to Certificateholders to
but excluding December 31, 1999 over (ii) the
amount of interest that would have accrued on such
Certificate Prepayment Amount over the same period
at a per annum rate of interest equal to the bond
equivalent yield to maturity on the Determination
Date preceding such Payment Date on the 7.75%
United States Treasury Note due December 31, 1999.
Such excess will be discounted on a monthly basis
to a present value on such Payment Date at the bond
equivalent yield described in clause (ii) above.
The Trust's obligation to pay the
Certificateholders' Prepayment Premium will be
limited to funds that are received from Case Credit
under the Sale and Servicing Agreement as
liquidated damages for the failure to deliver
Subsequent Receivables. No other assets of the
Trust will be available for the purpose of making
such payment.
Pre-Funding Account........ On or prior to the Closing Date, the Pre-Funding
Account will be established as a trust account in
the name of the Indenture Trustee. The amount on
deposit in the Pre-Funding Account (the "Pre-Funded
Amount") will initially equal the Initial
Pre-Funded Amount of $407,574,714, and, during the
Funding Period, will be reduced by the amount
thereof used to purchase Subsequent Receivables in
accordance with the Sale and Servicing Agreement
and the amounts thereof deposited in the Spread
Account in connection with the purchase of such
Subsequent Receivables. The Seller expects that the
Pre-Funded Amount will be reduced to less than
$100,000 by the March 1997 Payment Date. Any
Pre-Funded Amount remaining at the end of the
Funding Period will be payable (a) first, to the
A-1 Noteholders, (b) second, to the A-2 Noteholders
and (c) third (in the unlikely event that the A-2
Notes are repaid in full), to the A-3 Noteholders,
the Class B Noteholders and the Certificateholders
(in the same proportions as would apply to a
distribution of the Principal Distribution Amount)
as described in "Description of the Offered
Notes--Mandatory Redemption" and "Description of
the Certificates--Mandatory Repurchase." Prior to
being used to purchase Subsequent Receivables or
paid to the Noteholders and the Certificateholders,
the Pre-Funded
S-11
<PAGE> 12
Amount will be invested from time to time in
Eligible Investments. See "Description of the
Transfer and Servicing Agreements--Accounts" in the
Prospectus.
Negative Carry Account..... In order to maintain the rating of the Offered
Notes, Class B Notes and Certificates at their
initial levels, the Servicer will establish and
maintain in the name of the Indenture Trustee an
account (the "Negative Carry Account") as a Trust
Account for the benefit of the Offered
Securityholders and the Class B Noteholders. The
Negative Carry Account will be created with an
initial deposit by the Seller of $7,673,654 (the
"Negative Carry Account Initial Deposit"). On each
Payment Date, the Servicer will instruct the
Indenture Trustee to withdraw from the Negative
Carry Account and deposit into the Collection
Account an amount equal to the Negative Carry
Amount for such Collection Period. For each
Collection Period, the "Negative Carry Amount" will
be calculated by the Servicer as the difference (if
positive) between (i) the product of (a) the sum of
the Offered Noteholders' Interest Distributable
Amount, the Class B Noteholders' Interest
Distributable Amount and the Certificateholders'
Interest Distributable Amount multiplied by (b) the
Pre-Funded Percentage minus (ii) the investment
earnings on the Pre-Funded Amount. The "Pre-Funded
Percentage" for each Collection Period is the
percentage derived from the fraction the numerator
of which is the Pre-Funded Amount and the
denominator of which is the sum of the Pool Balance
and the Pre-Funded Amount, after taking into
account all transfers of Subsequent Receivables
during such Collection Period. Amounts on deposit
in the Negative Carry Account in excess of the
Required Negative Carry Account Balance will be
released to the Seller on each Payment Date, and
all amounts remaining on deposit in the Negative
Carry Account on the Payment Date on or immediately
following the last day of the Funding Period (after
giving effect to all withdrawals therefrom on such
Payment Date) will be released to the Seller.
Spread Account............. The Servicer will establish and maintain in the
name of the Indenture Trustee a collateral account
(the "Spread Account") into which funds will be
deposited from time to time as described herein.
Funds on deposit in the Spread Account will be
available on each Payment Date to cover shortfalls
in distributions of interest and principal on the
Offered Notes, the Class B Notes and the
Certificates to the extent described herein. The
Spread Account will be created with an initial
deposit by the Seller of $17,528,448, which equals
the Pool Balance as of the Initial Cutoff Date
multiplied by 3.75%. On each Subsequent Transfer
Date, cash or Eligible Investments having a value
approximately equal to 3.75% of the aggregate
Contract Value of the Subsequent Receivables
conveyed to the Trust on such Subsequent Transfer
Date will be withdrawn from the Pre-Funding Account
(or made available from the proceeds of issuance of
Additional Class B Notes) from amounts otherwise
distributable to the Seller in connection with the
sale of Subsequent Receivables and deposited in the
Spread Account. The amount initially deposited in
the Spread Account by the Seller together with the
aggregate amount transferred from the Pre-Funding
Account (or from the issuance of Class B Notes) to
the Spread Account on each Subsequent Transfer Date
is referred to as the "Spread Account Initial
Deposit." The Spread Account Initial Deposit will
be augmented on each Payment Date by the
S-12
<PAGE> 13
deposit in the Spread Account of amounts remaining
after deposit in the Note Distribution Account and
the Certificate Distribution Account of amounts to
be distributed to Offered Noteholders, Class B
Noteholders and Certificateholders and the payment
of the Administration Fee and the Servicing Fee.
Certain amounts in the Spread Account on any
Payment Date (after giving effect to all
distributions to be made on such Payment Date) in
excess of the Specified Spread Account Balance for
such Payment Date will be released to the Seller
or, on and after the July 1997 Payment Date, will
generally be released to the Note Distribution
Account for distribution to the Offered Noteholders
and the Class B Noteholders in the manner and
sequence described in "Description of the Offered
Notes--Payments of Principal" as an accelerated
payment of principal. The "Specified Spread Account
Balance" with respect to any Payment Date generally
will be equal to the greater of (i) 3.75% of the
Pool Balance as of the opening of business on the
first day of the Collection Period in which such
Payment Date occurs and (ii) the Spread Account
Floor. However, if either losses or delinquencies
with respect to the Receivables exceed certain
levels, the Specified Spread Account Balance may be
higher. The "Spread Account Floor" means 2.50% of
the Initial Pool Balance; provided, however, that
on any Payment Date when the sum of the outstanding
principal amount of the Offered Notes and the Class
B Notes and the Certificate Balance (the "Total
Principal Outstanding") is less than or equal to
97.50% of the Pool Balance, the "Spread Account
Floor" will instead equal 2.25% of the Initial Pool
Balance; provided, further, that on any Payment
Date when the Total Principal Outstanding is less
than or equal to 96.25% of the Pool Balance, the
"Spread Account Floor" will instead equal 2.00% of
the Initial Pool Balance; and provided, further,
that in no event will the Spread Account Floor
exceed the Total Principal Outstanding. The
Specified Spread Account Balance may be reduced or
the definition thereof otherwise modified without
the consent of the Offered Securityholders if the
Rating Agencies confirm in writing that such
reduction or modification will not result in a
reduction or withdrawal of the rating of the
Offered Notes or of the Certificates. See
"Description of the Transfer and Servicing
Agreements--Spread Account."
The Class B Notes.......... On the Closing Date, the Trust will issue Initial
Class B Notes in an aggregate principal amount of
$25,000,000. In addition, during the Funding
Period, the Trust will be permitted to issue
Additional Class B Notes in a maximum aggregate
original principal balance equal to the excess (if
any) of the aggregate Contract Value of Subsequent
Receivables conveyed to the Trust during the
Funding Period over the Initial Pre-Funded Amount
(but in no event more than $75,000,000; the sum of
the initial principal amounts of the Initial Class
B Notes and Additional Class B Notes will not
exceed $100,000,000). Except as described in the
next sentence: (a) the Initial Class B Notes will
bear interest at a fixed rate (the "Initial Class B
Rate") agreed upon between the Issuer and the
purchaser or purchasers of the Initial Class B
Notes but not in excess of 7.31%; and (b) any
Additional Class B Notes will bear interest at a
fixed rate agreed upon between the Issuer and the
purchaser or purchasers of the Additional Class B
Notes, but such rate may not exceed a rate per
annum equal to the weighted average APR of
S-13
<PAGE> 14
all Receivables after giving effect to all
purchases of Subsequent Receivables on or prior to
the date of issuance of such Additional Class B
Notes minus 1% unless the Rating Agencies confirm
in writing that a higher rate will not result in a
reduction or withdrawal of the rating of any Class
of the Offered Notes or of the Certificates. If
agreed upon between the Issuer and the purchaser or
purchasers of the Class B Notes, the interest rates
for all of the Class B Notes may be set as of the
date of issuance of any Additional Class B Notes at
a uniform rate, which may not exceed a rate per
annum equal to the weighted average APR of all
Receivables after giving effect to all purchases of
Subsequent Receivables on or prior to the date of
issuance of such Class B Additional Notes minus 1%
unless the Rating Agencies confirm in writing that
a higher rate will not result in a reduction or
withdrawal of the rating of any Class of the
Offered Notes or of the Certificates. Distributions
of interest and principal on the Class B Notes will
be subordinated in priority of payment to interest
and principal due on the Offered Notes, and
distributions of interest and principal on the
Certificates will be subordinated in priority of
payment to interest and principal due on the Class
B Notes, in each case to the extent described
herein. It is expected that the Class B Notes will
be issued to one or more institutional investors in
private placements exempt from the registration
requirements of the Securities Act. See
"Description of the Class B Notes" in this
Prospectus Supplement.
Collection Account;
Priority of
Distributions.............. The Servicer will establish and maintain in the
name of the Indenture Trustee an account (the
"Collection Account") into which all payments made
on or with respect to the Receivables will be
deposited and held until the distribution thereof
to Offered Noteholders, holders of the Class B
Notes (the "Class B Noteholders") and
Certificateholders as described herein. Except
under certain conditions described herein, the
Servicer will be required to remit collections
received with respect to the Receivables within two
business days of receipt thereof to the Collection
Account. Pursuant to the Sale and Servicing
Agreement, the Servicer will have the revocable
power to instruct the Indenture Trustee to withdraw
funds on deposit in the Collection Account and to
apply such funds on each Payment Date to the
following (in the priority indicated): (i) the
Administration Fee for the prior Collection Period
and any overdue Administration Fees to the
Administrator; (ii) the Offered Noteholders'
Interest Distributable Amount into the Note
Distribution Account; (iii) the A-1 Noteholders'
Principal Distributable Amount into the Note
Distribution Account; (iv) the A-2 Noteholders'
Principal Distributable Amount into the Note
Distribution Account; (v) the A-3 Noteholders'
Principal Distributable Amount into the Note
Distribution Account; (vi) the Class B Noteholders'
Interest Distributable Amount into the Note
Distribution Account; (vii) the Class B
Noteholders' Principal Distributable Amount into
the Note Distribution Account; (viii) the
Certificateholders' Interest Distributable Amount
into the Certificate Distribution Account; (ix) the
Certificateholders' Principal Distributable Amount
into the Certificate Distribution Account; (x) the
Servicing Fee for the prior Collection Period and
any overdue Servicing Fees to the Servicer, except
that if Case Credit or an affiliate of Case Credit
is not the Servicer, the amounts described in this
clause will be
S-14
<PAGE> 15
paid prior to any other application of funds on
deposit in the Collection Account; and (xi) the
remaining balance, if any, to the Spread Account.
After an Event of Default and acceleration of the
Offered Notes (and, if any Offered Notes remain
outstanding, on and after the Final Scheduled
Maturity Date), principal payments will be made
ratably to all Offered Noteholders. See
"Description of the Transfer and Servicing
Agreements--Distributions."
Tax Status................. In the opinion of Mayer, Brown & Platt ("Federal
Tax Counsel"), for Federal income tax purposes the
Offered Notes will be characterized as debt and the
Trust will not be characterized as an association
(or publicly traded partnership) taxable as a
corporation. In the opinion of Foley & Lardner
("Wisconsin Tax Counsel"), the same
characterizations should apply for Wisconsin income
tax purposes as for Federal income tax purposes.
Each Offered Noteholder, by the acceptance of a
Offered Note, will agree to treat the Offered Notes
as indebtedness, each Certificateholder, by the
acceptance of a Certificate, will agree to treat
the Trust as a partnership in which the
Certificateholders are partners, and, in the event
that the Seller or the Trustee decides to make the
election contemplated in Internal Revenue Service
Notice 95-14 to elect that the Trust be classified
as a partnership for Federal income tax purposes,
the Certificateholders agree to take such actions
as the Seller or Trustee shall reasonably request
in order to effectuate such election. Alternative
characterizations of the Trust and the Certificates
are possible but would not result in materially
adverse tax consequences to Certificateholders as
compared to the consequences of treatment of the
Certificates as equity interests in a partnership.
See "Certain Federal Income Tax Consequences" and
"Certain State Tax Consequences" in the Prospectus
for additional information concerning the
application of Federal and Wisconsin tax laws to
the Trust and the Offered Securities.
ERISA Considerations....... Subject to the considerations discussed under
"ERISA Considerations," the Offered Notes are
eligible for purchase by employee benefit plans.
The Certificates may not be acquired by any
employee benefit plan subject to ERISA or by any
individual retirement account. See "ERISA
Considerations."
Legal Investment........... The A-1 Notes will be eligible securities for
purchase by money market funds under paragraph
(a)(9) of Rule 2a-7 under the Investment Company
Act of 1940, as amended.
Rating of the Offered
Securities................. It is a condition to the issuance of the Offered
Securities that the A-1 Notes be rated in the
highest short-term rating category, that the A-2
Notes and the A-3 Notes be rated in the highest
long-term rating category and that the Certificates
be rated at least in the "A" category or its
equivalent, in each case by at least two nationally
recognized statistical rating agencies (the "Rating
Agencies"). The rating agencies do not evaluate,
and the ratings do not address, the likelihood that
the Prepayment Premium will be paid. There can be
no assurance that such ratings will not be lowered
or withdrawn by a rating agency if circumstances so
warrant. See "Risk Factors--Ratings of the Offered
Securities."
S-15
<PAGE> 16
RISK FACTORS
Limited Liquidity. There is currently no secondary market for the Offered
Securities. Each Underwriter currently intends to make a market in the Offered
Securities for which it is an Underwriter, but is under no obligation to do so.
There can be no assurance that a secondary market will develop or, if a
secondary market does develop, that it will provide the Offered Securityholders
with liquidity of investment or that it will continue for the life of the
Offered Securities.
The Receivables and the Pre-Funding Account. On the Closing Date, the
Seller will transfer to the Trust the approximately $466,125,519 of Initial
Receivables (calculated for the Standard Precomputed Receivables by using a
discount rate equal to the APR of each such Standard Precomputed Receivable and
for the Precomputed Simple Rebate Receivables using the current balance on the
Servicer's records; or $467,425,286 calculated for all of the Initial
Receivables using a discount rate equal to the Initial Cutoff Date APR) and the
approximately $407,574,714 Initial Pre-Funded Amount to be deposited in the
Pre-Funding Account. If the principal amount of eligible Receivables originated
by Dealers or by retail outlets owned by Case and purchased by Case Credit
during the Funding Period is less than the Initial Pre-Funded Amount, the Seller
will have insufficient Receivables to sell to the Trust on the Subsequent
Transfer Dates, thereby resulting in a prepayment of principal to the Offered
Noteholders, the Class B Noteholders and the Certificateholders as described
below. See "Economic and Other Factors" and "Trust's Relationship to the Seller,
Case Credit Corporation and Case Corporation" below. Conversely, if the
principal amount of eligible Receivables originated by Dealers or by retail
outlets owned by Case and purchased by Case Credit during the Funding Period is
greater than the Initial Pre-Funded Amount, the Seller will have sufficient
Receivables to sell to the Trust on Subsequent Transfer Dates so that the entire
Initial Pre-Funded Amount will be used to pay the purchase price for Subsequent
Receivables (and make related transfers to the Spread Account) and Additional
Class B Notes may be issued by the Trust and their proceeds used to pay for
additional Subsequent Receivables (and make related transfers to the Spread
Account).
Any conveyance of Subsequent Receivables is subject to the satisfaction, on
or before the related Subsequent Transfer Date, of the following conditions
precedent, among others: (i) each such Subsequent Receivable must satisfy the
eligibility criteria specified in the Sale and Servicing Agreement; (ii) the
Seller shall not have selected such Subsequent Receivables in a manner that it
believes is adverse to the interests of the Offered Noteholders, the Class B
Noteholders or the Certificateholders; (iii) as of the related Subsequent Cutoff
Date, the Receivables in the Trust at that time, including the Subsequent
Receivables to be conveyed by the Seller as of such Subsequent Cutoff Date,
shall satisfy the parameters described under "The Receivables Pool" herein and
under "The Receivables Pools" in the Prospectus; (iv) the applicable Spread
Account Initial Deposit for such Subsequent Transfer Date shall have been made;
(v) the Seller shall have executed and delivered to the Trust (with a copy to
the Indenture Trustee) a written assignment conveying such Subsequent
Receivables to the Trust (including a schedule identifying such Subsequent
Receivables); (vi) the Seller shall have delivered certain opinions of counsel
to the Trustee, the Indenture Trustee and the Rating Agencies with respect to
the transfer of all such Subsequent Receivables conveyed during such Collection
Period; (vii) the Trust and the Indenture Trustee shall have received written
confirmation from a firm of certified independent public accountants that, as of
the end of the preceding Collection Period, the Receivables in the Trust at that
time, including the Subsequent Receivables conveyed by the Seller during such
Collection Period, satisfied the parameters described under "The Receivables
Pool" herein and under "The Receivables Pools" in the Prospectus; and (viii)
Moody's Investors Service, Inc. ("Moody's") shall have received written
notification from the Seller of the addition of all such Subsequent Receivables.
To the extent that amounts on deposit in the Pre-Funding Account have not
been fully applied to the conveyance of Subsequent Receivables to the Trust by
the end of the Funding Period, any such amounts remaining will be applied (a)
first, to redeem the A-1 Notes, in whole or in part, (b) second (if the A-1
Notes are redeemed in whole), to redeem the A-2 Notes, in whole or in part and
(c) third (in the unlikely event that the A-2 Notes are redeemed in whole), to
redeem the A-3 Notes and the Class B Notes and to prepay the Certificates (in
the same proportions as would apply to a distribution of the Principal
Distribution Amount), in whole or in part. If the aggregate mandatory redemption
of the A-1 Notes exceeds $100,000, the A-1 Noteholders will be entitled to
receive a Noteholders' Prepayment Premium. The A-2 Noteholders, A-3
S-16
<PAGE> 17
Noteholders and Certificateholders will be entitled to receive a Noteholders'.
Prepayment Premium and the Certificateholders' Prepayment Premium, respectively,
if there is any mandatory redemption or prepayment of the A-2 Notes, A-3 Notes
or the Certificates, respectively.
Any such prepayment will shorten the weighted average life of the Offered
Notes and the Certificates to an extent that cannot be predicted with assurance,
since the amount of such prepayment cannot be predicted with assurance. The
Noteholders' Prepayment Premium and the Certificateholders' Prepayment Premium
are intended to compensate Offered Securityholders for any reinvestment risks
resulting from any such prepayment in excess of the amounts specified above.
Holders of Offered Notes and Certificates purchased at a premium should consider
the risk that such a prepayment could result in an actual yield that is less
than the anticipated yield.
Each Subsequent Receivable must satisfy the eligibility criteria specified
in the Sale and Servicing Agreement at the time of its addition. However, except
for such criteria, there will be no required characteristics of the Subsequent
Receivables. Subsequent Receivables may be originated by the Dealers or by the
retail outlets owned by Case at a later date using credit criteria different
from those that were applied to the Initial Receivables and may be of a
different credit quality and seasoning. In addition, following the transfer of
Subsequent Receivables to the Trust, the characteristics of the entire
Receivables Pool, including the composition of the Receivables, the distribution
by APR, equipment type, payment frequency, average maturity, current Contract
Value and geographic distribution, may vary from those of the Initial
Receivables. See "The Receivables Pool." Since the weighted average life of the
Offered Notes, the Class B Notes and the Certificates will be influenced by the
rate at which the principal balances of the Receivables are paid, some of these
variations will affect the weighted average life of the Offered Notes and the
Certificates. See "Weighted Average Life of the Securities" in the Prospectus.
The requirements that no Receivables have a remaining term in excess of 72
months and that on each Subsequent Transfer Date the weighted average original
term of the Receivables in the Trust will not be greater than 55 months are
intended to minimize the effect of the addition of Subsequent Receivables on the
weighted average life of the Offered Notes and the Certificates.
Seasonality of Cash Flow. Payments on the Receivables may be made on a
monthly, quarterly, semiannual, annual or an irregular basis. The majority of
the Initial Receivables (representing approximately 64% of the aggregate
Contract Value of the Receivables as of the Initial Cutoff Date) are
agricultural equipment retail installment sale contracts and tend to have
payment dates that correspond to periods in which farmers have stronger cash
flows. As a result, the amounts of cash distributed to Offered Securityholders
will tend to share in this seasonality, with higher amounts of principal paid on
the Payment Dates occurring in the first and fourth calendar quarters in each
year and relatively lower amounts paid on other Payment Dates. See "The
Receivables Pool."
Economic and Other Factors. The ability of the Dealers and of the retail
stores owned by Case to sell agricultural and construction equipment and thereby
generate Subsequent Receivables is affected by the general level of activity in
the agricultural and construction industries, including the rate of United
States farm production and demand, government subsidies for the agricultural
sector, weather conditions, commodity prices, interest rates, prevailing levels
of construction (especially housing starts), and levels of total industry
capacity and equipment inventory. However, Case and the Seller are unable to
determine and have no basis to predict whether or to what extent these factors
will affect the level of sales of agricultural or construction equipment.
Subordination. Distributions of interest and principal on the Certificates
will be subordinated in priority of payment to interest and principal due on the
Offered Notes and the Class B Notes to the extent described herein.
Consequently, the Certificateholders will not receive any distributions with
respect to a Collection Period until the full amount of principal of and
interest on the Offered Notes and the Class B Notes relating to such Collection
Period has been deposited in the Note Distribution Account. No distributions of
principal with respect to the Certificates will be made until funds sufficient
to pay the A-1 Notes and the A-2 Notes in full have been deposited in the Note
Distribution Account. Distributions of interest and principal on the Class B
Notes will be similarly subordinated in priority of payment to interest and
principal due on the Offered Notes.
S-17
<PAGE> 18
Limited Assets. The Trust does not have, nor is it permitted or expected to
have, any significant assets or sources of funds other than the Receivables, the
Pre-Funding Account, the Negative Carry Account and the Spread Account. Holders
of the Offered Notes and the Certificates must rely for repayment upon payments
on the Receivables and, if and to the extent available, amounts on deposit in
the Negative Carry Account and the Spread Account. Amounts to be deposited in
the Spread Account are limited in amount and will be reduced as the Pool Balance
is reduced. In addition, funds in the Spread Account will be available on each
Payment Date to cover shortfalls in distributions of interest and principal on
the Offered Notes and the Class B Notes prior to the application thereof to
cover shortfalls on the Certificates. If the Negative Carry Account and the
Spread Account are exhausted, the Trust will depend solely on current
distributions on the Receivables to make payments on the Offered Notes, the
Class B Notes and the Certificates.
Issuance of Additional Class B Notes. During the Funding Period, the Trust
will be permitted to issue Additional Class B Notes in a maximum aggregate
original principal balance equal to the excess (if any) of the aggregate
Contract Value of Subsequent Receivables conveyed to the Trust during the
Funding Period over the Initial Pre-Funded Amount (but in no event more than
$75,000,000). Payments of principal of, and interest on, the Certificates will
be subordinated to all payments to be made with respect to the Class B Notes to
the extent described herein. The Trust's right to issue Additional Class B Notes
will be subject to certain conditions, including that (i) each Subsequent
Receivable to be purchased with the proceeds of issuance of such Additional
Class B Notes must satisfy the eligibility criteria specified in the Sale and
Servicing Agreement; (ii) the Seller shall not have selected such Subsequent
Receivables in a manner that it believes is adverse to the interests of the
Offered Noteholders, the Class B Noteholders or the Certificateholders; (iii) as
of the related Subsequent Cutoff Date, the Receivables in the Trust at that
time, including the Subsequent Receivables to be conveyed by the Seller as of
such Subsequent Cutoff Date, shall satisfy the parameters described under "The
Receivables Pool" herein and under "The Receivables Pools" in the Prospectus;
(iv) the applicable Spread Account Initial Deposit for such Subsequent Transfer
Date shall have been made; (v) the Seller shall have executed and delivered to
the Trust (with a copy to the Indenture Trustee) a written assignment conveying
such Subsequent Receivables to the Trust (including a schedule identifying such
Subsequent Receivables); (vi) the Seller shall have delivered certain opinions
of counsel to the Trustee, the Indenture Trustee and the Rating Agencies with
respect to the transfer of all such Subsequent Receivables conveyed during such
Collection Period; (vii) the Trust and the Indenture Trustee shall have received
written confirmation from a firm of certified independent public accountants
that, as of the end of the preceding Collection Period, the Receivables in the
Trust at that time, including the Subsequent Receivables conveyed by the Seller
during such Collection Period, satisfied the parameters described under "The
Receivables Pool" herein and under "The Receivables Pools" in the Prospectus;
and (viii) Moody's shall have received written notification from the Seller of
the addition of all such Subsequent Receivables. However, since the Certificates
are subordinated to the Class B Notes, there can be no assurance that the
issuance of Additional Class B Notes will not affect the timing or amounts of
distributions of principal of, and interest on, the Certificates. Moreover, the
purchase of additional Subsequent Receivables with the proceeds of Additional
Class B Notes could affect the weighted average life of the Offered Securities.
Ratings of the Offered Securities. It is a condition to the issuance of the
Offered Notes and the Certificates that the A-1 Notes be rated in the highest
short-term investment rating category, that the A-2 Notes and the A-3 Notes be
rated in the highest long-term investment rating category and the Certificates
be rated at least in the "A" category or its equivalent, in each case by at
least two Rating Agencies. A rating is not a recommendation to purchase, hold or
sell Offered Securities, inasmuch as such rating does not comment as to market
price or suitability for a particular investor. The ratings of the Offered
Securities address the likelihood of the timely payment of interest on and the
ultimate payment of principal of the Offered Securities pursuant to their terms.
The Rating Agencies do not evaluate, and the ratings do not address, the
likelihood that the Prepayment Premium will be paid. There can be 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 in the future so warrant.
Trust's Relationship to the Seller, Case Credit Corporation and Case
Corporation. Neither the Seller, Case Credit, Case nor any of their affiliates
is generally obligated to make payments in respect of the Offered
S-18
<PAGE> 19
Notes, the Certificates or the Receivables. However, the ability of the Seller
to convey Subsequent Receivables on Subsequent Transfer Dates is completely
dependent on the generation of additional receivables by Case Credit. The
ability of Case Credit to generate receivables in turn depends on the sales of
agricultural and construction equipment manufactured or distributed by Case. If,
during the Funding Period, Case were temporarily or permanently no longer
manufacturing or distributing agricultural or construction equipment, the rate
of sales of agricultural and construction equipment manufactured or distributed
by Case would decrease, adversely affecting the ability of the Seller to sell
Subsequent Receivables to the Trust. The use of incentive programs (e.g.,
manufacturer's rebate programs), may also affect retail sales. There can be no
assurance, therefore, that Case Credit will continue to generate receivables at
the same rate as in prior years. Moreover, in connection with the sale of the
Receivables by Case Credit to the Seller pursuant to the Liquidity Receivables
Purchase Agreement or the Purchase Agreement, Case Credit has made or will make
representations and warranties with respect to the characteristics of such
Receivables and, in certain circumstances, Case Credit may be required to
repurchase Receivables with respect to which any such representation or warranty
has been breached. See "Description of the Transfer and Servicing
Agreements--Sale and Assignment of Receivables" and "--Commercial Paper Program"
in the Prospectus. In addition, under certain circumstances, the Servicer may be
required to purchase Receivables. See "Description of the Transfer and Servicing
Agreements--Servicing Procedures" in the Prospectus. Moreover, if Case Credit
were to cease acting as Servicer, delays in processing payments on the
Receivables and information in respect thereof could occur and result in delays
in payments to the Offered Securityholders.
Case and its subsidiaries manufacture and distribute a full line of
agricultural equipment and light and medium-sized construction equipment, which
are sold worldwide through independent dealers and retail outlets owned by Case
and its affiliates. For the six months ended June 30, 1996 and the year ended
December 31, 1995, Case reported operating earnings (industrial earnings before
interest, taxes, changes in accounting principles and extraordinary items,
including net income of the finance companies on an equity basis) of $313
million and $509 million, respectively (compared to $261 million for the six
months ended June 30, 1995 and $315 million for the year ended December 31,
1994), and net income of $163 million and $337 million, respectively (compared
to $171 million for the six months ended June 30, 1995 and $131 million for the
year ended December 31, 1994) on net sales of $2.5 billion and $4.9 billion,
respectively (compared to $2.5 billion for the six months ended June 30, 1995
and $4.3 billion for the year ended December 31, 1994). At June 30, 1996, Case's
consolidated equity was $1.7 billion.
Case Credit had consolidated net income of $45 million for the six months
ended June 30, 1996 and $94 million for the year ended December 31, 1995,
compared with net income of $45 million for the six months ended June 30, 1995
and $70 million for the year ended December 31, 1994. Revenues for the first six
months of 1996 were $125 million and for the year ended December 31, 1995 were
$217 million, compared to $110 million for the first six months of 1995 and $184
million for the year ended December 31, 1994. The timing of sales through
asset-backed securitizations positively impacted earnings and revenues for the
year ended December 31, 1995. This was partially offset by the impact of
Tenneco's retention of $1.1 billion of U.S. retail receivables at the time of
the Reorganization. At June 30, 1996, total North American gross receivables
serviced by Case Credit were $3.9 billion, up 14% from June 30, 1995.
For additional information regarding the Seller, Case Credit or Case, see
"The Seller, Case Credit Corporation and Case Corporation" in the Prospectus.
THE TRUST
GENERAL
Case Equipment Loan Trust 1996-B is a trust formed under the laws of the
State of Delaware pursuant to the Trust Agreement for the transactions described
in this Prospectus Supplement. After its formation, the Trust will not engage in
any activity other than (i) acquiring, holding and managing the Receivables, the
Pre-Funding Account and the other assets of the Trust and proceeds therefrom,
(ii) issuing the Offered Notes, the Class B Notes and the Certificates, (iii)
making payments on the Offered Notes, the Class B Notes and the
S-19
<PAGE> 20
Certificates and (iv) engaging in other activities that are necessary, suitable
or convenient to accomplish the foregoing or are incidental thereto or connected
therewith.
The Trust will initially be capitalized with equity of $34,000,000
excluding amounts deposited in the Negative Carry Account and the Spread
Account, representing the initial principal balance of the Certificates.
Certificates with an original principal balance of $340,000 will be sold to the
Seller and the remaining Certificates will be sold to third party investors that
are expected to be unaffiliated with the Seller, the Servicer and their
affiliates. The equity of the Trust, together with the proceeds from the initial
sale of the Offered Notes and the Initial Class B Notes and any sale of
Additional Class B Notes, will be used by the Trust to purchase the Receivables
from the Seller pursuant to the Sale and Servicing Agreement. The Servicer will
initially service the Receivables pursuant to the Sale and Servicing Agreement
and will be compensated for acting as the Servicer. See "Description of the
Transfer and Servicing Agreements--Servicing Compensation and Payment of
Expenses." To facilitate servicing and to minimize administrative burden and
expense, the Servicer will be appointed custodian for the Receivables by the
Trustee, but will not stamp the Receivables to reflect the sale and assignment
of the Receivables to the Trust, or amend or assign the financing statements
filed to perfect the security interest in the Financed Equipment or, where
applicable, the certificates of title of the Financed Equipment. In the absence
of amendments to the financing statements or certificates of title, the Trust
may not have perfected security interests in the Financed Equipment securing the
Receivables originated in some states. See "Certain Legal Aspects of the
Receivables" in the Prospectus.
If the protection provided to the Offered Securityholders by the Negative
Carry Account and the Spread Account is insufficient, the Offered
Securityholders must rely solely on payments from the Obligors on the
Receivables and the proceeds from the repossession and sale of Financed
Equipment that secure defaulted Receivables. In such event, certain factors,
such as the Trust's not having first priority perfected security interests in
some of the Financed Equipment, may affect the Trust's ability to realize on the
collateral securing the Receivables, and thus may reduce the proceeds to be
distributed to Offered Securityholders with respect to the Offered Securities.
See "Description of the Transfer and Servicing Agreements--Distributions,"
"--Negative Carry Account" and "--Spread Account" herein and "Certain Legal
Aspects of the Receivables" in the Prospectus.
The Trust's principal offices are in Wilmington, Delaware, in care of Chase
Manhattan Bank Delaware, as Trustee, at the address listed below under "--The
Trustee."
CAPITALIZATION OF THE TRUST
The following table illustrates the capitalization of the Trust as of the
Cutoff Date, as if the issuance and sale of the Offered Notes, the Initial Class
B Notes and the Certificates had taken place on such date:
<TABLE>
<S> <C>
Class A-1 5.5625% Asset Backed Notes....................... $125,000,000
Class A-2 6.25% Asset Backed Notes......................... 362,000,000
Class A-3 6.65% Asset Backed Notes......................... 329,000,000
Initial Class B Asset Backed Notes......................... 25,000,000
6.95% Asset Backed Certificates............................ 34,000,000
------------
Total................................................. $875,000,000
============
</TABLE>
The capitalization of the Trust will change to the extent that any
Additional Class B Notes are issued.
THE TRUSTEE
Chase Manhattan Bank Delaware is the Trustee under the Trust Agreement.
Chase Manhattan Bank Delaware is a Delaware banking corporation and its
principal offices are located at 1201 North Market Street, Wilmington, Delaware
19801. In the ordinary course of its business, the Trustee and its affiliates
have engaged and may in the future engage in commercial banking or financial
advisory transactions with Case Credit and its affiliates.
S-20
<PAGE> 21
THE RECEIVABLES POOL
The pool of Receivables (the "Receivables Pool") will include the Initial
Receivables purchased as of the Initial Cutoff Date and any Subsequent
Receivables purchased as of any applicable Subsequent Cutoff Date (the Initial
Cutoff Date or any Subsequent Cutoff Date being individually referred to herein
as a "Cutoff Date").
The Initial Receivables were selected, and the Subsequent Receivables will
be selected, from the Seller's portfolio using several criteria, some of which
are set forth in the Prospectus under "The Receivables Pools," as well as that
each Receivable (i) is not more than 90 days past due as of the applicable
Cutoff Date, (ii) has an APR that is equal to or greater than 3%, (iii) has a
remaining term to maturity (i.e., the period from but excluding the applicable
Cutoff Date to and including the Receivable's maturity date) of not more than 72
months and (iv) has a Contract Value as of the applicable Cutoff Date that (when
combined with the Contract Value of any other Receivables with the same or an
affiliated Obligor) does not exceed 1% of the aggregate Contract Value of all
the Receivables. The Receivables will include Contracts with respect to which
the first payment has not been made and interest waiver contracts pursuant to
which interest will not begin to accrue for some designated period of time. As
of the applicable Cutoff Date, no Obligor on any Receivable was or will be noted
in the records of the Servicer as being the subject of a bankruptcy proceeding.
No selection procedures believed by the Seller to be adverse to Offered
Securityholders were or will be used in selecting the Receivables.
According to the eligibility criteria set forth in the Sale and Servicing
Agreement, the obligation of the Trust to purchase the Subsequent Receivables on
a Subsequent Transfer Date will be subject to the Receivables in the Trust,
including the Subsequent Receivables to be conveyed to the Trust on such
Subsequent Transfer Date, meeting the following criteria: (i) the weighted
average original term of the Receivables in the Trust will not be greater than
55 months; and (ii) not more than 40% of the principal balances of the
Receivables in the Trust will represent Contracts for the financing of
construction equipment.
The Initial Receivables will represent approximately 53% of the aggregate
initial principal balance of the Offered Securities. However, except for the
criteria described in the preceding paragraphs, there will be no required
characteristics of the Subsequent Receivables. Therefore, following the transfer
of Subsequent Receivables to the Trust, the aggregate characteristics of the
entire Receivables Pool, including the composition of the Receivables, the
distribution by APR, equipment type, payment frequency, current Contract Value
and geographic distribution described in the following tables, may vary from
those of the Initial Receivables. Following the end of the Funding Period, the
Seller will file a report on Form 8-K containing information comparable to that
contained in the tables set forth below regarding the aggregate characteristics
of the entire Receivables Pool, after the addition of the Subsequent
Receivables.
The composition, distribution by APR, equipment type, payment frequency,
current Contract Value and geographic distribution, in each case of the Initial
Receivables as of the Initial Cutoff Date, are as set forth in the following
tables. For purposes of the data in the following tables, "Contract Value" (a)
for each Standard Precomputed Receivable has been calculated as the sum of the
present value of the scheduled and unpaid payments on such Standard Precomputed
Receivable as of the Initial Cutoff Date discounted monthly at an annual rate
equal to the APR of such Standard Precomputed Receivable and (b) for each
Precomputed Simple Rebate Receivable has been deemed to equal the current
balance of that Receivable on the Servicer's records as of the Initial Cutoff
Date.
COMPOSITION OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED WEIGHTED AVERAGE
APR OF AGGREGATE NUMBER OF AVERAGE AVERAGE CONTRACT
RECEIVABLES CONTRACT VALUE RECEIVABLES REMAINING TERM ORIGINAL TERM VALUE
- ----------- -------------- ----------- -------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
8.31% $ 466,125,519 19,077 45.12 months 47.59 months $24,433.90
</TABLE>
S-21
<PAGE> 22
DISTRIBUTION BY APR OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
AGGREGATE
NUMBER OF AGGREGATE CONTRACT
APR RANGE RECEIVABLES CONTRACT VALUE VALUE
- ------------------------------------------------------ ----------- -------------- ----------
<S> <C> <C> <C>
3.00% to 3.99%....................................... 1,011 $ 13,946,704 2.99%
4.00% to 4.99%....................................... 1,160 28,849,837 6.19
5.00% to 5.99%....................................... 720 16,090,136 3.45
6.00% to 6.99%....................................... 654 8,849,950 1.90
7.00% to 7.99%....................................... 6,097 161,325,437 34.61
8.00% to 8.99%....................................... 2,012 104,581,904 22.44
9.00% to 9.99%....................................... 1,776 54,672,862 11.73
10.00% to 10.99%...................................... 4,517 66,270,867 14.22
11.00% to 11.99%...................................... 742 7,197,287 1.54
12.00% to 12.99%...................................... 239 2,254,575 0.48
13.00% to 13.99%...................................... 135 1,573,195 0.34
14.00% to 14.99%...................................... 14 512,765 0.11
------ ------------- ------
Total....................................... 19,077 $ 466,125,519 100.00%
====== ============= ======
</TABLE>
DISTRIBUTION BY EQUIPMENT TYPE OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
AGGREGATE
NUMBER OF AGGREGATE CONTRACT
TYPE RECEIVABLES CONTRACT VALUE VALUE
- ------------------------------------------------------ ----------- -------------- ----------
<S> <C> <C> <C>
Agricultural
New.............................................. 6,690 $ 145,693,723 31.25%
Used............................................. 6,921 151,956,613 32.60
Construction
New.............................................. 3,697 120,940,873 25.95
Used............................................. 1,769 47,534,310 10.20
------ ------------- ------
Total....................................... 19,077 $ 466,125,519 100.00%
====== ============= ======
</TABLE>
DISTRIBUTION BY PAYMENT FREQUENCY OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
AGGREGATE
NUMBER OF AGGREGATE CONTRACT
FREQUENCY RECEIVABLES CONTRACT VALUE VALUE
- ------------------------------------------------------ ----------- -------------- ----------
<S> <C> <C> <C>
Annual(1)............................................. 9,956 $ 240,036,402 51.50%
Semiannual............................................ 845 23,460,997 5.03
Quarterly............................................. 147 3,209,668 0.69
Monthly............................................... 8,129 199,418,452 42.78
------ ------------- ------
Total.......................................... 19,077 $ 466,125,519 100.00%
====== ============= ======
</TABLE>
- ------------
(1) Approximately 6.70%, 13.18%, 13.70%, 14.12%, 11.02%, 9.22%, 7.04% and 8.81%,
of the annual Receivables have scheduled payments within the Collection
Periods relating to the Payment Dates in January, April, May, June, July,
August, September and December, respectively.
S-22
<PAGE> 23
DISTRIBUTION BY CURRENT CONTRACT VALUE OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
CONTRACT AGGREGATE
VALUE NUMBER OF AGGREGATE CONTRACT
RANGE RECEIVABLES CONTRACT VALUE VALUE
- ----------------------------------------------------------- ----------- -------------- ----------
<S> <C> <C> <C>
$ 0.00 to 5,000.00.................................. 2,935 $ 9,141,836 1.96%
5,000.01 to 10,000.00.................................. 4,000 29,448,132 6.31
10,000.01 to 15,000.00.................................. 3,041 37,429,981 8.03
15,000.01 to 20,000.00.................................. 2,000 34,612,402 7.42
20,000.01 to 25,000.00.................................. 1,208 26,895,586 5.77
25,000.01 to 30,000.00.................................. 863 23,619,040 5.07
30,000.01 to 35,000.00.................................. 747 24,179,419 5.19
35,000.01 to 40,000.00.................................. 695 26,056,589 5.59
40,000.01 to 45,000.00.................................. 614 26,090,150 5.60
45,000.01 to 50,000.00.................................. 508 24,018,778 5.15
50,000.01 to 55,000.00.................................. 416 21,764,020 4.67
55,000.01 to 60,000.00.................................. 345 19,817,327 4.25
60,000.01 to 65,000.00.................................. 288 17,949,508 3.85
65,000.01 to 70,000.00.................................. 199 13,406,937 2.88
70,000.01 to 75,000.00.................................. 187 13,542,376 2.91
75,000.01 to 100,000.00.................................. 514 43,982,468 9.43
100,000.01 to 200,000.00.................................. 464 58,604,521 12.57
200,000.01 to 300,000.00.................................. 35 8,318,188 1.78
300,000.01 and over....................................... 18 7,248,261 1.57
------- ------------- -------
Total............................................ 19,077 $ 466,125,519 100.00%
======= ============= =======
</TABLE>
S-23
<PAGE> 24
GEOGRAPHIC DISTRIBUTION OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
AGGREGATE
CONTRACT
STATE(1) VALUE
- ---------------------------------- ----------
<S> <C>
Alabama........................... 1.17%
Alaska............................ 0.27
Arizona........................... 1.88
Arkansas.......................... 4.76
California........................ 3.02
Colorado.......................... 1.63
Connecticut....................... 0.54
Delaware.......................... 0.51
Florida........................... 1.95
Georgia........................... 3.20
Hawaii............................ 0.07
Idaho............................. 2.12
Illinois.......................... 5.12
Indiana........................... 3.28
Iowa.............................. 4.82
Kansas............................ 2.59
Kentucky.......................... 1.50
Louisiana......................... 1.47
Maine............................. 0.51
Maryland.......................... 1.31
Massachusetts..................... 0.37
Michigan.......................... 3.05
Minnesota......................... 4.46
Mississippi....................... 2.00
Missouri.......................... 2.92
Montana........................... 1.46
<CAPTION>
PERCENT OF
AGGREGATE
CONTRACT
STATE(1) VALUE
- ---------------------------------- ----------
<S> <C>
Nebraska.......................... 2.94%
Nevada............................ 0.68
New Hampshire..................... 0.25
New Jersey........................ 1.11
New Mexico........................ 0.36
New York.......................... 3.39
North Carolina.................... 1.98
North Dakota...................... 2.77
Ohio.............................. 2.87
Oklahoma.......................... 1.44
Oregon............................ 1.50
Pennsylvania...................... 2.96
Rhode Island...................... 0.01
South Carolina.................... 0.75
South Dakota...................... 3.59
Tennessee......................... 2.89
Texas............................. 6.48
Utah.............................. 1.16
Vermont........................... 0.24
Virginia.......................... 1.21
Washington........................ 2.27
Washington, D.C................... 0.00
West Virginia..................... 0.32
Wisconsin......................... 2.43
Wyoming........................... 0.42
------
Total........................ 100.00%
======
</TABLE>
- ------------
(1) Based on billing addresses of Obligors.
DELINQUENCIES, REPOSSESSIONS, AND NET LOSSES
Set forth below is certain information concerning Case Credit's experience
pertaining to the entire portfolio of United States retail agricultural and
construction equipment receivables that it services, including receivables
previously sold to trusts under prior asset-backed securitizations and
receivables that remained with Tenneco Credit Corporation as a part of the
Reorganization. In the years 1991 and 1992, delinquencies, repossessions and net
losses on construction contracts were adversely affected by the economic
recession, which resulted in declines in housing starts and nonresidential
construction. However, beginning in 1993, delinquencies, repossessions and net
losses on construction contracts improved principally as a result of
improvements in the economy, and also as a result of improvements in Case
Credit's collection systems. Delinquencies, repossessions and net losses on
agricultural contracts may be affected by weather conditions such as flood and
drought, commodity market prices and the level of farmers' income. However,
delinquencies, repossessions and net losses on agricultural contracts have
remained generally stable during the years shown below. There can be no
assurance that the delinquency, repossession and net loss experience on the
Receivables of the Trust will be comparable to that set forth below.
S-24
<PAGE> 25
DELINQUENCY EXPERIENCE(1)
<TABLE>
<CAPTION>
AT DECEMBER 31,
-----------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991
-------------------- -------------------- -------------------- -------------------- ---------
NUMBER NUMBER NUMBER NUMBER NUMBER
OF OF OF OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS
--------- -------- --------- -------- --------- -------- --------- -------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio................. 135,722 $3,093.1 128,891 $2,641.0 128,562 $2,434.0 138,711 $2,549.8 144,786
Period of Delinquency
31-60 days............. 1,927 33.5 1,457 18.4 2,033 27.2 4,877 71.7 5,297
60 Days or More........ 1,509 18.5 855 9.4 2,145 22.5 6,177 78.3 5,289
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total Delinquencies....... 3,436 $ 52.0 2,312 $ 27.8 4,178 $ 49.7 11,054 $ 150.0 10,586
Total Delinquencies as a
Percent of the
Portfolio................ 2.5% 1.7% 1.8% 1.0% 3.2% 2.0% 8.0% 5.9% 7.3%
<CAPTION>
AT DECEMBER 31, AT JUNE 30,
------------------------------------------------------
1991 1996 1995
-------- -------------------- --------------------
NUMBER NUMBER
OF OF
AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
-------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
Portfolio................. $2,534.1 132,739 $3,160.5 134,255 $2,855.6
Period of Delinquency
31-60 days............. 91.4 1,768 31.4 1,462 20.6
60 Days or More........ 71.2 1,838 28.6 1,166 14.3
-------- -------- -------- -------- --------
Total Delinquencies....... $ 162.6 3,606 $ 60.0 2,628 $ 34.9
Total Delinquencies as a
Percent of the
Portfolio................ 6.4% 2.7% 1.9% 2.0% 1.2%
</TABLE>
- ------------
(1) Except as indicated, all amounts and percentages are based on the gross
amount scheduled to be paid on each retail installment sale contract,
including unearned finance and other charges. The information in the table
includes an immaterial amount of retail installment sale contracts on
equipment other than agricultural and construction equipment and includes
the receivables that remained with Tenneco Credit Corporation and previously
sold contracts that Case Credit continues to service.
CREDIT LOSS/REPOSSESSION EXPERIENCE(1)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
YEAR ENDED DECEMBER 31, 30,
---------------------------------------------------------------- ----------------------
1995 1994 1993 1992 1991 1996 1995
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Gross Portfolio
Outstanding During the Period... $2,857.7 $2,511.2 $2,487.1 $2,512.7 $2,349.1 $3,108.1 $2,742.7
Repossessions as a Percent of
Average Gross Portfolio
Outstanding(5).................. 1.14% 1.33% 1.83% 2.68% 2.77% 1.25% 1.28%
Net Losses as a Percent of
Liquidations(2)(3)(4)(5)........ 0.22% 0.36% 0.61% 1.23% 0.62% 0.15% 0.18%
Net Losses as a Percent of
Average Gross Portfolio
Outstanding(2)(3)(5)............ 0.11% 0.19% 0.31% 0.67% 0.34% 0.08% 0.09%
</TABLE>
- ------------
(1) Except as indicated, all amounts and percentages are based on the gross
amount scheduled to be paid on each retail installment sale contract,
including unearned finance and other charges. The information in the table
includes an immaterial amount of retail installment sale contracts on
equipment other than agricultural and construction equipment and includes
the receivables that remained with Tenneco Credit Corporation and previously
sold contracts that Case Credit continues to service.
(2) A portion of the contracts provide for recourse to Dealers. See "The
Receivables Pools--The Retail Equipment Financing Business--Dealer
Agreements" in the Prospectus. Approximately 28%, 22%, 22%, 22%, 22%, 27%
and 26% of the aggregate amounts scheduled to be paid on the contracts
acquired during the six months ended June 30, 1996 and 1995 and the years
ended December 31, 1995, 1994, 1993, 1992 and 1991, provide for recourse to
Dealers (excluding contracts which provide for recourse to Dealers through
the Dealers' reserve accounts). In the event of defaults by the obligor
under any such contract, the contract is required to be repurchased by the
Dealer for an amount generally equal to all amounts due and unpaid
thereunder. As a result, any losses under any such contract are incurred by
the Dealer and are not included in the net loss figures set forth above.
(3) Net losses are equal to the aggregate of the principal balances of all
contracts (plus accrued but unpaid interest thereon) that are determined to
be uncollectible in the period, less any recoveries on contracts charged off
in the period or any prior periods, excluding any losses resulting from
repossession expenses and excluding any recoveries from Dealers' reserve
accounts.
(4) Liquidations represent a reduction in the outstanding balances of the
contracts as a result of cash payments and charge-offs.
(5) Percentages have been annualized for the six months ended June 30, 1996 and
1995, and are not necessarily indicative of the experience for the year.
S-25
<PAGE> 26
The net loss figures above reflect the fact that Case Credit had recourse
to Dealers on a portion of the Contracts. See "The Receivables Pools--The Retail
Equipment Financing Business--Dealer Agreements" in the Prospectus. This fact
was taken into consideration in determining the principal balance of the
Certificates and the Specified Spread Account Balance. In the event of a
Dealer's bankruptcy, a bankruptcy trustee, a creditor or the Dealer as debtor in
possession might attempt to characterize recourse sales of Contracts as loans to
the Dealer secured by the Contracts. Such an attempt, if successful, could
result in payment delays or losses on the affected Receivables.
WEIGHTED AVERAGE LIFE OF THE OFFERED SECURITIES
Information regarding certain maturity and prepayment considerations with
respect to the Offered Securities is set forth under "Weighted Average Life of
the Securities" in the Prospectus. In addition, on and after the July 1997
Payment Date, the Offered Noteholders (together with the Class B Noteholders)
are entitled to receive certain amounts available to be released from the Spread
Account as an accelerated payment of principal in the same manner and sequence
as other principal payments on the Notes. See "Description of the Offered
Notes--Payments of Principal" and "Description of the
Certificates--Distributions of Principal Payments." As the rate of payment of
principal of the Offered Notes, the Class B Notes and the Certificates depends
primarily on the rate of payment (including prepayments) of the principal
balance of the Receivables, final payment of each Class of Offered Notes and the
final distribution in respect of the Certificates could occur significantly
earlier than the A-1 Note Final Scheduled Maturity Date or the Final Scheduled
Maturity Date, as applicable. Offered Securityholders will bear the risk of
being able to reinvest principal payments of the Offered Securities at yields at
least equal to the yield on their respective Offered Securities.
Prepayments on retail installment sale contracts can be measured relative
to a prepayment standard or model. The model used in this Prospectus Supplement
is based on a conditional prepayment rate ("CPR"). CPR is determined by the
percentage of principal outstanding at the beginning of a period that prepays
during that period, stated as an annualized rate. The CPR prepayment model, like
any prepayment model, does not purport to be either an historical description of
prepayment experience or a prediction of the anticipated rate of prepayment.
The tables on pages S-28 and S-29 have been prepared on the basis of
certain assumptions, including that: (a) the Receivables prepay in full at the
specified monthly CPR, with no repurchases, (b) each scheduled payment on the
Receivables is made on the last day of each Collection Period, (c) distributions
are made on each Payment Date in respect of the Offered Notes and Certificates
in accordance with the description set forth under "Description of the Transfer
and Servicing Agreements--Distributions," (d) the balance in the Spread Account
on any day is equal to the Specified Spread Account Balance, (e) the Closing
Date occurs on September 19, 1996, (f) the A-1 Note Rate, A-2 Note Rate, A-3
Note Rate and Certificate Rate are 5.5625%, 6.25%, 6.65% and 6.95%, and the
Initial Class B Rate equals the rate expected to be agreed upon between the
Issuer and the purchaser or purchasers of the Initial Class B Notes and (g) the
Servicer exercises its option to purchase the Receivables on the Payment Date
after the Pool Balance declines to 10% of the Initial Pool Balance. The table
indicates the projected weighted average life of each Class of Notes and the
Certificates and sets forth the percent of the initial principal balance of each
class of Offered Notes and the percent of initial principal amount of the
Certificates that is projected to be outstanding after each of the Payment Dates
shown at various CPR percentages.
S-26
<PAGE> 27
The table also assumes that the Receivables have been aggregated into four
hypothetical pools with all of the Receivables within each such pool having the
following characteristics:
<TABLE>
<CAPTION>
AGGREGATE WEIGHTED
POOL CONTRACT VALUE AVERAGE APR
---------------------------------------------------- -------------- -----------
<S> <C> <C>
1................................................... $ 467,425,286 8.31%
2................................................... 163,712,520 8.31
3................................................... 121,931,097 8.31
4................................................... 121,931,097 8.31
------------
$ 875,000,000
============
</TABLE>
Hypothetical pool 1 has the same Contract Value and cashflow
characteristics as the Initial Receivables. Hypothetical pools 2, 3 and 4 have
Contract Values equal in the aggregate to the Initial Pre-Funded Amount, which
means in effect that the following table assumes that no Additional Class B
Notes are issued and the aggregate Contract Values of Subsequent Receivables as
of their respective Subsequent Cutoff Dates is no greater than the Pre-Funded
Amount. The cash flow characteristics of pools 2, 3 and 4 are generally modelled
on actual scheduled payments on receivables originated by Case Credit in
September and October of 1995 and transferred to Case Equipment Loan Trust
1995-B, except that the cash flows have been adjusted consistent with the
assumed weighted average APR.
The actual characteristics and performance of the Receivables will differ
from the assumptions used in constructing the tables on pages S-28 and S-29. The
assumptions used are hypothetical and have been provided only to give a general
sense of how the principal cash flows might behave under varying prepayment
scenarios. For example, it is highly unlikely that the Receivables will prepay
at a constant CPR until maturity or that all of the Receivables will prepay at
the same CPR. Similarly, the aggregate Contract Value of Subsequent Receivables
may be less than the Pre-Funded Amount or up to $75,000,000 greater than the
Initial Pre-Funded Amount (if Additional Class B Notes are issued). Moreover,
the diverse terms of Receivables within each of the three hypothetical pools
could produce slower or faster principal distributions than indicated in the
table at the various CPR specified. Any difference between such assumptions and
the actual characteristics and performance of the Receivables, or actual
prepayment experience, will affect the percentages of initial balances
outstanding over time and the weighted average lives of the Offered Notes and
Certificates. For instance, all other things being equal, the purchase of
Subsequent Receivables with an aggregate Contract Value in excess of the Initial
Pre-Funded Amount would tend to result in a faster repayment of the Offered
Securities. As an example, if the assumed aggregate Contract Value of pool 4 was
increased by $75,000,000, Additional Class B Notes in an aggregate principal
amount of $75,000,000 were assumed to have been issued and all other assumptions
described above were unchanged, then the hypothetical weighted average lives of
the Offered Securities would be reduced by approximately one month.
S-27
<PAGE> 28
PERCENT OF INITIAL PRINCIPAL AMOUNT OF THE NOTES OR
INITIAL CERTIFICATE BALANCE AT VARIOUS CPR PERCENTAGES
<TABLE>
<CAPTION>
A-1 NOTES A-2 NOTES
---------------------------------------- ----------------------------------------
PAYMENT DATE 0% 13% 15% 17% 19% 0% 13% 15% 17% 19%
- --------------------------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Closing Date........................... 100 100 100 100 100 100 100 100 100 100
October 1996........................... 90 86 85 84 84 100 100 100 100 100
November 1996.......................... 81 72 70 68 67 100 100 100 100 100
December 1996.......................... 70 54 52 49 46 100 100 100 100 100
January 1997........................... 54 31 28 24 20 100 100 100 100 100
February 1997.......................... 42 12 7 2 0 100 100 100 100 99
March 1997............................. 35 0 0 0 0 100 99 97 95 93
April 1997............................. 24 0 0 0 0 100 94 91 89 87
May 1997............................... 9 0 0 0 0 100 87 84 81 79
June 1997.............................. 0 0 0 0 0 99 81 78 75 72
July 1997.............................. 0 0 0 0 0 94 74 71 68 65
August 1997............................ 0 0 0 0 0 90 68 64 61 58
September 1997......................... 0 0 0 0 0 85 62 58 54 51
October 1997........................... 0 0 0 0 0 77 53 49 46 42
November 1997.......................... 0 0 0 0 0 71 46 42 38 35
December 1997.......................... 0 0 0 0 0 65 39 35 32 28
January 1998........................... 0 0 0 0 0 59 33 29 25 21
February 1998.......................... 0 0 0 0 0 55 28 24 20 16
March 1998............................. 0 0 0 0 0 53 24 20 16 12
April 1998............................. 0 0 0 0 0 49 20 16 11 7
May 1998............................... 0 0 0 0 0 44 14 10 6 1
June 1998.............................. 0 0 0 0 0 40 10 5 1 0
July 1998.............................. 0 0 0 0 0 35 5 0 0 0
August 1998............................ 0 0 0 0 0 31 0 0 0 0
September 1998......................... 0 0 0 0 0 26 0 0 0 0
October 1998........................... 0 0 0 0 0 19 0 0 0 0
November 1998.......................... 0 0 0 0 0 12 0 0 0 0
December 1998.......................... 0 0 0 0 0 7 0 0 0 0
January 1999........................... 0 0 0 0 0 1 0 0 0 0
February 1999.......................... 0 0 0 0 0 0 0 0 0 0
March 1999............................. 0 0 0 0 0 0 0 0 0 0
April 1999............................. 0 0 0 0 0 0 0 0 0 0
May 1999............................... 0 0 0 0 0 0 0 0 0 0
June 1999.............................. 0 0 0 0 0 0 0 0 0 0
July 1999.............................. 0 0 0 0 0 0 0 0 0 0
August 1999............................ 0 0 0 0 0 0 0 0 0 0
September 1999......................... 0 0 0 0 0 0 0 0 0 0
October 1999........................... 0 0 0 0 0 0 0 0 0 0
November 1999.......................... 0 0 0 0 0 0 0 0 0 0
December 1999.......................... 0 0 0 0 0 0 0 0 0 0
January 2000........................... 0 0 0 0 0 0 0 0 0 0
February 2000.......................... 0 0 0 0 0 0 0 0 0 0
March 2000............................. 0 0 0 0 0 0 0 0 0 0
April 2000............................. 0 0 0 0 0 0 0 0 0 0
May 2000............................... 0 0 0 0 0 0 0 0 0 0
June 2000.............................. 0 0 0 0 0 0 0 0 0 0
July 2000.............................. 0 0 0 0 0 0 0 0 0 0
August 2000............................ 0 0 0 0 0 0 0 0 0 0
September 2000......................... 0 0 0 0 0 0 0 0 0 0
October 2000........................... 0 0 0 0 0 0 0 0 0 0
November 2000.......................... 0 0 0 0 0 0 0 0 0 0
December 2000.......................... 0 0 0 0 0 0 0 0 0 0
Weighted Average Life (years)(1)....... 0.41 0.29 0.27 0.26 0.25 1.58 1.19 1.13 1.09 1.04
</TABLE>
- ------------
(1) The weighted average life of an A-1 Note or A-2 Note is determined by: (a)
multiplying the amount of each principal payment on the applicable Offered
Note by the number of years from the date of issuance of the Offered Note to
the related Payment Date, (b) adding the results, and (c) dividing the sum
by the related initial principal amount of the Offered Note.
THIS TABLE HAS BEEN PREPARED BASED ON THE ASSUMPTIONS DESCRIBED ON PAGE
S-26 (INCLUDING THE ASSUMPTIONS REGARDING THE CHARACTERISTICS AND PERFORMANCE OF
THE RECEIVABLES, WHICH WILL DIFFER FROM THE ACTUAL CHARACTERISTICS AND
PERFORMANCE THEREOF) AND SHOULD BE READ IN CONJUNCTION THEREWITH.
S-28
<PAGE> 29
PERCENT OF INITIAL PRINCIPAL AMOUNT OF THE NOTES OR
INITIAL CERTIFICATE BALANCE AT VARIOUS CPR PERCENTAGES
<TABLE>
<CAPTION>
A-3 NOTES AND INITIAL CLASS B NOTES CERTIFICATES
---------------------------------------- ----------------------------------------
PAYMENT DATE 0% 13% 15% 17% 19% 0% 13% 15% 17% 19%
- --------------------------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Closing Date........................... 100 100 100 100 100 100 100 100 100 100
October 1996........................... 100 100 100 100 100 100 100 100 100 100
November 1996.......................... 100 100 100 100 100 100 100 100 100 100
December 1996.......................... 100 100 100 100 100 100 100 100 100 100
January 1997........................... 100 100 100 100 100 100 100 100 100 100
February 1997.......................... 100 100 100 100 100 100 100 100 100 100
March 1997............................. 100 100 100 100 100 100 100 100 100 100
April 1997............................. 100 100 100 100 100 100 100 100 100 100
May 1997............................... 100 100 100 100 100 100 100 100 100 100
June 1997.............................. 100 100 100 100 100 100 100 100 100 100
July 1997.............................. 100 100 100 100 100 100 100 100 100 100
August 1997............................ 100 100 100 100 100 100 100 100 100 100
September 1997......................... 100 100 100 100 100 100 100 100 100 100
October 1997........................... 100 100 100 100 100 100 100 100 100 100
November 1997.......................... 100 100 100 100 100 100 100 100 100 100
December 1997.......................... 100 100 100 100 100 100 100 100 100 100
January 1998........................... 100 100 100 100 100 100 100 100 100 100
February 1998.......................... 100 100 100 100 100 100 100 100 100 100
March 1998............................. 100 100 100 100 100 100 100 100 100 100
April 1998............................. 100 100 100 100 100 100 100 100 100 100
May 1998............................... 100 100 100 100 100 100 100 100 100 100
June 1998.............................. 100 100 100 100 97 100 100 100 100 99
July 1998.............................. 100 100 100 96 92 100 100 100 98 97
August 1998............................ 100 100 95 91 87 100 100 98 96 94
September 1998......................... 100 95 91 87 82 100 98 96 94 92
October 1998........................... 100 88 84 80 76 100 95 93 91 90
November 1998.......................... 100 82 78 75 71 100 93 91 89 88
December 1998.......................... 100 77 73 69 65 100 91 89 87 85
January 1999........................... 100 72 68 64 61 100 88 87 85 83
February 1999.......................... 97 68 64 60 57 99 87 85 84 82
March 1999............................. 94 65 61 58 54 98 86 84 82 81
April 1999............................. 91 62 58 54 51 96 84 83 81 79
May 1999............................... 86 58 54 50 47 94 82 81 79 78
June 1999.............................. 82 54 50 47 44 92 81 79 78 76
July 1999.............................. 77 50 47 43 40 91 79 78 76 75
August 1999............................ 73 47 43 40 37 89 78 76 75 74
September 1999......................... 68 43 40 37 34 87 76 75 74 72
October 1999........................... 61 38 35 32 29 84 74 73 72 70
November 1999.......................... 56 34 31 28 26 82 72 71 70 69
December 1999.......................... 51 30 28 25 23 79 71 70 69 68
January 2000........................... 46 27 24 22 20 77 69 68 67 66
February 2000.......................... 43 24 22 20 17 76 68 67 66 65
March 2000............................. 41 22 20 18 16 75 67 66 66 65
April 2000............................. 38 20 18 16 0 74 67 66 65 0
May 2000............................... 34 17 15 0 0 72 65 64 0 0
June 2000.............................. 31 15 0 0 0 71 64 0 0 0
July 2000.............................. 28 0 0 0 0 70 0 0 0 0
August 2000............................ 25 0 0 0 0 68 0 0 0 0
September 2000......................... 21 0 0 0 0 67 0 0 0 0
October 2000........................... 16 0 0 0 0 65 0 0 0 0
November 2000.......................... 12 0 0 0 0 63 0 0 0 0
December 2000.......................... 0 0 0 0 0 0 0 0 0 0
Weighted Average Life (years)(1)....... 3.38 2.90 2.82 2.75 2.68 3.88 3.44 3.36 3.28 3.20
</TABLE>
- ------------
(1) The weighted average life of an A-3 Note, Initial Class B Note or
Certificate is determined by: (a) multiplying the amount of each principal
payment on the applicable security by the number of years from the date of
issuance of the security to the related Payment Date, (b) adding the
results, and (c) dividing the sum by the related initial principal amount of
the security.
THIS TABLE HAS BEEN PREPARED BASED ON THE ASSUMPTIONS DESCRIBED ON PAGE
S-26 (INCLUDING THE ASSUMPTIONS REGARDING THE CHARACTERISTICS AND PERFORMANCE OF
THE RECEIVABLES, WHICH WILL DIFFER FROM THE ACTUAL CHARACTERISTICS AND
PERFORMANCE THEREOF) AND SHOULD BE READ IN CONJUNCTION THEREWITH.
S-29
<PAGE> 30
DESCRIPTION OF THE OFFERED NOTES
GENERAL
The Offered Notes will be issued pursuant to the terms of the Indenture, a
form of which has been filed as an exhibit to the Registration Statement. The
following summarizes the material terms of the Offered Notes and the Indenture.
The summary does not purport to be complete and is qualified in its entirety by
reference to the provisions of the Offered Notes and the Indenture. The
following summary supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of the notes of
any given series and the related indenture set forth in the Prospectus.
PAYMENTS OF INTEREST
The Offered Notes will constitute Fixed Rate Securities, as such term is
defined under "Certain Information Regarding the Securities--Fixed Rate
Securities" in the Prospectus. Interest on the principal balance of the Offered
Notes will accrue at the A-1 Rate, in the case of the A-1 Notes, the A-2 Rate,
in the case of the A-2 Notes, and the A-3 Rate, in the case of the A-3 Notes,
and, in each case, will be payable to the Offered Noteholders monthly on each
Payment Date commencing October 15, 1996. Interest will accrue from and
including the Closing Date or from the most recent Payment Date on which
interest has been paid to but excluding the following Payment Date and will be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
Interest accrued as of any Payment Date but not paid on such Payment Date will
be due on the next Payment Date together with interest on such amount at a rate
per annum equal to the interest rate on the applicable Class of Offered Notes
(to the extent lawful).
Interest payments on the Offered Notes will be derived from the Total
Distribution Amount remaining after the payment of the Administration Fee, the
Servicing Fee (if neither Case Credit nor any of its affiliates is the Servicer)
and from amounts on deposit in the Spread Account. If the amount of interest on
the Offered Notes payable on any Payment Date exceeds the amounts available from
these sources, the A-1 Noteholders, A-2 Noteholders and A-3 Noteholders will
receive their ratable share (based upon the total amount of interest due to each
of them) of the amount available to be distributed in respect of interest on the
Offered Notes. See "Description of the Transfer and Servicing
Agreements--Distributions" and "--Spread Account."
PAYMENTS OF PRINCIPAL
Principal payments will be made to the Offered Noteholders on each Payment
Date as follows. Principal payments will be made to the A-1 Noteholders in an
amount generally equal to the Principal Distribution Amount until the A-1 Notes
have been repaid in full. Commencing on the Payment Date on which the A-1 Notes
are repaid in full, principal payments will be made to the A-2 Noteholders in an
amount generally equal to the Principal Distribution Amount (less any amount
applied to repay the A-1 Notes) until the A-2 Repayment Date. Commencing on the
A-2 Repayment Date, principal payments will be made to the A-3 Noteholders in an
amount equal to the A-3 Noteholders' Principal Distributable Amount until the
A-3 Notes have been repaid in full. The A-3 Noteholders' Principal Distributable
Amount generally will be based on the A-3 Percentage of the Noteholders'
Principal Distribution Amount. The A-3 Percentage will generally equal the
percentage equivalent of a fraction the numerator of which is the outstanding
principal amount of the A-3 Notes and the denominator of which is the aggregate
outstanding principal amount of the A-3 Notes and the Class B Notes, as
determined on the A-2 Repayment Date. The Noteholders' Principal Distribution
Amount for each Payment Date on and after the A-2 Repayment Date will generally
equal the Noteholders' Percentage of the Principal Distribution Amount for that
Payment Date. However, if at any time the balance on deposit in the Spread
Account is less than the Spread Account Floor, then (a) the A-3 Percentage will
increase to 100% until the A-3 Notes have been paid in full and (b) the
Noteholders' Principal Distribution Amount will increase to 100% of the
Principal Distribution Amount until the A-3 Notes and the Class B Notes have
been paid in full. The effect of these changes would be to apply the entire
Principal Distribution Amount on each Payment Date: first, to the repayment of
the A-3 Notes until they have been paid in full; second, to the repayment of the
Class B Notes until they have been paid in full; and, third, to the repayment of
the Certificates. See "Description of the Transfer and Servicing
Agreements--Distributions."
S-30
<PAGE> 31
In addition, on and after the July 1997 Payment Date, certain amounts
available to be released from the Spread Account will be distributed to Offered
Noteholders (as well as Class B Noteholders) as an accelerated payment of
principal, any such accelerated payment to be made in the same manner and
sequence as other principal payments on the Notes.
Principal payments on the Offered Notes will generally be derived from the
Total Distribution Amount remaining after the payment of the Administration Fee,
the Servicing Fee (if neither Case Credit nor any of its affiliates is the
Servicer) and the Offered Noteholders' Interest Distributable Amount and from
amounts on deposit in the Spread Account. However, if on any Payment Date on
which any Offered Notes are outstanding the amount on deposit in the Spread
Account is less than 1.50% of the Pool Balance as of the end of the preceding
Collection Period, then funds will be withdrawn from the Spread Account only to
the extent needed to pay the interest due on the Offered Notes, the Class B
Notes and the Certificates, and no funds from the Spread Account will be applied
on such Payment Date to pay principal of the Offered Notes, the Class B Notes or
the Certificates. See "Description of the Transfer and Servicing
Agreements--Distributions" and "--Spread Account."
MANDATORY REDEMPTION
On the Payment Date on or immediately following the last day of the Funding
Period, any funds remaining in the Pre-Funding Account (after giving effect to
the purchase of all Subsequent Receivables, including any such purchase on such
date) will be applied to redeem the A-1 Notes then outstanding in whole or in
part, and if the A-1 Notes are redeemed in whole, any such funds remaining will
be applied to redeem the A-2 Notes in whole or in part (each, a "Mandatory
Redemption"). The aggregate principal amount of the A-1 Notes to be redeemed
will equal the lesser of (a) the remaining Pre-Funded Amount and (b) the full
outstanding principal amount of the A-1 Notes. The aggregate principal amount of
the A-2 Notes to be redeemed will equal the lesser of (i) the remaining
Pre-Funded Amount, after giving effect to the redemption of A-1 Notes in full,
and (ii) the full outstanding principal amount of the A-2 Notes. In the unlikely
event that the A-2 Notes are redeemed in full and there are any remaining funds
in the Pre-Funding Account, such funds will be applied towards the redemption of
the A-3 Notes and the Class B Notes and the prepayment of the Certificates in
the same proportions that would apply if the remaining Pre-Funded Amount were a
part of the Principal Distribution Amount.
The Noteholders' Prepayment Premium will be payable by the Trust to the A-1
Noteholders if the aggregate principal amount of A-1 Notes to be redeemed
pursuant to a Mandatory Redemption exceeds $100,000 and to the A-2 Noteholders
(and the A-3 Noteholders) if any portion of the A-2 Notes (or the A-3 Notes) is
redeemed. The Noteholders' Prepayment Premium, if any, with respect to the A-1
Notes will equal the excess, if any, discounted as described below, of (i) the
amount of interest that would have accrued on the principal amount of the A-1
Notes that is being redeemed (the "A-1 Note Redemption Amount") at the A-1 Note
Rate during the period commencing on and including the Payment Date on which the
A-1 Note Redemption Amount is required to be distributed to the A-1 Noteholders
to but excluding March 17, 1997, over (ii) the amount of interest that would
have accrued on the A-1 Note Redemption Amount over the same period at a per
annum rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Payment Date on the United States Treasury
Note due March 31, 1997. Such excess will be discounted on a monthly basis to a
present value on such Payment Date at the applicable yield described in clause
(ii) above. The Noteholders' Prepayment Premium, if any, with respect to the A-2
Notes (and the A-3 Notes) will be calculated in the same manner, but
substituting (w) the principal amount of the A-2 Notes (or the A-3 Notes) that
is being redeemed for the A-1 Note Redemption Amount, (x) the A-2 Note Rate (or
the A-3 Note Rate) for the A-1 Note Rate, (y) the date October 31, 1997 (or June
30, 1999, in the case of the A-3 Notes) for the date March 17, 1997 and (z) the
5.625% United States Treasury Note due October 31, 1997 (or the 6.75% United
States Treasury Note due June 30, 1999, in the case of the A-3 Notes) for the
reference Treasury Note referred to above.
The Trust's obligation to pay the Noteholders' Prepayment Premium will be
limited to funds that are received from the Seller under the Sale and Servicing
Agreement as liquidated damages for the failure to deliver Subsequent
Receivables. No other assets of the Trust will be available for the purpose of
making such
S-31
<PAGE> 32
payment. If the aggregate Noteholders' Prepayment Premium exceeds the amount
available, the A-1 Noteholders, A-2 Noteholders and A-3 Noteholders will receive
their ratable share (based upon the total amount of Noteholders' Prepayment
Premium due to each of them) of the amount available to be distributed in
respect of Noteholders' Prepayment Premium.
OPTIONAL REDEMPTION
The A-3 Notes will be redeemed in whole, but not in part, at the A-3 Note
Redemption Price, on any Payment Date, after the date on which the A-1 Notes and
the A-2 Notes have been paid in full, on which the Servicer exercises its option
to purchase the Receivables. The Servicer may purchase the Receivables from the
Trust if the Pool Balance declines to 10% or less of the Initial Pool Balance,
as described in the Prospectus under "Description of the Transfer and Servicing
Agreements--Termination." The A-3 Note Redemption Price will equal the unpaid
principal amount of the A-3 Notes, plus accrued and unpaid interest thereon.
THE INDENTURE TRUSTEE
Harris Trust and Savings Bank is the Indenture Trustee under the Indenture.
Harris Trust and Savings Bank is an Illinois banking corporation, and its
corporate trust offices are located at 311 West Monroe Street, Chicago, Illinois
60606. In the ordinary course of its business, the Indenture Trustee and its
affiliates have engaged and may in the future engage in commercial banking or
financial advisory transactions with Case Credit and its affiliates.
DESCRIPTION OF THE CLASS B NOTES
The Class B Notes will be issued pursuant to a note purchase agreement (the
"Note Purchase Agreement") among the Issuer, the initial purchaser of the Class
B Notes and such other parties as may be identified therein. The following
summarizes the terms of the Class B Notes and the Note Purchase Agreement that
are material to the Offered Securityholders. The Class B Notes are not offered
hereby and do not constitute "Notes" for purposes of the descriptions of the
"Notes" in (and as defined in) the Prospectus to which this Prospectus
Supplement is attached.
On the Closing Date, the Trust will issue Initial Class B Notes in the
aggregate principal amount of $25,000,000. In addition, during the Funding
Period, the Issuer may also issue Additional Class B Notes. The maximum
aggregate original principal balance of Additional Class B Notes that may be
issued will equal the lesser of: (a) the excess (if any) of the aggregate
Contract Value of Subsequent Receivables conveyed to the Trust during the
Funding Period over the Initial Pre-Funded Amount and (b) $75,000,000.
Consequently, the sum of the initial principal amounts of the Initial Class B
Notes and Additional Class B Notes will not exceed $100,000,000. Except as
described in the next sentence: (i) the Initial Class B Notes will bear interest
at a fixed rate (the "Initial Class B Rate") agreed upon between the Issuer and
the purchaser or purchasers of the Initial Class B Notes but not in excess of
7.31%; and (ii) any Additional Class B Notes will bear interest at a fixed rate
agreed upon between the Issuer and the purchaser or purchasers of the Additional
Class B Notes, but such rate may not exceed a rate per annum equal to the
weighted average APR of all Receivables after giving effect to all purchases of
Subsequent Receivables on or prior to the date of issuance of such Additional
Class B Notes minus 1% unless the Rating Agencies confirm in writing that a
higher rate will not result in a reduction or withdrawal of the rating of any
Class of the Offered Notes or of the Certificates. If agreed upon between the
Issuer and the purchaser or purchasers of the Class B Notes, the interest rates
for all of the Class B Notes may be set as of the date of issuance of any
Additional Class B Notes at a uniform rate, which may not exceed a rate per
annum equal to the weighted average APR of all Receivables after giving effect
to all purchases of Subsequent Receivables on or prior to the date of issuance
of such Additional Class B Notes minus 1% unless the Rating Agencies confirm in
writing that a higher rate will not result in a reduction or withdrawal of the
rating of any Class of the Offered Notes or of the Certificates. Additional
credit enhancement may be provided if necessary to enable the Issuer to issue
Additional Class B Notes bearing an interest rate in excess of the weighted
average APR of the Receivables minus 1% (or to reset the interest rate on the
Initial Class B Notes at such a rate).
S-32
<PAGE> 33
Distributions of interest and principal on the Class B Notes will be
subordinated in priority of payment to interest and principal due on the Offered
Notes, and distributions of interest and principal on the Certificates will be
subordinated in priority of payment to interest and principal due on the Class B
Notes, in each case to the extent described herein. It is expected that the
Initial Class B Notes and any Additional Class B Notes will be issued to one or
more institutional investors in private placements exempt from the registration
requirements of the Securities Act. The Class B Notes will be payable from the
assets of the Trust solely as described in this Prospectus Supplement. See
"Description of the Transfer and Servicing Agreements-- Distributions" below.
The Trust's right to issue Additional Class B Notes will be subject to
certain conditions, including that (i) each Subsequent Receivable to be
purchased with the proceeds of issuance of such Additional Class B Notes must
satisfy the eligibility criteria specified in the Sale and Servicing Agreement;
(ii) the Seller shall not have selected such Subsequent Receivables in a manner
that it believes is adverse to the interests of the Offered Noteholders, the
Class B Noteholders or the Certificateholders; (iii) as of the related
Subsequent Cutoff Date, the Receivables in the Trust at that time, including the
Subsequent Receivables to be conveyed by the Seller as of such Subsequent Cutoff
Date, shall satisfy the parameters described under "The Receivables Pool" herein
and under "The Receivables Pools" in the Prospectus; (iv) the applicable Spread
Account Initial Deposit for such Subsequent Transfer Date shall have been made;
(v) the Seller shall have executed and delivered to the Trust (with a copy to
the Indenture Trustee) a written assignment conveying such Subsequent
Receivables to the Trust (including a schedule identifying such Subsequent
Receivables); (vi) the Seller shall have delivered certain opinions of counsel
to the Trustee, the Indenture Trustee and the Rating Agencies with respect to
the transfer of all such Subsequent Receivables conveyed during such Collection
Period; (vii) the Trust and the Indenture Trustee shall have received written
confirmation from a firm of certified independent public accountants that, as of
the end of the preceding Collection Period, the Receivables in the Trust at that
time, including the Subsequent Receivables conveyed by the Seller during such
Collection Period, satisfied the parameters described under "The Receivables
Pool" herein and under "The Receivables Pools" in the Prospectus; and (viii)
Moody's shall have received written notification from the Seller of the addition
of all such Subsequent Receivables.
The Class B Notes will be secured (together with the Offered Notes) by the
Receivables, the Spread Account and the other assets of the Issuer
(collectively, the "Collateral"), and the Indenture Trustee will act as
representative of the Class B Noteholders for the limited purpose of perfecting
that security interest. The Class B Notes will have defined events of default
substantially similar to the Events of Default applicable to the Offered Note,
and the Class B Noteholders will be Specified Parties for purposes of the
definition of "Servicer Default" in the Prospectus. However, the Class B
Noteholders will not be permitted to declare any default under or accelerate the
maturity of the Class B Notes, or take any action with respect to the
Collateral, until the Offered Notes have been repaid in full, except that the
principal amount of the Class B Notes will automatically become due and owing if
the maturity of the Offered Notes is accelerated as the result of an Event of
Default (but such acceleration will be rescinded if the Offered Noteholders
rescind their own acceleration). So long as the Offered Notes remain
outstanding, the Class B Noteholders will be subject to the stand-still
provisions described below.
So long as the Offered Notes remain outstanding, the Offered Noteholders
(or the Indenture Trustee on their behalf) will have the sole rights, without
the necessity of any consent from the Class B Noteholders, to (a) except for
their notice rights as Specified Parties, exercise any rights arising from the
occurrence of a Servicer Default (including the right to remove Case Credit as
Servicer and appoint a successor Servicer), (b) declare an Event of Default with
respect to the Offered Notes or accelerate the maturity of the Offered Notes and
(c) direct the Indenture Trustee as to the taking of any actions with respect to
any Event of Default and the pursuit of any remedies (other than a sale of the
Collateral, which will require the consent of the Class B Noteholders). No
amendments may be made to the Indenture, the Trust Agreement or the Transfer and
Servicing Agreements, and the Trust may not be reconstituted after an Insolvency
Event occurs with respect to the Seller, in each case without the consent of the
Class B Noteholders.
S-33
<PAGE> 34
After the Offered Notes have been repaid in full, if any Class B Notes
remain outstanding, the Class B Noteholders and their appointed representative
will have the same rights with respect to events of default, Servicer Defaults
and the exercise of remedies as Offered Noteholders and the Indenture Trustee
had prior to the Offered Notes being repaid in full.
On the Payment Date on or immediately following the last day of the Funding
Period, any funds remaining in the Pre-Funding Account (after giving effect to
the purchase of all Subsequent Receivables, including any such purchase on such
date) and any Mandatory Redemption of A-1 Notes and the A-2 Notes on that date
will be applied to redeem the A-3 Notes and the Class B Notes and to prepay the
Certificates (in the same proportions that would apply to a distribution of the
Principal Distribution Amount) then outstanding in whole or in part.
DESCRIPTION OF THE CERTIFICATES
GENERAL
The Certificates will be issued pursuant to the terms of the Trust
Agreement, a form of which has been filed as an exhibit to the Registration
Statement. The following summarizes the material terms of the Certificates and
the Trust Agreement. However, the summary does not purport to be complete and is
qualified in its entirety by reference to the provisions of the Certificates and
the Trust Agreement. The following summary supplements, and to the extent
inconsistent therewith replaces, the description of the general terms and
provisions of the certificates of any given series and the related trust
agreement set forth in the Prospectus, to which description reference is hereby
made. Chase Manhattan Bank Delaware, a Delaware banking corporation, will be the
Trustee under the Trust Agreement.
DISTRIBUTIONS OF INTEREST INCOME
On each Payment Date commencing October 15, 1996, Certificateholders will
be entitled to distributions in an amount equal to the amount of interest that
would accrue at the Pass-Through Rate on the Certificate Balance as of the last
day of the preceding Collection Period. The Certificates will constitute Fixed
Rate Securities, as such term is defined in the Prospectus under "Certain
Information Regarding the Securities-- Fixed Rate Securities." Interest
distributable on a Payment Date will accrue from and including the Closing Date
or from the most recent Payment Date on which interest distributions have been
made to but excluding such Payment Date and will be calculated on the basis of a
360-day year consisting of twelve 30-day months. Interest distributions due for
any Payment Date but not distributed on such Payment Date will be due on the
next Payment Date increased by an amount equal to interest on such amount at a
rate per annum equal to the Pass-Through Rate (to the extent lawful). Interest
distributions with respect to the Certificates will be funded from the portion
of the Total Distribution Amount and amounts on deposit in the Spread Account
remaining after the payment of the Administration Fee, the Offered Noteholders'
Distributable Amount, the Class B Noteholders' Distributable Amount and the
Servicing Fee (if Case Credit or an affiliate of Case Credit is not the
Servicer). See "Description of the Transfer and Servicing
Agreements--Distributions" and "--Spread Account."
DISTRIBUTIONS OF PRINCIPAL PAYMENTS
Certificateholders will be entitled to distributions on each Payment Date
on and after the Payment Date on which the A-2 Notes are paid in full in an
amount generally equal to the Certificateholders' Percentage of (or, following
the payment in full of the Notes, all of) the Principal Distribution Amount for
such Payment Date (less any portion of the Principal Distribution Amount applied
on such Payment Date to reduce the outstanding principal amount of the A-2 Notes
to zero). Distributions with respect to principal payments will be funded from
the portion of the Total Distribution Amount remaining after the distribution of
the Servicing Fee (if Case Credit or an affiliate of Case Credit is not the
Servicer), the Administration Fee, the Offered Noteholders' Distributable
Amount, the Class B Noteholders' Distributable Amount, the Certificateholders'
Interest Distributable Amount and from amounts on deposit, if any, in the Spread
Account remaining after the payment of the Offered Noteholders' Distributable
Amount, the Class B Noteholders' Distributable
S-34
<PAGE> 35
Amount and the Certificateholders' Interest Distributable Amount. However, if on
any Payment Date on which any Offered Notes or the Class B Notes are outstanding
the amount on deposit in the Spread Account is less than 1.50% of the Pool
Balance as of the end of the preceding Collection Period, then funds will be
withdrawn from the Spread Account only to the extent needed to pay the interest
due on the Offered Notes, the Class B Notes and the Certificates, and no funds
from the Spread Account will be applied on such Payment Date to pay principal of
the Offered Notes, the Class B Notes or the Certificates. In addition, if at any
time the balance on deposit in the Spread Account is less than the Spread
Account Floor, then the Certificateholders will not receive any further
distributions of principal until the Notes have been paid in full. See
"Description of the Transfer and Servicing Agreements--Distributions" and
"--Spread Account."
MANDATORY REPURCHASE
The Certificates will be prepaid (a "Mandatory Repurchase"), in whole or in
part, on a pro rata basis on the Payment Date on or immediately following the
last day of the Funding Period in the unlikely event that the remaining
Pre-Funded Amount, after giving effect to the purchase of all Subsequent
Receivables, including any such purchase on such date, exceeds the aggregate
outstanding principal amount of the A-1 Notes and the A-2 Notes. The aggregate
principal amount of the Certificates to be repurchased will be an amount equal
to the Certificateholders' Percentage of the excess of the remaining Pre-Funded
Amount over the aggregate outstanding principal amount of the A-1 Notes and A-2
Notes.
The Certificateholders' Prepayment Premium will be payable by the Trust to
the Certificateholders if any portion of the principal amount of the
Certificates is prepaid pursuant to a Mandatory Repurchase. The
Certificateholders' Prepayment Premium for the Certificates will equal the
excess, if any, discounted as described below, of (i) the amount of interest
that would accrue on the aggregate principal balance of the Certificates that is
being prepaid (the "Certificate Prepayment Amount") at the Pass-Through Rate
during the period commencing on and including the Payment Date on which such
Certificate Prepayment Amount is required to be distributed to
Certificateholders to but excluding December 31, 1999, over (ii) the amount of
interest that would have accrued on such Certificate Prepayment Amount over the
same period at a per annum rate of interest equal to the bond equivalent yield
to maturity on the Determination Date preceding such Payment Date on the 7.75%
United States Treasury Note due December 31, 1999. Such excess will be
discounted on a monthly basis to a present value on such Payment Date at the
yield described in clause (ii) above.
The Trust's obligation to pay the Certificateholders' Prepayment Premium
will be limited to funds that are received from the Seller under the Sale and
Servicing Agreement as liquidated damages for the failure to deliver Subsequent
Receivables. No other assets of the Trust will be available for the purpose of
making such payment.
OPTIONAL PURCHASE
If the Servicer exercises its option to purchase the Receivables after the
Pool Balance declines to 10% or less of the Initial Pool Balance, as described
in the Prospectus under "Description of the Transfer and Servicing
Agreements--Termination," Certificateholders will receive an amount in respect
of the Certificates equal to the outstanding Certificate Balance together with
accrued interest at the Pass-Through Rate, which distribution shall effect early
retirement of the Certificates.
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS
The following summarizes the material terms of the Sale and Servicing
Agreement, the Purchase Agreement, the Administration Agreement and the Trust
Agreement (collectively, the "Transfer and Servicing Agreements," forms of which
have been filed as exhibits to the Registration Statement). The summary does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the provisions of the Transfer and Servicing Agreements. The
following summary supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of the Transfer
and
S-35
<PAGE> 36
Servicing Agreements set forth under the heading "Description of the Transfer
and Servicing Agreements" in the Prospectus.
SALE AND ASSIGNMENT OF INITIAL RECEIVABLES AND SUBSEQUENT RECEIVABLES
Certain information with respect to the conveyance prior to the Closing
Date of the Owned Contracts from Case Credit to the Seller pursuant to the
Liquidity Receivables Purchase Agreement and on the Closing Date of the Initial
Receivables from the Seller to the Trust pursuant to the Sale and Servicing
Agreement is set forth under "Description of the Transfer and Servicing
Agreements--Sale and Assignment of Receivables" and "--Commercial Paper Program"
in the Prospectus. In addition, during the Funding Period, pursuant to the Sale
and Servicing Agreement, the Seller will be obligated to sell to the Trust
Subsequent Receivables having an aggregate Contract Value equal to approximately
$407,574,714, such amount being equal to the Initial Pre-Funded Amount. In
addition, at the Seller's option, the Seller will have the right to sell, and
the Trust will be obligated to purchase, additional Subsequent Receivables from
time to time during the Funding Period having an aggregate Contract Value of up
to $75,000,000, the maximum permitted aggregate original principal balance of
the Additional Class B Notes.
During the Funding Period, on each Subsequent Transfer Date, subject to the
conditions described below, the Seller will sell and assign to the Trust,
without recourse, the Seller's entire interest in the Subsequent Receivables
designated by the Seller as of the related Subsequent Cutoff Date and identified
in a schedule attached to an assignment relating to such Subsequent Receivables
executed on such date by the Seller. Upon the conveyance of Subsequent
Receivables to the Trust on a Subsequent Transfer Date, (i) the Pool Balance
will increase in an amount equal to the aggregate Contract Value of the
Subsequent Receivables, (ii) an amount equal to 3.75% of the aggregate Contract
Value of the Subsequent Receivables will be withdrawn from the Pre-Funding
Account (or made available by the Issuer from the proceeds of issuance of
Additional Class B Notes) and deposited in the Spread Account, and (iii) an
amount equal to the excess of the aggregate Contract Value of such Subsequent
Receivables over the amount described in clause (ii) will be withdrawn from the
Pre-Funding Account (or made available by the Issuer from the proceeds of
issuance of Additional Class B Notes) and paid to the Seller.
Any conveyance of Subsequent Receivables is subject to the satisfaction, on
or before the related Subsequent Transfer Date, of the following conditions
precedent, among others: (i) each such Subsequent Receivable must satisfy the
eligibility criteria specified in the Sale and Servicing Agreement (see "The
Receivables Pool"); (ii) the Seller shall not have selected such Subsequent
Receivables in a manner that it believes is adverse to the interests of the
Offered Noteholders, the Class B Noteholders or the Certificateholders; (iii) as
of the related Subsequent Cutoff Date, the Receivables, including any Subsequent
Receivables conveyed by the Seller as of such Subsequent Cutoff Date, must
satisfy the criteria described under "The Receivables Pool" herein and "The
Receivables Pools" in the Prospectus; (iv) the applicable Spread Account Initial
Deposit for such Subsequent Transfer Date shall have been made; (v) the Seller
shall have executed and delivered to the Trust (with a copy to the Indenture
Trustee) a written assignment conveying such Subsequent Receivables to the Trust
(including a schedule identifying such Subsequent Receivables); (vi) the Seller
shall have delivered certain opinions of counsel to the Trustee, the Indenture
Trustee and the Rating Agencies with respect to the transfer of all such
Subsequent Receivables conveyed during such Collection Period; (vii) the Trust
and the Indenture Trustee shall have received written confirmation from a firm
of certified independent public accountants that, as of the end of the preceding
Collection Period, the Receivables in the Trust at that time, including the
Subsequent Receivables conveyed by the Seller during each Collection Period,
satisfied the parameters described under "The Receivables Pool" herein and under
"The Receivables Pools" in the Prospectus; and (viii) Moody's shall have
received written notification from the Seller of the addition of all such
Subsequent Receivables.
Except for the criteria described in the preceding paragraph, there will be
no required characteristics of the Subsequent Receivables. Therefore, following
the transfer of Subsequent Receivables to the Trust, the aggregate
characteristics of the entire Receivables Pool may vary from those of the
Initial Receivables. See "Risk Factors--The Receivables and the Pre-Funding
Account" and "The Receivables Pool."
S-36
<PAGE> 37
ACCOUNTS
In addition to the Accounts referred to in the Prospectus under
"Description of the Transfer and Servicing Agreements--Accounts," the Servicer
will establish and maintain the Pre-Funding Account, the Negative Carry Account
and the Spread Account, each in the name of the Indenture Trustee and on behalf
of the Offered Noteholders and the Certificateholders.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicing Fee Rate with respect to the Servicing Fee to be paid to the
Servicer will be 1.00% per annum of the Pool Balance as of the first day of each
Collection Period. The Servicing Fee (together with any portion of the Servicing
Fee that remains unpaid from prior Payment Dates) will be paid solely to the
extent of the Total Distribution Amount and will be paid after the distribution
of any portion of the Total Distribution Amount to the Offered Noteholders, the
Class B Noteholders and the Certificateholders. However, if the Servicer is not
Case Credit or an affiliate of Case Credit, the Servicing Fee will be paid prior
to the distribution of any portion of the Total Distribution Amount to the
Offered Noteholders, the Class B Noteholders or the Certificateholders. See
"Description of the Transfer and Servicing Agreements--Servicing Compensation
and Payment of Expenses" in the Prospectus.
DISTRIBUTIONS
Deposits to Collection Account. By the third business day prior to a
Payment Date (the "Determination Date"), the Servicer will provide the Indenture
Trustee with certain information with respect to the preceding Collection
Period, including the amount of aggregate collections on the Receivables, the
aggregate Purchase Amount of Receivables to be repurchased by the Seller or to
be purchased by the Servicer and the Negative Carry Amount to be withdrawn from
the Negative Carry Account.
On or before the business day preceding each Payment Date, the Servicer
will cause the Total Distribution Amount to be deposited into the Collection
Account. The "Total Distribution Amount" for a Payment Date will be the
aggregate collections on the Receivables (including collections received after
the end of the preceding calendar month on any Subsequent Receivables added to
the Trust after the end of that preceding calendar month and on or prior to that
Payment Date) with respect to the related Collection Period (including any
Liquidation Proceeds, the Purchase Amount of any Receivables repurchased by the
Seller or purchased by the Servicer and Investment Earnings for such Payment
Date) plus the Negative Carry Amount for such Collection Period. "Liquidated
Receivables" means defaulted Receivables in respect of which the Financed
Equipment has been sold or otherwise disposed of and "Liquidation Proceeds"
means all proceeds of the Liquidated Receivables obtained through the sale or
other disposition of the Financed Equipment, net of expenses incurred by the
Servicer in connection with such liquidation and any amounts required by law to
be remitted to the Obligor on such Liquidated Receivables.
The Total Distribution Amount on any Payment Date will exclude: (i) all
payments and proceeds (including Liquidation Proceeds) of any Receivables the
Purchase Amount of which has been included in the Total Distribution Amount in a
prior Collection Period; (ii) any monies collected with respect to any
Liquidated Receivable (other than from the sale or other disposition of the
Financed Equipment) during any Collection Period after the Collection Period in
which such Receivable became a Liquidated Receivable; or (iii) amounts released
from the Pre-Funding Account.
Deposits to the Distribution Accounts. On each Payment Date, the Servicer
will instruct the Indenture Trustee to make the deposits and distributions set
forth below, to the extent of the Total Distribution Amount in the following
order of priority:
(i) to the Administrator, from the Interest Distribution Amount, the
Administration Fee and all unpaid Administration Fees from prior Collection
Periods;
(ii) to the Note Distribution Account, the Offered Noteholders'
Interest Distributable Amount;
(iii) to the Note Distribution Account, the A-1 Noteholders' Principal
Distributable Amount;
S-37
<PAGE> 38
(iv) to the Note Distribution Account, the A-2 Noteholders' Principal
Distributable Amount;
(v) to the Note Distribution Account, the A-3 Noteholders' Principal
Distributable Amount;
(vi) to the Note Distribution Account, the Class B Noteholders'
Interest Distributable Amount;
(vii) to the Note Distribution Account, the Class B Noteholders'
Principal Distributable Amount;
(viii) to the Certificate Distribution Account, the
Certificateholders' Interest Distributable Amount;
(ix) to the Certificate Distribution Account, the Certificateholders'
Principal Distributable Amount;
(x) to the Servicer, the Servicing Fee and all unpaid Servicing Fees
from prior Collection Periods; provided that if Case Credit or an affiliate
of Case Credit is not the Servicer, the amounts described in this clause
(x) will be paid prior to any other application of funds on deposit in the
Collection Account; and
(xi) to the Spread Account, the remaining Total Distribution Amount.
After an Event of Default and acceleration of the Offered Notes (and, if
any Offered Notes remain outstanding, on and after the Final Scheduled Maturity
Date), principal payments will be made ratably to all Offered Noteholders.
"A-1 Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Payment Date until the Payment Date on which the outstanding
principal amount of the A-1 Notes has been reduced to zero, 100% of the
Principal Distribution Amount for such Payment Date.
"A-1 Noteholders' Principal Carryover Shortfall" means, with respect
to any Payment Date, the excess of the A-1 Noteholders' Principal
Distributable Amount for the preceding Payment Date over the amount that
was actually deposited in the Note Distribution Account in respect of
principal of the A-1 Notes on such preceding Payment Date.
"A-1 Noteholders' Principal Distributable Amount" means, with respect
to any Payment Date, the sum of (i) the A-1 Noteholders' Monthly Principal
Distributable Amount for such Payment Date and (ii) the A-1 Noteholders'
Principal Carryover Shortfall for such Payment Date; provided, however,
that on or after the July 1997 Payment Date, certain amounts from the
Spread Account may be paid as accelerated payments of principal of the
Offered Notes and the Class B Notes as described under "--Spread Account"
below; and provided further, that the sum of clauses (i) and (ii) above
shall not exceed the outstanding principal amount of the A-1 Notes, and on
the A-1 Note Final Scheduled Maturity Date, the A-1 Noteholders' Principal
Distributable Amount will include the amount, to the extent of available
funds, necessary (after giving effect to the other amounts to be deposited
in the Note Distribution Account on such Payment Date and allocable to
principal) to reduce the outstanding principal amount of the A-1 Notes to
zero.
"A-2 Noteholders' Monthly Principal Distributable Amount" means, with
respect to each Payment Date on or after the Payment Date on which an
amount sufficient to reduce the outstanding principal amount of the A-1
Notes to zero has been deposited in the Note Distribution Account, 100% of
the Principal Distribution Amount (less the portion thereof, if any,
applied to reduce the outstanding principal amount of the A-1 Notes to zero
on such Payment Date).
"A-2 Noteholders' Principal Carryover Shortfall" means, with respect
to any Payment Date, the excess of the A-2 Noteholders' Principal
Distributable Amount for the preceding Payment Date over the amount that
was actually deposited in the Note Distribution Account in respect of
principal of the A-2 Notes on such preceding Payment Date.
"A-2 Noteholders' Principal Distributable Amount" means, with respect
to any Payment Date, the sum of (i) the A-2 Noteholders' Monthly Principal
Distributable Amount for such Payment Date and (ii) the A-2 Noteholders'
Principal Carryover Shortfall for such Payment Date; provided, however,
that,
S-38
<PAGE> 39
until an amount sufficient to reduce the outstanding principal amount of
the A-1 Notes to zero has been deposited in the Note Distribution Account,
the A-2 Noteholders' Principal Distributable Amount shall be zero;
provided, further, that on or after the July 1997 Payment Date, certain
amounts from the Spread Account may be paid as accelerated payments of
principal of the Offered Notes and the Class B Notes as described under
"--Spread Account" below; and provided further, that the sum of clauses (i)
and (ii) shall not exceed the outstanding principal amount of the A-2
Notes, and on the Final Scheduled Maturity Date, the A-2 Noteholders'
Principal Distributable Amount will include the amount, to the extent of
available funds, necessary (after giving effect to the other amounts to be
deposited in the Note Distribution Account on such Payment Date and
allocable to principal) to reduce the outstanding principal amount of the
A-2 Notes to zero.
"A-2 Repayment Date" means the Payment Date on which an amount
sufficient to reduce the outstanding principal amount of the A-2 Notes to
zero is deposited in the Note Distribution Account.
"A-3 Noteholders' Monthly Principal Distributable Amount" means, with
respect to each Payment Date on or after the A-2 Repayment Date, the A-3
Percentage of the Noteholders' Principal Distribution Amount (less the
portion thereof, if any, applied to reduce the outstanding principal amount
of the A-2 Notes to zero on such Payment Date).
"A-3 Noteholders' Principal Carryover Shortfall" means, with respect
to any Payment Date, the excess of the A-3 Noteholders' Principal
Distributable Amount for the preceding Payment Date over the amount that
was actually deposited in the Note Distribution Account in respect of
principal of the A-3 Notes on such preceding Payment Date.
"A-3 Noteholders' Principal Distributable Amount" means, with respect
to any Payment Date, the sum of (i) the A-3 Noteholders' Monthly Principal
Distributable Amount for such Payment Date and (ii) the A-3 Noteholders'
Principal Carryover Shortfall for such Payment Date; provided, however,
that, until the A-2 Repayment Date, the A-3 Noteholders' Principal
Distributable Amount shall be zero; provided, further, that on or after the
July 1997 Payment Date, certain amounts from the Spread Account may be paid
as accelerated payments of principal of the Offered Notes and the Class B
Notes as described under "--Spread Account" below; and provided further,
that the sum of clauses (i) and (ii) shall not exceed the outstanding
principal amount of the A-3 Notes, and on the Final Scheduled Maturity
Date, the A-3 Noteholders' Principal Distributable Amount will include the
amount, to the extent of available funds, necessary (after giving effect to
the other amounts to be deposited in the Note Distribution Account on such
Payment Date and allocable to principal) to reduce the outstanding
principal amount of the A-3 Notes to zero.
"A-3 Percentage" means the percentage equivalent of a fraction (a) the
numerator of which is the outstanding principal amount of the A-3 Notes and
(b) the denominator of which is the aggregate outstanding principal amount
of the A-3 Notes and the Class B Notes, all as determined on the A-2
Repayment Date; provided, however, that (x) if at any time the balance on
deposit in the Spread Account is less than the Spread Account Floor, then,
with respect to each Payment Date thereafter until the A-3 Notes have been
repaid in full, the A-3 Percentage will equal 100% and (y) after the
Payment Date on which an amount sufficient to reduce the outstanding
principal amount of the A-3 Notes to zero is deposited in the Note
Distribution Account, the A-3 Percentage will equal 0%.
"Certificate Balance" equals, initially, $34,000,000 and, thereafter,
equals such amount reduced by all amounts allocable to principal previously
distributed to Certificateholders.
"Certificateholders' Distributable Amount" means, with respect to any
Payment Date, the sum of the Certificateholders' Principal Distributable
Amount and the Certificateholders' Interest Distributable Amount.
"Certificateholders' Interest Carryover Shortfall" means, with respect
to any Payment Date (the "current Payment Date"), the excess of the
Certificateholders' Interest Distributable Amount for the preceding Payment
Date over the amount in respect of interest that was actually deposited in
the Certificate Distribution Account on such preceding Payment Date, plus
interest on such excess, to the
S-39
<PAGE> 40
extent permitted by law, at the Pass-Through Rate from such preceding
Payment Date to but excluding the current Payment Date.
"Certificateholders' Interest Distributable Amount" means, with
respect to any Payment Date (the "current Payment Date"), the sum of (i)
interest accrued from and including the preceding Payment Date (or, in the
case of the first Payment Date, the Closing Date) to but excluding the
current Payment Date at the Pass-Through Rate on the Certificate Balance on
the preceding Payment Date after giving effect to all changes therein on
such preceding Payment Date (or, in the case of the first Payment Date, on
the Closing Date) plus (ii) the Certificateholders' Interest Carryover
Shortfall for the current Payment Date.
"Certificateholders' Percentage" means 4%.
"Certificateholders' Principal Carryover Shortfall" means, with
respect to any Payment Date, the excess of the Certificateholders'
Principal Distributable Amount for the preceding Payment Date over the
amount in respect of principal that was actually deposited in the
Certificate Distribution Account on such preceding Payment Date.
"Certificateholders' Principal Distributable Amount" means, with
respect to any Payment Date on or after the A-2 Repayment Date, the sum of
(i) the Certificateholders' Principal Distribution Amount, plus (ii) the
Certificateholders' Principal Carryover Shortfall for such Payment Date;
provided, however, that the Certificateholders' Principal Distributable
Amount will not exceed the Certificate Balance. In addition, on the Final
Scheduled Maturity Date, the principal required to be distributed to
Certificateholders will include the amount, to the extent of available
funds, necessary (after giving effect to the other amounts to be deposited
in the Certificate Distribution Account on such Payment Date and allocable
to principal) to reduce the Certificate Balance to zero.
"Certificateholders' Principal Distribution Amount" means, with
respect to any Payment Date on or after the A-2 Repayment Date, the excess,
if any, of the Principal Distribution Amount over the Noteholders'
Principal Distribution Amount.
"Class B Noteholders' Distributable Amount" means, with respect to any
Payment Date, the sum of (i) the Class B Noteholders' Interest
Distributable Amount and (ii) the Class B Noteholders' Principal
Distributable Amount.
"Class B Noteholders' Interest Carryover Shortfall" means, with
respect to any Payment Date (the "current Payment Date"), the excess of the
Class B Noteholders' Interest Distributable Amount for the preceding
Payment Date over the amount in respect of interest on the Class B Notes
that was actually deposited in the Note Distribution Account on such
preceding Payment Date, plus interest on such excess, to the extent
permitted by law, at a rate per annum equal to the Class B Rate from such
preceding Payment Date to but excluding the current Payment Date.
"Class B Noteholders' Interest Distributable Amount" means, with
respect to any Payment Date (the "current Payment Date"), an amount equal
to the sum of (i) the aggregate amount of interest accrued on the Class B
Notes at the Class B Rate from and including the preceding Payment Date
(or, if later, the issuance date for the Class B Notes) to but excluding
the current Payment Date plus (ii) the Class B Noteholders' Interest
Carryover Shortfall for the current Payment Date.
"Class B Noteholders' Monthly Principal Distributable Amount" means,
with respect to each Payment Date on or after the A-2 Repayment Date, the
Class B Percentage of the Noteholders' Principal Distribution Amount (less
the portion thereof, if any, applied to reduce the outstanding principal
amount of the A-2 Notes to zero on such Payment Date), or on and after the
Payment Date on which an amount sufficient to reduce the outstanding
principal amount of the A-3 Notes to zero has been deposited in the Note
Distribution Account, 100% of the Noteholders' Principal Distribution
Amount (less the portion thereof, if any, applied to reduce the outstanding
principal amount of the A-3 Notes to zero on such Payment Date).
S-40
<PAGE> 41
"Class B Noteholders' Principal Carryover Shortfall" means, with
respect to any Payment Date, the excess of the Class B Noteholders'
Principal Distributable Amount for the preceding Payment Date over the
amount that was actually deposited in the Note Distribution Account in
respect of principal of the Class B Notes on such preceding Payment Date.
"Class B Noteholders' Principal Distributable Amount" means, with
respect to any Payment Date, the sum of (i) the Class B Noteholders'
Monthly Principal Distributable Amount for such Payment Date and (ii) the
Class B Noteholders' Principal Carryover Shortfall for such Payment Date;
provided, however, that, until the A-2 Repayment Date, the Class B
Noteholders' Principal Distributable Amount shall be zero; and provided
further,that on or after the July 1997 Payment Date, certain amounts from
the Spread Account may be paid as accelerated payments of principal of the
Offered Notes and the Class B Notes as described under "--Spread Account"
below; and provided further, that the sum of clauses (i) and (ii) shall not
exceed the outstanding principal amount of the Class B Notes, and on the
Final Scheduled Maturity Date, the Class B Noteholders' Principal
Distributable Amount will include the amount, to the extent of available
funds, necessary (after giving effect to the other amounts to be deposited
in the Note Distribution Account on such Payment Date and allocable to
principal) to reduce the outstanding principal amount of the Class B Notes
to zero.
"Class B Percentage" means 100% minus the A-3 Percentage.
"Class B Rate" means, as to each Class B Note, the interest rate
applicable to that Class B Note.
"Initial Cutoff Date APR" means 8.31%, which is the weighted average
APR of the Initial Receivables as of the Initial Cutoff Date.
"Interest Distribution Amount" means, with respect to any Payment
Date, the excess, if any, of the Total Distribution Amount over the
Principal Distribution Amount for such Payment Date.
"Noteholders' Distributable Amount" means, with respect to any Payment
Date, the sum of the Offered Noteholders' Distributable Amount and the
Class B Noteholders' Distributable Amount.
"Noteholders' Percentage" means 96%.
"Noteholders' Principal Distribution Amount" means: (a) with respect
to the A-2 Repayment Date, a portion of the Principal Distribution Amount
equal to the sum of (i) the amount required to be deposited in the Note
Distribution Account on that date in order to reduce the outstanding
principal amount of the A-2 Notes to zero plus (ii) the Noteholders'
Percentage of the excess (if any) of the Principal Distribution Amount over
the amount referred to in clause (i) above; and (b) with respect to each
Payment Date thereafter, the Noteholders' Percentage of the Principal
Distribution Amount; provided, however, that (x) if at any time the balance
on deposit in the Spread Account is less than the Spread Account Floor,
then, with respect to each Payment Date thereafter, the Noteholders'
Principal Distribution Amount for each Payment Date will (subject to clause
(y) below) equal 100% of the Principal Distribution Amount for that Payment
Date and (y) in no event will the Noteholders' Principal Distribution
Amount for any Payment Date exceed the aggregate outstanding principal
amount of the A-2 Notes, A-3 Notes and Class B Notes on the Determination
Date prior to that Payment Date.
"Offered Noteholders' Distributable Amount" means, with respect to any
Payment Date, the sum of (i) the A-1 Noteholders' Principal Distributable
Amount, (ii) the A-2 Noteholders' Principal Distributable Amount, (iii) the
A-3 Noteholders' Principal Distributable Amount and (iv) the Offered
Noteholders' Interest Distributable Amount.
"Offered Noteholders' Interest Carryover Shortfall" means, with
respect to any Payment Date (the "current Payment Date"), the excess of the
Offered Noteholders' Interest Distributable Amount for the preceding
Payment Date over the amount in respect of interest on the Offered Notes
that was actually deposited in the Note Distribution Account on such
preceding Payment Date, plus interest on such excess, to the extent
permitted by law, at a rate per annum equal to the interest rate on the
applicable Class of Offered Notes from such preceding Payment Date to but
excluding the current Payment Date.
S-41
<PAGE> 42
"Offered Noteholders' Interest Distributable Amount" means, with
respect to any Payment Date (the "current Payment Date"), an amount equal
to the sum of (i) the aggregate amount of interest accrued on the Offered
Notes at their respective interest rates from and including the preceding
Payment Date (or, in the case of the initial Payment Date, from and
including the Closing Date) to but excluding the current Payment Date
(based on a 360-day year of twelve 30-day months) plus (ii) the Offered
Noteholders' Interest Carryover Shortfall for the current Payment Date.
"Pass-Through Rate" means, with respect to the Certificates, 6.95% per
annum.
"Principal Distribution Amount" means, with respect to any Payment
Date, the amount (not less than zero) equal to (i) the sum of the Contract
Value of all Receivables and the Pre-Funded Amount as of the beginning of
the immediately preceding Collection Period less (ii) the sum of the
Contract Value of all Receivables and the Pre-Funded Amount as of the
beginning of the current Collection Period.
"Subsequent Cutoff Date APR" means, with respect to any Subsequent
Cutoff Date, the weighted average APR of the Subsequent Receivables sold as
of such Subsequent Cutoff Date.
On each Payment Date, all amounts on deposit in the Note Distribution
Account will be distributed to the Offered Noteholders and the Class B
Noteholders, as applicable. On each Payment Date, all amounts on deposit in the
Certificate Distribution Account will be distributed to the Certificateholders.
NEGATIVE CARRY ACCOUNT
The Servicer will establish and maintain in the name of the Indenture
Trustee the Negative Carry Account as a Trust Account for the benefit of the
Offered Securityholders. The Negative Carry Account will be created with an
initial deposit by the Seller of $7,673,654 (the "Negative Carry Account Initial
Deposit"), which is equal to the Maximum Negative Carry Amount as of the Closing
Date. The "Maximum Negative Carry Amount" is equal to the product of (i) the
difference between (a) the weighted average of the interest rate on each class
of the Offered Notes and the Certificates and the Initial Class B Rate minus (b)
2.5%, multiplied by (ii) the amount on deposit in the Pre-Funded Account
multiplied by (iii) the fraction of a year represented by the number of days
until the expected end of the Funding Period (calculated on the basis of a
360-day year of twelve 30-day months). On each Payment Date, the Servicer will
instruct the Indenture Trustee to withdraw from the Negative Carry Account and
deposit into the Collection Account an amount equal to the Negative Carry Amount
for such Collection Period. For each Collection Period, the "Negative Carry
Amount" will be calculated by the Servicer as the difference (if positive)
between (1) the product of (A) the sum of the Offered Noteholders' Interest
Distributable Amount, the Class B Noteholders' Interest Distributable Amount and
the Certificateholders' Interest Distributable Amount multiplied by (B) the Pre-
Funded Percentage, as of the immediately prior Payment Date, or in the case of
the first Payment Date, the Closing Date, minus (2) the investment earnings on
the Pre-Funded Amount. The "Pre-Funded Percentage" for each Collection Period is
the percentage derived from the fraction the numerator of which is the Pre-
Funded Amount and the denominator of which is the sum of the Pool Balance and
the Pre-Funded Amount, after taking into account all transfers of Subsequent
Receivables during such Collection Period. The amount required to be on deposit
in the Negative Carry Account (the "Required Negative Carry Account Balance") as
of the beginning of each Collection Period will be equal to the lesser of (x)
the Negative Carry Account Initial Deposit minus all previous withdrawals from
the Negative Carry Account and (y) the Maximum Negative Carry Amount as of such
day. If the amount on deposit in the Negative Carry Account on any Payment Date
(after giving effect to the withdrawal of the Negative Carry Amount for such
Payment Date) is greater than the Required Negative Carry Account Balance, the
excess will be released to the Seller. All amounts remaining on deposit in the
Negative Carry Account on the Payment Date on or immediately following the last
day of the Funding Period (after giving effect to all withdrawals therefrom on
such Payment Date) will be released to the Seller.
SPREAD ACCOUNT
The rights of the Certificateholders to receive distributions with respect
to the Receivables will be subordinated to the rights of the Offered Noteholders
and the Class B Noteholders in the event of defaults and
S-42
<PAGE> 43
delinquencies on the Receivables as provided in the Sale and Servicing
Agreement. The rights of the Class B Noteholders to receive distributions with
respect to the Receivables will be similarly subordinated to the rights of the
Offered Noteholders to the extent described herein. The protection afforded to
the Offered Noteholders through subordination will be effected both by the
preferential right of the Offered Noteholders to receive current distributions
with respect to the Receivables and by the establishment of the Spread Account.
The Spread Account will be created with the initial deposit by the Seller of
$17,528,448, which is equal to the Pool Balance as of the Initial Cutoff Date
multiplied by 3.75%. On each Subsequent Transfer Date, cash or Eligible
Investments having a value approximately equal to 3.75% of the aggregate
Contract Value of the Subsequent Receivables conveyed to the Trust on such
Subsequent Transfer Date will be withdrawn from the Pre-Funding Account (or made
available by the Issuer from the proceeds of issuance of the Class B Notes) from
amounts otherwise distributable to the Seller in connection with the sale of
Subsequent Receivables and deposited in the Spread Account. The amount initially
deposited in the Spread Account by the Seller together with the aggregate amount
transferred from the Pre-Funding Account (or such proceeds) to the Spread
Account on each Subsequent Transfer Date is referred to as the "Spread Account
Initial Deposit." The Spread Account Initial Deposit will be augmented on each
Payment Date by the deposit in the Spread Account of amounts remaining after the
deposit in the Note Distribution Account and the Certificate Distribution
Account of amounts to be distributed to Offered Noteholders, Class B Noteholders
and Certificateholders and the payment of the Administration Fee and the
Servicing Fee. Subject to certain limitations, amounts on deposit in the Spread
Account will be released to the Seller to the extent that the amount on deposit
in the Spread Account exceeds the Specified Spread Account Balance. The Seller
may at any time, without consent of the Offered Securityholders, sell, transfer,
convey or assign in any manner its rights to and interests in distributions from
the Spread Account, including interest earnings thereon, provided that certain
conditions are satisfied, including: (i) the Rating Agencies confirm in writing
that such action will not result in a reduction or withdrawal of the rating of
the Offered Notes or the Certificates, (ii) the Seller provides to the Trustee
and the Indenture Trustee an opinion of independent counsel that such action
will not cause the Trust to be treated as an association (or publicly traded
partnership) taxable as a corporation for Federal income tax purposes, and (iii)
such transferee or assignee agrees to take positions for tax purposes consistent
with the tax positions agreed to be taken by the Seller.
"Specified Spread Account Balance" means, with respect to any Payment
Date, the greater of (i) 3.75% of the Pool Balance as of the opening of
business on the first day of the Collection Period in which such Payment
Date occurs and (ii) the Spread Account Floor; provided, however, that the
Specified Spread Account Balance with respect to a Payment Date (the
"current Payment Date") will be equal to the Specified Spread Account
Balance calculated for the Payment Date preceding such current Payment Date
if any of the following events occur: (A) the aggregate of the Realized
Losses from the Initial Cutoff Date through the end of the Collection
Period preceding such current Payment Date exceeds an amount equal to 2.25%
of the Initial Pool Balance; (B) the aggregate, on an annual basis, of the
Realized Losses during the Collection Period immediately preceding such
current Payment Date plus the aggregate Contract Value as of the last day
of the Collection Period immediately preceding such current Payment Date of
all Receivables that have not, as of such day, been liquidated as to which
the Financed Equipment securing such Receivables has been repossessed
exceeds an amount equal to 1.65% of the Pool Balance at the beginning of
such Collection Period; or (C) the aggregate amount of scheduled payments
that are delinquent by more than 60 days as of the end of the Collection
Period immediately preceding such current Payment Date exceeds an amount
equal to 2.25% of the Pool Balance as of the end of such Collection Period.
The Specified Spread Account Balance may be reduced or the definition
thereof otherwise modified without the consent of the Offered
Securityholders if the Rating Agencies confirm in writing that such
reduction or modification will not result in a reduction or withdrawal of
the rating of the Offered Notes or the Certificates.
"Spread Account Floor" means 2.50% of the Initial Pool Balance;
provided, however, that on any Payment Date when the sum of the outstanding
principal amount of the Offered Notes and the Class B Notes and the
Certificate Balance (the "Total Principal Outstanding") is less than or
equal to 97.50% of the Pool Balance, the "Spread Account Floor" will
instead equal 2.25% of the Initial Pool Balance; provided, further, that on
any Payment Date when the Total Principal Outstanding is less than or equal
to
S-43
<PAGE> 44
96.25% of the Pool Balance, the "Spread Account Floor" will instead equal
2.00% of the Initial Pool Balance; and provided, further, that in no event
will the Spread Account Floor exceed the Total Principal Outstanding.
"Realized Losses" means the excess of the principal balance of
Liquidated Receivables plus accrued but unpaid interest thereon over
Liquidation Proceeds.
If the amount on deposit in the Spread Account on any Payment Date (after
giving effect to all deposits or withdrawals therefrom on such Payment Date),
prior to the July 1997 Payment Date (or following the payment of the Offered
Notes and the Class B Notes in full) is greater than the Specified Spread
Account Balance for such Payment Date, the Servicer will instruct the Indenture
Trustee to distribute the amount of the excess to the Seller; provided, however,
that if, after giving effect to all payments made on the Offered Notes, Class B
Notes and Certificates on such Payment Date, the sum of the Pool Balance plus
the Pre-Funded Amount as of the first day of the Collection Period in which such
Payment Date occurs is less than the sum of the outstanding principal amount of
the Offered Notes, Class B Notes and the Certificate Balance, such excess amount
will not be distributed to the Seller and will be retained in the Spread
Account. Upon the Final Scheduled Payment Date or after payment of all interest
and principal of the Offered Notes, Class B Notes and Certificates, the Servicer
will instruct the Indenture Trustee to distribute the Spread Account balance to
the Seller. On any Payment Date on and after the July 1997 Payment Date, if the
amount on deposit in the Spread Account (after giving effect to all deposits or
withdrawals therefrom on such Payment Date, other than withdrawals described in
this sentence) is greater than the Specified Spread Account Balance for such
Payment Date, subject to certain limitations, the Servicer shall instruct the
Indenture Trustee to deposit the amount of the excess in the Note Distribution
Account for distribution to the Offered Noteholders or the Class B Noteholders
as an accelerated payment of principal in the same manner and sequence as other
principal payments on the Notes. Upon any distribution to the Seller of amounts
from the Spread Account made in accordance with the Sale and Servicing
Agreement, neither the Offered Noteholders nor the Certificateholders will have
any rights in, or claims to, such amounts.
Subject to the limitations described in the preceding paragraph, amounts
held from time to time in the Spread Account will continue to be held for the
benefit of Offered Noteholders, the Class B Noteholders and Certificateholders.
Funds will be withdrawn from the Spread Account to the extent that the Total
Distribution Amount (after the payment of the Administration Fee (and the
Servicing Fee if Case Credit or an affiliate of Case Credit is not the
Servicer)) with respect to any Collection Period is less than the Noteholders'
Distributable Amount and will be deposited in the Note Distribution Account and
used to cover shortfalls, first in the Offered Noteholders' Distributable Amount
and then in the Class B Noteholders' Distributable Amount. In addition, funds
will be withdrawn from the Spread Account to the extent that the portion of the
Total Distribution Amount remaining after the payment of the Administration Fee
(and the Servicing Fee if Case Credit or an affiliate of Case Credit is not the
Servicer) and the deposit of the Offered Noteholders' Distributable Amount and
Class B Noteholders' Distributable Amount in the Note Distribution Account is
less than the Certificateholders' Distributable Amount and will be deposited in
the Certificate Distribution Account. Notwithstanding the foregoing, if on any
Payment Date on which any Offered Notes or Class B Notes are outstanding the
amount on deposit in the Spread Account is less than 1.50% of the Pool Balance
as of the end of the preceding Collection Period, then funds will be withdrawn
from the Spread Account only to the extent needed to pay the interest due on the
Offered Notes, the Class B Notes and the Certificates and no funds from the
Spread Account will be applied on such Payment Date to principal of the Offered
Notes, the Class B Notes or the Certificates.
If on any Payment Date the entire Offered Noteholders' Distributable Amount
and Class B Noteholders' Distributable Amount for such Payment Date (after
giving effect to any amounts withdrawn from the Spread Account) is not deposited
in the Note Distribution Account, the Certificateholders will not receive any
distributions.
The Spread Account and the subordination of the Certificates and the Class
B Notes to the Offered Notes are intended to enhance the likelihood of receipt
by Offered Noteholders of the full amount of principal and interest due them and
to decrease the likelihood that the Offered Noteholders will experience losses.
In
S-44
<PAGE> 45
addition, the Spread Account is intended to enhance the likelihood of receipt by
Certificateholders of the full amount of the Certificate Balance and interest
thereon and to decrease the likelihood that the Certificateholders will
experience losses. However, in certain circumstances, the Spread Account could
be depleted. If the amount required to be withdrawn from the Spread Account to
cover shortfalls in collections on the Receivables (including the portion of
such shortfalls otherwise allocable to the Class B Notes) exceeds the amount of
cash in the Spread Account, Offered Noteholders and Certificateholders could
incur losses or a temporary shortfall in the amounts distributed to the Offered
Noteholders or the Certificateholders could result, which could, in turn,
increase the average life of the Offered Notes or the Certificates.
LEGAL INVESTMENT
The A-1 Notes will be eligible for purchase by money market funds under
paragraph (a)(9) of Rule 2a-7 under the Investment Company Act of 1940, as
amended.
ERISA CONSIDERATIONS
THE OFFERED NOTES
The Seller has been advised that, although there is little guidance on the
subject, the Offered Notes will not be treated as "equity interests" in the
Trust under the Plan Asset Regulation. As a result, the Offered Notes may be
purchased by an employee benefit plan or an individual retirement account (a
"Plan") subject to ERISA or Section 4975 of the Code.
However, without regard to whether the Offered Notes are treated as equity
interests for purposes of the Plan Asset Regulation, the acquisition or holding
of Offered Notes by or on behalf of a Plan could be considered to give rise to a
"prohibited transaction" if the Issuer, the Servicer or the Trustee is or
becomes a "party in interest" or a "disqualified person" with respect to such
Plan. Certain exemptions from the prohibited transaction rules could be
applicable to the purchase and holding of Offered Notes by a Plan depending on
the type and circumstances of the plan fiduciary making the decision to acquire
such Offered Notes. Included among these exemptions are: Prohibited Transaction
Class Exemption ("PTCE") 75-1, regarding transactions between registered
broker-dealers and plans; PTCE 90-1, regarding investments by insurance company
pooled separate accounts; PTCE 91-38, regarding investments by bank collective
investment funds; PTCE 84-14, regarding transactions effected by "qualified
professional asset managers"; PTCE 95-60, regarding transactions by insurance
company general accounts; and PTCE 96-23, regarding certain transactions
determined by in-house asset managers.
For additional information regarding treatment of the Offered Notes under
ERISA, see "ERISA Considerations" in the Prospectus.
THE CERTIFICATES
The Certificates may not be acquired by (i) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code or (iii) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By its acceptance of a
Certificate, each Certificateholder will be deemed to have represented and
warranted that it is not a Benefit Plan. For additional information regarding
treatment of the Certificates under ERISA, see "ERISA Considerations" in the
Prospectus.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Note Underwriting Agreement"), the Seller has agreed to cause the Trust to
sell to each of the Note Underwriters named below
S-45
<PAGE> 46
(the "Note Underwriters"), and each of the Note Underwriters has severally
agreed to purchase, the principal amount of Offered Notes set forth opposite its
name below:
A-1 NOTES
<TABLE>
<CAPTION>
PRINCIPAL
NOTE UNDERWRITERS AMOUNT
---------------------------------------------------------------- ------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................... $ 21,000,000
BA Securities, Inc. ............................................ 20,800,000
CS First Boston Corporation..................................... 20,800,000
First Chicago Capital Markets, Inc. ............................ 20,800,000
J.P. Morgan Securities Inc. .................................... 20,800,000
NationsBanc Capital Markets, Inc. .............................. 20,800,000
------------
$125,000,000
============
</TABLE>
A-2 NOTES
<TABLE>
<CAPTION>
PRINCIPAL
NOTE UNDERWRITERS AMOUNT
---------------------------------------------------------------- ------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................... $ 60,750,000
BA Securities, Inc. ............................................ 60,250,000
CS First Boston Corporation..................................... 60,250,000
First Chicago Capital Markets, Inc. ............................ 60,250,000
J.P. Morgan Securities Inc. .................................... 60,250,000
NationsBanc Capital Markets, Inc. .............................. 60,250,000
------------
$362,000,000
============
</TABLE>
A-3 NOTES
<TABLE>
<CAPTION>
PRINCIPAL
NOTE UNDERWRITERS AMOUNT
---------------------------------------------------------------- ------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................... $ 55,250,000
BA Securities, Inc. ............................................ 54,750,000
CS First Boston Corporation..................................... 54,750,000
First Chicago Capital Markets, Inc. ............................ 54,750,000
J.P. Morgan Securities Inc. .................................... 54,750,000
NationsBanc Capital Markets, Inc. .............................. 54,750,000
------------
$329,000,000
============
</TABLE>
The Seller has been advised by the Note Underwriters that they propose
initially to offer the Offered Notes to the public at the prices set forth
herein, and to certain dealers at such prices less the initial concession not in
excess of 0.10% per A-1 Note, 0.175% per A-2 Note and 0.18% per A-3 Note. The
Note Underwriters may allow and such dealers may reallow a concession not in
excess of 0.075% per A-1 Note, 0.125% per A-2 Note and 0.125% per A-3 Note to
certain other dealers. After the initial public offering of the Offered Notes,
the public offering prices and such concessions may be changed.
In the ordinary course of their respective businesses, the Note
Underwriters and their respective affiliates have engaged and may in the future
engage in investment banking or commercial banking transactions with Case Credit
and its affiliates. Without limiting the generality of the foregoing, an
affiliate of First Chicago
S-46
<PAGE> 47
Capital Markets, Inc. administers a special purpose entity that is expected to
be the initial purchaser of the Class B Notes and will receive customary
compensation in connection with such purchases.
Subject to the terms and conditions set forth in an underwriting agreement
(the "Certificate Underwriting Agreement"), the Seller has agreed to cause the
Trust to sell to each of the Certificate Underwriters named below (the
"Certificate Underwriters" and, together with the Note Underwriters, the
"Underwriters"), and each of the Certificate Underwriters has severally agreed
to purchase, the principal amount of Certificates set forth opposite its name
below:
<TABLE>
<CAPTION>
PRINCIPAL
CERTIFICATE UNDERWRITERS AMOUNT
----------------------------------------------------------------- -----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................... $17,000,000
CS First Boston Corporation...................................... 17,000,000
------------
$34,000,000
============
</TABLE>
The Seller has been advised by the Certificate Underwriters that they
propose initially to offer the Certificates to the public at the prices set
forth herein, and to certain dealers at such price less the initial concession
not in excess of 0.40% per Certificate. The Certificate Underwriters may allow
and such dealers may reallow a concession not in excess of 0.30% per Certificate
to certain other dealers. After the initial public offering of the Certificates,
the public offering price and such concessions may be changed.
In the ordinary course of their respective businesses, the Certificate
Underwriters and their respective affiliates have engaged and may in the future
engage in investment banking or commercial banking transactions with Case Credit
and its affiliates.
LEGAL OPINIONS
Certain legal matters relating to the Offered Notes and the Certificates
will be passed upon for the Trust, the Seller and the Servicer by Richard S.
Brennan, General Counsel and Secretary of Case, and by Mayer, Brown & Platt.
Certain legal matters relating to the Offered Notes and the Certificates will be
passed upon for the Underwriters by Cravath, Swaine & Moore. Certain Federal
income tax and other matters will be passed upon for the Trust by Mayer, Brown &
Platt. Certain Wisconsin state tax matters will be passed upon for the Trust by
Foley & Lardner. Mr. Brennan is also a partner at Mayer, Brown & Platt. Case has
been advised by Mr. Brennan that, at September 5, 1996, he owned 1,000 shares of
common stock and options to purchase 28,000 shares of common stock of Case.
Cravath, Swaine & Moore and Foley & Lardner have also provided legal services to
Case, Case Credit and the Seller.
S-47
<PAGE> 48
INDEX OF TERMS
Set forth below is a list of the defined terms used in this Prospectus
Supplement and the pages on which the definitions of such terms may be found.
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
A-1 Note Final Scheduled Maturity Date............................................. S-8
A-1 Noteholders.................................................................... S-6
A-1 Noteholders' Monthly Principal Distributable Amount............................ S-38
A-1 Noteholders' Principal Carryover Shortfall..................................... S-38
A-1 Noteholders' Principal Distributable Amount.................................... S-38
A-1 Note Rate...................................................................... S-6
A-1 Note Redemption Amount......................................................... S-9, 31
A-1 Notes.......................................................................... S-1, 3
A-2 Noteholders.................................................................... S-6
A-2 Noteholders' Monthly Principal Distributable Amount............................ S-38
A-2 Noteholders' Principal Carryover Shortfall..................................... S-38
A-2 Noteholders' Principal Distributable Amount.................................... S-38
A-2 Note Rate...................................................................... S-6
A-2 Notes.......................................................................... S-1, 3
A-2 Repayment Date................................................................. S-7, 39
A-3 Noteholders.................................................................... S-6
A-3 Noteholders' Monthly Principal Distributable Amount............................ S-39
A-3 Noteholders' Principal Carryover Shortfall..................................... S-39
A-3 Noteholders' Principal Distributable Amount.................................... S-39
A-3 Note Rate...................................................................... S-6
A-3 Note Redemption Price.......................................................... S-8
A-3 Notes.......................................................................... S-1, 3
A-3 Percentage..................................................................... S-39
Additional Class B Notes........................................................... S-1, 4
APR................................................................................ S-5
Benefit Plan....................................................................... S-45
Case............................................................................... S-5
Case Credit........................................................................ S-3
Cede............................................................................... S-2
Certificate Balance................................................................ S-39
Certificateholders................................................................. S-10
Certificateholders' Distributable Amount........................................... S-39
Certificateholders' Interest Carryover Shortfall................................... S-39
Certificateholders' Interest Distributable Amount.................................. S-40
Certificateholders' Percentage..................................................... S-40
Certificateholders' Prepayment Premium............................................. S-11
Certificateholders' Principal Carryover Shortfall.................................. S-40
Certificateholders' Principal Distributable Amount................................. S-40
Certificateholders' Principal Distribution Amount.................................. S-40
Certificate Prepayment Amount...................................................... S-11, 35
Certificates....................................................................... S-1, 3
Certificate Underwriters........................................................... S-47
Certificate Underwriting Agreement................................................. S-47
Class.............................................................................. S-2
</TABLE>
S-48
<PAGE> 49
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Class B Noteholders................................................................ S-14
Class B Noteholders' Distributable Amount.......................................... S-40
Class B Noteholders' Interest Carryover Shortfall.................................. S-40
Class B Noteholders' Interest Distributable Amount................................. S-40
Class B Noteholders' Monthly Principal Distributable Amount........................ S-40
Class B Noteholders' Principal Carryover Shortfall................................. S-41
Class B Noteholders' Principal Distributable Amount................................ S-41
Class B Notes...................................................................... S-1, 4
Class B Percentage................................................................. S-41
Class B Rate....................................................................... S-41
Closing Date....................................................................... S-4
Collateral......................................................................... S-33
Collection Account................................................................. S-14
Collection Period.................................................................. S-7
Commission......................................................................... S-2
Contracts.......................................................................... S-4
Contract Value..................................................................... S-6
CPR................................................................................ S-26
Cutoff Date........................................................................ S-21
Dealers............................................................................ S-5
Determination Date................................................................. S-37
DTC................................................................................ S-2
Exchange Act....................................................................... S-2
Federal Tax Counsel................................................................ S-15
Final Scheduled Maturity Date...................................................... S-8
Financed Equipment................................................................. S-4
Funding Period..................................................................... S-5
Indenture.......................................................................... S-1, 3
Indenture Trustee.................................................................. S-3
Initial Class B Notes.............................................................. S-1, 4
Initial Class B Rate............................................................... S-13, 32
Initial Cutoff Date................................................................ S-4
Initial Cutoff Date APR............................................................ S-41
Initial Pool Balance............................................................... S-8
Initial Pre-Funded Amount.......................................................... S-4
Initial Receivables................................................................ S-4
Interest Distribution Amount....................................................... S-41
Issuer............................................................................. S-3
Liquidated Receivables............................................................. S-37
Liquidation Proceeds............................................................... S-37
Mandatory Redemption............................................................... S-8, 31
Mandatory Repurchase............................................................... S-11, 35
Maximum Negative Carry Amount...................................................... S-42
Moody's............................................................................ S-16
Negative Carry Account............................................................. S-12
Negative Carry Account Initial Deposit............................................. S-12, 42
Negative Carry Amount.............................................................. S-12, 42
Noteholders' Distributable Amount.................................................. S-41
</TABLE>
S-49
<PAGE> 50
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Noteholders' Percentage............................................................ S-41
Noteholders' Prepayment Premium.................................................... S-9
Noteholders' Principal Distribution Amount......................................... S-41
Note Purchase Agreement............................................................ S-32
Notes.............................................................................. S-1, 4
Note Underwriters.................................................................. S-46
Note Underwriting Agreement........................................................ S-45
Offered Noteholders................................................................ S-6
Offered Noteholders' Distributable Amount.......................................... S-41
Offered Noteholders' Interest Carryover Shortfall.................................. S-41
Offered Noteholders' Interest Distributable Amount................................. S-42
Offered Notes...................................................................... S-1, 3
Offered Securities................................................................. S-1
Offered Securityholders............................................................ S-10
Owned Contracts.................................................................... S-4
Pass-Through Rate.................................................................. S-42
Payment Date....................................................................... S-2, 6
Plan............................................................................... S-45
Pool Balance....................................................................... S-6
Pre-Funded Amount.................................................................. S-11
Pre-Funded Percentage.............................................................. S-12, 42
Pre-Funding Account................................................................ S-1
Prepayment Premium................................................................. S-11
Principal Distribution Amount...................................................... S-42
Prospectus......................................................................... S-2
PTCE............................................................................... S-45
Purchase Agreement................................................................. S-4
Purchased Contracts................................................................ S-4
Rating Agencies.................................................................... S-15
Realized Losses.................................................................... S-44
Receivables........................................................................ S-1, 5
Receivables Pool................................................................... S-21
Record Date........................................................................ S-6
Required Negative Carry Account Balance............................................ S-42
Sale and Servicing Agreement....................................................... S-4
Seller............................................................................. S-1, 3
Servicer........................................................................... S-3
Specified Spread Account Balance................................................... S-13, 43
Spread Account..................................................................... S-12
Spread Account Floor............................................................... S-13, 43
Spread Account Initial Deposit..................................................... S-12, 43
Subsequent Cutoff Date............................................................. S-5
Subsequent Cutoff Date APR......................................................... S-42
Subsequent Receivables............................................................. S-2
Subsequent Transfer Date........................................................... S-5
Total Distribution Amount.......................................................... S-37
Total Principal Outstanding........................................................ S-13, 43
Transfer and Servicing Agreements.................................................. S-35
</TABLE>
S-50
<PAGE> 51
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Trust.............................................................................. S-1, 3
Trust Agreement.................................................................... S-3
Trustee............................................................................ S-3
Underwriters....................................................................... S-47
Wisconsin Tax Counsel.............................................................. S-15
</TABLE>
S-51
<PAGE> 52
PROSPECTUS
- ---------------------
CASE EQUIPMENT LOAN TRUSTS
ASSET BACKED NOTES
ASSET BACKED CERTIFICATES
------------------------
CASE RECEIVABLES II INC.
SELLER
CASE CREDIT CORPORATION
SERVICER
------------------------
The Asset Backed Notes (the "Notes") and the Asset Backed Certificates (the
"Certificates" and, together with the Notes, the "Securities") described herein
may be sold from time to time in one or more series, in amounts, at prices and
on terms to be determined at the time of sale and to be set forth in a
supplement to this Prospectus (a "Prospectus Supplement"). Each series of
Securities, which will include one or more classes of Notes and one or more
classes of Certificates, will be issued by a trust to be formed with respect to
such series (each, a "Trust"). Each Trust will be formed pursuant to a Trust
Agreement to be entered into between Case Receivables II Inc., as seller (the
"Seller"), and the trustee specified in the related Prospectus Supplement (the
"Trustee"). The Notes of each series will be issued and secured pursuant to an
Indenture between the Trust and the indenture trustee specified in the related
Prospectus Supplement (the "Indenture Trustee") and will represent indebtedness
of the related Trust. The Certificates of each series will represent fractional
undivided interests in the related Trust. The property of each Trust will
include a pool of retail installment sale contracts secured by new or used
agricultural and construction equipment (the "Receivables"), certain monies due
or received thereunder on and after the applicable Cutoff Date set forth in the
related Prospectus Supplement, security interests in the equipment financed
thereby and certain other property, all as described herein and in the related
Prospectus Supplement. In addition, if so specified in the related Prospectus
Supplement, the property of the Trust will include monies on deposit in a trust
account (the "Pre-Funding Account") to be established with the Indenture
Trustee, which will be used to purchase additional retail installment sale
contracts secured by new or used agricultural or construction equipment (the
"Subsequent Receivables") from the Seller from time to time during the Funding
Period specified in the related Prospectus Supplement.
Except as otherwise provided in the related Prospectus Supplement, each
class of Securities of any series will represent the right to receive a
specified amount of payments of principal and interest on the related
Receivables, at the rates, on the dates and in the manner described herein and
in the related Prospectus Supplement. The right of each class of Securities to
receive payments may be senior or subordinate to the rights of one or more of
the other classes of such series. Distributions on Certificates of a series may
be subordinated in priority to payments due on the related Notes to the extent
described herein and in the related Prospectus Supplement. A series may include
one or more classes of Notes and Certificates that differ as to the timing and
priority of payment, interest rate or amount of distributions in respect of
principal or interest or both.
PROSPECTIVE INVESTORS SHOULD CONSIDER THE FACTORS SET FORTH UNDER "RISK
FACTORS" HEREIN AND IN THE RELATED PROSPECTUS SUPPLEMENT.
------------------------
EXCEPT AS OTHERWISE SPECIFIED IN THE RELATED PROSPECTUS SUPPLEMENT, THE NOTES
OF A GIVEN SERIES REPRESENT OBLIGATIONS OF, AND THE CERTIFICATES OF SUCH
SERIES REPRESENT BENEFICIAL INTERESTS IN, THE RELATED TRUST ONLY AND
DO NOT REPRESENT OBLIGATIONS OF OR INTERESTS IN, AND ARE NOT
GUARANTEED OR INSURED BY, CASE RECEIVABLES II INC. OR CASE
CREDIT CORPORATION OR ANY OF THEIR RESPECTIVE
AFFILIATES.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Retain this Prospectus for future reference. This Prospectus may not be
used to consummate sales of Securities offered hereby unless accompanied by a
Prospectus Supplement.
------------------------
The date of this Prospectus is September 10, 1996.
<PAGE> 53
A series may also include one or more classes of Notes or Certificates
entitled to distributions in respect of principal with disproportionate, nominal
or no interest distributions, or to interest distributions with
disproportionate, nominal or no distributions in respect of principal. The rate
of payment in respect of principal of the Notes and distributions in respect of
the Certificate Balance of the Certificates of any class will depend on the
priority of payment of such class and the rate and timing of payments (including
prepayments, defaults, liquidations and repurchases of Receivables) on the
related Receivables. A rate of payment lower or higher than that anticipated may
affect the weighted average life of each class of Securities in the manner
described herein and in the related Prospectus Supplement.
AVAILABLE INFORMATION
The Seller, as originator of each Trust, has filed with the Securities and
Exchange Commission (the "Commission") a Registration Statement (together with
all amendments and exhibits thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Notes and the Certificates offered pursuant to this Prospectus. For further
information, reference is made to the Registration Statement that may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549; and at the
Commission's regional offices at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of the Registration Statement may be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All documents filed by the Seller, as originator of any Trust, pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), subsequent to the date of this Prospectus and
prior to the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus. Any statement contained herein or
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Seller will provide without charge to each person, including any
beneficial owner of Securities, to whom a copy of this Prospectus is delivered,
on the written or oral request of any such person, a copy of any or all of the
documents incorporated herein or in any related Prospectus Supplement by
reference, except the exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents). Requests for such
copies should be directed to Case Receivables II Inc., 233 Lake Avenue, Racine,
Wisconsin 53403, Attention: Vice President (Telephone 414-636-6564).
2
<PAGE> 54
SUMMARY OF TERMS
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus and by reference to
the information with respect to the Securities of any series contained in the
related Prospectus Supplement to be prepared and delivered in connection with
the offering of such Securities. Certain capitalized terms used in this summary
are defined elsewhere in this Prospectus on the pages indicated in the "Index of
Terms."
Issuer..................... With respect to each series of Securities, the
Trust to be formed pursuant to a trust agreement
(as amended and supplemented from time to time, a
"Trust Agreement") between the Seller and the
Trustee for such Trust (the "Trust" or the
"Issuer").
Seller..................... Case Receivables II Inc. (the "Seller" or "CRC"), a
wholly-owned subsidiary of Case Credit Corporation.
Servicer................... Case Credit Corporation, a Delaware corporation
(the "Servicer" or "Case Credit").
Indenture Trustee.......... With respect to each series of Securities, the
Indenture Trustee specified in the related
Prospectus Supplement.
Trustee.................... With respect to each series of Securities, the
Trustee specified in the related Prospectus
Supplement.
The Notes.................. Each series of Securities will include one or more
classes of Notes, which will be issued pursuant to
an indenture between the related Trust and the
Indenture Trustee (as amended and supplemented from
time to time, an "Indenture").
Unless otherwise specified in the related
Prospectus Supplement, Notes will be available for
purchase in denominations of $1,000 and integral
multiples thereof and will be available in
book-entry form only. Unless otherwise specified in
the related Prospectus Supplement, holders of Notes
("Noteholders") will be able to receive Definitive
Notes only in the limited circumstances described
herein or in the related Prospectus Supplement. See
"Certain Information Regarding the
Securities--Definitive Securities."
Unless otherwise specified in the related
Prospectus Supplement, each class of Notes will
have a stated principal amount and will bear
interest at a specified rate or rates (with respect
to each class of Notes, the "Interest Rate"). Each
class of Notes may have a different Interest Rate,
which may be a fixed, variable or adjustable
Interest Rate, or any combination of the foregoing.
The related Prospectus Supplement will specify the
Interest Rate for each class of Notes, or the
method for determining the Interest Rate.
With respect to a series that includes two or more
classes of Notes, each class may differ as to the
timing and priority of payments, seniority,
allocations of losses, Interest Rate or amount of
payments of principal or interest, or payments of
principal or interest in respect of any such class
or classes may or may not be made upon the
occurrence of specified events or on the basis of
collections from designated portions of the
Receivables in the related Trust. In addition, a
series may include one or more classes of Notes
("Strip Notes") entitled to (i) principal payments
with disproportionate, nominal or no interest
payments or (ii) interest payments with
disproportionate, nominal or no principal payments.
3
<PAGE> 55
If the Servicer exercises its option to purchase
the Receivables of a Trust in the manner and on the
respective terms and conditions described under
"Description of the Transfer and Servicing
Agreements--Termination," the outstanding Notes
will be redeemed as set forth in the related
Prospectus Supplement. In addition, if the related
Prospectus Supplement provides that the property of
a Trust will include a Pre-Funding Account, the
outstanding Notes may be subject to partial
redemption on or immediately following the end of
the Funding Period (as such term is defined in the
related Prospectus Supplement, the "Funding
Period") in an amount and manner specified in the
related Prospectus Supplement. In the event of such
partial redemption, the Noteholders may be entitled
to receive a redemption premium from the Trust, in
the amount and to the extent provided in the
related Prospectus Supplement.
The Certificates........... Each series of Securities will include one or more
classes of Certificates, which will be issued
pursuant to a Trust Agreement.
Unless otherwise specified in the related
Prospectus Supplement, Certificates will be
available for purchase in denominations of $1,000
and integral multiples thereof and will be
available in book-entry form only. Unless otherwise
specified in the related Prospectus Supplement,
holders of Certificates ("Certificateholders" and,
together with the Noteholders, "Securityholders")
will be able to receive Definitive Certificates
only in the limited circumstances described herein
or in the related Prospectus Supplement. See
"Certain Information Regarding the
Securities--Definitive Securities."
Unless otherwise specified in the related
Prospectus Supplement, each class of Certificates
will have a stated Certificate Balance specified in
the related Prospectus Supplement (the "Certificate
Balance") and will accrue interest on such
Certificate Balance at a specified rate (with
respect to each class of Certificates, the
"Pass-Through Rate"). Each class of Certificates
may have a different Pass-Through Rate, which may
be a fixed, variable or adjustable Pass-Through
Rate, or any combination of the foregoing. The
related Prospectus Supplement will specify the
Pass-Through Rate for each class of Certificates or
the method for determining the Pass-Through Rate.
With respect to a series that includes two or more
classes of Certificates, each class may differ as
to timing and priority of distributions, seniority,
allocations of losses, Pass-Through Rates or amount
of distributions in respect of principal or
interest, or distributions in respect of principal
or interest in respect of any such class or classes
may or may not be made upon the occurrence of
specified events or on the basis of collections
from designated portions of the Receivables in the
related Trust. In addition, a series may include
one or more classes of Certificates ("Strip
Certificates") entitled to (i) distributions in
respect of principal with disproportionate, nominal
or no interest distributions or (ii) interest
distributions with disproportionate, nominal or no
distributions in respect of principal.
To the extent specified in the related Prospectus
Supplement, distributions in respect of the
Certificates may be subordinated in priority of
payment to payments on the Notes.
4
<PAGE> 56
If the Servicer exercises its option to purchase
the Receivables of a Trust, in the manner and on
the respective terms and conditions described under
"Description of the Transfer and Servicing
Agreements--Termination," Certificateholders will
receive as a prepayment an amount in respect of the
Certificates as specified in the related Prospectus
Supplement. In addition, if the related Prospectus
Supplement provides that the property of a Trust
will include a Pre-Funding Account,
Certificateholders may receive a partial prepayment
of principal on or immediately following the end of
the Funding Period in an amount and manner
specified in the related Prospectus Supplement. In
the event of such partial prepayment, the
Certificateholders may be entitled to receive a
prepayment premium from the Trust, in the amount
and to the extent provided in the related
Prospectus Supplement.
The Trust Property......... The property of each Trust will include a pool of
retail installment sale contracts ("Contracts")
secured by new or used agricultural and
construction equipment, including rights to receive
certain payments made with respect to such
Contracts, security interests in the equipment
financed thereby (the "Financed Equipment") and any
proceeds from claims on certain related insurance
policies. The property of each Trust will also
include amounts on deposit in certain trust
accounts, including the related Collection Account,
any Spread Account, any Pre-Funding Account and any
other account identified in the applicable
Prospectus Supplement, and the proceeds thereof. On
the Closing Date specified in the related
Prospectus Supplement with respect to a Trust, the
Seller will sell Contracts (the "Initial
Receivables") having an aggregate principal balance
specified in the related Prospectus Supplement as
of a date specified therein (the "Initial Cutoff
Date") to such Trust pursuant to a Sale and
Servicing Agreement among the Seller, the Servicer
and the Trust (as amended and supplemented from
time to time, a "Sale and Servicing Agreement").
To the extent provided in the related Prospectus
Supplement, the Seller will be obligated (subject
only to the availability thereof) to sell, and the
related Trust will be obligated to purchase
(subject to the satisfaction of certain conditions
described in the applicable Sale and Servicing
Agreement), the Subsequent Receivables from time to
time during the Funding Period specified in the
related Prospectus Supplement having an aggregate
principal balance approximately equal to the amount
on deposit in the Pre-Funding Account (the
"Pre-Funded Amount") on such Closing Date, plus any
additional amount specified in the related
Prospectus Supplement.
The Receivables arise from financing provided in
connection with retail sales by dealers (the
"Dealers") and are purchased by Case Credit
pursuant to agreements with the Dealers or are
originated directly by retail outlets owned by Case
Corporation ("Case") and immediately assigned to
Case Credit. The Receivables are generally sold on
a monthly basis by Case Credit to the Seller
pursuant to the Liquidity Receivables Purchase
Agreement, but may also be sold by Case Credit to
the Seller pursuant to a Purchase Agreement in
connection with the issuance of a series of
Securities. The Receivables sold to a Trust will be
selected from the portfolio of Contracts owned by
the Seller based on the criteria specified in the
applicable Sale and Servicing Agreement and
described herein and in the related Prospectus
Supplement.
5
<PAGE> 57
Credit and Cash Flow
Enhancement................ If and to the extent specified in the related
Prospectus Supplement, credit enhancement with
respect to a Trust or any class or classes of
Securities may include any one or more of the
following: subordination of one or more other
classes of Securities, Spread Accounts, over-
collateralization, letters of credit, credit or
liquidity facilities, surety bonds, guaranteed
investment contracts, swaps or other interest rate
protection agreements, repurchase obligations,
other agreements with respect to third party
payments or other support, cash deposits or other
arrangements. Unless otherwise specified in the
related Prospectus Supplement, any form of credit
enhancement will have certain limitations and
exclusions from coverage thereunder, which will be
described in the related Prospectus Supplement, and
may be replaced with another form of credit
enhancement provided the Rating Agencies confirm in
writing that such substitution will not result in a
reduction or withdrawal of the rating of any class
of Securities.
Spread Account............. Unless otherwise specified in the related
Prospectus Supplement, a Spread Account will be
created for each Trust with an initial deposit by
the Seller of cash or certain investments having a
value equal to the amount specified in the related
Prospectus Supplement. To the extent specified in
the related Prospectus Supplement, funds in the
Spread Account will thereafter be supplemented by
the deposit of amounts remaining on any Payment
Date after making all other distributions required
on such date and any amounts deposited from time to
time from the Pre-Funding Account in connection
with the purchase of Subsequent Receivables.
Amounts in the Spread Account will be available to
cover shortfalls in amounts due to the holders of
those classes of Securities specified in the
related Prospectus Supplement in the manner and
under the circumstances specified therein. The
related Prospectus Supplement will also specify to
whom and the manner and circumstances under which
amounts on deposit in the Spread Account (after
giving effect to all other required distributions
to be made by the applicable Trust) in excess of
the Specified Spread Account Balance (as defined in
the related Prospectus Supplement) will be
distributed.
Transfer and Servicing
Agreements................. With respect to each Trust, the Seller will sell
the related Receivables to such Trust pursuant to a
Sale and Servicing Agreement. The rights and
benefits of such Trust under the Sale and Servicing
Agreement will be assigned to the Indenture Trustee
as collateral for the Notes of the related series.
The Servicer will agree with such Trust to be
responsible for servicing, managing, maintaining
custody of and making collections on the
Receivables. In addition, Case Credit will
undertake certain administrative duties with
respect to such Trust under an Administration
Agreement.
Unless otherwise provided in the related Prospectus
Supplement, the Seller will be obligated to
repurchase any Receivable if the interest of the
applicable Trust in such Receivable is materially
adversely affected by a breach of any
representation or warranty made by the Seller with
respect to the Receivable that has not been cured
following the discovery by or notice to the Seller
of the breach. Case Credit will, in most cases, be
6
<PAGE> 58
obligated to repurchase from the Seller any
Receivable that the Seller is obligated to
repurchase from the related Trust.
Unless otherwise provided in the related Prospectus
Supplement, the Servicer will be obligated to
purchase any Receivable if, among other things, it
extends the date for final payment by the Obligor
of such Receivable beyond the applicable Final
Scheduled Maturity Date (as defined in the related
Prospectus Supplement, the "Final Scheduled
Maturity Date"), decreases the annual percentage
rate ("APR") or a loss is incurred due to its
failure to maintain a perfected security interest
in the related Financed Equipment.
Unless otherwise specified in the related
Prospectus Supplement, the Servicer will be
entitled to receive a fee for servicing the
Receivables of each Trust equal to a specified
percentage of the aggregate principal balance of
such Receivables, as set forth in the related
Prospectus Supplement. See "Description of the
Transfer and Servicing Agreements--Servicing
Compensation and Payment of Expenses" herein and in
the related Prospectus Supplement.
Certain Legal Aspects of
the Receivables; Repurchase
Obligations................ In connection with the sale of Receivables to a
Trust, security interests in the Financed Equipment
securing such Receivables will be assigned by the
Seller to such Trust. A first priority perfected
security interest in the Financed Equipment is
obtained by Case Credit when Case Credit finances
the purchase of equipment by a customer. Case
Equipment Loan Trust 1994-B, a Delaware trust
organized by Case Credit, currently has a first
priority security interest in certain of the
Receivables owned by the Seller, but will terminate
its security interest (and make such filings
necessary to evidence such termination) upon the
sale of such Receivables to a Trust by the Seller
and the receipt by the Seller of the proceeds of
such sale. Unless otherwise specified in the
related Prospectus Supplement, the Seller will be
obligated to repurchase any Receivable sold to a
Trust as to which a first priority perfected
security interest in the name of Case Credit in the
Financed Equipment securing such Receivable shall
not exist as of the date such Receivable is
purchased by such Trust, if such breach shall
materially adversely affect such Receivable and if
such failure or breach shall not have been cured by
the last day of the second (or, if the Seller
elects, the first) month following the discovery by
or notice to the Trustee of such breach. If such
Trust does not have a perfected security interest
in an item of Financed Equipment, its ability to
realize on such item in the event of a default may
be adversely affected. To the extent the security
interest is perfected, such Trust will have a prior
claim over subsequent purchasers of such Financed
Equipment and holders of subsequently perfected
security interests. However, as against liens for
repairs of Financed Equipment or for taxes unpaid
by an Obligor under a Receivable, or because of
fraud or negligence, such Trust could lose the
priority of its security interest or its security
interest in Financed Equipment. Neither the Seller
nor the Servicer will have any obligation to
repurchase a Receivable as to which any of the
aforementioned occurrences result in a Trust's
losing the priority of its security interest or its
security interest in such Financed Equipment after
the Closing Date. Federal and state
7
<PAGE> 59
consumer protection laws impose requirements upon
creditors in connection with extensions of credit
and collections of retail installment loans, and
certain of these laws make an assignee of such a
loan liable to the obligor thereon for any
violation by the lender. Unless otherwise specified
in the related Prospectus Supplement, the Seller
will be obligated to repurchase any Receivable that
fails to comply with such requirements.
Tax Status................. Upon the issuance of each series of Securities,
except as otherwise provided in the related
Prospectus Supplement, (a) Federal Tax Counsel to
the applicable Trust will deliver an opinion to the
effect that, for Federal income tax purposes: (i)
the Notes of such series will be characterized as
debt and (ii) such Trust will not be characterized
as an association (or a publicly traded
partnership) taxable as a corporation and (b)
Wisconsin Tax Counsel to such Trust will deliver an
opinion to the effect that the same
characterizations would apply for Wisconsin income
tax purposes as would apply for Federal income tax
purposes. Each Noteholder, by the acceptance of a
Note of a given series, will agree to treat such
Note as indebtedness, and each Certificateholder,
by the acceptance of a Certificate of a given
series, will agree to treat the related Trust as a
partnership in which such Certificateholder is a
partner for Federal income and Wisconsin income tax
purposes. Alternative characterizations of such
Trust and such Certificates are possible, but would
not result in materially adverse tax consequences
to Certificateholders. See "Certain Federal Income
Tax Consequences" and "Certain State Tax
Consequences" for additional information concerning
the application of Federal and Wisconsin tax laws.
ERISA Considerations....... Subject to the considerations discussed under
"ERISA Considerations" herein and in the related
Prospectus Supplement, and unless otherwise
specified therein, the Notes of each series are
eligible for purchase by employee benefit plans.
Unless otherwise specified in the related
Prospectus Supplement, the Certificates of any
series may not be acquired by any employee benefit
plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or by
any individual retirement account. See "ERISA
Considerations" herein and in the related
Prospectus Supplement.
8
<PAGE> 60
RISK FACTORS
Certain Legal Aspects--Security Interests in Financed Equipment. In
connection with the sale of Receivables to a Trust, security interests in the
Financed Equipment securing such Receivables will be assigned by the Seller to
such Trust simultaneously with the sale of such Receivables to such Trust. A
first priority perfected security interest in the Financed Equipment is obtained
by Case Credit when Case Credit finances the purchase of equipment by a
customer. Case Equipment Loan Trust 1994-B, a Delaware trust organized by Case
Credit, currently has a first priority security interest in certain of the
Receivables owned by the Seller, but will terminate its security interest (and
make such filings necessary to evidence such termination) upon the sale of such
Receivables to a Trust by the Seller and the receipt by the Seller of the
proceeds of such sale. See "Description of the Transfer and Servicing
Agreements--Commercial Paper Program." Unless otherwise provided in the related
Prospectus Supplement, the Seller will be obligated to repurchase any Receivable
sold to such Trust as to which a perfected security interest in the name of Case
Credit in the Financed Equipment securing such Receivable will not exist as of
the date such Receivable is transferred to such Trust, if such breach will
materially adversely affect the interest of such Trust in such Receivable and if
such failure or breach will not have been cured by the last day of the second
(or, if the Seller elects, the first) month following the discovery by or notice
to the Seller of such breach. If such Trust does not have a perfected security
interest in an item of Financed Equipment, its ability to realize on such
Financed Equipment in the event of a default may be adversely affected. To the
extent the security interest is perfected, such Trust will have a prior claim
over subsequent purchasers of such Financed Equipment and holders of
subsequently perfected security interests. However, as against liens for repairs
of Financed Equipment or for taxes unpaid by an Obligor under a Receivable, or
through fraud or negligence, such Trust could lose the priority of its security
interest or its security interest in such Financed Equipment. Neither the Seller
nor the Servicer will have any obligation to repurchase a Receivable as to which
any of the aforementioned occurrences result in such Trust's losing the priority
of its security interest or its security interest in such Financed Equipment
after the date such security interest was assigned to such Trust. Federal and
state consumer protection laws impose requirements on creditors in connection
with extensions of credit and collections of retail installment loans, and
certain of these laws make an assignee of such a loan (such as such Trust)
liable to the obligor thereon for any violation by the lender. Unless otherwise
specified in the related Prospectus Supplement, the Seller will be obligated to
repurchase any Receivable that fails to comply with such requirements.
Certain Legal Aspects--Bankruptcy Considerations. The Seller will take
steps in structuring the transactions contemplated hereby that are intended to
ensure that the voluntary or involuntary application for relief by Case Credit
under the United States Bankruptcy Code or similar applicable state laws
("Insolvency Laws") will not result in consolidation of the assets and
liabilities of the Seller with those of Case Credit. These steps include the
creation of the Seller as a separate, limited-purpose subsidiary pursuant to a
certificate of incorporation containing certain limitations (including
restrictions on the nature of the Seller's business and a restriction on the
Seller's ability to commence a voluntary case or proceeding under any Insolvency
Law without the prior unanimous affirmative vote of all its directors). However,
there can be no assurance that the activities of the Seller would not result in
a court concluding that the assets and liabilities of the Seller should be
consolidated with those of Case Credit in a proceeding under any Insolvency Law.
Case Credit has warranted, in the Liquidity Receivables Purchase Agreement,
and will warrant, in any Purchase Agreement related to a Trust, that the sale of
Receivables by Case Credit to the Seller is a valid sale. See "Description of
the Transfer and Servicing Agreements--Sale and Assignment of Receivables" and
"--Commercial Paper Program." If Case Credit were to become a debtor in a
bankruptcy case and a creditor or trustee-in-bankruptcy of such debtor or such
debtor itself were to take the position that the sale of Receivables to the
Seller should instead be treated as a pledge of such Receivables to secure a
borrowing of such debtor, then delays in payments of collections of Receivables
to the Seller could occur or (should the court rule in favor of any such
trustee, debtor or creditor) reductions in the amount of such payments could
result. If the transfer of Receivables to the Seller pursuant to the Liquidity
Receivables Purchase Agreement or the applicable Purchase Agreement is treated
as a pledge instead of a sale, a tax or government lien on the property of Case
Credit arising before the transfer of a Receivable to the Seller may have
priority over the
9
<PAGE> 61
Seller's interest in such Receivable. If the transactions contemplated herein
and in the Liquidity Receivables Purchase Agreement are treated as a sale, the
Receivables would not be part of Case Credit's bankruptcy estate and would not
be available to Case Credit's creditors, except under certain limited
circumstances. In addition, while Case Credit is the Servicer, cash collections
on the Receivables will, under certain circumstances, be commingled with the
funds of Case Credit and, in the event of the bankruptcy of Case Credit, a Trust
may not have a perfected interest in such collections.
If an Insolvency Event with respect to the Seller occurs, the Indenture
Trustee for each Trust will promptly sell, dispose of or otherwise liquidate the
related Receivables in a commercially reasonable manner on commercially
reasonable terms, except under certain limited circumstances. The proceeds from
any such sale, disposition or liquidation of Receivables will be treated as
collections on the Receivables and deposited in the Collection Account of such
Trust. If the proceeds from the liquidation of the Receivables and any amounts
on deposit in the Spread Account, the Note Distribution Account and the
Certificate Distribution Account with respect to any Trust and any amounts
available from any credit enhancement, if any, are not sufficient to pay the
Notes and Certificates of the related series in full, the amount of principal
returned to Noteholders or Certificateholders will be reduced and Noteholders
and Certificateholders will incur a loss. See "Description of the Transfer and
Servicing Agreements--Insolvency Event."
A substantial portion of the Receivables was originated by Dealers and
purchased by Case Credit. See "The Receivables Pools--The Retail Equipment
Financing Business." A significant portion of all the Receivables purchased by
Case Credit from Dealers provide for recourse to the originating Dealer for
defaults by the Obligors. In addition, the Dealers retain the right to
repurchase at any time the Receivables originated by them. In the event of a
Dealer's bankruptcy, a creditor or bankruptcy trustee of the Dealer or the
Dealer as a debtor in possession might attempt to characterize the sales of
Receivables to Case Credit as loans to the Dealer secured by the Receivables;
such an attempt, if successful, could result in payment delays or losses on the
affected Receivables. However, in connection with the sale of the Receivables by
Case Credit to the Seller, Case Credit has warranted, pursuant to the Liquidity
Receivables Purchase Agreement, or will warrant pursuant to the applicable
Purchase Agreement, that at the time of such sale it had good title to the
Receivables.
In a 1993 case decided by the U.S. Court of Appeals for the Tenth Circuit,
Octagon Gas System, Inc. v. Rimmer, the court determined that "accounts," as
defined under the Uniform Commercial Code, would be included in the bankruptcy
estate of a transferor regardless of whether the transfer is treated as a sale
or a secured loan. Although the Receivables are likely to be viewed as "chattel
paper," as defined under the Uniform Commercial Code, rather than as accounts,
the rationale behind the Octagon holding is equally applicable to chattel paper.
The circumstances under which the Octagon ruling would apply are not fully known
and the extent to which the Octagon decision will be followed in other courts or
outside of the Tenth Circuit is not certain. If the holding in the Octagon case
were applied in a Case Credit bankruptcy, however, even if the transfer of
Receivables to the Seller pursuant to the Liquidity Receivables Purchase
Agreement or the applicable Purchase Agreement and to the Trust pursuant to the
Sale and Servicing Agreement were treated as a sale, the Receivables would be
part of Case Credit's bankruptcy estate and would be subject to claims of
certain creditors and delays and reductions in payments to the Seller and
Securityholders could result.
Trusts' Relationships to the Seller, Case Credit Corporation and their
Affiliates. The Receivables will be serviced by Case Credit. Case Credit and its
subsidiaries are engaged in the business of financing farm and construction
equipment. None of the Seller or Case Credit or their affiliates is generally
obligated to make any payments in respect of the Notes, the Certificates or the
Receivables of a given Trust. However, if Case Credit were to cease acting as
Servicer, delays in processing payments on the Receivables and information in
respect thereof could occur and result in delays in payments to the
Securityholders. In addition, under certain circumstances, the Servicer may be
required to purchase Receivables.
In connection with the sale of Receivables by Case Credit to the Seller
pursuant to the Liquidity Receivables Purchase Agreement or the applicable
Purchase Agreement, Case Credit has made or will make representations and
warranties with respect to the characteristics of such Receivables and, in
certain
10
<PAGE> 62
circumstances, Case Credit may be required to repurchase Receivables with
respect to which such representations and warranties have been breached. See
"Description of the Transfer and Servicing Agreements--Sale and Assignment of
Receivables" and "--Commercial Paper Program."
The related Prospectus Supplement may set forth certain additional
information regarding the Seller and Case Credit.
Subordination; Limited Assets. To the extent specified in the related
Prospectus Supplement, distributions of interest and principal on the
Certificates of a series will be subordinated in priority of payment to interest
and principal due on the Notes of such series. Moreover, each Trust will not
have, nor is it permitted or expected to have, any significant assets or sources
of funds other than the Receivables and, to the extent provided in the related
Prospectus Supplement, a Spread Account and any other credit enhancement. The
Notes of any series will represent obligations solely of, and the Certificates
of such series will represent interests solely in, the related Trust, and
neither the Notes nor the Certificates of any such series will be insured or
guaranteed by the Seller, the Servicer, the applicable Trustee, the applicable
Indenture Trustee or any other person or entity. Consequently, holders of the
Securities of any series must rely for repayment upon payments on the related
Receivables and, if and to the extent available, amounts on deposit in the Pre-
Funding Account (if any), the Spread Account (if any) and any other credit
enhancement, all as specified in the related Prospectus Supplement.
Maturity and Prepayment Considerations. All the Receivables are prepayable
at any time. (For this purpose the term "prepayments" includes prepayments in
full, partial prepayments (including those related to insurance premiums), and
liquidations due to default, as well as receipts of proceeds from physical
damage and term life insurance policies and certain other Receivables
repurchased for administrative or other reasons.) Each prepayment will shorten
the average remaining term of the Receivables and the average life of the Notes
and the Certificates. The rate of prepayments on the Receivables may be
influenced by a variety of economic, climatic and other factors, including the
fact that an Obligor generally may not sell or transfer the Financed Equipment
securing a Receivable without the consent of Case Credit. For example, the
majority of the Receivables are agricultural equipment retail installment sale
contracts. The amount of prepayments on that type of receivable has historically
tended to increase during periods in which farmers have strong cash flows. In
addition, under certain circumstances, the Seller will be obligated to
repurchase Receivables pursuant to a Sale and Servicing Agreement, as a result
of breaches of representations and warranties and, under certain circumstances,
the Servicer will be obligated to purchase Receivables pursuant to such Sale and
Servicing Agreement as a result of breaches of certain covenants. See
"Description of the Transfer and Servicing Agreements--Sale and Assignment of
Receivables." On the other hand, the payment schedule under a Receivable may be
extended or revised under certain circumstances. An extension or revision may
lengthen the average remaining term of the Receivables and the average life of
the Notes and the Certificates. See "The Receivables Pools--The Retail Equipment
Financing Business--Extension/Revision Procedures." Any reinvestment risks
resulting from a faster or slower incidence of prepayment of Receivables held by
a given Trust will be borne entirely by the Securityholders of the related
series of Securities. See also "Description of the Transfer and Servicing
Agreements--Termination" regarding the Servicer's option to purchase the
Receivables of a Trust and "--Insolvency Event" regarding the sale of the
Receivables if an Insolvency Event with respect to the Seller occurs.
Holders of Notes and Certificates should consider, in the case of
Securities purchased at a discount, the risk that a slower than anticipated rate
of principal payments on the Receivables could result in an actual yield that is
less than the anticipated yield and, in the case of Securities purchased at a
premium, the risk that a faster than anticipated rate of principal payments on
the Receivables could result in an actual yield that is less than the
anticipated yield.
Risk of Commingling. With respect to each Trust, the Servicer will deposit
all payments on the related Receivables (from whatever source) and all proceeds
of such Receivables collected during each Collection Period into the Collection
Account of such Trust within two business days of receipt thereof. However, in
the event that Case Credit satisfies certain requirements for monthly or less
frequent remittances and the Rating Agencies (as such term is defined in the
related Prospectus Supplement, the "Rating Agencies") affirm their
11
<PAGE> 63
ratings of the related Securities at the initial level, then for so long as Case
Credit is the Servicer and provided that (i) there exists no Servicer Default
and (ii) each other condition to making such monthly or less frequent deposits
as may be specified by the Rating Agencies and described in the related
Prospectus Supplement is satisfied, the Servicer will not be required to deposit
such amounts into the Collection Account of such Trust until on or before the
business day preceding each Payment Date. The Servicer will deposit the
aggregate Purchase Amount of Receivables purchased by the Servicer into the
applicable Collection Account on or before the business day preceding each
Payment Date. Pending deposit into such Collection Account, collections may be
invested by the Servicer at its own risk and for its own benefit and will not be
segregated from funds of the Servicer. If the Servicer were unable to remit such
funds, the applicable Securityholders might incur a loss. To the extent set
forth in the related Prospectus Supplement, the Servicer may, in order to
satisfy the requirements described above, obtain a letter of credit or other
security for the benefit of the related Trust to secure timely remittances of
collections on the related Receivables and payment of the aggregate Purchase
Amount with respect to Receivables purchased by the Servicer.
Servicer Default. Unless otherwise provided in the related Prospectus
Supplement with respect to a given series of Securities, in the event a Servicer
Default occurs, the Indenture Trustee or Noteholders evidencing 25% or more of
the outstanding principal amount of the Notes with respect to such series, as
described under "Description of the Transfer and Servicing Agreements--Rights
upon Servicer Default," may remove the Servicer without the consent of the
Trustee or any of the Certificateholders with respect to such series. Neither
the Trustee nor the Certificateholders with respect to such series will have the
ability to remove the Servicer if a Servicer Default occurs. In addition, the
Noteholders of such series have the ability, with certain specified exceptions,
to waive defaults by the Servicer, including defaults that could materially
adversely affect the Certificateholders of such series. See "Description of the
Transfer and Servicing Agreements--Waiver of Past Defaults."
Book-Entry Registration. Each class of the Notes and the Certificates of a
given series will be initially represented by one or more certificates
registered in the name of Cede & Co. ("Cede"), or any other nominee for The
Depository Trust Company ("DTC") set forth in the related Prospectus Supplement
(Cede, or such other nominee, "DTC's Nominee"), and will not be registered in
the names of the holders of the Securities of such series or their nominees.
Because of this, unless and until Definitive Securities for such series are
issued, holders of such Securities will not be recognized by the applicable
Indenture Trustee or Trustee as "Noteholders," "Certificateholders" or
"Securityholders," as the case may be (as such terms are used herein or in the
related Indenture and Trust Agreement). Hence, until Definitive Securities are
issued, holders of such Securities will only be able to exercise the rights of
Securityholders indirectly through DTC and its participating organizations. See
"Certain Information Regarding the Securities--Book-Entry Registration" and
"--Definitive Securities."
THE TRUSTS
With respect to each series of Securities, the Seller will establish a
separate Trust pursuant to the respective Trust Agreement for the transactions
described herein and in the related Prospectus Supplement. The property of each
Trust will include a pool of Contracts (the "Receivables") between the Dealers
and retail purchasers (the "Obligors") of new and used agricultural and
construction equipment and the obligations of the Obligor thereunder including
all moneys paid thereunder (including any late fees, non-sufficient funds fees
and other administrative fees or similar charges allowable by applicable law
with respect to Receivables) on or after the applicable Cutoff Date (as such
term is defined in the related Prospectus Supplement, a "Cutoff Date"). The
Receivables were or will be originated by the Dealers and purchased by Case
Credit pursuant to agreements with Dealers ("Dealer Agreements") or were
originated directly by retail outlets owned by Case and immediately assigned to
Case Credit. Such Receivables will continue to be serviced by the Servicer and
evidence indirect financing made available by Case Credit to the Obligors. The
Receivables either were sold previously by Case Credit to the Seller on a
monthly basis pursuant to the Liquidity Receivables Purchase Agreement or will
be sold by Case Credit to the Seller on the applicable Closing Date pursuant to
a Purchase Agreement related to the applicable Trust. See "Description of the
Transfer and Servicing Agreements--Sale and Assignment of Receivables" and
"--Commercial Paper
12
<PAGE> 64
Program." On the applicable Closing Date, after the issuance of the Notes and
the Certificates of a given series, the Seller will sell the Initial Receivables
to the Trust. To the extent so provided in the related Prospectus Supplement,
Subsequent Receivables will be conveyed to the Trust as frequently as daily
during the Funding Period. Any Subsequent Receivables so conveyed will also be
assets of the applicable Trust, subject to the prior rights of the related
Indenture Trustee and the Noteholders therein. The property of each Trust will
also include (i) such amounts as from time to time may be held in separate trust
accounts established and maintained pursuant to the related Sale and Servicing
Agreement and the proceeds of such accounts, as described herein and in the
related Prospectus Supplement; (ii) security interests in the Financed Equipment
and any other interest of the Seller in such Financed Equipment; (iii) the
rights to proceeds from claims on certain physical damage and term life
insurance policies covering the Financed Equipment or the Obligors, as the case
may be; (iv) the interest of the Seller in any proceeds from recourse to Dealers
with respect to Receivables (but excluding any amounts contained in Dealers'
reserve accounts); (v) any property that secures a Receivable and that has been
acquired by the applicable Trust; and (vi) any and all proceeds of the
foregoing. To the extent specified in the related Prospectus Supplement, a
Pre-Funding Account, a Spread Account or other form of credit enhancement may be
a part of the property of any given Trust or may be held by the Trustee or the
Indenture Trustee for the benefit of holders of the related Securities.
Additionally, pursuant to contracts between the Servicer and the Dealers, the
Dealers have an obligation after origination to repurchase Receivables as to
which Dealers have made certain misrepresentations.
In connection with an asset-backed commercial paper program established by
Case Credit in August 1994, Case Credit generally sells to the Seller on the
13th day of each month pursuant to the Liquidity Receivables Purchase Agreement
all of the Receivables meeting certain eligibility requirements that it
purchased from Dealers or retail outlets owned by Case in the preceding calendar
month. The Seller has granted Case Equipment Loan Trust 1994-B a first perfected
security interest in the Receivables purchased. Case Equipment Loan Trust 1994-B
has agreed, pursuant to the Loan and Security Agreement, to release its security
interest in certain Receivables when those Receivables are sold to a Trust and
the Seller receives the proceeds from such sale. See "Description of the
Transfer and Servicing Agreements--Commercial Paper Program."
The Servicer will continue to service the Receivables held by each Trust
and will receive fees for such services. See "Description of the Transfer and
Servicing Agreements--Servicing Compensation and Payment of Expenses" herein and
in the related Prospectus Supplement. To facilitate the servicing of the
Receivables, the Seller and each Trustee will authorize the Servicer to retain
physical possession of the Receivables held by each Trust and other documents
relating thereto as custodian for each such Trust. See "Certain Legal Aspects of
the Receivables" and "Description of the Transfer and Servicing Agreements--Sale
and Assignment of Receivables."
If the protection provided to Noteholders of a given series by the
subordination of the related Certificates and by the Spread Account, if any, or
other credit enhancement for such series or the protection provided to
Certificateholders by such Spread Account or other credit enhancement is
insufficient, such Noteholders or Certificateholders, as the case may be, would
have to look principally to the Obligors on the related Receivables, the
proceeds from the repossession and sale of Financed Equipment that secure
defaulted Receivables and the proceeds from any recourse against Dealers with
respect to such Receivables. In such event, certain factors, such as the
applicable Trust's not having first priority perfected security interests in the
Financed Equipment in all states, may affect the Servicer's ability to repossess
and sell the collateral securing the Receivables, and thus may reduce the
proceeds to be distributed to the holders of the Securities of such series. See
"Description of the Transfer and Servicing Agreements--Distributions" and
"--Credit and Cash Flow Enhancement" and "Certain Legal Aspects of the
Receivables."
The principal offices of each Trust and the related Trustee will be
specified in the applicable Prospectus Supplement.
13
<PAGE> 65
THE TRUSTEE
The Trustee for each Trust will be specified in the related Prospectus
Supplement. The Trustee's liability in connection with the issuance and sale of
the related Securities is limited solely to the express obligations of such
Trustee set forth in the related Trust Agreement and Sale and Servicing
Agreement. A Trustee may resign at any time, in which event the Servicer will be
obligated to appoint a successor trustee. The Administrator of a Trust may also
remove the Trustee if the Trustee ceases to be eligible to continue as Trustee
under the related Trust Agreement or if the Trustee becomes insolvent. In such
circumstances, the Administrator will be obligated to appoint a successor
trustee. Any resignation or removal of a Trustee and appointment of a successor
trustee will not become effective until acceptance of the appointment by the
successor trustee.
THE RECEIVABLES POOLS
GENERAL
The Receivables in each Trust consist of Contracts evidencing the credit
sale of new and used agricultural and construction equipment to purchasers. The
Contracts are purchased by Case Credit as described below and are generally sold
on a monthly basis to the Seller pursuant to the Liquidity Receivables Purchase
Agreement, but may also be sold by Case Credit to the Seller pursuant to a
Purchase Agreement in connection with the issuance of a series of Securities.
Case Credit continues to service all Contracts sold to the Seller.
The Receivables to be held by each Trust will be selected from the Seller's
portfolio using several criteria, including that, unless otherwise provided in
the related Prospectus Supplement, each Receivable (i) is secured by new or used
agricultural or construction equipment, (ii) was originated in the United
States, (iii) provides for payments that fully amortize the amount financed over
its original term to maturity, (iv) is a Precomputed Receivable or a Simple
Interest Receivable and (v) satisfies the other criteria, if any, set forth in
the related Prospectus Supplement. No selection procedures believed by the
Seller to be adverse to the Securityholders of any series were or will be used
in selecting the related Receivables.
If so specified in the related Prospectus Supplement, the Receivables to be
held by a Trust may include Receivables satisfying the applicable criteria that
were purchased by Case Credit from Tenneco Credit Corporation out of the $1.1
billion pool of retail receivables retained by Tenneco Credit Corporation in
connection with the Reorganization. Except to the extent otherwise provided in
the related Prospectus Supplement, all discussion in this Prospectus relating to
the Receivables will apply equally to any Receivables purchased by Case Credit
from Tenneco Credit Corporation.
Precomputed Receivables provide for allocation of payments according to the
"sum of periodic balances" or "sum of monthly payments" method, similar to the
"Rule of 78's" ("Rule of 78's Receivables") or are monthly actuarial receivables
("Actuarial Receivables" and, together with Rule of 78's Receivables,
"Precomputed Receivables"). An Actuarial Receivable provides for amortization of
the loan over a series of fixed level payment installments. Each installment,
including the installment representing the final payment on the Receivable,
consists of an amount of interest equal to 1/12 of the APR of the loan
multiplied by the unpaid principal balance of the loan, and an amount of
principal equal to the remainder of the installment. A Rule of 78's Receivable
provides for the payment by the obligor of a specified total amount of payments,
payable in equal installments on each due date, which total represents the
principal amount financed and add-on interest in an amount calculated on the
basis of the stated APR for the term of the receivable. The rate at which such
amount of add-on interest is earned and, correspondingly, the amount of each
fixed monthly payment allocated to reduction of the outstanding principal are
calculated in accordance with the "Rule of 78's."
"Simple Interest Receivables" are receivables that provide for the
amortization of the amount financed under each receivable over a series of fixed
level monthly payments. However, unlike the monthly payment under an Actuarial
Receivable, each monthly payment consists of an installment of interest that is
calculated on the basis of the outstanding principal balance of the receivable
multiplied by the stated APR and further
14
<PAGE> 66
multiplied by the period elapsed (as a fraction of a calendar year) since the
preceding payment of interest was made. As payments are received under a Simple
Interest Receivable, they are applied first to interest accrued to the date of
payment and the balance is applied to reduce the unpaid principal balance.
Accordingly, if an obligor pays a fixed monthly installment before its scheduled
due date, the portion of the payment allocable to interest for the period since
the preceding payment was made will be less than it would have been had the
payment been made as scheduled, and the portion of the payment applied to reduce
the unpaid principal balance will be correspondingly greater. Conversely, if an
obligor pays a fixed monthly installment after its scheduled due date, the
portion of the payment allocable to interest for the period since the preceding
payment was made will be greater than it would have been had the payment been
made as scheduled, and the portion of the payment applied to reduce the unpaid
principal balance will be correspondingly less. In either case, the obligor pays
a fixed monthly installment until the final scheduled payment date, at which
time the amount of the final installment is increased or decreased as necessary
to repay the then outstanding principal balance.
In the event of the prepayment in full (voluntarily or by acceleration) of
a Rule of 78's Receivable, under the terms of the contract, a "refund" or
"rebate" will be made to the obligor of the portion of the total amount of
payments then due and payable under the Contract allocable to "unearned" add-on
interest, calculated in accordance with a method equivalent to the Rule of 78's.
If an Actuarial Receivable is prepaid in full, with minor variations based upon
state law, the Actuarial Receivable requires that the rebate be calculated on
the basis of a constant interest rate. If a Simple Interest Receivable is
prepaid, rather than receive a rebate, the obligor is required to pay interest
only to the date of prepayment. The amount of a rebate under a Rule of 78's
Receivable generally will be less than the amount of a rebate on an Actuarial
Receivable and generally will be less than the remaining scheduled payments of
interest that would have been due under a Simple Interest Receivable for which
all payments were made on schedule. However, the amount of the rebate for
certain Precomputed Receivables ("Precomputed Simple Rebate Receivables") will
equal approximately the remaining scheduled payments of interest that would have
been due under a Simple Interest Receivable for which all payments were made on
schedule. Precomputed Receivables that are not Precomputed Simple Rebate
Receivables are called "Standard Precomputed Receivables."
Unless otherwise provided in the related Prospectus Supplement, all the
Receivables included in a Trust will be Precomputed Receivables. Information
with respect to each pool of Receivables will be set forth in the related
Prospectus Supplement, including, to the extent appropriate, the composition of
the Receivables, the distribution by APR, type of equipment, payment frequency
and contract value of the Receivables and the geographic distribution of the
Receivables.
THE RETAIL EQUIPMENT FINANCING BUSINESS
Case Credit purchases Contracts primarily from Dealers. Case Credit also
finances Contracts originated through retail outlets owned by Case that are
immediately thereafter assigned to Case Credit. As of December 31, 1995, there
were approximately 1,046 independently owned Dealer outlets in the United States
and approximately 30 retail outlets owned by Case in the United States. The
agricultural equipment financed by Case Credit includes tractors, combines,
cotton pickers and implements and equipment used for hay and forage, soil
conditioning and crop production. The construction equipment financed by Case
Credit includes wheel loaders, skid steer loaders, crawler dozers and loaders,
excavators, rough terrain forklifts, trenchers and loader/backhoes. New
equipment financed by Case Credit is almost exclusively manufactured by Case.
Origination Process. Each prospective customer is required to complete a
credit application that lists the applicant's liabilities, income, credit and
employment history and other demographic and personal information. Credit
applications, which are obtained by the Dealer, are sent by the Dealer to one of
four regional finance offices maintained by Case Credit. The application is
processed by Case Credit and additional information is obtained in order to
evaluate the prospective customer's creditworthiness. The extent of the
additional information varies based primarily on the amount of financing
requested. In most cases, Case Credit obtains a credit bureau report on the
applicant from an independent credit bureau and credit references provided by
the applicant, typically banks or finance companies or suppliers that have
furnished credit to the applicant, are checked. In certain cases, audited or
certified financial statements of the applicant are obtained.
15
<PAGE> 67
Case Credit also maintains five-year loan histories on all past and present Case
Credit customers that are reviewed.
Creditworthiness is evaluated based on criteria established by Case
Credit's management. The same credit criteria are applied regardless of which of
Case Credit's regional finance offices reviews the application and regardless of
whether the applicant is purchasing equipment from a Dealer or from a Case
retail outlet.
Dealer Agreements. At the time Case Credit approves the customer's
application and fully executed copies of all required agreements and instruments
are delivered by the Dealer to Case Credit, the related Contract is sold by the
Dealer to Case Credit pursuant to a Dealer Agreement that Case Credit enters
into with each Dealer. A significant portion of all Contracts purchased by Case
Credit from Dealers provide for recourse to the originating Dealer for defaults
by the obligor under the Contract. A large portion of such Contracts provide for
recourse to the Dealers through a "reserve account" maintained with Case Credit
in which Dealers are required to maintain certain amounts on deposit. The Seller
will assign to the Trusts its rights to recourse against the Dealers except for
the Dealers' reserve accounts and, therefore, any recourse to the Dealers
through the reserve accounts will not be assigned to the Trusts. The level of
recourse to Dealers varies and, depending on the level of recourse, is subject
to certain conditions. An insignificant portion of Contracts are assigned to
Case Credit with no recourse to Dealers in the event of defaults by obligors
under the Contracts. The Trusts will also be assigned rights arising under the
Dealer Agreements as a result of the breach by the Dealer of certain
representations and warranties made therein. Neither the Seller nor the Servicer
makes any representation as to the financial condition of any of the Dealers,
and there can be no assurances as to the ability of any Dealer to perform its
obligations under any Dealer Agreement.
Contract Terms. Case Credit offers Contracts with a variety of repayment
schedules tailored to the applicant's anticipated cash flows, such as annual,
semi-annual, quarterly and monthly payments. Contracts secured by construction
equipment are normally financed with equal monthly payments. However, a "skip
payment" schedule, under which payments in up to three predetermined consecutive
months are "skipped" to coincide with slow work periods, can be selected by the
obligor at the time the Contract is originated. For example, contractors in
areas with colder winters normally elect to skip payments in January, February
and March, in which case the normal twelve payments are amortized over a
nine-month period.
The maximum amount that Case Credit will finance under a Contract varies
based on the obligor's credit history, the type of equipment financed and
whether the equipment is new or used, the payment schedule and the length of the
Contract. The amount financed is calculated as a percentage of the value of the
related equipment. For new equipment, such value is based on Dealer's cost for
the related equipment plus freight charges. The value of used equipment is based
on the "as-is" value of the related equipment reported in the most recent
edition of the North American Equipment Dealers Association guidebook or other
comparable guidebook. Obligors are required to obtain and maintain physical
damage insurance covering the financed equipment. Dealers are responsible for
verifying insurance coverage on the equipment at the time the Contract is
originated. If a Dealer fails to verify insurance coverage and the obligor did
not obtain insurance coverage at the time the Contract was originated, the
Dealer will be responsible for any resulting loss. At the time the Contract is
originated, Case Credit offers customers physical damage insurance and term life
insurance that can be financed under the Contract.
The equipment securing the Contracts depreciates in value over time.
However, Case Credit's practice is to provide for repayment schedules under the
Contracts that will generally result in the outstanding principal balance of the
Contract at any time in the life of the Contract being less than the anticipated
value of the equipment at the time.
Extension/Revision Procedures. Contracts may be extended or revised when
payment delinquencies result from temporary interruptions in an obligor's cash
flow. An extension provides for one or more payments to be moved to a future
date either within the original maturity of the Contract or beyond the original
maturity. A revision is a restructuring of the entire Contract, normally with
lower payments and a longer term. Case Credit charges obligors an extension fee
that is payable at the time a Contract is extended. The extension fee is
generally equal to interest accrued on the unpaid balance of the Contract during
the period that payments are not required to be made as a result of the
extension.
16
<PAGE> 68
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Certain information concerning the experience of Case Credit pertaining to
delinquencies, repossessions and net losses with respect to its entire portfolio
of Contracts serviced by Case Credit (including receivables previously sold that
Case Credit continues to service) will be set forth in each Prospectus
Supplement. There can be no assurance that the delinquency, repossession and net
loss experience on any Receivables will be comparable to prior experience or to
such information.
WEIGHTED AVERAGE LIFE OF THE SECURITIES
The weighted average life of the Notes and the Certificates of any series
will generally be influenced by the rate at which the principal balances of the
related Receivables are paid, which payment may be in the form of scheduled
amortization or prepayments. (For this purpose, the term "prepayments" includes
prepayments in full, partial prepayments (including those related to rebates of
insurance premiums), liquidations due to default, and receipts of proceeds from
physical damage and term life insurance policies and certain other Receivables
repurchased by the Seller or the Servicer for administrative reasons.) All of
the Receivables are prepayable at any time without penalty to the Obligor. Each
prepayment will shorten the average remaining term of the Receivables and the
average life of the Securities. The rate of prepayment of Contracts is
influenced by a variety of economic, climatic and other factors. For example,
the large majority of the Receivables are agricultural equipment retail
installment sale contracts. The amount of prepayments on that type of receivable
may tend to increase during periods in which farmers have strong cash flows.
However, Case Credit does not maintain historical prepayment data with respect
to its portfolio of retail installment sale contracts. In addition, under
certain circumstances, the Seller will be obligated to repurchase such
Receivables from the related Trust pursuant to the related Sale and Servicing
Agreement, as a result of breaches of representations and warranties, and the
Servicer will be obligated to purchase Receivables from such Trust pursuant to
such Sale and Servicing Agreement as a result of breaches of certain covenants.
See "Description of the Transfer and Servicing Agreements--Sale and Assignment
of Receivables" and "--Servicing Procedures." See also "Description of the
Transfer and Servicing Agreements--Termination" regarding the Servicer's option
to purchase the Receivables from a given Trust and "--Insolvency Event"
regarding the sale of the Receivables if an Insolvency Event with respect to the
Seller occurs. On the other hand, the payment schedule under a Contract may be
extended or revised by the Servicer under certain circumstances. An extension or
revision may lengthen the average remaining term of the Receivables and the
average life of the Securities. See "The Receivables Pools--The Retail Equipment
Financing Business--Extension/Revision Procedures."
In light of the above considerations, there can be no assurance as to the
amount of principal payments to be made on the Notes or the Certificates of a
given series on each Payment Date, since such amount will depend, in part, on
the amount of principal collected on the related Receivables during the
applicable Collection Period. Any reinvestment risks resulting from a faster or
slower incidence of prepayment of Receivables will be borne entirely by the
Noteholders and the Certificateholders of a given series. Such reinvestment
risks may include the risk that interest rates are lower at the time
Securityholders receive payments from the Trust than interest rates would
otherwise have been had such prepayments not been made or had such prepayments
been made at a different time. The related Prospectus Supplement may set forth
certain additional information with respect to the maturity and prepayment
considerations applicable to the particular Receivables and the related series
of Securities.
POOL FACTORS AND TRADING INFORMATION
The "Note Pool Factor" for each class of Notes will be a seven-digit
decimal that the Servicer will compute with respect to such class of Notes
indicating the remaining outstanding principal balance of such class of Notes,
as of the applicable Payment Date (after giving effect to payments to be made on
such Payment Date), as a fraction of the initial outstanding principal balance
of such class of Notes. The "Certificate Pool Factor " for each class of
Certificates will be a seven-digit decimal that the Servicer will compute with
respect to such class of Certificates indicating the remaining Certificate
Balance of such class of
17
<PAGE> 69
Certificates, as of the applicable Payment Date (after giving effect to
distributions to be made on such Payment Date), as a fraction of the initial
Certificate Balance of such class of Certificates. Each Note Pool Factor and
each Certificate Pool Factor will initially be 1.0000000 and thereafter will
decline to reflect reductions in the outstanding principal balance of the
applicable class of Notes, or the reduction of the Certificate Balance of the
applicable class of Certificates, as the case may be. A Noteholder's portion of
the aggregate outstanding principal balance of the related class of Notes is the
product of (i) the original denomination of such Noteholder's Note and (ii) the
applicable Note Pool Factor. A Certificateholder's portion of the aggregate
outstanding Certificate Balance for the related class of Certificates is the
product of (a) the original denomination of such Certificateholder's Certificate
and (b) the applicable Certificate Pool Factor.
Unless otherwise provided in the related Prospectus Supplement with respect
to each Trust, the Noteholders will receive reports on or about each Payment
Date concerning the Receivables, the Pool Balance (as such term is defined in
the related Prospectus Supplement, the "Pool Balance"), each Note Pool Factor
and various other items of information, and the Certificateholders will receive
reports on or about each Payment Date concerning the Receivables, the Pool
Balance, each Certificate Pool Factor and various other items of information. In
addition, Securityholders of record during any calendar year will be furnished
information for tax reporting purposes not later than the latest date permitted
by law. See "Certain Information Regarding the Securities--Reports to
Securityholders."
USE OF PROCEEDS
Unless otherwise provided in the related Prospectus Supplement, the net
proceeds from the sale of the Securities of a given series will be applied by
the applicable Trust (i) to the purchase of the Receivables from the Seller,
(ii) to make the initial deposit into the Spread Account, if any, and (iii) to
make the deposit of the Pre-Funded Amount into the Pre-Funding Account, if any.
Unless otherwise specified in the related Prospectus Supplement, the Seller will
use that portion of such net proceeds paid to it with respect to any such Trust
to repay outstanding indebtedness under the Loan and Security Agreement or to
purchase related Receivables from Case Credit.
THE SELLER, CASE CREDIT CORPORATION AND CASE CORPORATION
CASE RECEIVABLES II INC.
The Seller, a wholly-owned subsidiary of Case Credit, was incorporated in
the State of Delaware on June 15, 1994. The Seller was organized for the limited
purpose of purchasing receivables from Case Credit and transferring such
receivables to third parties and any activities incidental to and necessary or
convenient for the accomplishment of such purposes. The principal executive
offices of the Seller are located at 233 Lake Avenue, Racine, Wisconsin 53403,
and its telephone number is (414) 636-6564.
The Seller has taken steps in structuring the transactions contemplated
hereby and by the related Prospectus Supplement that are intended to ensure that
the voluntary or involuntary application for relief by Case Credit under any
Insolvency Law will not result in consolidation of the assets and liabilities of
the Seller with those of Case Credit. These steps include the creation of the
Seller as a separate, limited-purpose subsidiary pursuant to a certificate of
incorporation containing certain limitations (including restrictions on the
nature of the Seller's business and a restriction on the Seller's ability to
commence a voluntary case or proceeding under any Insolvency Law without the
prior unanimous affirmative vote of all of its directors). However, there can be
no assurance that the activities of the Seller would not result in a court's
concluding that the assets and liabilities of the Seller should be consolidated
with those of Case Credit in a proceeding under any Insolvency Law. See "Risk
Factors--Certain Legal Aspects--Bankruptcy Considerations."
In addition, the Indenture Trustee, the Trustee, all Noteholders and all
Certificateholders will covenant that they will not at any time institute
against the Seller any bankruptcy, reorganization or other proceeding under any
Federal or state bankruptcy or similar law.
18
<PAGE> 70
Case Credit has warranted, in the Liquidity Receivables Purchase Agreement
or will warrant, in the applicable Purchase Agreement, that the sale of the
Receivables to the Seller is a valid sale, and has taken all actions required to
perfect the Seller's ownership interest in such Receivables. Notwithstanding the
foregoing, if Case Credit were to become a debtor in a bankruptcy case and a
creditor or trustee-in-bankruptcy of such debtor or such debtor itself were to
take the position that the sale of Receivables to the Seller should be
recharacterized as a pledge of such Receivables to secure a borrowing of such
debtor, then delays in payments of collections of Receivables to the Seller
could occur or (should the court rule in favor of any such trustee, debtor or
creditor) reductions in the amount of such payments could result. If the
transfer of Receivables to the Seller pursuant to the Liquidity Receivables
Purchase Agreement or the applicable Purchase Agreement is recharacterized as a
pledge, a tax or government lien on the property of Case Credit arising before
the transfer of Receivables to the Seller, may have priority over the Seller's
interest in such Receivables. If the transactions contemplated herein are
treated as a sale, the Receivables would not be part of Case Credit's bankruptcy
estate and would not be available to Case Credit's creditors, except under
certain limited circumstances.
CASE CREDIT CORPORATION
Case Credit is primarily engaged in financing goods and services
manufactured, distributed or provided by Case. Prior to the Reorganization (as
defined below), the retail financing provided by Case to purchasers of its farm
and construction equipment was offered through Case Credit, a division of Case
Corporation ("old Case Credit"). After the Reorganization, the retail financing
has been and will be provided through Case Credit, a wholly-owned subsidiary of
Case. All of the services and functions provided by old Case Credit were
transferred to Case Credit on the Reorganization Date.
Case Credit's headquarters are located at 233 Lake Avenue, Racine,
Wisconsin 53403, and its telephone number is (414) 636-6011.
CASE CORPORATION
Case Corporation, a Delaware corporation, and its subsidiaries manufacture
and distribute a full line of agricultural equipment and light and medium-sized
construction equipment, which are sold worldwide through independent dealers and
retail outlets owned by Case and its affiliates. Case's business is affected by
the general level of activity in the agricultural and construction industries,
including the rate of worldwide agricultural production and demand, levels of
total industry capacity, weather conditions, exchange rates, commodity prices,
levels of equipment inventory and prevailing levels of construction. The
agricultural and construction equipment industry is characterized by unrelenting
global competition and flat to declining markets. Both United States and
international manufacturers of agricultural and construction equipment compete
on a worldwide basis in such markets.
Case Corporation and its subsidiaries acquired the farm and construction
equipment business of subsidiaries of Tenneco Inc. on June 23, 1994 (the
"Reorganization Date") pursuant to a Reorganization Agreement dated as of that
date (the "Reorganization Agreement"). The acquisition of such business is
referred to herein as the "Reorganization." In connection with the
Reorganization, shares of common stock of Case were sold by certain subsidiaries
of Tenneco Inc. in underwritten public offerings.
Case's offices are located at 700 State Street, Racine, Wisconsin 53404,
and its telephone number is (414) 636-6011. Case is subject to the informational
requirements of the Exchange Act and in accordance therewith files reports and
other information with the Commission. For further information regarding Case,
reference is made to such reports and other information that are available as
described under "Available Information."
19
<PAGE> 71
DESCRIPTION OF THE NOTES
GENERAL
With respect to each Trust, one or more classes of Notes of a given series
will be issued pursuant to the terms of an indenture, a form of which has been
filed as an exhibit to the Registration Statement. The following summary does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, all the provisions of the Notes and the Indenture.
Unless otherwise specified in the related Prospectus Supplement, each class
of Notes will initially be represented by one or more Notes, in each case
registered in the name of DTC's Nominee (together with any successor depository
selected by the Trust, the "Depository") except as set forth below. Unless
otherwise specified in the related Prospectus Supplement, the Notes will be
available for purchase in denominations of $1,000 and integral multiples thereof
in book-entry form only. The Seller has been informed by DTC that DTC's Nominee
will be Cede, unless another nominee is specified in the related Prospectus
Supplement. Accordingly, such nominee is expected to be the holder of record of
the Notes of each class. Unless and until Definitive Notes are issued under the
limited circumstances described herein or in the related Prospectus Supplement,
no Noteholder will be entitled to receive a physical certificate representing a
Note. All references herein and in the related Prospectus Supplement to actions
by Noteholders refer to actions taken by DTC upon instructions from its
participating organizations (the "Participants") and all references herein and
in the related Prospectus Supplement to distributions, notices, reports and
statements to Noteholders refer to distributions, notices, reports and
statements to DTC or its nominee, as the registered holder of the Notes, as the
case may be, for distribution to Noteholders in accordance with DTC's procedures
with respect thereto. See "Certain Information Regarding the
Securities--Book-Entry Registration" and "--Definitive Securities."
PRINCIPAL AND INTEREST ON THE NOTES
The timing and priority of payment, seniority, allocations of losses,
Interest Rate and amount of or method of determining payments of principal and
interest on each class of Notes of a given series will be described in the
related Prospectus Supplement. The right of holders of any class of Notes to
receive payments of principal and interest may be senior or subordinate to the
rights of holders of any other class or classes of Notes of such series, as
described in the related Prospectus Supplement. Unless otherwise provided in the
related Prospectus Supplement, payments of interest on the Notes of such series
will be made prior to payments of principal thereon. To the extent provided in
the related Prospectus Supplement, a series may include one or more classes of
Strip Notes entitled to (i) principal payments with disproportionate, nominal or
no interest payments or (ii) interest payments with disproportionate, nominal or
no principal payments. Each class of Notes may have a different Interest Rate,
which may be a fixed, variable or adjustable Interest Rate (and that may be zero
for certain classes of Strip Notes), or any combination of the foregoing. The
related Prospectus Supplement will specify the Interest Rate for each class of
Notes of a given series or the method for determining such Interest Rate. See
also "Certain Information Regarding the Securities--Fixed Rate Securities" and
"--Floating Rate Securities." One or more classes of Notes of a series may be
redeemable in whole or in part under the circumstances specified in the related
Prospectus Supplement, including at the end of the Funding Period (if any) or as
a result of the Servicer's exercising its option to purchase the Receivables of
the related Trust.
To the extent specified in any Prospectus Supplement, one or more classes
of Notes of a given series may have fixed principal payment schedules, as set
forth in such Prospectus Supplement; Noteholders of such Notes would be entitled
to receive as payments of principal on any given Payment Date the applicable
amounts set forth on such schedule with respect to such Notes, in the manner and
to the extent set forth in the related Prospectus Supplement.
Unless otherwise specified in the related Prospectus Supplement, payments
to Noteholders of all classes within a series in respect of interest will have
the same priority. Under certain circumstances, the amount available for such
payments could be less than the amount of interest payable on the Notes on any
of the dates specified for payments in the related Prospectus Supplement (each,
a "Payment Date"), in which case, unless
20
<PAGE> 72
otherwise provided in the related Prospectus Supplement, each class of
Noteholders will receive its ratable share (based upon the aggregate amount of
interest due to such class of Noteholders) of the aggregate amount available to
be distributed in respect of interest on the Notes of such series. See
"Description of the Transfer and Servicing Agreements--Distributions" and
"--Credit and Cash Flow Enhancement."
In the case of a series of Notes that includes two or more classes of
Notes, the sequential order and priority of payment in respect of principal and
interest, and any schedule or formula or other provisions applicable to the
determination thereof, of each such class will be set forth in the related
Prospectus Supplement. Payments in respect of principal and interest of any
class of Notes will be made on a pro rata basis among all the Noteholders of
such class.
If the Servicer exercises its option to Purchase the Receivables of a Trust
in the manner and on the respective terms and conditions described under
"Description of the Transfer and Servicing Agreements-- Termination," the
outstanding Notes will be redeemed as set forth in the related Prospectus
Supplement. In addition, if the related Prospectus Supplement provides that the
property of a Trust will be included a Pre-Funding Account, the outstanding
Notes may be subject to partial redemption on or immediately following the end
of the Funding Period in an amount and manner specified in the related
Prospectus Supplement. In the event of such partial redemption, the Noteholders
may be entitled to receive a redemption premium from the Trust, in the amount
and to the extent provided in the related Prospectus Supplement.
THE INDENTURE
Modification of Indenture. With respect to each Trust, with the consent of
the holders of a majority of the outstanding Notes of the related series, the
Trust and the Indenture Trustee may execute a supplemental indenture to add
provisions to, change in any manner or eliminate any provisions of, the related
Indenture, or modify (except as provided below) in any manner the rights of the
related Noteholders.
Unless otherwise specified in the related Prospectus Supplement with
respect to a series of Notes, without the consent of the holder of each such
outstanding Note affected thereby, however, no supplemental indenture will: (i)
change the due date of any installment of principal of or interest on any such
Note or reduce the principal amount thereof, the interest rate specified thereon
or the redemption price with respect thereto or change any place of payment
where or the coin or currency in which any such Note or any interest thereon is
payable; (ii) impair the right to institute suit for the enforcement of certain
provisions of the related Indenture regarding payment; (iii) reduce the
percentage of the aggregate amount of the outstanding Notes of such series, the
consent of the holders of which is required for any such supplemental indenture
or the consent of the holders of which is required for any waiver of compliance
with certain provisions of the related Indenture or of certain defaults
thereunder and their consequences as provided for in such Indenture; (iv) modify
or alter the provisions of the related Indenture regarding the voting of Notes
held by the applicable Trust, any other obligor on such Notes, the Seller or an
affiliate of any of them; (v) reduce the percentage of the aggregate outstanding
amount of such Notes, the consent of the holders of which is required to direct
the related Indenture Trustee to sell or liquidate the Receivables if the
proceeds of such sale would be insufficient to pay the principal amount and
accrued but unpaid interest on the outstanding Notes of such series; (vi)
decrease the percentage of the aggregate principal amount of such Notes required
to amend the sections of the related Indenture that specify the applicable
percentage of aggregate principal amount of the Notes of such series necessary
to amend such Indenture or certain other related agreements; or (vii) permit the
creation of any lien ranking prior to or on a parity with the lien of the
related Indenture with respect to any of the collateral for such Notes or,
except as otherwise permitted or contemplated in such Indenture, terminate the
lien of such Indenture on any such collateral or deprive the holder of any such
Note of the security afforded by the lien of such Indenture.
Unless otherwise provided in the applicable Prospectus Supplement, a Trust
and the applicable Indenture Trustee may also enter into supplemental
indentures, without obtaining the consent of the Noteholders of the related
series, for the purpose of, among other things, adding any provisions to or
changing in any manner or eliminating any of the provisions of the related
Indenture or of modifying in any manner the rights of such
21
<PAGE> 73
Noteholders; provided that such action will not materially and adversely affect
the interest of any such Noteholder.
In addition, unless otherwise provided in the applicable Prospectus
Supplement, a Trust and the applicable Indenture Trustee may enter into
supplemental indentures, without obtaining the consent of the Noteholders of the
related series, to substitute credit enhancement for any class of Notes provided
the Rating Agencies confirm in writing that such substitution will not result in
the reduction or withdrawal of the rating for such class of Notes or any other
class of Securities of the related series.
Events of Default; Rights upon Event of Default. With respect to the Notes
of a given series, unless otherwise specified in the related Prospectus
Supplement, "Events of Default" under the related Indenture will consist of: (i)
a default for five days or more in the payment of any interest on any such Note;
(ii) a default in the payment of the principal of or any installment of the
principal of any such Note when the same becomes due and payable; (iii) a
default in the observance or performance of any covenant or agreement of the
applicable Trust made in the related Indenture and the continuation of any such
default for a period of 30 days after notice thereof is given to such Trust by
the applicable Indenture Trustee or to such Trust and such Indenture Trustee by
the holders of at least 25% in principal amount of such Notes then outstanding;
(iv) any representation or warranty made by such Trust in the related Indenture
or in any certificate delivered pursuant thereto or in connection therewith
having been incorrect in a material respect as of the time made, and such breach
not having been cured within 30 days after notice thereof is given to such Trust
by the applicable Indenture Trustee or to such Trust and such Indenture Trustee
by the holders of at least 25% in principal amount of such Notes then
outstanding or (v) certain events of bankruptcy, insolvency, receivership or
liquidation of the applicable Trust. However, the amount of principal required
to be paid to Noteholders of such series under the related Indenture will
generally be limited to amounts available to be deposited in the applicable Note
Distribution Account. Therefore, unless otherwise specified in the related
Prospectus Supplement, the failure to pay principal on a class of Notes
generally will not result in the occurrence of an Event of Default until the
final scheduled Payment Date for such class of Notes.
If an Event of Default should occur and be continuing with respect to the
Notes of any series, the related Indenture Trustee or holders of a majority in
principal amount of such Notes then outstanding may declare the principal of
such Notes to be immediately due and payable. Unless otherwise specified in the
related Prospectus Supplement, such declaration may, under certain
circumstances, be rescinded by the holders of a majority in principal amount of
such Notes then outstanding.
If the Notes of any series have been declared due and payable following an
Event of Default with respect thereto, the related Indenture Trustee may
institute proceedings to collect amounts due or foreclose on Trust property,
exercise remedies as a secured party, sell the related Receivables or elect to
have the applicable Trust maintain possession of such Receivables and continue
to apply collections on such Receivables as if there had been no declaration of
acceleration. Unless otherwise specified in the related Prospectus Supplement,
however, such Indenture Trustee is prohibited from selling the related
Receivables following an Event of Default, other than a default in the payment
of any principal of or a default for five days or more in the payment of any
interest on any Note of such series, unless (i) the holders of all such
outstanding Notes consent to such sale, (ii) the proceeds of such sale are
sufficient to pay in full the principal of and the accrued interest on such
outstanding Notes at the date of such sale or (iii) such Indenture Trustee
determines that the proceeds of Receivables would not be sufficient on an
ongoing basis to make all payments on such Notes as such payments would have
become due if such obligations had not been declared due and payable, and such
Indenture Trustee obtains the consent of the holders of 66 2/3% of the aggregate
outstanding amount of such Notes.
Subject to the provisions of the applicable Indenture relating to the
duties of the related Indenture Trustee, if an Event of Default occurs and is
continuing with respect to a series of Notes, such Indenture Trustee will be
under no obligation to exercise any of the rights or powers under such Indenture
at the request or direction of any of the holders of such Notes, if such
Indenture Trustee reasonably believes it will not be adequately indemnified
against the costs, expenses and liabilities that might be incurred by it in
complying with such request. Subject to the provisions for indemnification and
certain limitations contained in the related
22
<PAGE> 74
Indenture, the holders of a majority in principal amount of the outstanding
Notes of a given series will have the right to direct the time, method and place
of conducting any proceeding or any remedy available to the applicable Indenture
Trustee, and the holders of a majority in principal amount of such Notes then
outstanding may, in certain cases, waive any default with respect thereto,
except a default in the payment of principal or interest or a default in respect
of a covenant or provision of such Indenture that cannot be modified without the
waiver or consent of all the holders of such outstanding Notes.
Unless otherwise specified in the related Prospectus Supplement, no holder
of a Note of any series will have the right to institute any proceeding with
respect to the related Indenture, unless (i) such holder previously has given to
the applicable Indenture Trustee written notice of a continuing Event of
Default, (ii) the holders of not less than 25% in principal amount of the
outstanding Notes of such series have made written request to such Indenture
Trustee to institute such proceeding in its own name as Indenture Trustee, (iii)
such holder or holders have offered such Indenture Trustee reasonable indemnity,
(iv) such Indenture Trustee has for 60 days failed to institute such proceeding
and (v) no direction inconsistent with such written request has been given to
such Indenture Trustee during such 60-day period by the holders of a majority in
principal amount of such outstanding Notes.
In addition, each Indenture Trustee and the related Noteholders, by
accepting the related Notes, will covenant that they will not at any time
institute against the applicable Trust any bankruptcy, reorganization or other
proceeding under any Federal or state bankruptcy or similar law.
With respect to any Trust, neither the related Trustee nor the related
Indenture Trustee in its individual capacity, nor any holder of a Certificate
representing an ownership interest in such Trust nor any of their respective
owners, beneficiaries, agents, officers, directors, employees, affiliates,
successors or assigns will, in the absence of an express agreement to the
contrary, be personally liable for the payment of the principal of or interest
on the related Notes or for the agreements of such Trust contained in the
applicable Indenture.
Certain Covenants. Each Indenture will provide that the related Trust may
not consolidate with or merge into any other entity, unless (i) the entity
formed by or surviving such consolidation or merger is organized under the laws
of the United States or any state, (ii) such entity expressly assumes such
Trust's obligation to make due and punctual payments upon the Notes of the
related series and the performance or observance of every agreement and covenant
of such Trust under the Indenture, (iii) no Event of Default shall have occurred
and be continuing immediately after such merger or consolidation, (iv) such
Trust has been advised that the rating of the Notes or the Certificates of such
series then in effect would not be reduced or withdrawn by the Rating Agencies
as a result of such merger or consolidation and (v) such Trust has received an
opinion of counsel to the effect that such consolidation or merger would have no
material adverse tax consequence to the Trust or to any related Noteholder or
Certificateholder.
Each Trust will not, among other things, (i) except as expressly permitted
by the applicable Indenture, the applicable Transfer and Servicing Agreements or
certain related documents with respect to such Trust (collectively, the "Related
Documents"), sell, transfer, exchange or otherwise dispose of any of the assets
of such Trust, (ii) claim any credit on or make any deduction from the principal
and interest payable in respect of the Notes of the related series (other than
amounts withheld under the Code or applicable state law) or assert any claim
against any present or former holder of such Notes because of the payment of
taxes levied or assessed upon such Trust, (iii) except as contemplated by the
Related Documents, dissolve or liquidate in whole or in part, (iv) permit the
validity or effectiveness of the related Indenture to be impaired or permit any
person to be released from any covenants or obligations with respect to such
Notes under such Indenture except as may be expressly permitted thereby or (v)
permit any lien, charge, excise, claim, security interest, mortgage or other
encumbrance to be created on or extend to or otherwise arise upon or burden the
assets of such Trust or any part thereof, or any interest therein or the
proceeds thereof.
No Trust may engage in any activity other than as specified under the
section of the related Prospectus Supplement entitled "The Trust." No Trust will
incur, assume or guarantee any indebtedness other than indebtedness incurred
pursuant to the related Notes and the related Indenture or otherwise in
accordance with the Related Documents.
23
<PAGE> 75
Annual Compliance Statement. Each Trust will be required to file annually
with the related Indenture Trustee a written statement as to the fulfillment of
its obligations under the Indenture.
Indenture Trustee's Annual Report. The Indenture Trustee for each Trust
will be required to mail each year to all related Noteholders a brief report
relating to its eligibility and qualification to continue as Indenture Trustee
under the related Indenture, any amounts advanced by it under the Indenture, the
amount, interest rate and maturity date of certain indebtedness owing by such
Trust to the applicable Indenture Trustee in its individual capacity, the
property and funds physically held by such Indenture Trustee as such and any
action taken by it that materially affects the related Notes and that has not
been previously reported.
Satisfaction and Discharge of Indenture. An Indenture will be discharged
with respect to the collateral securing the related Notes upon the delivery to
the related Indenture Trustee for cancellation of all such Notes or, with
certain limitations, upon deposit with such Indenture Trustee of funds
sufficient for the payment in full of all such Notes.
THE INDENTURE TRUSTEE
The Indenture Trustee for a series of Notes will be specified in the
related Prospectus Supplement. The Indenture Trustee for any series may resign
at any time, in which event the Trust will be obligated to appoint a successor
trustee for such series. The Trust may also remove any such Indenture Trustee if
such Indenture Trustee ceases to be eligible to continue as such under the
related Indenture or if such Indenture Trustee becomes insolvent. In such
circumstances, the Trust will be obligated to appoint a successor indenture
trustee for the applicable series of Notes. Any resignation or removal of the
Indenture Trustee and appointment of a successor indenture trustee for any
series of Notes does not become effective until acceptance of the appointment by
the successor indenture trustee for such series.
DESCRIPTION OF THE CERTIFICATES
GENERAL
With respect to each Trust, one or more classes of Certificates of a given
series will be issued pursuant to the terms of a Trust Agreement, a form of
which has been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part. The following summary does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of the Certificates and the Trust Agreement.
Unless otherwise specified in the related Prospectus Supplement and except
for the Certificates of a given series purchased by the Seller, each class of
Certificates will initially be represented by one or more Certificates
registered in the name of the Depository, except as set forth below. Unless
otherwise specified in the related Prospectus Supplement and except for the
Certificates of a given series purchased by the Seller, the Certificates will be
available for purchase in minimum denominations of $1,000 and integral multiples
thereof in book-entry form only. The Seller has been informed by DTC that DTC's
Nominee will be Cede, unless another nominee is specified in the related
Prospectus Supplement. Accordingly, such nominee is expected to be the holder of
record of the Certificates of any series that are not purchased by the Seller.
Unless and until Definitive Certificates are issued under the limited
circumstances described herein or in the related Prospectus Supplement, no
Certificateholder (other than the Seller) will be entitled to receive a physical
certificate representing a Certificate. All references herein and in the related
Prospectus Supplement to actions by Certificateholders refer to actions taken by
DTC upon instructions from the Participants and all references herein and in the
related Prospectus Supplement to distributions, notices, reports and statements
to Certificateholders refer to distributions, notices, reports and statements to
DTC or its nominee, as the registered holder of the Certificates, as the case
may be, for distribution to Certificateholders in accordance with DTC's
procedures with respect thereto. See "Certain Information Regarding the
Securities--Book Entry Registration" and "--Definitive Securities."
24
<PAGE> 76
DISTRIBUTIONS OF PRINCIPAL AND INTEREST
The timing and priority of distributions, seniority, allocations of losses,
Pass-Through Rate and amount of or method of determining distributions with
respect to principal and interest of each class of Certificates of a given
series will be described in the related Prospectus Supplement. Distributions of
interest on such Certificates will be made on the Payment Dates specified in the
related Prospectus Supplement and will be made prior to distributions with
respect to principal of such Certificates. To the extent provided in the related
Prospectus Supplement, a series may include one or more classes of Strip
Certificates entitled to (i) distributions in respect of principal with
disproportionate, nominal or no interest distributions or (ii) interest
distributions with disproportionate, nominal or no distributions in respect of
principal. Each class of Certificates may have a different Pass-Through Rate,
which may be a fixed, variable or adjustable Pass-Through Rate (and that may be
zero for certain classes of Strip Certificates), or any combination of the
foregoing. The related Prospectus Supplement will specify the Pass-Through Rate
for each class of Certificates of a given series or the method for determining
such Pass-Through Rate. See also "Certain Information Regarding the
Securities--Fixed Rate Securities" and "--Floating Rate Securities." Unless
otherwise provided in the related Prospectus Supplement, distributions in
respect of the Certificates of a given series may be subordinate to payments in
respect of the Notes of such series as more fully described in the related
Prospectus Supplement. Distributions in respect of interest on and principal of
any class of Certificates will be made on a pro rata basis among all the
Certificateholders of such class.
In the case of a series of Certificates that includes two or more classes
of Certificates, the timing, sequential order, priority of payment or amount of
distributions in respect of interest and principal, and any schedule or formula
or other provisions applicable to the determination thereof, of each such class
shall be as set forth in the related Prospectus Supplement.
If the Servicer exercises its option to purchase the Receivables of a
Trust, in the manner and on the respective terms and conditions described under
"Description of the Transfer and Servicing Agreements--Termination,"
Certificateholders will receive as prepayment an amount in respect of the
Certificates as specified in the related Prospectus Supplement. In addition, if
the related Prospectus Supplement provides that the property of a Trust will
include a Pre-Funding Account, Certificateholders may receive a partial
prepayment of principal on or immediately following the end of the Funding
Period in an amount and manner specified in the related Prospectus Supplement.
In the event of such partial prepayment, the Certificateholders may be entitled
to receive a prepayment premium from the Trust, in the amount and to the extent
provided in the related Prospectus Supplement.
CERTAIN INFORMATION REGARDING THE SECURITIES
FIXED RATE SECURITIES
Each class of Securities (other than certain classes of Strip Notes or
Strip Certificates) may bear interest at a fixed rate per annum ("Fixed Rate
Securities") or at a variable or adjustable rate per annum ("Floating Rate
Securities"), as more fully described below and in the applicable Prospectus
Supplement. Each class of Fixed Rate Securities will bear interest at the
applicable per annum Interest Rate or Pass-Through Rate, as the case may be,
specified in the applicable Prospectus Supplement. Unless otherwise set forth in
the applicable Prospectus Supplement, interest on each class of Fixed Rate
Securities will be computed on the basis of a 360-day year of twelve 30-day
months. See "Description of the Notes--Principal and Interest on the Notes" and
"Description of the Certificates--Distributions of Principal and Interest."
FLOATING RATE SECURITIES
Each class of Floating Rate Securities will bear interest for each
applicable Interest Reset Period (as such term is defined in the related
Prospectus Supplement with respect to a class of Floating Rate Securities,
"Interest Reset Period") at a rate per annum determined by reference to an
interest rate basis (the "Base Rate"), plus or minus the Spread, if any, or
multiplied by the Spread Multiplier, if any, in each case as specified in the
related Prospectus Supplement. The "Spread" is the number of basis points (one
basis point
25
<PAGE> 77
equals one one-hundredth of a percentage point) that may be specified in the
applicable Prospectus Supplement as being applicable to such class, and the
"Spread Multiplier" is the percentage that may be specified in the applicable
Prospectus Supplement as being applicable to such class.
The applicable Prospectus Supplement will designate a Base Rate for a given
Floating Rate Security based on the London interbank offered rate ("LIBOR"),
commercial paper rates, Federal funds rates, U.S. Government treasury securities
rates, negotiable certificates of deposit rates or another rate as set forth in
such Prospectus Supplement.
As specified in the applicable Prospectus Supplement, Floating Rate
Securities of a given class may also have either or both of the following (in
each case expressed as a rate per annum): (i) a maximum limitation, or ceiling,
on the rate at which interest may accrue during any interest period and (ii) a
minimum limitation, or floor, on the rate at which interest may accrue during
any interest period. In addition to any maximum interest rate that may be
applicable to any class of Floating Rate Securities, the interest rate
applicable to any class of Floating Rate Securities will in no event be higher
than the maximum rate permitted by applicable law, as the same may be modified
by United States law of general application.
Each Trust with respect to which a class of Floating Rate Securities will
be issued will appoint, and enter into agreements with, a calculation agent
(each, a "Calculation Agent") to calculate interest rates on each such class of
Floating Rate Securities issued with respect thereto. The applicable Prospectus
Supplement will set forth the identity of the Calculation Agent for each such
class of Floating Rate Securities of a given series, which may be either the
Trustee or Indenture Trustee with respect to such series. All determinations of
interest by the Calculation Agent shall, in the absence of manifest error, be
conclusive for all purposes and binding on the holders of Floating Rate
Securities of a given class. Unless otherwise specified in the applicable
Prospectus Supplement, all percentages resulting from any calculation of the
rate of interest on a Floating Rate Security will be rounded, if necessary, to
the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage
point rounded upward.
INDEXED SECURITIES
To the extent so specified in any Prospectus Supplement, any class of
Securities of a given series may consist of Securities ("Indexed Securities") in
which the principal amount payable at the final scheduled Payment Date for such
class (the "Indexed Principal Amount") is determined by reference to a measure
(the "Index") that will be related to (i) the difference in the rate of exchange
between United States dollars and a currency or composite currency (the "Indexed
Currency") specified in the applicable Prospectus Supplement (such Indexed
Securities, "Currency Indexed Securities"); (ii) the difference in the price of
a specified commodity (the "Indexed Commodity") on specified dates (such Indexed
Securities, "Commodity Indexed Securities"); (iii) the difference in the level
of a specified stock index (the "Stock Index"), which may be based on U.S. or
foreign stocks on specified dates (such Indexed Securities, "Stock Indexed
Securities"); or (iv) such other objective price or economic measures as are
described in the applicable Prospectus Supplement. The manner of determining the
Indexed Principal Amount of an Indexed Security and historical and other
information concerning the Indexed Currency, the Indexed Commodity, the Stock
Index or other price or economic measures used in such determination will be set
forth in the applicable Prospectus Supplement, together with information
concerning tax consequences to the holders of such Indexed Securities.
If the determination of the Indexed Principal Amount of an Indexed Security
is based on an Index calculated or announced by a third party and such third
party either suspends the calculation or announcement of such Index or changes
the basis upon which such Index is calculated (other than changes consistent
with policies in effect at the time such Indexed Security was issued and
permitted changes described in the applicable Prospectus Supplement), then such
Index shall be calculated for purposes of such Indexed Security by an
independent calculation agent named in the applicable Prospectus Supplement on
the same basis, and subject to the same conditions and controls, as applied to
the original third party. If for any reason such Index cannot be calculated on
the same basis and subject to the same conditions and controls as applied to the
original third party, then the Indexed Principal Amount of such Indexed Security
shall be calculated in the
26
<PAGE> 78
manner set forth in the applicable Prospectus Supplement. Any determination of
such independent calculation agent shall, in the absence of manifest error, be
binding on all parties.
Unless otherwise specified in the applicable Prospectus Supplement,
interest on an Indexed Security will be payable based on the amount designated
in the applicable Prospectus Supplement as the "Face Amount" of such Indexed
Security. The applicable Prospectus Supplement will describe whether the
principal amount of the related Indexed Security, if any, that would be payable
upon redemption or repayment prior to the applicable final scheduled Payment
Date will be the Face Amount of such Indexed Security, the Indexed Principal
Amount of such Indexed Security at the time of redemption or repayment or
another amount described in such Prospectus Supplement.
BOOK-ENTRY REGISTRATION
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York UCC and a "clearing agency"
registered pursuant to Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance and settlement
of securities transactions between Participants through electronic book-entries,
thereby eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations. Indirect access to the DTC system also is available to others such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
("Indirect Participants").
Unless otherwise specified in the related Prospectus Supplement,
Securityholders that are not Participants or Indirect Participants but desire to
purchase, sell or otherwise transfer ownership of, or other interests in,
Securities may do so only through Participants and Indirect Participants. In
addition, Securityholders will receive all distributions of principal and
interest from the related Indenture Trustee or the related Trustee, as
applicable (the "Applicable Trustee"), through Participants. Under a book-entry
format, Securityholders may experience some delay in their receipt of payments,
since such payments will be forwarded by the Applicable Trustee to DTC's
Nominee. DTC will forward such payments to its Participants, which thereafter
will forward them to Indirect Participants or Securityholders. Except for the
Seller, it is anticipated that the only "Securityholder," "Noteholder" and
"Certificateholder" will be DTC's Nominee. Noteholders will not be recognized by
each Indenture Trustee as Noteholders, as such term is used in each Indenture,
and Noteholders will be permitted to exercise the rights of Noteholders only
indirectly through DTC and its Participants. Similarly, Certificateholders will
not be recognized by each Trustee as Certificateholders as such term is used in
each Trust Agreement, and Certificateholders will be permitted to exercise the
rights of Certificateholders only indirectly through DTC and its Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
Securities among Participants on whose behalf it acts with respect to the
Securities and to receive and transmit distributions of principal of, and
interest on, the Securities. Participants and Indirect Participants with which
Securityholders have accounts with respect to the Securities similarly are
required to make book-entry transfers and receive and transmit such payments on
behalf of their respective Securityholders. Accordingly, although
Securityholders will not possess Securities, the Rules provide a mechanism by
which Participants will receive payments and will be able to transfer their
interests.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a
Securityholder to pledge Securities to persons or entities that do not
participate in the DTC system, or otherwise to act with respect to such
Securities, may be limited due to the lack of a physical certificate for such
Securities.
DTC has advised the Seller (and will advise the Applicable Trustee) that it
will take any action permitted to be taken by a Noteholder under the related
Indenture or a Certificateholder under the related Trust Agreement only at the
direction of one or more Participants to whose accounts with DTC the applicable
Notes or Certificates are credited. DTC may take conflicting actions with
respect to other undivided interests
27
<PAGE> 79
to the extent that such actions are taken on behalf of Participants whose
holdings include such undivided interests.
Except as required by law, neither the Administrator, the applicable
Trustee nor the applicable Indenture Trustee will have any liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Securities of any series held by DTC's Nominee, or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
DEFINITIVE SECURITIES
Unless otherwise specified in the related Prospectus Supplement, the Notes
and the Certificates of a given series will be issued in fully registered,
certificated form ("Definitive Notes" and "Definitive Certificates,"
respectively, and collectively referred to herein as "Definitive Securities") to
Noteholders or Certificateholders or their respective nominees, rather than to
DTC or its nominee, only if (i) the Administrator advises the Applicable Trustee
in writing that DTC is no longer willing or able to discharge properly its
responsibilities as depository with respect to such Securities and the
Administrator is unable to locate a qualified successor, (ii) the Administrator,
at its option, elects to terminate the book-entry system through DTC or (iii)
after the occurrence of an Event of Default or a Servicer Default with respect
to such Securities, Securityholders representing at least a majority of the
outstanding principal amount of the Notes or the Certificates, as the case may
be, of such series advise the Applicable Trustee through DTC in writing that the
continuation of a book-entry system through DTC (or a successor thereto) with
respect to such Notes or Certificates is no longer in the best interest of the
Securityholders of such Securities.
Upon the occurrence of any event described in the immediately preceding
paragraph, the Applicable Trustee will be required to notify all applicable
Securityholders of a given series through Participants of the availability of
Definitive Securities. Upon surrender by DTC of the definitive certificates
representing the corresponding Securities and receipt of instructions for
re-registration, the Applicable Trustee will reissue such Securities as
Definitive Securities to such Securityholders.
Distributions of principal of, and interest on, such Definitive Securities
will thereafter be made by the Applicable Trustee in accordance with the
procedures set forth in the related Indenture or the related Trust Agreement, as
applicable, directly to holders of Definitive Securities in whose names the
Definitive Securities were registered at the close of business on the applicable
Record Date specified for such Securities in the related Prospectus Supplement.
Such distributions will be made by check mailed to the address of such holder as
it appears on the register maintained by the Applicable Trustee. The final
payment on any such Definitive Security, however, will be made only upon
presentation and surrender of such Definitive Security at the office or agency
specified in the notice of final distribution to the applicable Securityholders.
Definitive Securities will be transferable and exchangeable at the offices
of the Applicable Trustee or of a registrar named in a notice delivered to
holders of Definitive Securities. No service charge will be imposed for any
registration of transfer or exchange, but the Applicable Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge
imposed in connection therewith.
LIST OF SECURITYHOLDERS
Unless otherwise specified in the related Prospectus Supplement with
respect to the Notes of any series, three or more holders of the Notes of such
series or one or more holders of such Notes evidencing at least 25% of the
aggregate outstanding principal balance of such Notes may, by written request to
the related Indenture Trustee, obtain access to the list of all Noteholders
maintained by such Indenture Trustee for the purpose of communicating with other
Noteholders with respect to their rights under the related Indenture or under
such Notes. Such Indenture Trustee may elect not to afford the requesting
Noteholders access to the list of Noteholders if it agrees to mail the desired
communication or proxy, on behalf of and at the expense of the requesting
Noteholders, to all Noteholders of such series.
Unless otherwise specified in the related Prospectus Supplement with
respect to the Certificates of any series, three or more holders of the
Certificates of such series or one or more holders of such Certificates
28
<PAGE> 80
evidencing at least 25% of the Certificate Balance of such Certificates may, by
written request to the related Trustee, obtain access to the list of all
Certificateholders maintained by such Trustee for the purpose of communicating
with other Certificateholders with respect to their rights under the related
Trust Agreement or under such Certificates.
REPORTS TO SECURITYHOLDERS
With respect to each series of Securities, on or prior to each Payment
Date, the Servicer will prepare and provide to the related Indenture Trustee a
statement to be delivered to the related Noteholders on such Payment Date and to
the related Trustee a statement to be delivered to the related
Certificateholders. With respect to each series of Securities, each such
statement to be delivered to Noteholders will include (to the extent applicable)
the following information (and any other information so specified in the related
Prospectus Supplement) as to the Notes of such series with respect to such
Payment Date or the period since the previous Payment Date, as applicable, and
each such statement to be delivered to Certificateholders will include (to the
extent applicable) the following information (and any other information so
specified in the related Prospectus Supplement) as to the Certificates of such
series with respect to such Payment Date or the period since the previous
Payment Date, as applicable:
(i) the amount of the distribution allocable to principal of each
class of Securities of such series;
(ii) the amount of the distribution allocable to interest on or with
respect to each class of Securities of such series;
(iii) the Pool Balance as of the close of business on the last day of
the preceding Collection Period;
(iv) the aggregate outstanding principal balance and the Note Pool
Factor for each class of such Notes, and the Certificate Balance and the
Certificate Pool Factor for each class of such Certificates, each after
giving effect to all payments reported under clause (i) above on such date;
(v) the amount of the Servicing Fee paid to the Servicer with respect
to the related Collection Period;
(vi) the Interest Rate or Pass-Through Rate for the next period for
any class of Notes or Certificates of such series with variable or
adjustable rates;
(vii) the amount of the Administration Fee paid to the Administrator
in respect of the related Collection Period;
(viii) the amount of the aggregate Realized Losses, if any, for such
Collection Period;
(ix) the aggregate Purchase Amounts for Receivables, if any, that were
repurchased or purchased in such Collection Period;
(x) the balance of the Spread Account (if any) on such Payment Date,
after giving effect to changes therein on such Payment Date;
(xi) for each such date during the Funding Period (if any), the
remaining Pre-Funded Amount; and
(xii) for the first such date that is on or immediately following the
end of the Funding Period (if any), the amount of any remaining Pre-Funded
Amount that has not been used to fund the purchase of Subsequent
Receivables and is being passed through as payments of principal on the
Securities of such series.
Each amount set forth pursuant to subclauses (i), (ii), (v) and (vii) with
respect to the Notes or the Certificates of any series will be expressed as a
dollar amount per $1,000 of the initial principal balance of such Notes or the
initial Certificate Balance of such Certificates, as applicable.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of each Trust, the Applicable Trustee
will mail to each person who at any time during such calendar
29
<PAGE> 81
year has been a Securityholder with respect to such Trust and received any
payment thereon, a statement containing certain information for the purposes of
such Securityholder's preparation of Federal income tax returns. See "Certain
Federal Income Tax Consequences."
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS
The following summary describes certain terms of (i) each Sale and
Servicing Agreement pursuant to which a Trust will purchase Receivables from the
Seller and the Servicer will agree to service such Receivables; (ii) each
Purchase Agreement pursuant to which the Seller will purchase Receivables from
Case Credit; (iii) each Trust Agreement pursuant to which a Trust will be
created and Certificates will be issued; (iv) each Administration Agreement
pursuant to which Case Credit will undertake certain administrative duties with
respect to a Trust (collectively, the "Transfer and Servicing Agreements"); and
(v) the Liquidity Receivables Purchase Agreement pursuant to which the Seller
purchases Receivables from Case Credit and other agreements related to CRC's
asset-backed commercial paper program. Forms of the Transfer and Servicing
Agreements and the Liquidity Receivables Purchase Agreement have been filed as
exhibits to the Registration Statement of which this Prospectus forms a part.
This summary does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the provisions of the definitive agreements.
SALE AND ASSIGNMENT OF RECEIVABLES
On the Closing Date specified with respect to any given Trust in the
related Prospectus Supplement (the "Closing Date"), if Case Credit is selling
Receivables to the Seller in addition to those previously sold to the Seller
pursuant to the Liquidity Receivables Purchase Agreement, Case Credit will sell
and assign to the Seller, without recourse, its entire interest in the related
Receivables, including security interests in the related Financed Equipment,
pursuant to a Purchase Agreement (as amended and supplemented from time to time,
a "Purchase Agreement," which term will also include, as the context requires,
the Liquidity Receivables Purchase Agreement). The Seller will transfer and
assign to the related Trustee, without recourse, its entire interest in such
Receivables and security interests, together with its entire interest in
designated Receivables previously sold to the Seller pursuant to the Liquidity
Receivables Purchase Agreement, pursuant to a Sale and Servicing Agreement. Each
such Receivable will be identified in a schedule appearing as an exhibit to such
Sale and Servicing Agreement (a "Schedule of Receivables"). The related Trustee
will, concurrently with such transfer and assignment, execute and deliver the
related Notes and Certificates. Unless otherwise provided in the related
Prospectus Supplement, the net proceeds received from the sale of the
Certificates and the Notes of a given series will be applied to the purchase of
the related Initial Receivables from the Seller, and, to the extent specified in
the related Prospectus Supplement, to the deposit of the Pre-Funded Amount into
the Pre-Funding Account. The related Prospectus Supplement for a given Trust
will specify whether, and the terms, conditions and manner under which,
Subsequent Receivables will be sold by the Seller to the applicable Trust from
time to time during the Funding Period on each date specified as a transfer date
in the related Prospectus Supplement (each, a "Subsequent Transfer Date").
In each Purchase Agreement, Case Credit will represent and warrant to the
Seller, among other things, that (i) the information provided with respect to
the related Receivables is correct in all material respects; (ii) the Obligor on
each related Receivable is required to maintain physical damage insurance
covering the Financed Equipment in accordance with Case Credit's normal
requirements; (iii) as of the applicable Closing Date or the applicable
Subsequent Transfer Date, if any, the related Receivables are free and clear of
all security interests, liens, charges and encumbrances and no offset, defenses
or counterclaims have been asserted or threatened; (iv) as of the Closing Date
or the applicable Subsequent Transfer Date, if any, each of such Receivables is
or will be secured by a first priority perfected security interest in the
Financed Equipment in favor of Case Credit; (v) each related Receivable, at the
time it was originated, complied and, as of the Closing Date or the applicable
Subsequent Transfer Date, if any, complies in all material respects with
applicable Federal and state laws, including, without limitation, consumer
credit, truth in lending, equal credit opportunity and disclosure laws; and (vi)
any other representations and warranties that may be set forth in the related
Prospectus Supplement.
30
<PAGE> 82
Unless otherwise provided in the related Prospectus Supplement, if the
Seller breaches any of its representations or warranties made in the Sale and
Servicing Agreement, and such breach has not been cured by the last day of the
second (or, if the Seller elects, the first) Collection Period following the
discovery by or notice to the Trustee of such breach, the Seller will repurchase
from such Trust any Receivable materially and adversely affected by such breach
as of such last day at a price equal to the Contract Value (as defined in the
related Prospectus Supplement) (the "Purchase Amount"). The obligation of the
Seller to repurchase any Receivables with respect to which any such
representation or warranty has been breached is subject to Case Credit's
repurchase of such Receivables. The repurchase obligation constitutes the sole
remedy available to the Noteholders, the Indenture Trustee, the
Certificateholders or the Trustee in respect of such Trust for any such uncured
breach.
Pursuant to each Sale and Servicing Agreement, to assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Seller and
each Trust will designate the Servicer as custodian to maintain possession, as
such Trust's agent, of the Receivables and any other documents relating to the
Receivables. The Servicer's accounting records will reflect the sale and
assignment of the related Receivables to the applicable Trust, and Uniform
Commercial Code ("UCC") financing statements reflecting such sale and assignment
will be filed.
COMMERCIAL PAPER PROGRAM
In connection with an asset-backed commercial paper program established in
August 1994, Case Credit and CRC entered into a Receivables Purchase Agreement
dated as of August 1, 1994 (the "Liquidity Receivables Purchase Agreement").
Case Credit intends generally to sell to CRC on the 15th day of each month all
Receivables meeting certain eligibility requirements that Case Credit purchased
from Dealers or originated directly in the preceding calendar month. Under the
Liquidity Receivables Purchase Agreement, if Case Credit elects to sell any
Receivables to CRC in a month, Case Credit is obligated to sell to CRC all
Receivables originated by Case Credit in the preceding month meeting the
applicable eligibility requirements, unless the aggregate Contract Value (as
defined in the Liquidity Receivables Purchase Agreement) of such Receivables
would exceed the purchase limit under the Liquidity Receivables Purchase
Agreement, in which event Case Credit must use procedures to select the
Receivables to be sold that are not adverse to the interests of CRC.
On each monthly settlement date under the Liquidity Receivables Purchase
Agreement, Case Credit will sell and assign to CRC, without recourse, its entire
interest in designated Receivables, including security interests in the related
Financed Equipment, and CRC will grant to Case Equipment Loan Trust 1994-B a
security interest in its entire interest in such Receivables and certain other
collateral pursuant to the Loan and Security Agreement described below. Each
such Receivable will be identified in a schedule appearing as an exhibit to the
Liquidity Receivables Purchase Agreement.
In the Liquidity Receivables Purchase Agreement, Case Credit will represent
and warrant to CRC on each monthly purchase date as to designated Receivables
being purchased by CRC on such purchase date, among other things, that: (i) each
designated Receivable meets the applicable eligibility requirements; (ii) the
information provided with respect to the designated Receivables is correct in
all material respects; (iii) the Obligor on each designated Receivable is
required to maintain physical damage insurance covering the Financed Equipment
in accordance with Case Credit's normal requirements; (iv) as of the applicable
purchase date, the designated Receivables are free and clear of all security
interests, liens, charges and encumbrances and no offsets, defenses or
counterclaims have been asserted or threatened; (v) as of the purchase date,
each of such Receivables is or will be secured by a first priority perfected
security interest in the Financed Equipment in favor of Case Credit; and (vi)
each designated Receivable, at the time it was originated, complied and, as of
the purchase date, complies in all material respects with applicable Federal and
state laws, including, without limitation, consumer credit, truth in lending,
equal credit opportunity and disclosure laws.
If Case Credit breaches any of its representations or warranties in the
Liquidity Receivables Purchase Agreement, Case Credit will repurchase from CRC
any Receivable materially and adversely affected by such
31
<PAGE> 83
breach at a price equal to the Contract Value of such Receivable on the
settlement date immediately succeeding the month in which such repurchase
obligation arises. The repurchase obligation constitutes the sole remedy
available to CRC for any such breach.
CRC and Case Equipment Loan Trust 1994-B have entered into a Loan and
Security Agreement dated as of August 1, 1994 (the "Loan and Security
Agreement"), pursuant to which Case Equipment Loan Trust 1994-B has agreed to
make or increase the principal amount of a loan (the "CRC Loan") to CRC on a
monthly basis and CRC has agreed to grant to Case Equipment Loan Trust 1994-B a
security interest in CRC's entire interest in all Receivables purchased by CRC
pursuant to the Liquidity Receivables Purchase Agreement and not previously
released from the lien created by the Loan and Security Agreement and certain
other collateral (the "CRC Collateral"). Case Equipment Loan Trust 1994-B will
have funds available to lend to CRC pursuant to the Loan and Security Agreement
to the extent that it is able to issue commercial paper notes or to borrow under
a Liquidity Agreement among Case Equipment Loan Trust 1994-B, certain Lenders
and Chemical Bank, as Administrative Agent.
The CRC Collateral shall consist primarily of (i) all of the Receivables
acquired by CRC from Case Credit pursuant to the Liquidity Receivables Purchase
Agreement from time to time that have been pledged to Case Equipment Loan Trust
1994-B pursuant to the Loan and Security Agreement and not previously released
from the lien created by the Loan and Security Agreement and certain other
related property, (ii) the security interests in the Financed Equipment granted
by Obligors pursuant to such Receivables, (iii) funds on deposit in the certain
accounts, (iv) all right, title and interest of CRC in and to the Liquidity
Receivables Purchase Agreement and the Servicing Agreement dated as of August 1,
1994, between Case Credit, as Servicer, and CRC, (v) all right, title and
interest of CRC in and to certain interest rate caps required to be maintained
by CRC under the Loan and Security Agreement and (vi) the proceeds of the
foregoing.
Under the Loan and Security Agreement, CRC has the right to have
Receivables released from the lien of the Loan and Security Agreement for the
purpose of transferring such Receivables (or interests in such Receivables) if,
among other requirements, prior to any such transfer, CRC has received written
confirmation from the applicable rating agencies that such transfer and the
related transaction will not result in the withdrawal or downgrade of the
current ratings on the outstanding trust certificates and commercial paper notes
issued by Case Equipment Loan Trust 1994-B and after giving effect to such
transfer and the related transactions, the outstanding principal amount of the
CRC Loan will not exceed the Net Pool Balance (as defined in the Loan and
Security Agreement).
In connection with any release of Receivables from the lien of the Loan and
Security Agreement, CRC will be required to deposit into the related collection
account an amount equal to the aggregate Contract Value of such Receivables plus
accrued interest thereon at the applicable APRs to the date of such release.
ACCOUNTS
With respect to each Trust, the Servicer will establish and maintain with
the related Indenture Trustee one or more accounts, in the name of the Indenture
Trustee on behalf of the related Noteholders and Certificateholders, into which
all payments made on or with respect to the related Receivables will be
deposited (the "Collection Account"). The Servicer will establish and maintain
with such Indenture Trustee an account, in the name of such Indenture Trustee on
behalf of such Noteholders, into which amounts released from the Collection
Account and Spread Account or other credit enhancement for payment to such
Noteholders will be deposited and from which all distributions to such
Noteholders will be made (the "Note Distribution Account"). The Servicer will
establish and maintain with the related Trustee an account, in the name of such
Trustee on behalf of such Certificateholders, into which amounts released from
the Collection Account and Spread Account or other credit enhancement for
distribution to such Certificateholders will be deposited and from which all
distributions to such Certificateholders will be made (the "Certificate
Distribution Account"). If so specified in the Prospectus Supplement, the
Servicer may also establish and maintain a Pre-Funding Account, in the name of
the Indenture Trustee on behalf of the Noteholders and the Certificateholders,
which will be used to purchase Subsequent Receivables from the Seller from time
to time during the Funding Period.
32
<PAGE> 84
Any other accounts to be established with respect to a Trust will be
described in the related Prospectus Supplement.
For any series of Securities, funds in the Collection Account, the Note
Distribution Account, any Pre-Funding Account, the Spread Account and other
accounts identified as such in the related Prospectus Supplement (collectively,
the "Trust Accounts") will be invested as provided in the related Sale and
Servicing Agreement in Eligible Investments. "Eligible Investments" are limited
to investments acceptable to the Rating Agencies as being consistent with the
rating of such Securities and include: (a) direct obligations of, and
obligations fully guaranteed as to timely payment by, the United States of
America; (b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or State
banking or depository institution authorities; provided, however, that at the
time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term senior unsecured debt obligations (other
than such obligations the rating of which is based on the credit of a Person
other than such depository institution or trust company) thereof will have a
credit rating from each of the Rating Agencies in the highest investment
category granted thereby; (c) commercial paper having, at the time of the
investment or contractual commitment to invest therein, a rating from each of
the Rating Agencies in the highest investment category granted thereby; (d) to
the extent described below, investments in money market funds having a rating
from each of the Rating Agencies in the highest investment category granted
thereby (including funds for which the Indenture Trustee or the Trustee or any
of their respective Affiliates is investment manager or advisor); (e) bankers'
acceptances issued by any depository institution or trust company referred to in
clause (b) above; (f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed as to timely payment by, the
United States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the United
States of America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (b); and (g) any other
investment permitted by each of the Rating Agencies as set forth in writing
delivered to the Indenture Trustee; provided that in the case of clauses (d) and
(g) such investments will be made only so long as making such investments will
not require the Trust to register as an investment company, in accordance with
the Investment Company Act of 1940, as amended. During any Funding Period, no
investments in money market funds will be made with funds in any account other
than the Collection Account.
Subject to certain conditions, Eligible Investments may include securities
issued by the Seller or its affiliates or trusts originated by the Seller or its
affiliates. Except as described below or in the related Prospectus Supplement,
Eligible Investments are limited to obligations or securities that mature on or
before the business day preceding the date of the next distribution. However, to
the extent permitted by the Rating Agencies, funds in any Spread Account of a
Trust may be invested in securities that will not mature prior to the date of
the next distribution with respect to Notes issued by such Trust and will not be
sold to meet any shortfalls. Thus, the amount of cash in any Spread Account at
any time may be less than the balance of the Spread Account. If the amount
required to be withdrawn from any Spread Account to cover shortfalls in
collections on the related Receivables (as provided in the related Prospectus
Supplement) exceeds the amount of cash in the Spread Account, a temporary
shortfall in the amounts distributed to the related Noteholders or
Certificateholders could result, which could, in turn, increase the average life
of the Notes or the Certificates of such series. Except as otherwise specified
in the related Prospectus Supplement, investment earnings on funds deposited in
the Trust Accounts, net of losses and investment expenses (collectively,
"Investment Earnings"), shall be deposited in the applicable Collection Account
on each Payment Date and shall be treated as collections of interest on the
related Receivables.
The Trust Accounts will be maintained as Eligible Deposit Accounts.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or any other segregated account the deposit of funds in
which has been approved by the Rating Agencies or (b) a segregated trust account
with the corporate trust department of a depository institution 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), having
corporate trust powers and acting as trustee for funds deposited in such
account, so long as any of the
33
<PAGE> 85
securities of such depository institution have a credit rating from each Rating
Agency in one of its generic rating categories that signifies investment grade.
"Eligible Institution" means, with respect to a Trust, (a) the corporate trust
department of the related Indenture Trustee or the related Trustee, as
applicable, or (b) a depository institution 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) (i) that has either (A) a
long-term unsecured debt rating or certificate of deposit rating acceptable to
the Rating Agencies or (B) a short-term unsecured debt rating or certificate of
deposit rating acceptable to the Rating Agencies and (ii) whose deposits are
insured by the FDIC.
SERVICING PROCEDURES
The Servicer will make reasonable efforts to collect all payments due with
respect to the Receivables held by any Trust in a manner consistent with the
related Sale and Servicing Agreement, and will utilize such collection
procedures as it follows with respect to comparable agricultural and
construction equipment retail installment sale contracts it services for itself
or others. Consistent with its normal procedures, the Servicer may, in its
discretion, arrange with the Obligor on a Receivable to extend or modify the
payment schedule, but no such arrangement will extend the final payment date of
any Receivable beyond the Final Scheduled Maturity Date unless the Servicer
purchases the Receivable as described below. Some of such arrangements
(including, without limitation, any extension of the payment schedule beyond the
Final Scheduled Maturity Date) may result in the Servicer purchasing the
Receivable for the Purchase Amount. In the event of a foreclosure with respect
to a Receivable, the Servicer may sell the Financed Equipment securing the
respective Receivable at public or private sale, or take any other action
permitted by applicable law. See "Certain Legal Aspects of the Receivables."
COLLECTIONS
With respect to each Trust, the Servicer will deposit all payments on the
related Receivables (from whatever source) and all proceeds of such Receivables
collected during each collection period specified in the related Prospectus
Supplement (each, a "Collection Period") into the related Collection Account
within two business days after receipt thereof. However, at any time that and
for so long as (i) Case Credit is the Servicer, (ii) there exists no Servicer
Default and (iii) each other condition to making deposits less frequently than
daily as may be specified by the Rating Agencies or set forth in the related
Prospectus Supplement is satisfied, the Servicer will not be required to deposit
such amounts into the Collection Account until on or before the business day
preceding the applicable Payment Date. Pending deposit into the Collection
Account, collections may be invested by the Servicer at its own risk and for its
own benefit and will not be segregated from its own funds. If the Servicer were
unable to remit such funds, Securityholders might incur a loss. To the extent
set forth in the related Prospectus Supplement, the Servicer may, in order to
satisfy the requirements described above, obtain a letter of credit or other
security for the benefit of the related Trust to secure timely remittances of
collections on the related Receivables and payment of the aggregate Purchase
Amount with respect to Receivables purchased by the Servicer.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
Unless otherwise specified in the Prospectus Supplement with respect to any
Trust, the Servicer will be entitled to receive the Servicing Fee for each
Collection Period in an amount equal to specified percentage per annum (as set
forth in the related Prospectus Supplement, the "Servicing Fee Rate") of the
Pool Balance as of the first day of each month during the related Collection
Period (the "Servicing Fee"). The Servicing Fee (together with any portion of
the Servicing Fee that remains unpaid from prior Payment Dates) will be paid
solely to the extent of the Total Distribution Amount (as defined in the related
Prospectus Supplement) and, unless otherwise disclosed in the related Prospectus
Supplement, will be paid prior to the distribution of any portion of the Total
Distribution Amount to the Noteholders or the Certificateholders. Under certain
circumstances as described in a related Prospectus Supplement, the Servicing Fee
will not be paid until after the distribution to the Noteholders and the
Certificateholders of their respective portions of the Total Distribution
Amount.
34
<PAGE> 86
The Servicing Fee will compensate the Servicer for performing the functions
of a third party servicer of agricultural and construction equipment receivables
as an agent for their beneficial owner, including collecting and posting all
payments, responding to inquiries of Obligors on the Receivables, investigating
delinquencies, sending payment coupons to Obligors, reporting tax information to
Obligors, paying costs of collections and disposition of defaults and policing
the collateral. The Servicing Fee also will compensate the Servicer for
administering the Receivables of each Trust, accounting for collections and
furnishing monthly and annual statements to the related Trustee and Indenture
Trustee with respect to distributions and generating Federal income tax
information for such Trust and for the related Noteholders and
Certificateholders. The Servicing Fee also will reimburse the Servicer for
certain taxes, accounting fees, outside auditor fees, data processing costs and
other costs incurred in connection with administering the Receivables of each
Trust.
DISTRIBUTIONS
With respect to each series of Securities, beginning on the Payment Date
specified in the related Prospectus Supplement, distributions of principal and
interest (or, where applicable, of principal or interest only) on each class of
such Securities entitled thereto will be made by the applicable Trustee to the
Noteholders and the Certificateholders of such series. The timing, calculation,
allocation, order, source, priorities of and requirements for all payments to
each class of Noteholders and all distributions to each class of
Certificateholders of such series will be set forth in the related Prospectus
Supplement.
With respect to each Trust, on each Payment Date, collections on the
related Receivables will be transferred from the Collection Account to the Note
Distribution Account and the Certificate Distribution Account for distribution
to Noteholders and Certificateholders to the extent provided in the related
Prospectus Supplement. Credit enhancement, such as a Spread Account, will be
available to cover any shortfalls in the amount available for distribution on
such date to the extent specified in the related Prospectus Supplement. As more
fully described in the related Prospectus Supplement, and unless otherwise
specified therein, distributions in respect of principal of a class of
Securities of a given series will be subordinate to distributions in respect of
interest on such class, and distributions in respect of the Certificates of such
series may be subordinate to payments in respect of the Notes of such series.
CREDIT AND CASH FLOW ENHANCEMENT
The amounts and types of credit enhancement arrangements and the provider
thereof, if applicable, with respect to each class of Securities of a given
series, if any, will be set forth in the related Prospectus Supplement. If and
to the extent provided in the related Prospectus Supplement, credit enhancement
may be in the form of subordination of one or more classes of Securities, Spread
Accounts, over-collateralization, letters of credit, credit or liquidity
facilities, surety bonds, guaranteed investment contracts, swaps or other
interest rate protection agreements, repurchase obligations, other agreements
with respect to third party payments or other support, cash deposits or such
other arrangements as may be described in the related Prospectus Supplement or
any combination of two or more of the foregoing. If specified in the applicable
Prospectus Supplement, credit enhancement for a class of Securities may cover
one or more other classes of Securities of the same series, and credit
enhancement for a series of Securities may cover one or more other series of
Securities.
The presence of a Spread Account and other forms of credit enhancement for
the benefit of any class or series of Securities is intended to enhance the
likelihood of receipt by the Securityholders of such class or series of the full
amount of principal and interest due thereon and to decrease the likelihood that
such Securityholders will experience losses. Unless otherwise specified in the
related Prospectus Supplement, the credit enhancement for a class or series of
Securities will not provide protection against all risks of loss and will not
guarantee repayment of the entire principal balance and interest thereon. If
losses occur that exceed the amount covered by any credit enhancement or which
are not covered by any credit enhancement, Securityholders of any class or
series will bear their allocable share of deficiencies, as described in the
related Prospectus Supplement. In addition, if a form of credit enhancement
covers more than one series of Securities, Securityholders of any such series
will be subject to the risk that such credit enhancement will be exhausted by
the claims of Securityholders of other series.
35
<PAGE> 87
Unless otherwise provided in the related Prospectus Supplement, the Seller
may replace the credit enhancement for any class of Securities with another form
of credit enhancement without the consent of Securityholders provided the Rating
Agencies confirm in writing that substitution will not result in the reduction
or withdrawal of the rating of such class of Securities or any other class of
Securities of the related series.
Spread Account. If so provided in the related Prospectus Supplement,
pursuant to the related Sale and Servicing Agreement, the Seller will establish
for a series or class of Securities an account, as specified in the related
Prospectus Supplement (the "Spread Account"), which will be maintained in the
name of the applicable Indenture Trustee. Unless otherwise provided in the
related Prospectus Supplement, the Spread Account will be funded by an initial
deposit by the Seller on the Closing Date in the amount set forth in the related
Prospectus Supplement. As further described in the related Prospectus
Supplement, the amount on deposit in the Spread Account will be increased on
each Payment Date thereafter up to the Specified Spread Account Balance (as
defined in the related Prospectus Supplement) by the deposit therein of the
amount of collections on the related Receivables remaining on each such Payment
Date after the payment of all other required payments and distributions on such
date. The related Prospectus Supplement will describe the circumstances and
manner under which distributions may be made out of the Spread Account, either
to holders of the Securities covered thereby, to the Seller or to any transferee
or assignee of the Seller.
The Seller may at any time, without consent of the Securityholders, sell,
transfer, convey or assign in any manner its rights to and interests in
distributions from the Spread Account, including interest earnings thereon;
provided that (i) the Rating Agencies confirm in writing that such action will
not result in a reduction or withdrawal of the rating of any class of
Securities, (ii) the Seller provides to the Trustee and the Indenture Trustee a
written opinion from independent counsel to the effect that such action will not
cause the Trust to be treated as an association (or publicly traded partnership)
taxable as a corporation for Federal income tax purposes and (iii) such
transferee or assignee agrees in writing to take positions for tax purposes
consistent with the tax positions agreed to be taken by the Seller.
NET DEPOSITS
As an administrative convenience, unless the Servicer is required to remit
collections daily (see "--Collections" above), the Servicer will be permitted to
make the deposit of collections and Purchase Amounts for any Trust for or with
respect to the related Collection Period net of distributions to be made to the
Servicer for such Trust with respect to such Collection Period. The Servicer,
however, will account to the Indenture Trustee, the Trustee, the Noteholders and
the Certificateholders with respect to each Trust as if all deposits,
distributions and transfers were made individually.
STATEMENTS TO TRUSTEES AND TRUST
Prior to each Payment Date with respect to each series of Securities, the
Servicer will provide to the applicable Indenture Trustee and the applicable
Trustee as of the close of business on the last day of the preceding Collection
Period a statement setting forth substantially the same information as is
required to be provided in the periodic reports provided to Securityholders of
such series described under "Certain Information Regarding the
Securities--Reports to Securityholders."
EVIDENCE AS TO COMPLIANCE
Each Sale and Servicing Agreement will provide that a firm of independent
public accountants will furnish to the related Trustee and Indenture Trustee
annually a statement as to compliance by the Servicer during the preceding
twelve months (or in the case of the first such certificate, from the applicable
Closing Date) with certain standards relating to the servicing of the applicable
Receivables, the Servicer's accounting records and computer files with respect
thereto and certain other matters.
Each Sale and Servicing Agreement will also provide for delivery to the
related Trust and Indenture Trustee, substantially simultaneously with the
delivery of such accountants' statement referred to above, of a certificate
signed by an officer of the Servicer stating that the Servicer has fulfilled its
obligations under the
36
<PAGE> 88
Sale and Servicing Agreement throughout the preceding twelve months (or, in the
case of the first such certificate, from the Closing Date) or, if there has been
a default in the fulfillment of any such obligation, describing each such
default. The Servicer will agree to give each Indenture Trustee and each Trustee
notice of certain Servicer Defaults under the related Sale and Servicing
Agreement.
Copies of such statements and certificates may be obtained by
Securityholders by written request addressed to the Applicable Trustee.
CERTAIN MATTERS REGARDING THE SERVICER
Each Sale and Servicing Agreement will provide that Case Credit may not
resign from its obligations and duties as Servicer thereunder, except upon
determination that Case Credit's performance of such duties is no longer
permissible under applicable law. No such resignation will become effective
until the related Indenture Trustee or a successor servicer has assumed Case
Credit's servicing obligations and duties under such Sale and Servicing
Agreement.
Each Sale and Servicing Agreement will further provide that neither the
Servicer nor any of its directors, officers, employees and agents will be under
any liability to the related Trust or the related Noteholders or
Certificateholders for taking any action or for refraining from taking any
action pursuant to such Sale and Servicing Agreement or for errors in judgment;
except that neither the Servicer nor any such person will be protected against
any liability that would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence in the performance of the Servicer's duties thereunder
or by reason of reckless disregard of its obligations and duties thereunder. In
addition, each Sale and Servicing Agreement will provide that the Servicer is
under no obligation to appear in, prosecute or defend any legal action that is
not incidental to the Servicer's servicing responsibilities under such Sale and
Servicing Agreement and that, in its opinion, may cause it to incur any expense
or liability.
Under the circumstances specified in each Sale and Servicing Agreement, any
entity into which the Servicer may be merged or consolidated, or any entity
resulting from any merger or consolidation to which the Servicer is a party, or
any entity succeeding to the business of the Servicer or, with respect to its
obligations as Servicer, any corporation 50% or more of the voting stock of
which is owned, directly or indirectly, by Case or Case Credit, which
corporation or other entity in each of the foregoing cases assumes the
obligations of the Servicer, will be the successor of the Servicer under such
Sale and Servicing Agreement.
SERVICER DEFAULT
Except as otherwise provided in the related Prospectus Supplement,
"Servicer Default" under each Sale and Servicing Agreement will consist of (i)
any failure by the Servicer to deliver to the related Indenture Trustee for
deposit in any of the Trust Accounts or the Certificate Distribution Account any
required payment or to direct such Indenture Trustee to make any required
distributions therefrom, which failure continues unremedied for three business
days after written notice from such Indenture Trustee or the related Trustee is
received by the Servicer or after discovery of such failure by the Servicer;
(ii) any failure by the Servicer or the Seller, as the case may be, duly to
observe or perform in any material respect any other covenant or agreement in
such Sale and Servicing Agreement, which failure materially and adversely
affects the rights of the Noteholders, the Certificateholders of the related
series or any other person (a "Specified Party") identified in the related
Prospectus Supplement and that continues unremedied for 60 days after the giving
of written notice of such failure (A) to the Servicer or the Seller, as the case
may be, by such Indenture Trustee or such Trustee or (B) to the Servicer or the
Seller, as the case may be, and to such Indenture Trustee and such Trustee by
holders of Notes or Certificates of such series, as applicable, evidencing not
less than 25% in principal amount of such outstanding Notes or of such
Certificate Balance or by another Specified Party; and (iii) certain events of
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings with respect to the Servicer or the Seller and certain
actions by the Servicer or the Seller indicating its insolvency, reorganization
pursuant to bankruptcy proceedings or inability to pay its obligations (each, an
"Insolvency Event").
37
<PAGE> 89
RIGHTS UPON SERVICER DEFAULT
Unless otherwise provided in the related Prospectus Supplement, as long as
a Servicer Default under a Sale and Servicing Agreement remains unremedied, the
related Indenture Trustee or holders of Notes of the related series evidencing
not less than 25% in principal amount of such Notes then outstanding may
terminate all the rights and obligations of the Servicer under such Sale and
Servicing Agreement, whereupon such Indenture Trustee or a successor servicer
appointed by such Indenture Trustee will succeed to all the responsibilities,
duties and liabilities of the Servicer under such Sale and Servicing Agreement
and will be entitled to similar compensation arrangements. If, however, a
bankruptcy trustee or similar official has been appointed for the Servicer, and
no Servicer Default other than such appointment has occurred, such trustee or
official may have the power to prevent such Indenture Trustee or such
Noteholders from effecting a transfer of servicing. In the event that such
Indenture Trustee is unwilling or unable to so act, it may appoint, or petition
a court of competent jurisdiction for the appointment of, a successor with a net
worth of at least $100,000,000 and whose regular business includes the servicing
of equipment receivables. Such Indenture Trustee may make such arrangements for
compensation to be paid, which in no event may be greater than the servicing
compensation to the Servicer under such Sale and Servicing Agreement. Neither
the Trustee nor the Certificateholders have the right to remove the Servicer if
a Servicer Default occurs.
WAIVER OF PAST DEFAULTS
With respect to each Trust, unless otherwise provided in the related
Prospectus Supplement, the holders of Notes evidencing at least a majority in
principal amount of the then outstanding Notes of the related series (or the
holders of the Certificates of such series evidencing at least a majority of the
outstanding Certificate Balance, in the case of any Servicer Default that does
not adversely affect the related Indenture Trustee or such Noteholders) may, on
behalf of all such Noteholders and Certificateholders, waive any default by the
Servicer in the performance of its obligations under the related Sale and
Servicing Agreement and its consequences, except a default in making any
required deposits to or payments from any of the Trust Accounts in accordance
with such Sale and Servicing Agreement. Therefore, the Noteholders have the
ability, as limited above, to waive defaults by the Servicer which could
materially adversely affect the Certificateholders. No such waiver will impair
such Noteholders' or Certificateholders' rights with respect to subsequent
defaults.
AMENDMENT
Unless otherwise provided in the related Prospectus Supplement, each of the
Transfer and Servicing Agreements may be amended by the parties thereto, without
the consent of the related Noteholders or Certificateholders, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of such Transfer and Servicing Agreements or of modifying in any
manner the rights of such Noteholders or Certificateholders; provided that such
action will not, in the opinion of counsel satisfactory to the related Indenture
Trustee and the related Trustee, materially and adversely affect the interest of
any such Noteholder or Certificateholder. In addition, unless otherwise provided
in the related Prospectus Supplement, the Transfer and Servicing Agreements may
be amended by the parties thereto, without the consent of the related
Noteholders or Certificateholders, to substitute or add credit enhancement for
any class of Securities provided the Rating Agencies confirm in writing that
such substitution or addition will not result in a reduction or withdrawal of
the rating of such class of Securities or any other class of Securities of the
related series. Unless otherwise specified in the related Prospectus Supplement,
the Transfer and Servicing Agreements may also be amended by the Seller, the
Servicer and the related Trustee with the consent of the Indenture Trustee, the
holders of Notes evidencing at least a majority in principal amount of then
outstanding Notes of the related series and the holders of Certificates of such
series evidencing at least a majority of the Certificate Balance, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of such Transfer and Servicing Agreements or of modifying in
any manner the rights of such Noteholders or Certificateholders; provided,
however, that no such amendment may (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on the
related Receivables or distributions that are required to be made for the
benefit of such Noteholders or
38
<PAGE> 90
Certificateholders or (ii) reduce the aforesaid percentage of the Notes or
Certificates of such series that are required to consent to any such amendment,
without the consent of the holders of all the outstanding Notes or Certificates,
as the case may be, of such series.
INSOLVENCY EVENT
If an Insolvency Event occurs with respect to the Seller, the related
Receivables of each Trust will be liquidated and each Trust will be terminated
90 days after the date of such Insolvency Event, unless, before the end of such
90-day period, the Trustee of such Trust shall have received written
instructions from (i) holders of each class of the Certificates (other than the
Seller) with respect to such Trust representing more than 50% of the Certificate
Balance of each such class (not including the portion of the Certificate Balance
attributable to such Certificates held by the Seller), (ii) holders of each
class of Notes with respect to such Trust representing more than 50% of the
aggregate unpaid principal amount of each such class, (iii) holders of interests
in the Spread Account (other than the Seller) having interests with a value in
excess of 50% of all interests in the Spread Account held by such persons, (iv)
the Servicer and (v) any other person specified in the related Prospectus
Supplement to the effect that each such party disapproves of the liquidation of
such Receivables and the termination of such Trust. Promptly after the
occurrence of any Insolvency Event with respect to the Seller, notice thereof is
required to be given to such Noteholders and Certificateholders; provided,
however, that any failure to give such required notice will not prevent or delay
termination of such Trust. Upon termination of any Trust, the related Trustee
shall direct the related Indenture Trustee promptly to sell the assets of such
Trust (other than the Trust Accounts and the Certificate Distribution Account)
in a commercially reasonable manner and on commercially reasonable terms. The
proceeds from any such sale, disposition or liquidation of the Receivables of
such Trust will be treated as collections on such Receivables and deposited in
the related Collection Account. With respect to any Trust, if the proceeds from
the liquidation of the related Receivables and any amounts on deposit in the
Spread Account (if any), the Note Distribution Account and the Certificate
Distribution Account are not sufficient to pay the Notes and the Certificates of
the related series in full, the amount of principal returned to Noteholders and
Certificateholders thereof will be reduced and some or all of such Noteholders
and Certificateholders will incur a loss.
Each Trust Agreement will provide that the applicable Trustee does not have
the power to commence a voluntary proceeding in bankruptcy with respect to the
related Trust without the unanimous prior approval of all Certificateholders
(including the Seller) of such Trust and the delivery to such Trustee by each
such Certificateholder (including the Seller) of a certificate certifying that
such Certificateholder reasonably believes that such Trust is insolvent.
PAYMENT OF NOTES
Upon the payment in full of all outstanding Notes of a given series and the
satisfaction and discharge of the related Indenture, the related Trustee will
succeed to all the rights of the Indenture Trustee, and the Certificateholders
of such series will succeed to all the rights of the Noteholders of such series,
under the related Sale and Servicing Agreement, except as otherwise provided
therein.
SELLER LIABILITY
Under each Trust Agreement, the Seller will agree to be liable directly to
an injured party for the entire amount of any losses, claims, damages or
liabilities (other than those incurred by a Noteholder or a Certificateholder in
the capacity of an investor with respect to such Trust) arising out of or based
on the arrangement created by such Trust Agreement as though such arrangement
created a partnership under the Delaware Revised Uniform Limited Partnership Act
in which the Seller was a general partner.
TERMINATION
With respect to each Trust, the obligations of the Servicer, the Seller,
the related Trustee and the related Indenture Trustee pursuant to the Transfer
and Servicing Agreements will terminate upon (i) the maturity or other
liquidation of the last related Receivables and the disposition of any amounts
received upon liquidation
39
<PAGE> 91
of any such remaining Receivables and (ii) the payment to Noteholders and
Certificateholders of the related series of all amounts required to be paid to
them pursuant to the Transfer and Servicing Agreements.
Unless otherwise provided in the related Prospectus Supplement, in order to
avoid excessive administrative expense, the Servicer will be permitted at its
option to purchase from each Trust, as of the beginning of any applicable
Collection Period if, on the Payment Date in such Collection Period, the then
outstanding Pool Balance with respect to the Receivables held by such Trust is
10% or less of the Initial Pool Balance (as defined in the related Prospectus
Supplement, the "Initial Pool Balance"), all remaining related Receivables at a
price equal to the aggregate of the Contract Value of the Receivables as of the
end of such Collection Period plus accrued interest at the Cutoff Date APR.
As more fully described in the related Prospectus Supplement, any
outstanding Notes of the related series will be redeemed concurrently with
either of the events specified above and the subsequent distribution to the
related Certificateholders of all amounts required to be distributed to them
pursuant to the applicable Trust Agreement will effect early retirement of the
Certificates of such series.
ADMINISTRATION AGREEMENT
Case Credit, in its capacity as administrator (the "Administrator"), will
enter into an agreement (as amended and supplemented from time to time, an
"Administration Agreement") with each Trust and the related Indenture Trustee
pursuant to which the Administrator will agree, to the extent provided in such
Administration Agreement, to perform on behalf of the Trust certain
administrative obligations required by the related Indenture. Unless otherwise
specified in the related Prospectus Supplement with respect to any Trust, as
compensation for the performance of the Administrator's obligations under the
applicable Administration Agreement and as reimbursement for its expenses
related thereto, the Administrator will be entitled to a quarterly
administration fee in an amount equal to $500, or such other amount as may be
set forth in the related Prospectus Supplement (the "Administration Fee").
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
SECURITY INTEREST IN EQUIPMENT
In states in which retail installment sale contracts such as the
Receivables evidence the credit sale of agricultural and construction equipment
by dealers to obligors, the contracts also constitute personal property security
agreements and include grants of security interests in the equipment under the
applicable UCC. Perfection of security interests in the equipment is generally
governed by the UCC. However, under the laws of certain states and under certain
circumstances, perfection of security interests in agricultural or construction
equipment may be governed by certificate of title registration laws of the state
in which such equipment is located.
Case Credit generally sells on a monthly basis to the Seller, pursuant to
the Liquidity Receivables Purchase Agreement, all retail installment sales
contracts that Case Credit acquires from dealers or retail outlets owned by Case
or its affiliates and may sell additional such contracts originated or acquired
by it (but not sold to the Seller pursuant to the Liquidity Receivables Purchase
Agreement) to the Seller pursuant to a Purchase Agreement in connection with the
issuance of a series of Securities. All of such contracts acquired by Case
Credit name Case Credit as obligee or assignee and as the secured party. Case
Credit also confirms that all necessary action has been taken under the laws of
the state in which the financed equipment is located to perfect Case Credit's
security interest in the financed equipment. Because Case Credit continues to
service the contracts, the obligors on the contracts are not notified of the
sale from Case Credit to the Seller and will not be notified of the sale from
the Seller to the Trust. No action will be taken (by amendment of the financing
statements or, if applicable, the certificates of title for the financed
equipment or otherwise) to record the transfer of the security interest from the
Seller to the Trust. In connection with the Liquidity Receivables Purchase
Agreement, or any applicable Purchase Agreement, Case Credit has also sold and
assigned or will sell and assign its interests in the Financed Equipment
securing the related Receivables to the Seller. Case Credit has filed and will
file financing statements in Wisconsin reflecting the sale of its interests in
40
<PAGE> 92
the Receivables to the Seller. See "Description of the Transfer and Servicing
Agreements--Commercial Paper Program."
With respect to each Trust, pursuant to the related Sale and Servicing
Agreement, the Seller will assign its interests in such Financed Equipment to
such Trust. However, because of the administrative burden and expense, none of
the Seller, the Servicer nor the related Trustee will amend or assign any
financing statement or, if applicable, the certificate of title to identify such
Trust as the new secured party on such financing statement or, if applicable,
the certificate of title relating to the Financed Equipment. Also, the Servicer
will continue to hold the Receivables and any certificates of title relating to
the equipment in its possession as custodian for the Seller and such Trust
pursuant to the related Sale and Servicing Agreement. See "Description of the
Transfer and Servicing Agreements--Sale and Assignment of Receivables."
There are certain limited circumstances under the UCC and applicable
Federal law in which prior or subsequent transferees of Receivables held by a
Trust could have an interest in such Receivables with priority over such Trust's
interest. A purchaser of the Receivables who gives new value and takes
possession of the instruments that evidence the Receivables (i.e., the chattel
paper) in the ordinary course of such purchaser's business may, under certain
circumstances, have priority over the interest of the related Trust in the
Receivables. In addition, while Case Credit is the Servicer, cash collections on
the Receivables will, under certain circumstances, be commingled with the funds
of Case Credit and, in the event of the bankruptcy of Case Credit, the related
Trust may not have a perfected interest in such collections.
In most states, an assignment such as that under each Sale and Servicing
Agreement is an effective conveyance of a security interest without amendment or
assignment of any financing statement relating to the equipment or, if
applicable, notation on the related certificate of title, and the assignee
succeeds thereby to the assignor's rights as secured party. However, by not
identifying such Trust as the secured party on the financing statement or
certificate of title, the security interest of such Trust in the vehicle could
be defeated through fraud or negligence. In the absence of error, fraud or
forgery by the equipment owner or the Servicer or administrative error by state
or local agencies, the proper initial filing of the financing statement relating
to the equipment or, if applicable, the notation of the Dealer's lien on the
certificates of title will be sufficient to protect such Trust against the
rights of subsequent purchasers of Financed Equipment or subsequent lenders who
take a security interest in Financed Equipment. If there is any Financed
Equipment as to which the original secured party failed to obtain and assign to
Case Credit a perfected security interest, the security interest of Case Credit
would be subordinate to, among others, subsequent purchasers of the Financed
Equipment and holders of perfected security interests. Such a failure, however,
would constitute a breach of the warranties of Case Credit under the Liquidity
Receivables Purchase Agreement or the applicable Purchase Agreement and would
create an obligation of Case Credit to repurchase the related Receivable from
the Seller unless the breach is cured. See "Description of the Transfer and
Servicing Agreements--Sale and Assignment of Receivables" and "--Commercial
Paper Program."
Under the laws of most states, the perfected security interest in movable
property would continue for four months after such property is moved to a state
other than the state in which a financing statement was filed initially to
perfect the security interest in such property, or, if applicable, in which such
property is initially registered. With respect to any equipment that is subject
to certification of title under the laws of the state in which it is located, a
majority of states generally require a surrender of a certificate of title to
re-register the equipment. Accordingly, a secured party must surrender
possession if it holds the certificate of title to the equipment, or, in the
case of equipment registered in a state providing for the notation of a lien on
the certificate of title but not possession by the secured party, the secured
party would receive notice of surrender if the security interest is noted on the
certificate of title. Thus, the secured party would have the opportunity to
re-perfect its security interest in the equipment in the state of relocation. In
states that do not require a certificate of title for registration of equipment,
re-registration could defeat perfection.
Under each Sale and Servicing Agreement, the Servicer is and will be
obligated to take appropriate steps, at the Servicer's expense, to maintain
perfection of security interests in the Financed Equipment and is obligated to
purchase the related Receivable if it fails to do so.
41
<PAGE> 93
Under the laws of most states, liens for repairs performed on the equipment
and liens for unpaid taxes take priority over even a perfected security interest
in such goods. Under each Sale and Servicing Agreement, the Seller will
represent to the related Trust that, as of the date the related Receivable is
sold to such Trust, each security interest in the Financed Equipment is or will
be prior to all other present liens on and security interests in such Financed
Equipment. However, liens for repairs or taxes could arise at any time during
the term of a Receivable. No notice will be given to the Trustee, the Indenture
Trustee, the Noteholders or the Certificateholders in respect of a given Trust
if such a lien arises.
REPOSSESSION
In the event of default by equipment purchasers, the holder of the retail
installment sale contract has all the remedies of a secured party under the UCC,
except where specifically limited by other state laws. Among the UCC remedies,
the secured party has the right to perform self-help repossession unless such
act would constitute a breach of the peace. Self-help is the method employed by
the Servicer in most cases and is accomplished simply by retaking possession of
the financed equipment. In the event of default by the obligor, some
jurisdictions require that the obligor be notified of the default and be given a
time period within which the obligor may cure the default prior to repossession.
Generally, the right of reinstatement may be exercised on a limited number of
occasions in any one-year period. In cases where the obligor objects or raises a
defense to repossession, or if otherwise required by applicable state law, a
court order must be obtained from the appropriate state court, and the equipment
must then be repossessed in accordance with that order.
NOTICE OF SALE; REDEMPTION RIGHTS
The UCC and other state laws require the secured party to provide the
obligor with reasonable notice of the date, time and place of any public sale
and/or the date after which any private sale of the collateral may be held. The
obligor has the right to redeem the collateral prior to actual sale by paying
the secured party the unpaid principal balance of the obligation plus reasonable
expenses for repossessing, holding and preparing the collateral for disposition
and arranging for its sale, plus, in some jurisdictions, reasonable attorneys'
fees, or, in some states, by payment of delinquent installments or the unpaid
balance.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS; OTHER LIMITATIONS
The proceeds of resale of the equipment generally will be applied first to
the expenses of resale and repossession and then to the satisfaction of the
indebtedness. While some states impose prohibitions or limitations on deficiency
judgments if the net proceeds from resale do not cover the full amount of the
indebtedness, a deficiency judgment against the debtor can be sought for the
shortfall in those states that do not prohibit or limit such judgments. However,
because a defaulting obligor may have very little capital or sources of income
available following repossession, in many cases it may not be useful to seek a
deficiency judgment. If one is obtained, it may be uncollectible or settled at a
significant discount.
Occasionally, after resale of the equipment and payment of all expenses and
all indebtedness, there is a surplus of funds. In that case, the UCC requires
the creditor to remit the surplus to any holder of a lien with respect to the
equipment or, if no such lienholder exists, to the former owner of the
equipment.
Courts have applied general equitable principles to secured parties
pursuing repossession and litigation involving deficiency balances. These
equitable principles may have the effect of relieving an obligor from some or
all of the legal consequences of a default.
In several cases, obligors have asserted that the self-help remedies of
secured parties under the UCC and related laws violate the due process
protections provided under the 14th Amendment to the Constitution of the United
States. Courts have generally upheld the notice provisions of the UCC and
related laws as reasonable or have found that the repossession and resale by the
creditor do not involve sufficient state action to afford constitutional
protection to borrowers.
In addition to the laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including Federal bankruptcy laws and
related state laws, may interfere with or affect the ability of a secured
42
<PAGE> 94
party to realize upon collateral or to enforce a deficiency judgment. For
example, in a Chapter 11, 12 or 13 proceeding under the Federal bankruptcy law,
a court may prevent a creditor from repossessing equipment, and, as part of the
rehabilitation plan, reduce the amount of the secured indebtedness to the market
value of the equipment at the time of bankruptcy (as determined by the court),
leaving the creditor as a general unsecured creditor for the remainder of the
indebtedness. A bankruptcy court may also reduce the monthly payments due under
a contract or change the rate of interest and time of repayment of the
indebtedness.
CONSUMER PROTECTION LAWS
Numerous Federal and state consumer protection laws and related regulations
impose substantial requirements upon lenders and servicers involved in consumer
finance. Also, state laws impose finance charge ceilings and other restrictions
on consumer transactions and require contract disclosures in addition to those
required under Federal law. These requirements impose specific statutory
liabilities upon creditors who fail to comply with their provisions. In some
cases, this liability could affect an assignee's ability to enforce consumer
finance contracts. Certain of the Receivables may be deemed to be consumer
finance contracts under applicable Federal or state laws.
Under the Liquidity Receivables Purchase Agreement, Case Credit warrants to
the Seller upon each sale of Receivables that each Receivable sold complies with
all requirements of law in all material respects and will give, under each
Purchase Agreement, a similar warranty. Accordingly, if an Obligor has a claim
against the related Trust for violation of any law and such claim materially and
adversely affects such Trust's interest in a Receivable, such violation would
constitute a breach of the warranties of the Seller under such Sale and
Servicing Agreement and would create an obligation of the Seller to repurchase
the Receivable unless the breach is cured. See "Description of the Transfer and
Servicing Agreements--Sale and Assignment of Receivables."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of certain Federal income tax
consequences of the purchase, ownership and disposition of the Notes and the
Certificates. The summary does not purport to deal with Federal income tax
consequences applicable to all categories of holders, some of which may be
subject to special rules. For example, it does not discuss the tax treatment of
Noteholders or Certificateholders that are insurance companies, regulated
investment companies or dealers in securities. This discussion is directed to
prospective purchasers who purchase Notes or Certificates in the initial
distribution thereof and who hold the Notes or Certificates as "capital assets"
within the meaning of Section 1221 of the Internal Revenue Code of 1986, as
amended (the "Code"). Prospective investors are urged to consult their own tax
advisors in determining the Federal, state, local, foreign and any other tax
consequences to them of the purchase, ownership and disposition of the Notes and
the Certificates.
The following summary is based upon current provisions of the Code, the
Treasury regulations promulgated thereunder, judicial authority, and ruling
authority, all of which are subject to change, which change may be retroactive.
Each Trust will be provided with an opinion of special Federal tax counsel to
such Trust specified in the related Prospectus Supplement ("Federal Tax
Counsel") regarding certain Federal income tax matters discussed below. An
opinion of Federal Tax Counsel, however, is not binding on the Internal Revenue
Service (the "IRS") or the courts. Moreover, there are no cases or IRS rulings
on similar transactions involving both debt and equity interests issued by a
trust with terms similar to those of the Notes and the Certificates. As a
result, the IRS may disagree with all or a part of the discussion below. No
ruling on any of the issues discussed below will be sought from the IRS. For
purposes of the following summary, references to the Trust, the Notes, the
Certificates and related terms, parties and documents shall be deemed to refer,
unless otherwise specified herein, to each Trust and the Notes, Certificates and
related terms, parties and documents applicable to such Trust.
43
<PAGE> 95
TAX CHARACTERIZATION OF THE TRUST
Federal Tax Counsel will deliver its opinion that the Trust will not be an
association (or publicly traded partnership) taxable as a corporation for
Federal income tax purposes. This opinion will be based on the assumption that
the terms of the Trust Agreement and related documents will be complied with,
and on counsel's conclusions that (1) the Trust will not have certain
characteristics necessary for a business trust to be classified as an
association taxable as a corporation and (2) the nature of the income of the
Trust will exempt it from the rule that certain publicly traded partnerships are
taxable as corporations.
If the Trust were taxable as a corporation for Federal income tax purposes,
the Trust would be subject to corporate income tax on its taxable income. The
Trust's taxable income would include all its income on the Receivables, possibly
reduced by its interest expense on the Notes. Any such corporate income tax
could materially reduce cash available to make payments on the Notes and
distributions on the Certificates, and Certificateholders could be liable for
any such tax that is unpaid by the Trust.
TAX CONSEQUENCES TO HOLDERS OF THE NOTES
Treatment of the Notes as Indebtedness. The Seller will agree, and the
Noteholders will agree by their purchase of Notes, to treat the Notes as debt
for Federal, state and local income and franchise tax purposes. Federal Tax
Counsel will, except as otherwise provided in the related Prospectus Supplement,
advise the Trust that the Notes will be classified as debt for Federal income
tax purposes. The discussion below assumes this characterization of the Notes is
correct.
OID, Indexed Securities, etc. The discussion below assumes that all
payments on the Notes are denominated in U.S. dollars, and that the Notes are
not Indexed Securities or Strip Notes. Moreover, the discussion assumes that the
interest formula for the Notes meets the requirements for "qualified stated
interest" under Treasury regulations (the "OID Regulations") relating to
original issue discount ("OID"), and that any OID on the Notes (i.e., any excess
of the principal amount of the Notes over their issue price) is a de minimis
amount (i.e., less than 1/4% of their principal amount multiplied by the number
of full years included in their term), all within the meaning of the OID
Regulations. If these conditions are not satisfied with respect to any given
series of Notes and as a result the Notes are treated as issued with OID,
additional tax considerations with respect to such Notes will be disclosed in
the applicable Prospectus Supplement.
Interest Income on the Notes. Based on the above assumptions, except as
discussed below, the Notes will not be considered issued with OID. The stated
interest thereon will be taxable to a Noteholder as ordinary interest income
when received or accrued in accordance with such Noteholder's method of tax
accounting. Under the OID Regulations, a holder of a Note issued with a de
minimis amount of OID must include such OID in income, on a pro rata basis, as
principal payments are made on the Note. It is believed that any prepayment
premium paid as a result of a mandatory redemption will be taxable as contingent
interest when it becomes fixed and unconditionally payable. A purchaser who buys
a Note for more or less than its principal amount will generally be subject,
respectively, to the premium amortization or market discount rules of the Code.
A holder of a Note that has a fixed maturity date of not more than one year
from the issue date of such Note (a "Short-Term Note") may be subject to special
rules. Under the OID Regulations, all stated interest will be treated as OID. An
accrual basis holder of a Short-Term Note (and certain cash basis holders,
including regulated investment companies, as set forth in Section 1281 of the
Code) generally would be required to report interest income as OID accrues on a
straight-line basis over the term of each interest period. Other cash basis
holders of a Short-Term Note would, in general, be required to report interest
income as interest is paid (or, if earlier, upon the taxable disposition of the
Short-Term Note). However, a cash basis holder of a Short-Term Note reporting
interest income as it is paid may be required to defer a portion of any interest
expense otherwise deductible on indebtedness incurred to purchase or carry the
Short-Term Note until the taxable disposition of the Short-Term Note. A cash
basis taxpayer may elect under Section 1281 of the Code to accrue interest
income on all nongovernment debt obligations with a term of one year or less, in
which case the taxpayer would include OID on the Short-Term Note in income as it
accrues, but would not be
44
<PAGE> 96
subject to the interest expense deferral rule referred to in the preceding
sentence. Certain special rules apply if a Short-Term Note is purchased for more
or less than its principal amount.
Sale or Other Disposition. If a Noteholder sells a Note, the holder will
recognize gain or loss in an amount equal to the difference between the amount
realized on the sale and the holder's adjusted tax basis in the Note. The
adjusted tax basis of a Note to a particular Noteholder will equal the holder's
cost for the Note, increased by any market discount, OID and gain previously
included by such Noteholder in income with respect to the Note and decreased by
the amount of premium (if any) previously amortized and by the amount of
principal payments previously received by such Noteholder with respect to such
Note. Any such gain or loss will be capital gain or loss, except for gain
representing accrued interest and accrued market discount not previously
included in income. Capital losses generally may be used by a corporate taxpayer
only to offset capital gains, and by an individual taxpayer only to the extent
of capital gains plus $3,000 of other income.
Foreign Holders. Interest paid (or accrued) to a Noteholder who is a
nonresident alien, foreign corporation or other non-United States person (a
"foreign person") generally will be considered "portfolio interest," and
generally will not be subject to United States Federal income tax and
withholding tax, if the interest is not effectively connected with the conduct
of a trade or business within the United States by the foreign person and the
foreign person (i) is not actually or constructively a "10 percent shareholder"
of the Trust or the Seller (including a holder of 10% of the outstanding
Certificates) or a "controlled foreign corporation" with respect to which the
Trust or the Seller is a "related person" within the meaning of the Code and
(ii) provides the Trustee or other person who is otherwise required to withhold
U.S. tax with respect to the Notes with an appropriate statement (on Form W-8 or
a similar form), signed under penalties of perjury, certifying that the
beneficial owner of the Note is a foreign person and providing the foreign
person's name and address. If the information provided in this statement
changes, the foreign person must inform the Trust within 30 days of such change.
If a Note is held through a securities clearing organization or certain other
financial institutions, the organization or institution may provide the relevant
signed statement to the withholding agent; in that case, however, the signed
statement must be accompanied by a Form W-8 or substitute form provided by the
foreign person that owns the Note. If such interest is not portfolio interest,
then it will be subject to United States Federal income and withholding tax at a
rate of 30%, unless reduced or eliminated pursuant to an applicable tax treaty.
Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a Note by a foreign person will be exempt from United
States Federal income and withholding tax; provided that (i) such gain is not
effectively connected with the conduct of a trade or business in the United
States by the foreign person and (ii) in the case of an individual foreign
person, the foreign person is not present in the United States for 183 days or
more in the taxable year.
Backup Withholding. Each holder of a Note (other than an exempt holder such
as a corporation, tax-exempt organization, qualified pension and profit-sharing
trust, individual retirement account or nonresident alien who provides
certification as to status as a nonresident) will be required to provide, under
penalties of perjury, a certificate containing the holder's name, address,
correct Federal taxpayer identification number and a statement that the holder
is not subject to backup withholding. Should a nonexempt Noteholder fail to
provide the required certification, the Trust will be required to withhold 31%
of the amount otherwise payable to the holder, and remit the withheld amount to
the IRS as a credit against the holder's Federal income tax liability.
Possible Alternative Treatments of the Notes. If, contrary to the opinion
of Federal Tax Counsel, the IRS successfully asserted that one or more of the
Notes did not represent debt for Federal income tax purposes, the Notes might be
treated as equity interests in the Trust. If so treated, the Trust might be
taxable as a corporation with the adverse consequences described above (and the
taxable corporation would not be able to reduce its taxable income by deductions
for interest expense on Notes recharacterized as equity). Alternatively, and
most likely in the view of Federal Tax Counsel, the Trust might be treated as a
publicly traded partnership that would not be taxable as a corporation because
it would meet certain qualifying income tests. Nonetheless, treatment of the
Notes as equity interests in such a publicly traded partnership could have
45
<PAGE> 97
adverse tax consequences to certain holders. For example, income to foreign
holders might be subject to U.S. tax and U.S. tax return filing and withholding
requirements, and individual holders might be subject to certain limitations on
their ability to deduct their share of Trust expenses.
TAX CONSEQUENCES TO HOLDERS OF THE CERTIFICATES
Treatment of the Trust as a Partnership. The Seller and the Servicer will
agree, and the Certificateholders will agree by their purchase of Certificates,
to treat the Trust as a partnership for purposes of Federal and state income
tax, franchise tax and any other tax measured in whole or in part by income,
with the assets of the partnership being the assets held by the Trust, the
partners of the partnership being the Certificateholders (including the Seller
in its capacity as recipient of distributions from the Spread Account and any
other account specified in the related Prospectus Supplement in which the Seller
has an interest), and the Notes being debt of the partnership. In addition, in
the event that the Seller or the Trustee decides to make the election
contemplated in Internal Revenue Service Notice 95-14 to elect that the Trust be
classified as a partnership for Federal income tax purposes, the
Certificateholders agree to take such actions as the Seller or Trustee shall
reasonably request in order to effectuate such election. However, the proper
characterization of the arrangement involving the Trust, the Certificates, the
Notes, the Seller and the Servicer is not clear because there is no authority on
transactions closely comparable to that contemplated herein.
A variety of alternative characterizations are possible. For example,
because the Certificates have certain features characteristic of debt, the
Certificates might be considered debt of the Seller or the Trust. Any such
characterization should not result in materially adverse tax consequences to
Certificateholders as compared to the consequences from treatment of the
Certificates as equity in a partnership, described below. The following
discussion assumes that the Certificates represent equity interests in a
partnership.
Indexed Securities, etc. The following discussion assumes that all payments
on the Certificates are denominated in U.S. dollars, none of the Certificates
are Indexed Securities or Strip Certificates and a series of Securities includes
a single class of Certificates. If these conditions are not satisfied with
respect to any given series of Certificates, additional tax considerations with
respect to such Certificates will be disclosed in the applicable Prospectus
Supplement.
Partnership Taxation. As a partnership, the Trust will not be subject to
Federal income tax. Rather, each Certificateholder will be required to
separately take into account such holder's accruals of guaranteed payments from
the Trust and its allocated share of other income, gains, losses, deductions and
credits of the Trust. The Trust's income will consist primarily of interest and
finance charges earned on the Receivables (including appropriate adjustments for
market discount, OID and premium) and any gain upon collection or disposition of
Receivables. The Trust's deductions will consist primarily of interest accruing
with respect to the Notes, guaranteed payments on the Certificates, servicing
and other fees, and losses or deductions upon collection or disposition of
Receivables.
Under the Trust Agreement, interest payments on the Certificates at the
Pass-Through Rate (including interest on amounts previously due on the
Certificates but not yet distributed) will be treated as "guaranteed payments"
under Section 707(c) of the Code. Guaranteed payments are payments to partners
for the use of their capital and, in the present circumstances, are treated as
deductible to the Trust and ordinary income to the Certificateholders. The Trust
will have a calendar year tax year and will deduct the guaranteed payments under
the accrual method of accounting. Certificateholders with a calendar year tax
year are required to include the accruals of guaranteed payments in income in
their taxable year that corresponds to the year in which the Trust deducts the
payments, and Certificateholders with a different taxable year are required to
include the payments in income in their taxable year that includes the December
31 of the Trust year in which the Trust deducts the payments. It is possible
that guaranteed payments will not be treated as interest for all purposes of the
Code.
In addition, the Trust Agreement will provide, in general, that the
Certificateholders will be allocated taxable income of the Trust for each
Collection Period equal to the sum of (i) any Trust income attributable to
discount on the Receivables that corresponds to any excess of the principal
amount of the Certificates over
46
<PAGE> 98
their initial issue price; (ii) prepayment premium, if any, payable to the
Certificateholders for such month and (iii) any other amounts of income payable
to the Certificateholders for such month. Such allocation will be reduced by any
amortization by the Trust of premium on Receivables that corresponds to any
excess of the issue price of Certificates over their principal amount. All
remaining items of income, gain, loss and deduction of the Trust will be
allocated to the Seller.
Based on the economic arrangement of the parties, this approach for
accruing guaranteed payments and allocating Trust income should be permissible
under applicable Treasury regulations, although no assurance can be given that
the IRS would not require a greater amount of income to be allocated to
Certificateholders. Moreover, even under the foregoing method of allocation,
Certificateholders may be subject to tax on income equal to the entire
Pass-Through Rate plus the other items described above even though the Trust
might not have sufficient cash to make current cash distributions of such
amount. Thus, cash basis holders will in effect be required to report income
from the Certificates on the accrual basis and Certificateholders may become
liable for taxes on Trust income even if they have not received cash from the
Trust to pay such taxes. In addition, because tax allocations and tax reporting
will be done on a uniform basis for all Certificateholders but
Certificateholders may be purchasing Certificates at different times and at
different prices, Certificateholders may be required to report on their tax
returns taxable income that is greater or less than the amount reported to them
by the Trust.
Most of the guaranteed payments and taxable income allocated to a
Certificateholder that is a pension, profit-sharing or employee benefit plan or
other tax-exempt entity (including an individual retirement account) will
constitute "unrelated debt-financed income" generally taxable to such a holder
under the Code.
An individual taxpayer's share of expenses of the Trust (including fees to
the Servicer but not interest expense) would be miscellaneous itemized
deductions. Such deductions might be disallowed to the individual in whole or in
part and might result in such holder being taxed on an amount of income that
exceeds the amount of cash actually distributed to such holder over the life of
the Trust. It is not clear whether these rules would be applicable to a
Certificateholder accruing guaranteed payments.
The Trust intends to make all tax calculations relating to income and
allocations to Certificateholders on an aggregate basis. If the IRS were to
require that such calculations be made separately for each Receivable, the Trust
might be required to incur additional expense but it is believed that there
would not be a material adverse effect on Certificateholders.
Discount and Premium. The purchase price paid by the Trust for the
Receivables may be greater or less than the remaining principal balance of the
Receivables at the time of purchase. If so, the Receivables will have been
acquired at a premium or discount, as the case may be. (As indicated above, the
Trust will make this calculation on an aggregate basis, but might be required to
recompute it on a Receivable-by-Receivable basis.)
If the Trust acquires the Receivables at a market discount or premium, the
Trust will elect to include any such discount in income currently as it accrues
over the life of the Receivables or to offset any such premium against interest
income on the Receivables. As indicated above, a portion of such market discount
income or premium deduction may be allocated to Certificateholders.
Section 708 Termination. Under Section 708 of the Code, the Trust will be
deemed to terminate for Federal income tax purposes if 50% or more of the
capital and profits interests in the Trust are sold or exchanged within a
12-month period. If such a termination occurs, the Trust will be considered to
distribute its assets to the partners, who would then be treated as
recontributing those assets to the Trust, as a new partnership. The Trust will
not comply with certain technical requirements that might apply when such a
constructive termination occurs. As a result, the Trust may be subject to
certain tax penalties and may incur additional expenses if it is required to
comply with those requirements. Furthermore, the Trust might not be able to
comply due to lack of data.
Disposition of Certificates. Generally, capital gain or loss will be
recognized on a sale of Certificates in an amount equal to the difference
between the amount realized and the seller's tax basis in the Certificates sold.
A Certificateholder's tax basis in a Certificate will generally equal the
holder's cost increased by the holder's
47
<PAGE> 99
share of Trust income and accruals of guaranteed payments (includible in income)
and decreased by any distributions received with respect to such Certificate. In
addition, both the tax basis in the Certificates and the amount realized on a
sale of a Certificate would include the holder's share of the Notes and other
liabilities of the Trust. A holder acquiring Certificates at different prices
may be required to maintain a single aggregate adjusted tax basis in such
Certificates, and, upon sale or other disposition of some of the Certificates,
allocate a pro rata portion of such aggregate tax basis to the Certificates sold
(rather than maintaining a separate tax basis in each Certificate for purposes
of computing gain or loss on a sale of that Certificate).
Any gain on the sale of a Certificate attributable to the holder's share of
unrecognized accrued market discount on the Receivables would generally be
treated as ordinary income to the holder and would give rise to special tax
reporting requirements. The Trust does not expect to have any other assets that
would give rise to such special reporting requirements. Thus, to avoid those
special reporting requirements, the Trust will elect to include market discount
in income as it accrues.
If a Certificateholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions
described above) over the life of the Certificates that exceeds the aggregate
cash distributions with respect thereto, such excess will generally give rise to
a capital loss upon the retirement of the Certificates.
Allocations Between Transferors and Transferees. In general, the Trust's
taxable income and losses will be determined monthly and the tax items and
accruals of guaranteed payments for a particular calendar month will be
apportioned among the Certificateholders in proportion to the principal amount
of Certificates owned by them as of the close of the last day of such month. As
a result, a holder purchasing Certificates may be allocated tax items and
accruals of guaranteed payments (which will affect its tax liability and tax
basis) attributable to periods before the actual transaction.
The use of such a monthly convention may not be permitted by existing
regulations. If a monthly convention is not allowed (or only applies to
transfers of less than all of the partner's interest), taxable income or losses
and accruals of guaranteed payments of the Trust might be reallocated among the
Certificateholders. The Company is authorized to revise the Trust's method of
allocation between transferors and transferees to conform to a method permitted
by future regulations.
Section 754 Election. In the event that a Certificateholder sells its
Certificates at a profit (loss), the purchasing Certificateholder will have a
higher (lower) basis in the Certificates than the selling Certificateholder had.
The tax basis of the Trust's assets will not be adjusted to reflect that higher
(or lower) basis unless the Trust were to file an election under Section 754 of
the Code. In order to avoid the administrative complexities that would be
involved in keeping accurate accounting records, as well as potentially onerous
information reporting requirements, the Trust will not make such election. As a
result, Certificateholders might be allocated a greater or lesser amount of
Trust income than would be appropriate based on their own purchase price for
Certificates.
Administrative Matters. The Trustee is required to keep or have kept
complete and accurate books of the Trust. Such books will be maintained for
financial reporting and tax purposes on an accrual basis and the fiscal year of
the Trust will be the calendar year. The Trustee will file a partnership
information return (IRS Form 1065) with the IRS for each taxable year of the
Trust and will report each Certificateholder's accruals of guaranteed payments
and allocable share of items of Trust income and expense to holders and the IRS
on Schedule K-1. The Trust will provide the Schedule K-1 information to nominees
that fail to provide the Trust with the information statement described below
and such nominees will be required to forward such information to the beneficial
owners of the Certificates. Generally, holders must file tax returns that are
consistent with the information return filed by the Trust or be subject to
penalties unless the holder notifies the IRS of all such inconsistencies.
Under Section 6031 of the Code, any person that holds Certificates as a
nominee at any time during a calendar year is required to furnish the Trust with
a statement containing certain information on the nominee, the beneficial owners
and the Certificates so held. Such information includes (i) the name, address
and taxpayer identification number of the nominee and (ii) as to each beneficial
owner (x) the name, address and
48
<PAGE> 100
taxpayer identification number of such person, (y) whether such person is a
United States person, a tax-exempt entity or a foreign government, an
international organization, or any wholly-owned agency or instrumentality of
either of the foregoing and (z) certain information on Certificates that were
held, bought or sold on behalf of such person throughout the year. In addition,
brokers and financial institutions that hold Certificates through a nominee are
required to furnish directly to the Trust information as to themselves and their
ownership of Certificates. A clearing agency registered under Section 17A of the
Exchange Act is not required to furnish any such information statement to the
Trust. The information referred to above for any calendar year must be furnished
to the Trust on or before the following January 31. Nominees, brokers and
financial institutions that fail to provide the Trust with the information
described above may be subject to penalties.
The Seller will be designated as the tax matters partner in the Trust
Agreement and, as such, will be responsible for representing the
Certificateholders in any dispute with the IRS. The Code provides for
administrative examination of a partnership as if the partnership were a
separate and distinct taxpayer. Generally, the statute of limitations for
partnership items does not expire before three years after the date on which the
partnership information return is filed. Any adverse determination following an
audit of the return of the Trust by the appropriate taxing authorities could
result in an adjustment of the returns of the Certificateholders, and, under
certain circumstances, a Certificateholder may be precluded from separately
litigating a proposed adjustment to the items of the Trust. An adjustment could
also result in an audit of a Certificateholder's returns and adjustments of
items not related to the income and losses of the Trust.
Tax Consequences to Foreign Certificateholders. It is not clear whether the
Trust would be considered to be engaged in a trade or business in the United
States for purposes of Federal withholding taxes with respect to non-U.S.
persons because there is no clear authority dealing with that issue under facts
substantially similar to those described herein. Although it is not expected
that the Trust would be engaged in a trade or business in the United States for
such purposes, the Trust will withhold as if it were so engaged in order to
protect the Trust from possible adverse consequences of a failure to withhold.
The Trust expects to withhold on the portion of its taxable income that is
allocable to foreign Certificateholders pursuant to Section 1446 of the Code, as
if such income were effectively connected to a U.S. trade or business, at a rate
of 35% for foreign holders that are taxable as corporations and 39.6% for all
other foreign holders. Subsequent adoption of Treasury regulations or the
issuance of other administrative pronouncements may require the Trust to change
its withholding procedures. In determining a holder's nonforeign status, the
Trust may rely on IRS Form W-8, IRS Form W-9 or the holder's certification of
nonforeign status signed under penalties of perjury.
Each foreign holder might be required to file a U.S. individual or
corporate income tax return and pay U.S. income tax on the amount computed
therein (including, in the case of a corporation, the branch profits tax) on its
share of accruals of guaranteed payments and the Trust's income. Each foreign
holder must obtain a taxpayer identification number from the IRS and submit that
number to the Trust on Form W-8 in order to assure appropriate crediting of the
taxes withheld. A foreign holder generally would be entitled to file with the
IRS a claim for refund with respect to taxes withheld by the Trust, taking the
position that no taxes were due because the Trust was not engaged in a U.S.
trade or business. However, the IRS may assert that additional taxes are due,
and no assurance can be given as to the appropriate amount of tax liability.
Backup Withholding. Distributions made on the Certificates and proceeds
from the sale of the Certificates will be subject to a "backup" withholding tax
of 31% if, in general, the Certificateholder fails to comply with certain
identification procedures, unless the holder is an exempt recipient under
applicable provisions of the Code. See "Tax Consequences to Holders of the
Notes--Backup Withholding."
CERTAIN STATE TAX CONSEQUENCES
The following discussion is a summary of the Wisconsin income and franchise
tax consequences arising from the purchase, ownership and disposition of the
Notes and the Certificates. This summary is based upon current provisions of the
Wisconsin Statutes, administrative pronouncements thereunder, and judicial
authority, all of which are subject to change. Any such changes could be
retroactive. No ruling on any of the issues discussed below will be sought from
the Wisconsin Department of Revenue.
49
<PAGE> 101
In the opinion of Foley & Lardner, special Wisconsin tax counsel to the
Trust ("Wisconsin Tax Counsel"), if the Notes are treated as indebtedness of the
Trust for Federal income tax purposes, the Notes should be treated as
indebtedness of the Trust for Wisconsin income and franchise tax purposes.
Noteholders not otherwise subject to Wisconsin income or franchise tax
jurisdiction should not be subject to such jurisdiction as a consequence of
their purchase, ownership and disposition of the Notes. However, a Noteholder
already subject to Wisconsin income or franchise tax jurisdiction may be
required to take the income with respect to the Notes into account in
determining the Noteholder's liability for Wisconsin income or franchise tax.
In the opinion of Wisconsin Tax Counsel, if the Trust is classified as a
partnership for Federal income tax purposes (but is not classified as a publicly
traded partnership or, if it is so classified, qualifies for the exception from
treatment as a publicly traded partnership for partnerships having certain
levels of statutorily defined passive income), the Trust should then be
classified as a partnership for Wisconsin income and franchise tax purposes.
While the matter is not free from doubt, the Trust should not be subject to
Wisconsin income or franchise tax jurisdiction. If the Trust were subject to
Wisconsin income or franchise tax jurisdiction, it would be required to file
Wisconsin partnership information returns similar to the returns it will be
required to file for Federal income tax purposes. Regardless of whether the
Trust is subject to Wisconsin income or franchise tax jurisdiction,
Certificateholders not otherwise subject to Wisconsin income or franchise tax
jurisdiction should not be subject to such jurisdiction as a consequence of
their purchase, ownership and disposition of the Certificates.
If the Trust were characterized as an association taxable as a corporation:
(i) while the matter is not free from doubt, the Trust should not be subject to
Wisconsin income or franchise tax jurisdiction; and (ii) Certificateholders not
otherwise subject to Wisconsin income or franchise tax jurisdiction should not
be subject to such taxation as a consequence of their purchase, ownership and
disposition of the Certificates. If the Trust were classified as an association
taxable as a corporation and the Trust were determined to be subject to
Wisconsin income or franchise tax jurisdiction: (i) the Trust would be liable
for Wisconsin income or franchise taxes with respect to its taxable income
attributable to Wisconsin and any resulting Wisconsin income or franchise taxes
paid by the Trust would reduce the amounts otherwise available for distribution
to the Certificateholders; (ii) distributions to the Certificateholders would
not be subject to withholding for Wisconsin income or franchise taxes; and (iii)
Certificateholders not otherwise subject to Wisconsin income or franchise tax
jurisdiction should not be subject to Wisconsin income or franchise taxes as a
consequence of their purchase, ownership and disposition of the Certificates.
Because each state's income tax laws vary, it is impossible to predict the
income tax consequences to the Securityholders in all the state taxing
jurisdictions in which they are already subject to tax. Securityholders are
urged to consult their own advisors with respect to state income and franchise
taxes.
ERISA CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit a pension,
profit-sharing or other employee benefit plan, as well as individual retirement
accounts and certain types of Keogh Plans (each a "Benefit Plan"), from engaging
in certain transactions with persons that are "parties in interest" under ERISA
or "disqualified persons" under the Code with respect to such Benefit Plan. A
violation of these "prohibited transaction" rules may result in an excise tax or
other penalties and liabilities under ERISA and the Code for such persons.
Certain transactions involving the Trust might be deemed to constitute
prohibited transactions under ERISA and the Code with respect to a Benefit Plan
that purchased Notes or Certificates if assets of the Trust were deemed to be
assets of the Benefit Plan. Under a regulation issued by the United States
Department of Labor (the "Plan Assets Regulation"), the assets of the Trust
would be treated as plan assets of a Benefit Plan for the purposes of ERISA and
the Code only if the Benefit Plan acquired an "equity interest" in the Trust and
none of the exceptions contained in the Plan Assets Regulation was applicable.
An equity interest is defined under the Plan Assets Regulation as an interest
other than an instrument that is treated as
50
<PAGE> 102
indebtedness under applicable local law and that has no substantial equity
features. The likely treatment in this context of Notes and Certificates of a
given series will be discussed in the related Prospectus Supplement.
Employee benefit plans that are governmental plans (as defined in Section
3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA)
are not subject to ERISA requirements.
A plan fiduciary considering the purchase of Securities of a given series
should consult its tax and/or legal advisors regarding whether the assets of the
related Trust would be considered plan assets, the possibility of exemptive
relief from the prohibited transaction rules and other issues and their
potential consequences.
PLAN OF DISTRIBUTION
On the terms and conditions set forth in an underwriting agreement with
respect to the Notes of a given series and an underwriting agreement with
respect to the Certificates of a given series (collectively, the "Underwriting
Agreements"), the Seller will agree to cause the related Trust to sell to the
underwriters named therein and in the related Prospectus Supplement, and each of
such underwriters will severally agree to purchase, the principal amount of each
class of Notes and Certificates, as the case may be, of the related series set
forth therein and in the related Prospectus Supplement. In each of the
Underwriting Agreements with respect to any given series of Securities, the
several underwriters will agree, subject to the terms and conditions set forth
therein, to purchase all the Notes and Certificates, as the case may be,
described therein that are offered hereby and by the related Prospectus
Supplement if any of such Notes and Certificates, as the case may be, are
purchased.
Each Prospectus Supplement will either (i) set forth the price at which
each class of Notes and Certificates, as the case may be, being offered thereby
will be offered to the public and any concessions that may be offered to certain
dealers participating in the offering of such Notes and Certificates, as the
case may be, or (ii) specify that the related Notes and Certificates, as the
case may be, are to be resold by the underwriters in negotiated transactions at
varying prices to be determined at the time of such sale. After the initial
public offering of any such Notes and Certificates, as the case may be, such
public offering prices and such concessions may be changed.
Each Underwriting Agreement will provide that the Seller and Case Credit
will indemnify the underwriters against certain civil liabilities, including
liabilities under the Securities Act, or contribute to payments the several
underwriters may be required to make in respect thereof.
Each Trust may, from time to time, invest the funds in its Trust Accounts
in Eligible Investments acquired from such underwriters.
Pursuant to each of the Underwriting Agreements with respect to a given
series of Securities, the closing of the sale of any class of Securities subject
to either thereof will be conditioned on the closing of the sale of all other
such classes subject to either thereof. The place and time of delivery for the
Securities in respect of which this Prospectus is delivered will be set forth in
the related Prospectus Supplement.
LEGAL OPINIONS
Certain legal matters relating to the Securities of any series will be
passed upon for the related Trust, the Seller and the Servicer by Richard S.
Brennan, General Counsel and Secretary of Case.
51
<PAGE> 103
INDEX OF TERMS
Set forth below is a list of the defined terms used in this Prospectus and
the pages on which the definitions of such terms may be found herein.
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Actuarial Receivables................................................................. 14
Administration Agreement.............................................................. 40
Administration Fee.................................................................... 40
Administrator......................................................................... 40
Applicable Trustee.................................................................... 27
APR................................................................................... 7
Base Rate............................................................................. 25
Benefit Plan.......................................................................... 50
Calculation Agent..................................................................... 26
Case.................................................................................. 5
Case Credit........................................................................... 3
Cede.................................................................................. 12
Certificate Balance................................................................... 4
Certificate Distribution Account...................................................... 32
Certificate Pool Factor............................................................... 17
Certificateholders.................................................................... 4
Certificates.......................................................................... 1
Closing Date.......................................................................... 30
Code.................................................................................. 43
Collection Account.................................................................... 32
Collection Period..................................................................... 34
Commission............................................................................ 2
Commodity Indexed Securities.......................................................... 26
Contracts............................................................................. 5
CRC................................................................................... 3
CRC Collateral........................................................................ 32
CRC Loan.............................................................................. 32
Currency Indexed Securities........................................................... 26
Cutoff Date........................................................................... 12
Dealer Agreements..................................................................... 12
Dealers............................................................................... 5
Definitive Certificates............................................................... 28
Definitive Notes...................................................................... 28
Definitive Securities................................................................. 28
Depository............................................................................ 20
DTC................................................................................... 12
DTC's Nominee......................................................................... 12
Eligible Deposit Account.............................................................. 33
Eligible Institution.................................................................. 34
Eligible Investments.................................................................. 33
ERISA................................................................................. 8
Events of Default..................................................................... 22
Exchange Act.......................................................................... 2
Face Amount........................................................................... 27
</TABLE>
i
<PAGE> 104
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Federal Tax Counsel................................................................... 43
Final Scheduled Maturity Date......................................................... 7
Financed Equipment.................................................................... 5
Fixed Rate Securities................................................................. 25
Floating Rate Securities.............................................................. 25
foreign person........................................................................ 45
Funding Period........................................................................ 4
Indenture............................................................................. 3
Indenture Trustee..................................................................... 1
Index................................................................................. 26
Indexed Commodity..................................................................... 26
Indexed Currency...................................................................... 26
Indexed Principal Amount.............................................................. 26
Indexed Securities.................................................................... 26
Indirect Participants................................................................. 27
Initial Cutoff Date................................................................... 5
Initial Pool Balance.................................................................. 40
Initial Receivables................................................................... 5
Insolvency Event...................................................................... 37
Insolvency Laws....................................................................... 9
Interest Rate......................................................................... 3
Interest Reset Period................................................................. 25
Investment Earnings................................................................... 33
IRS................................................................................... 43
Issuer................................................................................ 3
LIBOR................................................................................. 26
Liquidity Receivables Purchase Agreement.............................................. 31
Loan and Security Agreement........................................................... 32
Note Distribution Account............................................................. 32
Note Pool Factor...................................................................... 17
Noteholders........................................................................... 3
Notes................................................................................. 1
Obligors.............................................................................. 12
OID................................................................................... 44
OID Regulations....................................................................... 44
old Case Credit....................................................................... 19
Participants.......................................................................... 20
Pass-Through Rate..................................................................... 4
Payment Date.......................................................................... 20
Plan Assets Regulation................................................................ 50
Pool Balance.......................................................................... 18
Precomputed Receivables............................................................... 14
Precomputed Simple Rebate Receivables................................................. 15
Pre-Funded Amount..................................................................... 5
Pre-Funding Account................................................................... 1
Prospectus Supplement................................................................. 1
Purchase Agreement.................................................................... 30
Purchase Amount....................................................................... 31
</TABLE>
ii
<PAGE> 105
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Rating Agencies....................................................................... 11
Receivables........................................................................... 1,12
Registration Statement................................................................ 2
Related Documents..................................................................... 23
Reorganization........................................................................ 19
Reorganization Agreement.............................................................. 19
Reorganization Date................................................................... 19
Rule of 78's Receivables.............................................................. 14
Rules................................................................................. 27
Sale and Servicing Agreement.......................................................... 5
Schedule of Receivables............................................................... 30
Securities............................................................................ 1
Securities Act........................................................................ 2
Securityholders....................................................................... 4
Seller................................................................................ 1,3
Servicer.............................................................................. 3
Servicer Default...................................................................... 37
Servicing Fee......................................................................... 34
Servicing Fee Rate.................................................................... 34
Short-Term Note....................................................................... 44
Simple Interest Receivables........................................................... 14
Specified Party....................................................................... 37
Spread................................................................................ 25
Spread Account........................................................................ 36
Spread Multiplier..................................................................... 26
Standard Precomputed Receivables...................................................... 15
Stock Index........................................................................... 26
Stock Indexed Securities.............................................................. 26
Strip Certificates.................................................................... 4
Strip Notes........................................................................... 3
Subsequent Receivables................................................................ 1
Subsequent Transfer Date.............................................................. 30
Transfer and Servicing Agreements..................................................... 30
Trust................................................................................. 1,3
Trust Accounts........................................................................ 33
Trust Agreement....................................................................... 3
Trustee............................................................................... 1
UCC................................................................................... 31
Underwriting Agreements............................................................... 51
Wisconsin Tax Counsel................................................................. 50
</TABLE>
iii
<PAGE> 106
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
OFFERED HEREBY, NOR AN OFFER OF THE SECURITIES IN ANY STATE OR JURISDICTION IN
WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER WOULD BE UNLAWFUL. THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT
INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Reports to Offered Securityholders....... S-2
Summary of Terms......................... S-3
Risk Factors............................. S-16
The Trust................................ S-19
The Receivables Pool..................... S-21
Weighted Average Life of the Offered
Securities............................. S-26
Description of the Offered Notes......... S-30
Description of the Class B Notes......... S-32
Description of the Certificates.......... S-34
Description of the Transfer and Servicing
Agreements............................. S-35
Legal Investment......................... S-45
ERISA Considerations..................... S-45
Underwriting............................. S-45
Legal Opinions........................... S-47
Index of Terms........................... S-48
PROSPECTUS
Available Information.................... 2
Incorporation of Certain Documents
by Reference........................... 2
Summary of Terms......................... 3
Risk Factors............................. 9
The Trusts............................... 12
The Receivables Pools.................... 14
Weighted Average Life of the
Securities............................. 17
Pool Factors and Trading Information..... 17
Use of Proceeds.......................... 18
The Seller, Case Credit Corporation and
Case Corporation....................... 18
Description of the Notes................. 20
Description of the Certificates.......... 24
Certain Information Regarding the
Securities............................. 25
Description of the Transfer and Servicing
Agreements............................. 30
Certain Legal Aspects of the
Receivables............................ 40
Certain Federal Income Tax
Consequences........................... 43
Certain State Tax Consequences........... 49
ERISA Considerations..................... 50
Plan of Distribution..................... 51
Legal Opinions........................... 51
Index of Terms........................... i
</TABLE>
------------------------
UNTIL DECEMBER 11, 1996 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS
SUPPLEMENT), ALL DEALERS EFFECTING TRANSACTIONS IN THE NOTES OR THE
CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS SUPPLEMENT AND A PROSPECTUS. THIS IS IN ADDITION TO THE
OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS SUPPLEMENT AND A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
$850,000,000
CASE EQUIPMENT
LOAN TRUST 1996-B
$125,000,000
CLASS A-1 5.5625%
ASSET BACKED NOTES
$362,000,000
CLASS A-2 6.25%
ASSET BACKED NOTES
$329,000,000
CLASS A-3 6.65%
ASSET BACKED NOTES
$34,000,000
6.95% ASSET BACKED CERTIFICATES
CASE
RECEIVABLES II INC.
SELLER
CASE
CREDIT CORPORATION
SERVICER
------------------------------------
PROSPECTUS SUPPLEMENT
------------------------------------
Note Underwriters
MERRILL LYNCH & CO.
BA SECURITIES, INC.
CS FIRST BOSTON
FIRST CHICAGO CAPITAL MARKETS, INC.
J.P. MORGAN & CO.
NATIONSBANC CAPITAL MARKETS, INC.
Certificate Underwriters
MERRILL LYNCH & CO.
CS FIRST BOSTON
SEPTEMBER 12, 1996
- ------------------------------------------------------
- ------------------------------------------------------
