As filed with the Securities and Exchange Commission on May 12, 1998
Registration No. 33-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
CASE RECEIVABLES II INC.
(Exact name of registrant as specified in its charter)
Delaware 6153 76-0439709
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
233 Lake Avenue
Racine, Wisconsin 53403
(414) 636-6564
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Richard S. Brennan
General Counsel and Secretary
Case Corporation
700 State Street
Racine, Wisconsin 53404
(414) 636-6011
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Robert F. Hugi David Mercado
Mayer, Brown & Platt Cravath, Swaine & Moore
190 South LaSalle Street 825 Eighth Avenue
Chicago, Illinois 60603-3441 New York, New York 10019-7475
(312) 782-0600 (212) 474-1000
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective as
determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.[]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering.[ ]________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]__________
If delivery of the prospectus is expected to be made pursuant to
Rule 434, check the following box.[ ]
CALCULATION OF REGISTRATION FEE
===============================================================================
Proposed Proposed
Maximum Maximum
Title of Each Offering Aggregate Amount of
Class to be Amount to be Price Per Offering Registration
Registered Registered(1) Unit(2) Price(2) Fee
- -------------------------------------------------------------------------------
Asset Backed
Securities..............$2,485,296,654 100% $ 2,485,296,654 $733,162.52
===============================================================================
(1) $514,703,346 aggregate principal amount of Asset Backed Securities
registered by the Registrant under Registration Statement No. 33-99298
referred to below and not previously sold are consolidated in
this Registration Statement pursuant to Rule 429. All registration
fees in connection with such unsold amount of Asset Backed Securities
have previously been paid under Registration Statement No. 33-99298.
The total amount registered under this Registration Statement as so
consolidated as of the date of this filing is $3,000,000,000.
(2) Estimated solely for the purpose of calculating the registration fee.
-----------------------
Pursuant to Rule 429 under the Securities Act of 1933, the
Prospectus filed as part of this Registration Statement relates to the
securities registered hereby, including the remaining unsold $514,703,346
principal amount of debt securities previously registered by the Registrant
under its Registration Statement on Form S-3 (File No. 33-99298).
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933, or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
The information in this prospectus supplement is not complete and
may be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is effective. This prospectus supplement is not an
offer to sell these securities and it is not soliciting an offer
to buy these securities in any state where the offer or sale is
not permitted.
Consider carefully the risk factors beginning on page __ in this prospectus
supplement and on page __ in the prospectus.
The Notes represent obligations of the Trust only [and do not][. The
Certificates represent interests in the Trust only. Neither the Notes nor
the Certificates] represent obligations of or interests in Case Receivables
II Inc., Case Credit Corporation or any of their affiliates.
This prospectus supplement may be used to offer and sell the Notes [and the
Certificates] only if accompanied by the prospectus.
Prospectus Supplement to Prospectus dated _______, 1998
Case Equipment Receivables Trust 199_-_
CASE RECEIVABLES II INC.
Seller
CASE CREDIT CORPORATION
Servicer
The Trust will issue the following [Classes of Notes] [Securities]--
Class A Notes [Class B
-------------------------------------- Notes]
A-1 Notes A-2 Notes A-3 Notes [Certificates]
Principal Amount
Interest Rate
Payment Dates Monthly Monthly Monthly Monthly
First Payment Date
Final Scheduled
Payment Date
Price to Public(1)
Underwriting
Discount(2)
Proceeds to Seller(3)
1 Plus accrued interest, if any, from __________. Total price to public
(excluding such interest) = $_________.
2 Total underwriting discount = $_________.
3 Total proceeds to issuer = $_______.
Credit Enhancement
o [The Trust is also issuing $_______ ___% Asset Backed Certificates,
which][The Certificates] are subordinated to the Notes.
Subordination of the Certificates provides credit enhancement for
the Notes.
o A Spread Account, with an initial balance of $___________ (__% of
the Contract Value of the initial Receivables), will serve as
additional credit enhancement for the [Notes] [Securities]. Each
time that the Trust purchases additional Receivables, an amount
equal to __% of their aggregate Contract Value will be transferred
from the Pre-Funding Account to the Spread Account.
[o The Class B Notes are subordinated to the Class A Notes. Subordination
of the Class B Notes provides additional credit enhancement for the
Class A Notes.]
[This prospectus supplement and the accompanying prospectus relate only to the
offering of the Notes, not to the offering of the Certificates.]
Neither the SEC nor any state securities commission has approved these
Securities or determined that this prospectus supplement or the prospectus is
accurate or complete. Any representation to the contrary is a criminal
offense.
Underwriters of the Class A Notes
Underwriters of the [Class B Notes] [Certificates]
[DATE]
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
We tell you about the [Notes] [Securities] in two separate documents
that progressively provide more detail: (a) the accompanying prospectus,
which provides general information, some of which may not apply to a
particular series of Securities, including your series; and (b) this
prospectus supplement, which describes the specific terms of your series of
Securities.
If the terms of your series of [Notes] [Securities] vary between this
prospectus supplement and the prospectus, you should rely on the
information in this prospectus supplement.
We include cross-references in this prospectus supplement and in the
accompanying prospectus to captions in these materials where you can find
further related discussions. The following Table of Contents and the Table
of Contents included in the accompanying prospectus provide the pages on
which these captions are located.
You can find a listing of the pages where capitalized terms used in
this prospectus supplement are defined under the caption "Index of Terms
for Prospectus Supplement" beginning on page __ in this prospectus
supplement and under the caption "Index of Terms for Prospectus" beginning
on page __ in the accompanying prospectus.
-----------------
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY OF TERMS..........................................................S-1
OFFERED SECURITIES....................................................S-1
Subordination ...............................................S-1
Closing Date ...............................................S-1
Indenture Trustee ...............................................S-1
Trustee ...............................................S-1
Payment Dates ...............................................S-1
Interest Payments ...............................................S-1
Principal Payments ...............................................S-1
Final Scheduled Maturity Dates....................................S-2
Optional Redemption; Clean-Up Call................................S-2
Mandatory Redemption..............................................S-2
TRUST PROPERTY........................................................S-2
The Initial Receivables...........................................S-3
Pre-Funding ...............................................S-3
Negative Carry Account............................................S-3
CREDIT ENHANCEMENT....................................................S-4
Spread Account ...............................................S-4
[The Certificates ...............................................S-5
[Subordination ...............................................S-5
COLLECTION ACCOUNT; PRIORITY OF
DISTRIBUTIONS.....................................................S-5
Tax Status ...............................................S-5
ERISA CONSIDERATIONS..................................................S-6
REGISTRATION OF [NOTES] [SECURITIES]..................................S-6
LEGAL INVESTMENT......................................................S-6
RATING OF THE [NOTES] [SECURITIES]....................................S-6
RISK FACTORS..............................................................S-7
Limited Ability to
Resell [Notes] [Securities].......................................S-7
Possible Prepayments as
a Result of Pre-Funding...........................................S-7
Trust's Dependence Upon
Case Credit and Case for
Subsequent Receivables............................................S-7
Possible Effects of Economic
and Other Factors.................................................S-7
Changes in Pool
Characteristics as a
Result of Pre-Funding.............................................S-8
Seasonality of Cash Flow..............................................S-8
Effects of Subordination on
[Class B Noteholders]
[Certificateholders]..............................................S-8
CASE CORPORATION AND CASE CREDIT
CORPORATION...........................................................S-8
<PAGE>
THE TRUST ................................................................S-9
General...............................................................S-9
Capitalization of the Trust ..........................................S-9
The Trustee ..........................................................S-9
THE RECEIVABLES POOL ....................................................S-10
Delinquencies, Repossessions, and Net Losses.........................S-14
WEIGHTED AVERAGE LIFE OF THE [NOTES]
[SECURITIES] ........................................................S-16
DESCRIPTION OF THE NOTES.................................................S-21
General..............................................................S-21
Payments of Interest.................................................S-21
Payments of Principal................................................S-21
Mandatory Redemption.................................................S-21
Optional Redemption..................................................S-21
Registration of Notes................................................S-22
The Indenture Trustee................................................S-22
DESCRIPTION OF THE CERTIFICATES..........................................S-22
[General.............................................................S-22
Distributions of Interest Income.....................................S-22
Distributions of Principal Payments..................................S-23
Mandatory Repurchase.................................................S-23
Optional Purchase....................................................S-23
DESCRIPTION OF THE TRANSFER AND
SERVICING AGREEMENTS.................................................S-23
Sale and Assignment of Initial Receivables and
Subsequent Receivables...........................................S-23
Accounts.............................................................S-24
Servicing Compensation and Payment of
Expenses.........................................................S-24
Distributions........................................................S-25
Negative Carry Account...............................................S-27
Spread Account.......................................................S-28
LEGAL INVESTMENT.........................................................S-29
ERISA CONSIDERATIONS.....................................................S-29
The Notes............................................................S-29
UNDERWRITING.............................................................S-30
[Class A] Notes......................................................S-30
LEGAL OPINIONS...........................................................S-32
INDEX OF TERMS...........................................................S-33
<PAGE>
SUMMARY OF TERMS
o This summary highlights selected information from this document and
does not contain all of the information that you need to consider in
making your investment decision. To understand all of the terms of an
offering of the [Notes] [Securities], read carefully this entire
document and the accompanying prospectus.
o This summary provides an overview of certain calculations, cash flows
and other information to aid your understanding and is qualified by
the full description of these calculations, cash flows and other
information in this prospectus supplement and the accompanying
prospectus.
OFFERED SECURITIES
Case Equipment Receivables Trust ____-_, a Delaware business trust (the
"Trust" or the "Issuer") will issue the following securities, which are
being offered pursuant to this prospectus supplement and the accompanying
prospectus:
o Class A-1 ____% Asset Backed Notes (the "A-1
Notes") in the aggregate principal amount of
$-----------;
o Class A-2 ____% Asset Backed Notes (the "A-2
Notes") in the aggregate principal amount of
$-----------;
o Class A-3 ____% Asset Backed Notes (the "A-3 Notes"; together with the
A-1 Notes and A-2 Notes, the "Class A Notes") in the aggregate
principal amount of $___________; and
o [Class B ____% Asset Backed Notes (the "Class B Notes"; together with
the Class A Notes, the "Notes") in the aggregate principal amount of
$__________.][____% Asset Backed Certificates (the "Certificates" and,
together with the Class A Notes, the "Securities") in the aggregate
principal amount of
$----------.]
Each class of [Notes] [Securities] is being offered in minimum
denominations of $1,000 and in greater whole-dollar denominations.
Subordination
The [Class B Notes] [Certificates] will be subordinated to the Class A
Notes as follows:
o no interest will be paid on the [Class B Notes] [Certificates] on any
payment date until all interest owed on the Class A Notes through that
payment date has been paid in full; and
o no principal will be paid on the [Class B Notes] [Certificates] [on
any payment date] until all principal owed on the Class A Notes
[through that payment date] has been paid in full.
Closing Date
- ---------------.
Indenture Trustee
[Harris Trust and Savings Bank].
Trustee
- ---------------.
Payment Dates
The [15]th day of each calendar month (or, if not a business day, the next
Business Day), beginning with _________, 199_.
S-1
<PAGE>
Interest Payments
The interest rate for each Class of [Notes] [Securities] is as specified on
the cover page of this prospectus supplement. Interest on each Class of
[Notes] [Securities] will be calculated on the basis of a 360-day year of
twelve 30-day months and will be payable on each payment date to holders of
record as of the fourteenth day of the calendar month in which such payment
date occurs or, if Definitive [Notes] [Securities] are issued, the close of
business on the last day of the prior calendar month (the "Record Date").
Principal Payments
Principal of the [Notes] [Securities] will be payable on each payment date
in an amount generally equal to the Principal Distribution Amount for such
payment date (to the extent of funds available therefor as described
herein) as follows:
o 100% to the holders of the various Classes of Class A Notes
sequentially, so that no principal will be paid on any Class of Class
A Notes until each Class of Class A Notes with a lower numerical
designation has been paid in full (e.g., no principal will be paid on
the Class A-2 Notes until the Class A-1 Notes have been paid in full);
and
o once all of the Class A Notes have been paid in full, 100% to the
holders of the [Class B Notes] [Certificates] until paid in full.
However, after an Event of Default and acceleration of the Notes (and, if
any Notes remain outstanding, on and after the Final Scheduled Maturity
Date, as defined below), principal payments will be made first to the
holders of the Class A Notes ratably according to the amounts due and
payable on the Class A Notes for principal until paid in full and then to
the [Class B Noteholders] [Certificateholders] until the outstanding
principal amount of the [Class B Notes] [Certificates] has been paid in
full.
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. As more fully described in "Description of the Transfer
and Servicing Agreements--Distributions," the Contract Value of the
Receivables is generally equivalent to their principal balance, and a
Collection Period is a period generally the length of a calendar month that
ends about nine days prior to a payment date.
Final Scheduled Maturity Dates
The outstanding principal amount, if any, of each Class of [Notes]
[Securities] will be payable in full on the date specified for each below:
o A-1 Notes: ____________ (the "Final Scheduled A-1
Maturity Date");
o A-2 Notes: ____________ (the "Final Scheduled A-2
Maturity Date");
o A-3 Notes: ____________ (the "Final Scheduled A-3
Maturity Date"); and
o [Class B Notes][Certificates]: ____________ (the
"Final Scheduled Maturity Date").
Optional Redemption; Clean-Up Call
Any [Notes] [Securities] that remain outstanding on any payment date on
which the Servicer exercises its Clean-Up Call will be prepaid in whole at
the applicable redemption price on that payment date. The Servicer cannot
exercise its Clean-Up Call until the Pool Balance declines to 10% or less
of the Initial Pool Balance. The redemption price for any Class of [Notes]
[Securities] in connection with any such optional redemption will equal the
unpaid principal balance of that Class of [Notes] [Securities], plus
accrued and unpaid interest thereon.
As more fully described in "Description of the Transfer and Servicing
Agreements--Distributions," the "Pool Balance" at any time equals the
aggregate Contract Value of the Receivables at that time, and the "Initial
Pool Balance" equals the sum of the Contract Values of all Receivables as
measured for each Receivable for purposes of the sale of that Receivable to
the Trust.
S-2
<PAGE>
Mandatory Redemption
As described under "The Trust Property--Pre-Funding" below in this Summary
of Terms, the Trust will have a pre-funding period. On the payment date on
or immediately following the last day of the pre-funding period, any funds
remaining in the Trust's pre-funding account (after any purchase of
Receivables on such date) will be applied to redeem the [Notes]
[Securities] then outstanding in whole or in part in the same sequence [and
proportions] that would apply if such remaining funds were a part of the
Principal Distribution Amount.
TRUST PROPERTY
The Trust will possess only the following property:
o the Receivables and related collections, as further
described below;
o bank accounts established for the Trust, including the Pre-Funding
Account and Negative Carry Account described below, the Spread Account
described under "Credit Enhancement" below in this summary of terms
and accounts established to hold collections pending distribution to
holders of the [Notes] [Securities];
o security interests in the Financed Equipment or
Leased Equipment;
o any property obtained in a default situation under
those security interests;
o rights to proceeds from certain insurance policies
covering Financed Equipment or Leased Equipment
or Obligors; and
o the interest of the Seller in any proceeds from recourse to Dealers on
Receivables (but excluding any amounts contained in Dealers' reserve
accounts).
The Initial Receivables
On the Closing Date, the Trust will acquire Retail Installment Contracts
(the "Initial Receivables") with an aggregate Contract Value of
approximately $_____________ [and [Full Payout] Leases with an aggregate
Contract Value of approximately $_____________, in each case] as of
_______, 199_ (the "Initial Cutoff Date"). Each Initial Receivable is a
Precomputed Receivable, including some Precomputed Simple Rebate
Receivables. As of the Initial Cutoff Date:
o the weighted average annual percentage rate (the
"APR") of the Initial Receivables was approximately
-----%,
o 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 _____ months and
o the weighted average original maturity of the Initial Receivables was
approximately _____ months.
No Initial Receivable has a scheduled maturity later than
the date that is six months prior to the Final Scheduled
Maturity Date. [No [Low Payment Leases or] Dealer
Loans will be included in the Trust.]
Pre-Funding
In addition to the Initial Receivables, the Trust will (subject to
availability and certain conditions) purchase additional Retail Installment
Contracts [and [Full Payout] Leases] (the "Subsequent Receivables") from
the Seller during a period (the "Funding Period") beginning on the Closing
Date and ending not later than the close of business on the _____________
payment date. The Subsequent Receivables together with the Initial
Receivables are referred to herein as the "Receivables." See "Description
of the Transfer and Servicing Agreement--Sale and Assignment of Initial
Receivables and Subsequent Receivables."
The Trust will pay the purchase price for Subsequent Receivables with funds
on deposit in a Pre-Funding Account established as a Trust Account, with an
initial deposit of $__________ (the "Initial Pre-Funded Amount"). The
Seller expects to sell Subsequent Receivables to the Trust with an
aggregate Contract Value approximately equal to the Initial Pre-Funded
Amount. Prior to being used to purchase Subsequent Receivables or paid to
S-3
<PAGE>
the Securityholders, funds on deposit in the Pre-Funding Account (the
"Pre-Funded Amount") will be invested from time to time in Eligible
Investments. See "Description of the Transfer and Servicing
Agreements--Accounts" in the Prospectus.
The Funding Period will end earlier than the date specified above when the
Pre-Funded Amount is reduced to less than $100,000, or if there is an Event
of Default under the Indenture or a Servicer Default under the Sale and
Servicing Agreement or the Seller or the Servicer becomes subject to
certain insolvency events. Any Pre-Funded Amount remaining at the end of
the Funding Period will be payable to the Noteholders [and/or the
Certificateholders] as described in "Offered Securities--Mandatory
Redemption" above.
Subsequent Receivables may be originated at a later date than the Initial
Receivables, 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 pool of Receivables included
in the Trust may vary from those of the Initial Receivables. See "Risk
Factors--Changes in Pool Characteristics as a Result of Pre-Funding" and
"The Receivables Pool." No Subsequent Receivable will have a scheduled
maturity later than the date that is six months prior to the Final
Scheduled Maturity Date.
Negative Carry Account
In order to provide a source of funds to cover anticipated negative carry
resulting from the difference between the weighted average interest rate on
the [Notes] [Securities] and investment earnings on the Pre-Funded Amount,
the Servicer will establish a Trust Account to be known as the "Negative
Carry Account." On or prior to the Closing Date, the Seller will deposit
$____________ into the Negative Carry Account. On each payment date, the
Servicer will instruct the Trustee to transfer from the Negative Carry
Account to the Trust's Collection Account an amount equal to the Negative
Carry Amount for that payment date. For this purpose:
o "Negative Carry Amount" means, for any payment date, the difference
(if positive) between (i) the product of (a) the sum of the Class A
Noteholders' Interest Distributable Amount and the Class B
Noteholders' Interest Distributable Amount for that Payment Date
multiplied by (b) the Pre-Funded Percentage for the prior Collection
Period minus (ii) the investment earnings on the Pre-Funded Amount
since the prior Payment Date.
o "Pre-Funded Percentage" for each Collection Period is the percentage
equivalent of a 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
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 on that date) will be released to the
Seller.
CREDIT ENHANCEMENT
Spread Account
As credit enhancement for the [Notes] [Securities], the Servicer will
establish and maintain in the name of the Indenture Trustee a Trust Account
to be known as the "Spread Account." The Spread Account will be funded as
follows:
o On the Closing Date, the seller will deposit $__________ (__% of the
Pool Balance as of the Initial Cutoff Date) into the Spread Account.
o On the date of each sale of Subsequent Receivables to the Trust, the
Indenture Trustee will transfer cash or Eligible Investments having a
value approximately equal to ____% of the aggregate Contract Value of
those Subsequent Receivables from the Pre-Funding
Account to the Spread Account.
S-4
<PAGE>
o On each payment date, the Servicer will instruct the
Indenture Trustee to deposit into the Spread Account
any amounts remaining after deposit in the
appropriate Trust Accounts of amounts to be
distributed to holders of the Notes, and the payment
of the Administration Fee and any third party
Servicing Fee. However, this deposit will be made
only to the extent necessary so that the balance on
deposit in the Spread Account will not be less than
the Specified Spread Account Balance.
The "Specified Spread Account Balance" with respect to any payment date
will equal ____% of the Initial Pool Balance, except that the Specified
Spread Account Balance will never exceed the aggregate outstanding
principal amount of the Notes (the "Note Balance"). The Specified Spread
Account Balance may be reduced or the definition thereof otherwise modified
without the consent of the Noteholders 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 Notes. See "Description of the Transfer
and Servicing Agreements--Spread Account."
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
Notes [and the Certificates] to the extent described herein. [Funds on
deposit in the Spread Account will not be used to cover shortfalls in any
distributions on the Certificates.]
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.
[The Certificates
On the Closing Date, the Trust will issue Certificates in an aggregate
principal amount of $________. The Seller will initially purchase the
entire principal amount of the Certificates. The Certificates will bear
interest at the rate of ____% per annum, except that during the Funding
Period no interest will accrue on the Pre-Funded Percentage of the
Certificate Balance. Distributions of interest and principal on the
Certificates will be subordinated in priority of payment to interest and
principal due on the Notes to the extent described herein. The
subordination of the Certificates will provide credit enhancement for the
Notes. See "Description of the Certificates" in this Prospectus
Supplement.] [Delete if Certificates are offered hereby.]
[Subordination
The subordination of the Class B Notes to the Class A Notes as described
herein will provide additional credit enhancement for the Class A Notes.]
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 the Receivables will be deposited and held pending distribution to
Noteholders and Certificateholders. On each payment date, funds on deposit
in the Collection Account relating to the prior Collection Period will be
applied to the following (in the priority indicated):
(i) accrued and unpaid Administration Fees through
the end of the related Collection Period;
(ii) accrued and unpaid interest on the Class A
Notes;
[(iii) accrued and unpaid interest on the Class B
Notes;]
(iv) the Principal Distribution Amount to pay
principal:
o first, 100% to the holders of the various Classes of Class A
Notes, sequentially, so that no principal will be paid on any
Class of Class A Notes until each Class of Class A
Notes with a lower numerical designation has been paid in
full (e.g., no principal will be paid on the Class A-2 Notes
until the Class A-1 Notes have been paid in full);
o second, once all of the Class A Notes have been paid in full,
100% to the holders of the Class B Notes until paid in full;
S-5
<PAGE>
(v) to the Spread Account, to the extent necessary so that the balance
on deposit therein will not be less than the Specified Spread
Account Balance;
(vi) accrued and unpaid interest on the Certificates;
(vii) the Certificateholders' Principal Distributable
Amount;
(viii) accrued and unpaid Servicing Fees through the end of the related
Collection Period, except that neither Case Credit nor any of its
affiliates is the Servicer, the amounts described in this clause
will be paid prior to any other application of funds on deposit in
the Collection Account; and
(ix) the remaining balance, if any, to the Seller.
After an Event of Default and acceleration of the Notes (and, if any Notes
remain outstanding, on and after the Final Scheduled Maturity Date),
principal payments will be made first to Class A Noteholders ratably
according to the amounts due on the Class A Notes for principal and then to
the Class B Noteholders until the outstanding principal amount of the Class
B Notes has been paid in full. See "Description of the Transfer and
Servicing Agreements--Distributions."
Tax Status
Mayer, Brown & Platt, special Federal tax counsel to the Seller ("Federal
Tax Counsel"), is of the opinion that for Federal income tax purposes the
Notes will be characterized as debt and the Trust will not be characterized
as an association (or publicly traded partnership) taxable as a
corporation. Foley & Lardner, special Wisconsin tax counsel to the Seller
("Wisconsin Tax Counsel"), is of the opinion that the same
characterizations should apply for Wisconsin income tax purposes as for
Federal income tax purposes. Each Noteholder, by the acceptance of a Note,
will agree to treat the Notes as indebtedness. 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 Notes.
ERISA CONSIDERATIONS
Subject to the considerations discussed under "ERISA Considerations," the
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."]
[Include only if the Certificates are offered hereby.]
REGISTRATION OF [NOTES] [SECURITIES]
The [Notes] [Securities] initially will be represented by Securities
registered in the name of Cede, as the nominee of DTC. No Noteholder will
be entitled to receive a Definitive [Note] [Security], except under the
limited circumstances described herein. Noteholders may elect to hold their
Notes through DTC (in the United States) or Cedel or Euroclear (in Europe).
Transfers will be made in accordance with the rules and operating
procedures described herein. See "Certain Information Regarding the
Securities--Definitive Securities" in the Prospectus.
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 [NOTES] [SECURITIES]
It is a condition to the issuance of the [Notes] [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 [Class B Notes] [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"). 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 Notes."
S-6
<PAGE>
RISK FACTORS
You should consider the following risk factors in deciding whether to
purchase the [Notes] [Securities].
Limited Ability to
Resell [Notes] [Securities] The underwriters may assist in resales of
the [Notes] [Securities], but they are not
required to do so. A secondary market for
the [Notes] [Securities] may not develop.
If a secondary market does develop, it
might not continue or it might not be
sufficiently liquid to allow you to
resell any of your [Notes]
[Securities].
Possible Prepayments as
a Result of Pre-Funding If the principal amount of eligible
Receivables purchased or directly originated
by Case Credit during the Funding Period
is less than the Initial Pre-Funded
Amount, the Seller will not have
sufficient Receivables to sell to the
Trust during the Funding Period. This
would result in a prepayment of
principal to the [Noteholders]
[Securityholders] as described below.
To the extent that the aggregate
Contract Value of Subsequent
Receivables sold during the Funding
Period is less than the Initial
Pre-Funded Amount, an amount equal to
the excess will remain on deposit in
the Pre-Funding Account at the end of
the Funding Period. Any such remaining
Pre-Funded Amount will be applied to
prepay the [Notes] [Securities] in the
same sequence [and proportions] that
would apply if such remaining funds
were a part of the Principal
Distribution Amount. Any such
prepayment will shorten the weighted
average life of the affected [Notes]
[Securities] to an extent that cannot
be predicted with assurance, since the
amount of such prepayment cannot be
predicted with assurance.
Trust's Dependence Upon
Case Credit and Case for
Subsequent Receivables The Seller will not be able to convey
Subsequent Receivables to the Trust unless
Case Credit generates those receivables.
Case Credit's ability to generate
receivables in turn depends primarily upon
sales of agricultural, construction and
other equipment manufactured or distributed
by Case. If, during the Funding Period,
Case were to temporarily or permanently stop
manufacturing or distributing agricultural,
construction and other equipment, the rate
of sales of agricultural, construction and
other equipment manufactured or distributed
by Case would decrease. This would
adversely affect the Seller's ability to
sell Subsequent Receivables to the Trust.
Case's use of manufacturer's rebate and
other incentive programs may also affect
retail sales, and neither the Seller nor the
Trust has any control over Case's future use
of such incentives.
S-7
<PAGE>
Possible Effects of Economic
and Other Factors The ability of Dealers to sell agricultural,
construction, and other equipment and
generate Subsequent Receivables through
those sales 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. Case Credit 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, construction or other
equipment.
Changes in Pool
Characteristics as a
Result of Pre-Funding There will be no required characteristics of
the Subsequent Receivables, except that
each Subsequent Receivable must satisfy the
eligibility criteria specified in the Sale
and Servicing Agreement at the time of its
addition. Subsequent Receivables may be
originated 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 [Notes] [Securities]
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 [Notes]
[Securities]. 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 [Notes] [Securities].
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 ___% 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 [Noteholders]
[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."
<PAGE>
Effects of Subordination on
[Class B Noteholders]
[Certificateholders] If you buy [Class B Notes] [Certificates],
your interest payments will be subordinated
in priority of payment to interest due on
the [Class A] Notes, and your principal
payments will be subordinated in priority of
payment to principal due on the [Class A]
Notes as follows. You will not receive any
interest payments on your [Class B Notes]
[Certificates] with respect to a Collection
Period until the full amount of interest on
the [Class A] Notes relating to such
Collection Period has been deposited in the
Note Distribution Account. You will not
receive any principal payments on your
[Class B Notes] [Certificates] until the
[Class A] Notes have been paid (or provided
for) in full. [Distributions of interest
and principal on the Certificates will be
subordinated in priority of payment to
interest and principal due on the Notes.]
CASE CORPORATION AND CASE CREDIT CORPORATION
Case is a leading worldwide designer, manufacturer, marketer and
distributor of farm equipment and light- and medium-sized construction
equipment, which is sold worldwide through independent dealers and retail
S-8
<PAGE>
outlets owned by Case and its affiliates. For the year ended December 31,
____, 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 $___
million (compared to $____ million for the year ended December 31, ____),
and net income of $____ million (compared to $____ million for the year
ended December 31, ____) on net sales of $____ billion (compared to $____
billion for the year ended December 31, ____). At December 31, ____, Case's
consolidated equity was $____ billion.
Case Credit had consolidated net income of $___ million for the year
ended December 31, ___, compared with net income of $____ million for the
year ended December 31, ____. [The $6 million decrease in net income
reported during the six months ended June 30, 1997 reflect lower net
operating margins and a shift in Case Credit's asset-management strategy to
retain a larger percentage of assets on balance sheet (as opposed to
selling those assets through asset-backed securitizations). The $9 million
decrease in net income for the year ended December 31, 1996 is primarily
due to increased interest expense as a result of maintaining higher average
debt levels necessary to fund the growth in both the finance lease and
operating lease equipment programs. In addition, Case Credit's 1996 net
income was lower as a result of lower interest rate margins on the sale of
retail notes under asset-backed securitization transactions.] Revenues for
the first six months of ____ were $___ million and for the year ended
December 31, ____ were $___ million, compared to $___ million for the first
six months of ____ and $___ million for the year ended December 31, ____.
At June 30, ____, total gross receivables serviced by Case Credit were $___
billion, up __% from June 30, ____.
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
The Trust is a business 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 Notes and the Certificates, (iii)
making payments on the Notes and the 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's principal offices are in Wilmington, Delaware, in care of
________________, 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 Notes and the
Certificates had taken place on such date:
Class A-1 _____% Asset Backed Notes......................... $___________
Class A-2 _____% Asset Backed Notes......................... ___________
Class A-3 _____% Asset Backed Notes......................... ___________
Class B _____% Asset Backed Notes........................... ___________
_____% Asset Backed Certificates............................ _________
Total.................................................. $
=========
The Trustee
_________________________ is the Trustee under the Trust Agreement.
__________________________ is a Delaware banking corporation and its principal
offices are located at ______________________, Wilmington, Delaware
S-9
<PAGE>
_____. 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.
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,
including the criteria set forth in the Prospectus under "The Receivables
Pools" and the additional criteria 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 _%, (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 _% 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 Noteholders 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 __ months; and (ii) not
more than __% 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 __% of the sum of
initial Note Balance and the initial Certificate Balance. 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, receivable type, 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.
S-10
<PAGE>
Composition of the Receivables Pool
as of the Initial Cutoff Date
Weighted Weighted
Average Aggregate Average Weighted Average
APR of Contract Number of Remaining Average Contract
Receivables Value Receivables Term Original Term Value
- ----------- --------- ----------- --------- ------------- --------
______ _________ _____ __.__ months __.__ months _____.__
Distribution by Receivable Type of the Receivables Pool
as of the Initial Cutoff Date
Percent of Aggregate
Number of Aggregate Contract
Receivable Type Receivables Contract Value Value
- --------------- ----------- -------------- ----------
Distribution by APR of the Receivables Pool as of the Initial Cutoff Date
Percent of
Aggregate
Number of Aggregate Contract
APR Range Receivables Contract Value Value
- --------- ----------- -------------- --------
_____% to ____%................... $ _.___%
_____% to ____%................... _.__
_____% to ____%................... _.__
_____% to ____%................... _.__
_____% to ____%................... _.__
_____% to ____%................... _.__
_____% to ____%................... _.__
_____% to ____% .................. _.__
____ % to _____%.................. _.__
_____% to _____%.................. _.__
_____% to _____%.................. _.__
_____% to _____%.................. ______ ____________ _.__
Total..................... ====== $=========== =.== %
S-11
<PAGE>
<TABLE>
<CAPTION>
Distribution by Equipment Type of the Receivables Pool
as of the Initial Cutoff Date
<S> <C> <C> <C>
Percent of
Aggregate
Number of Aggregate Contract
Type Receivables Contract Value Value
- ---- ----------- -------------- ---------
Agricultural
New.......................... $ __.___%
Used......................... __.__
Construction
New.......................... __.__
Used......................... _______ _________ __.__
Other
New.......................... __.__
Used......................... _____
Total................... $ . %
======= ========= ==========
<CAPTION>
Distribution by Payment Frequency of the Receivables Pool
as of the Initial Cutoff Date
<S> <C> <C> <C>
Percent of
Aggregate
Number of Aggregate Contract
Frequency Receivables Contract Value Value
- --------- ----------- -------------- --------
Annual(1)......................... $ __.___%
Semiannual........................ __.__
Quarterly......................... __.__
Monthly........................... __.__
------- ------------- -------
Total................... $ . %
======= ============= ========
- ---------------------
(1) Approximately __.__%, __.__%, __.__%, __.__% and __.__%, of the
annual Receivables have scheduled payments within the Collection
Periods relating to the Payment Dates in ________, ________,
________, _________ and __________, respectively.
</TABLE>
S-12
<PAGE>
<TABLE>
<CAPTION>
Distribution by Current Contract Value of the Receivables Pool
as of the Initial Cutoff Date
Percent of
Aggregate
Value Number of Aggregate Contract
Range Receivables Contract Value Value
--------- ----------- -------------- --------
<S> <C> <C> <C>
$ 0.00 to $ 4,999.99............... $ _.__%
5,000.00 to 9,999.99............... _.__
10,000.00 to 14,999.99............... _.__
15,000.00 to 19,999.99............... _.__
20,000.00 to 24,999.99............... _.__
25,000.00 to 29,999.99............... _.__
30,000.00 to 34,999.99............... _.__
35,000.00 to 39,999.99............... _.__
40,000.00 to 44,999.99............... _.__
45,000.00 to 49,999.99............... _.__
50,000.00 to 54,999.99............... _.__
55,000.00 to 59,999.99............... _.__
60,000.00 to 64,999.99............... _.__
65,000.00 to 69,999.99............... _.__
70,000.00 to 74,999.99............... _.__
75,000.00 to 99,999.99............... _.__
100,000.00 to 199,999.99............... _.__
200,000.00 to 299,999.99............... _.__
300,000.00 and over...................... ____ _______ _.__
Total............................. $ . %
==== ======= =======
</TABLE>
S-13
<PAGE>
Geographic Distribution of the Receivables Pool
as of the Initial Cutoff Date
Percent of Percent of
Aggregate Aggregate
Contract Contract
State(1) Value State(1) Value
- -------- ------------- -------- ---------
Alabama................ _.__% Nebraska.................. _.__%
Alaska................. _.__ Nevada.................... _.__
Arizona................ _.__ New Hampshire............. _.__
Arkansas............... _.__ New Jersey................ _.__
California............. _.__ New Mexico................ _.__
Colorado............... _.__ New York.................. _.__
Connecticut............ _.__ North Carolina............ _.__
Delaware............... _.__ North Dakota.............. _.__
Florida................ _.__ Ohio...................... _.__
Georgia................ _.__ Oklahoma.................. _.__
Hawaii................. _.__ Oregon.................... _.__
Idaho.................. _.__ Pennsylvania.............. _.__
Illinois............... _.__ Rhode Island.............. _.__
Indiana................ _.__ South Carolina............ _.__
Iowa................... _.__ South Dakota.............. _.__
Kansas................. _.__ Tennessee................. _.__
Kentucky............... _.__ Texas..................... _.__
Louisiana.............. _.__ Utah...................... _.__
Maine.................. _.__ Vermont................... _.__
Maryland............... _.__ Virginia.................. _.__
Massachusetts.......... _.__ Washington................ _.__
Michigan............... _.__ West Virginia............. _.__
Minnesota.............. _.__ Wisconsin................. _.__
Mississippi............ _.__ Wyoming................... _.__
Missouri............... _.__ Total................ . %
Montana................ _.__ =====
- -----------------
(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, construction, and other 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 year 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-14
<PAGE>
<TABLE>
<CAPTION>
Delinquency Experience(1)
At December 31, At June 30,
----------------------------------------------------------------------------------- ---------------------------------
1996 1995 1994 1993 1992 1997 1996
---------------- ---------------- --------------- ---------------- ---------------- ---------------- ----------------
(Dollars in Millions)
Number Number Number Number Number Number Number
of of of of of of of
Contracts Amount Contracts Amount Contract Amount Contracts Amount Contracts Amount Contracts Amount Contracts Amount
--------- ------ --------- ------ -------- ------ --------- ------ --------- ------ --------- ------ --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio..... $ $ $ $ $
Period of
Delinquency
31-60 days..
60 Days or
More......____ ____ ____ ____ ____ ____ ____ ____ ____ ____
Total
Delinquencies. $ $ $ $ $
Total
Delinquencies
as a Percent
of the
Portfolio.... % % % % % % % % % %
- --------------------
(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.
<CAPTION>
Credit Loss/Repossession Experience(1)
Six Months
Year Ended December 31, Ended June 30,
-------------------------------------------------------------------- ----------------------
1996 1995 1994 1993 1992 1997 1996
------------- ----------- ----------- ----------- ---------- ----------- ----------
(Dollars in Millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Gross Portfolio Outstanding
During the Period................ $ $ $ $ $
Repossessions as a Percent of Average
Gross Portfolio Outstanding...... % % % % %
Net Losses as a Percent of
Liquidations(2)(3)(4)............ % % % % %
Net Losses as a Percent of Average
Gross Portfolio Outstanding(2)(3) % % % % %
</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 __%, __%, __%, __% and __% of
the aggregate amounts scheduled to be paid on the contracts acquired
during the years ended December 31, 1996, 1995, 1994, 1993 and 1992,
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.
S-15
<PAGE>
(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.
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 [NOTES] [SECURITIES]
Information regarding certain maturity and prepayment considerations
with respect to the [Notes] [Securities] is set forth under "Weighted
Average Life of the Securities" in the Prospectus. As the rate of payment
of principal of the [Notes] [Securities] depends primarily on the rate of
payment (including prepayments) of the principal balance of the
Receivables, final payment of each Class of Notes could occur significantly
earlier than the applicable final scheduled maturity date. [Noteholders]
[Security Holders] will bear the risk of being able to reinvest principal
payments of the [Notes] [Securities] at yields at least equal to the yield
on their respective [Notes] [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 constant 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-__ and S-__, 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 Notes 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 [___________] and (f) the Servicer exercises
its option to purchase the Receivables on the Payment Date after the Pool
Balance declines to __% of the Initial Pool Balance. The table indicates
the projected weighted average life of each Class of Notes and sets forth
the percent of the initial principal balance of each class of Notes that is
projected to be outstanding after each of the Payment Dates shown at
various CPR percentages.
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:
S-16
<PAGE>
Aggregate Weighted
Pool Contract Value Average APR
---- -------------- -----------
1 ......................................... $___________ _____%
2 ......................................... ___________ _____
3 ......................................... ___________ _____
4 ......................................... _________ _____
$
=========
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. The cash flow characteristics of hypothetical pools 2, 3 and 4 are
proportionately identical to hypothetical pool 1.
The information included in the following tables represents
forward-looking statements and involves risks and uncertainties that could
cause actual results to differ materially from those in the forward-looking
statements. The actual characteristics and performance of the Receivables
will differ from the assumptions used in constructing the tables on pages
S-__ and S-__. 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. 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 [Notes] [Securities].
S-17
<PAGE>
Percent of Initial Principal Amount of the Notes at Various CPR Percentages
A-1 Notes A-2 Notes
--------------------- ---------------------------------
Payment Date 0% 13% 15% 17% 19% 0% 13% 15% 17% 19%
- ------------ ---- --- --- --- --- --- --- --- --- ---
Closing Date........... 100 100 100 100 100 100 100 100 100 100
February 1998..........
March 1998.............
April 1998.............
May 1998...............
June 1998..............
July 1998..............
August 1998............
September 1998.........
October 1998...........
November 1998..........
December 1998..........
January 1999...........
February 1999..........
March 1999.............
April 1999.............
May 1999...............
June 1999..............
July 1999..............
August 1999............
September 1999.........
October 1999...........
November 1999..........
December 1999..........
January 2000...........
February 2000..........
March 2000.............
April 2000.............
May 2000...............
June 2000..............
July 2000..............
August 2000............
September 2000.........
October 2000...........
November 2000..........
December 2000..........
January 2001...........
February 2001..........
March 2001.............
April 2001.............
May 2001...............
June 2001..............
July 2001..............
August 2001............
September 2001.........
October 2001...........
[OTHER MONTHS??]
Weighted Average Life (years)(1)
- ----------------------------
(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
Note by the number of years from the date of issuance of such Note to
the related Payment Date, (b) adding the results, and (c) dividing the
sum by the related initial principal amount of such Note.
S-18
<PAGE>
This table has been prepared based on the assumptions described on
page S-__ (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.
Percent of Initial Principal Amount of the Notes at Various CPR Percentages
A-3 Notes Class B Notes
---------------------------- ---------------------------
Payment Date 0% 13% 15% 17% 19% 0% 13% 15% 17% 19%
- ------------ ---- --- --- --- --- ---- --- --- --- ---
Closing Date........ 100 100 100 100 100 100 100 100 100 100
February 1998.......
March 1998..........
April 1998..........
May 1998............
June 1998...........
July 1998...........
August 1998.........
September 1998......
October 1998........
November 1998.......
December 1998.......
January 1999........
February 1999.......
March 1999..........
April 1999..........
May 1999............
June 1999...........
July 1999...........
August 1999.........
September 1999......
October 1999........
November 1999.......
December 1999.......
January 2000........
February 2000.......
March 2000..........
April 2000..........
May 2000............
June 2000...........
July 2000...........
August 2000.........
September 2000......
October 2000........
November 2000.......
December 2000.......
January 2001........
February 2001.......
March 2001..........
April 2001..........
May 2001............
June 2001...........
July 2001...........
August 2001.........
September 2001......
October 2001........
[OTHER MONTHS??]
Weighted Average Life (years)(1)
S-19
<PAGE>
(1) The weighted average life of an A-3 Note or Class B Note 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-__ (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-20
<PAGE>
DESCRIPTION OF THE NOTES
General
The following summarizes the material terms of the Notes and the
Indenture pursuant to which they will be issued. The summary does not
purport to be complete and is qualified in its entirety by reference to the
provisions of the 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 Interest Rate with respect to each Class of Notes is:
Interest Rate
(per annum)
Class A-1 Notes _____%
Class A-2 Notes _____%
Class A-3 Notes _____%
Class B Notes _____%
The 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
Notes will accrue at the applicable Interest Rate and will be payable
monthly on each payment date, commencing _______________.
If the amount of interest on the Class A Notes payable on any payment
date exceeds the amounts available on such date, the Class A 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 Class A Notes. See "Description of the Transfer and
Servicing Agreements--Distributions" and "--Spread Account."
Interest on the Class B Notes will not be paid on any payment date
until interest on the Class A Notes has been paid in full.
Payments of Principal
Principal payments will be made to the Noteholders on each payment
date in an amount generally equal to the Principal Distribution Amount as
follows: 100% to the holders of the various Classes of Class A Notes,
sequentially, so that no principal will be paid on any Class of Class A
Notes until each Class of Class A Notes with a lower numerical designation
has been paid in full (e.g., no principal will be paid on the Class A-2
Notes until the Class A-1 Notes have been paid in full); and once all of
the Class A Notes have been paid in full, 100% to the holders of the Class
B Notes until paid in full. The outstanding principal amount, if any, of
the A-1 Notes, A-2 Notes, A-3 Notes and [Class B Notes] will be payable in
full on the Final Scheduled A-1 Maturity Date, Final Scheduled A-2 Maturity
Date and Final Scheduled A-3 Maturity Date, respectively, in each case from
funds available therefor.
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 Notes then
outstanding in the same sequence [and proportions] that would apply if such
remaining funds were a part of the Principal Distribution Amount.
Optional Redemption
Any Notes that remain outstanding on any payment date on which the
Servicer exercises its Clean-Up Call will be prepaid in whole at the
applicable redemption price on that Payment Date. The Clean-Up Call cannot
be exercised until the Pool
S-21
<PAGE>
Balance declines to 10% or less of the Initial Pool Balance. The redemption
price for any Class of Notes in connection with any such optional
redemption will equal the unpaid principal balance of that Class of Notes,
plus accrued and unpaid interest thereon.
Registration of Notes
The Notes initially will be cleared through DTC. Investors may hold
their Notes through DTC (in the United States) or Cedel or Euroclear (in
Europe) if they are participants of such systems, or indirectly through
organizations that are participants in such systems. See "Certain
Information Regarding the Securities--Book-Entry Registration" and
"--Definitive Securities" in the Prospectus.
The Indenture Trustee
[_________________________] is the Indenture Trustee under the
Indenture. [____________________] is an [________ banking corporation], and
its corporate trust offices are located at [_________________]. 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.
[Pursuant to the Trust Indenture Act of 1939, as amended, the
Indenture Trustee may be deemed to have a conflict of interest and be
required to resign as trustee for either the Class A Notes or the Class B
Notes if a default occurs under the Indenture. The Indenture will provide
for a successor trustee to be appointed for one or both Classes of Notes in
these circumstances, so that there will be separate trustees for the Class
A Notes and the Class B Notes. In these circumstances, the Class A
Noteholders and Class B Noteholders will continue to vote as a single
group. So long as any amounts remain unpaid with respect to the Class A
Notes, only the trustee for the Class A Noteholders will have the right to
exercise remedies under the Indenture (but the Class B Noteholders will be
entitled to their share of any proceeds of enforcement, subject to the
subordination of the Class B Notes to the Class A Notes as described
herein). Upon repayment of the Class A Notes in full, all rights to
exercise remedies under the Indenture will transfer to the trustee for the
Class B Notes. Any resignation of the original Indenture Trustee as
described above with respect to any class of Notes will become effective
only upon the appointment of a successor trustee for such class of Notes
and such successor's acceptance of such appointment.]
DESCRIPTION OF THE CERTIFICATES
[The Certificates will be issued pursuant to the Trust Agreement. The
Seller will initially purchase the entire principal amount of the
Certificates. The Certificates will bear interest at the rate of ____% per
annum, except that during the Funding Period no interest will accrue on the
Pre-Funded Percentage of the Certificate Balance.
Distributions of interest and principal on the Certificates will be
subordinated in priority of payment to interest and principal due on the
Notes to the extent described herein. Funds on deposit in the Spread
Account will not be available to cover scheduled payments with respect to
the Certificates.] [Delete if Certificates are offered hereby.]
[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.
Distributions of Interest Income
The Certificates will bear interest at the rate of ____% per annum,
except that during the Funding Period no interest will accrue on the
Pre-Funded Percentage of the Certificate Balance.
S-22
<PAGE>
On each Payment Date, 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). During the Funding Period, no
interest will accrue on the Pre-Funded Percentage of the Certificate
Balance. Interest on the Certificates will not be paid on any Payment Date
until interest and principal (as described herein) on the Notes have been
paid in full. See "Description of the Transfer and Servicing
Agreements--Distributions" and "--Spread Account."
Distributions of Principal Payments
Principal on the Certificates will be payable on each Payment Date
after principal on all of the Notes has been paid in full in an amount
generally equal to the Principal Distribution Amount for such Payment Date
(to the extent of funds available therefor as described herein) until paid
in full.
Mandatory Repurchase
The Certificates will be prepaid, pro rata, in whole or in part, in
the unlikely event that on the Payment Date on or immediately following the
last day of the Funding Period, any funds remain in the Pre-Funding Account
(after giving effect to the purchase of all Subsequent Receivables,
including any such purchase on such date and after giving effect to the
mandatory redemption of the Notes on such date).
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.]
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 entered into in connection with the Trust (collectively,
the "Transfer and Servicing Agreements"), forms of which have been filed as
exhibits to the Registration Statement. Unless the context otherwise
requires, each reference in this prospectus supplement to the "Sale and
Servicing Agreement" and the "Purchase Agreement" refer to the Sale and
Servicing Agreement and Purchase Agreement (each as defined in the
accompanying prospectus), respectively, entered into in connection with the
Trust. 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 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 certain 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
S-23
<PAGE>
to sell to the Trust Subsequent Receivables having an aggregate Contract
Value of approximately $__________, such amount being equal to the Initial
Pre-Funded Amount.
It is expected that Subsequent Receivables will be conveyed to the
Trust monthly on dates specified by the Seller (each, a "Subsequent
Transfer Date") occurring during the Funding Period. 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. 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 ____% of the aggregate
Contract Value of the Subsequent Receivables will be withdrawn from the
Pre-Funding Account 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 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 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) the Rating Agencies 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."
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 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 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 Noteholders or the Certificateholders. See "Description of the
Transfer and Servicing Agreements--Servicing Compensation and Payment of
Expenses" in the Prospectus.
S-24
<PAGE>
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. "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)
to but excluding the sixth day of the calendar month in which the Payment
Date occurs.
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 or Leased 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 or Leased 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 or Leased 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, the Administration Fee and all unpaid
Administration Fees from prior Collection Periods;
(ii) to the Note Distribution Account, the Class A Noteholders'
Interest Distributable Amount;
(iii) to the Note Distribution Account, the Class B Noteholders'
Interest Distributable Amount;
(iv) to the Note Distribution Account, the Class Principal
Distributable Amount for each class of Notes;
(v) to the Spread Account, to the extent necessary so that the
balance on deposit therein will not be less than the Specified Spread
Account Balance;
(vi) to the Certificate Distribution Account, the Certificateholders'
Interest Distributable Amount;
(vii) to the Certificate Distribution Account, the Certificateholders'
Principal Distributable Amount;
(viii) 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 (vii) will be paid prior to any other application of funds
on deposit in the Collection Account; and
(ix) the remaining Total Distribution Amount, if any, to the Seller.
After an Event of Default and acceleration of the Notes (and, if any
Notes remain outstanding, on and after the Final Scheduled Maturity Date),
principal payments will be made first to the Class A Noteholders ratably
S-25
<PAGE>
according to the amounts due and payable on the Class A Notes for principal
until paid in full and then to the Class B Noteholders until the
outstanding principal amount of the Class B Notes has been paid in full.
["Certificateholders' 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 Certificates 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 Certificateholders'
Interest Carryover Shortfall for the current Payment Date.
"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 on the
Certificates that was actually deposited in the Certificate
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 Pass-Through Rate from such preceding Payment Date to but
excluding the current Payment Date.
"Certificateholders' Distributable Amount" means, with respect to
any Payment Date, the sum of the Certificateholders' Interest
Distributable Amount plus the Certificateholders' Principal
Distributable Amount.
"Certificateholders' Principal Distributable Amount" means, on
any Payment Date, the remainder, if any, of the Principal
Distributable Amount for that Payment Date after subtracting the Class
Principal Distributable Amount for each Class of Notes; provided that
(a) in no event shall the Certificateholders' Principal Distributable
Amount exceed the outstanding principal amount of Certificates, and
(b) on the Final Scheduled Maturity Date, the Certificateholders'
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 and the
Certificate Distribution Account on such Payment Date and allocable to
principal) to reduce the outstanding principal amount of Certificates
to zero.]
"Class A Noteholders' Distributable Amount" means, with respect
to any Payment Date, the sum of the Class A Noteholders' Interest
Distributable Amount plus the Class Principal Distributable Amount for
each Class of Class A Notes.
"Class A Noteholders' Interest Carryover Shortfall" means, with
respect to any Payment Date (the "current Payment Date"), the excess
of the Class A Noteholders' Interest Distributable Amount for the
preceding Payment Date over the amount in respect of interest on the
Class A 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 Class A Notes from such
preceding Payment Date to but excluding the current Payment Date.
"Class A 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 A 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 Class A Noteholders' Interest Carryover
Shortfall for the current Payment Date.
"Class B Noteholders' Distributable Amount" means, with respect
to any Payment Date, the sum of the Class B Noteholders' Interest
Distributable Amount plus the Class Principal Distributable Amount for
the Class B Notes.
"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 their
Interest 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
S-26
<PAGE>
equal to the sum of (i) the aggregate amount of interest accrued on
the Class B Notes at their Interest 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 Principal Distributable Amount" means, with respect to any
Class of Notes on a Payment Date, the remainder, if any, of the
Principal Distributable Amount for that Payment Date after subtracting
the Class Principal Distributable Amount for each Class of Notes
having priority of payment over such Class of Notes; provided that (a)
in no event shall the Class Principal Distributable Amount for any
Class exceed the outstanding principal amount of that Class, (b) on
the Final Scheduled A-1 Maturity Date, the Class Principal
Distributable Amount for the A-1 Notes 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 A-1 Notes to zero and (c) on the
applicable final scheduled maturity date, the Class Principal
Distributable Amount for each other Class of Notes 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 such Class of Notes to zero. For
purposes of the foregoing, the various Classes of Notes shall have the
following priority (beginning with the highest priority and descending
to the lowest): the A-1 Notes, the A-2 Notes, the A-3 Notes and the
Class B Notes.
"Contract Value" of the Receivables is generally equivalent to
their principal balance and is defined, as of any calculation date
(including the Initial Cutoff Date) as 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,
_____%, which is the weighted average APR of the Initial Receivables
as of the Initial Cutoff Date (the "Initial Cutoff Date APR") and (b)
in the case of the Subsequent Receivables, the weighted average APR of
the Subsequent Receivables sold as of the applicable Subsequent Cutoff
Date (the "Subsequent Cutoff Date APR").
"Noteholders' Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A Noteholders' Distributable Amount
and the Class B Noteholders' Distributable Amount.
"Pool Balance" at any time equals 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.
"Principal Carryover Shortfall" means, with respect to each
Payment Date, the excess of the 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 Notes on
such preceding Payment Date.
"Principal Distributable Amount" means, with respect to each
Payment Date, the sum of (a) the Principal Distribution Amount plus
(b) the Principal Carryover Shortfall.
"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.
On each Payment Date, all amounts on deposit in the Note Distribution
Account will be distributed to the Noteholders.
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 Noteholders. The Negative Carry Account will be created with an initial
deposit by the Seller of $_________ (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 Notes minus (b) ___%, multiplied by (ii) the Note
S-27
<PAGE>
Percentage of the amount on deposit in the Pre-Funding 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). At any time, the "Note Percentage" means the
percentage equivalent of a fraction the numerator of which is the Note
Balance and the denominator of which is the sum of the Note Balance and
Certificate Balance. 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 Class A Noteholders' Interest
Distributable Amount and the Class B Noteholders' 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
Noteholders in the event of defaults and 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 subordinated to the rights of the Class A Noteholders to the extent
described herein. The protection afforded to the each Class of Noteholders
through subordination will be effected both by the preferential right of
that Class of Noteholders to receive current distributions with respect to
the Receivables to the extent described herein and by the establishment of
the Spread Account. The Spread Account will be created with the initial
deposit by the Seller of $________, which is equal to the Pool Balance as
of the Initial Cutoff Date multiplied by ____%. On each Subsequent Transfer
Date, cash or Eligible Investments having a value approximately equal to
____% 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 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 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 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 Noteholders, 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 that the Rating Agencies confirm in writing that such
action will not result in a reduction or withdrawal of the rating of the Notes.
"Specified Spread Account Balance" means, with respect to any
Payment Date, the lesser of (a) ____% of the Initial Pool Balance and
(b) the Note Balance. The Specified Spread Account Balance may be
reduced or the definition thereof otherwise modified without the
consent of the Noteholders 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 Notes.
"Initial Pool Balance" means 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.
S-28
<PAGE>
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) 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 Notes 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 Note Balance 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 Notes, the Servicer will instruct the
Indenture Trustee to distribute the Spread Account balance to the Seller.
Upon any distribution to the Seller of amounts from the Spread Account made
in accordance with the Sale and Servicing Agreement, the Noteholders will
not 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 Noteholders. 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 in the Noteholders' Distributable Amount in the same order of
priority applicable to distributions from the Collection Account. Funds on
deposit in the Spread Account will not be used to cover shortfalls in any
distributions to the Certificateholders.
The Spread Account and the subordination of the Certificates and the
Class B Notes to the Class A Notes are intended to enhance the likelihood
of receipt by Class A Noteholders of the full amount of principal and
interest due them and to decrease the likelihood that the Class A
Noteholders will experience losses. In addition, the Spread Account and the
subordination of the Certificates to the Class B Notes are intended to
enhance the likelihood of receipt by Class B Noteholders of the full amount
of principal and interest due them and to decrease the likelihood that the
Class B Noteholders 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 exceeds the amount of cash in the Spread Account,
Noteholders could incur losses or a temporary shortfall in the amounts
distributed to the Noteholders could result, which could, in turn, increase
the average life of the Notes.
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 Notes
The Seller has been advised that, although there is little guidance on
the subject, the Notes will not be treated as "equity interests" in the
Trust under the Plan Asset Regulation. As a result, the Notes may be
purchased by an employee benefit plan or an individual retirement account
(a "Plan") subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986,
as amended.
However, without regard to whether the Notes are treated as equity
interests for purposes of the Plan Asset Regulation, the acquisition or
holding of Notes by or on behalf of a Plan could be considered to give rise
to a "prohibited transaction" if the Trust, 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 Notes by a Plan depending on
the type and circumstances of the plan fiduciary making the decision to
acquire such 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.
S-29
<PAGE>
For additional information regarding treatment of the Notes under
ERISA, see "ERISA Considerations" in the Prospectus.
UNDERWRITING
[Class A] Notes
Subject to the terms and conditions set forth in an underwriting
agreement (the "[Class A] Note Underwriting Agreement"), the Seller has
agreed to cause the Trust to sell to each of the Underwriters named below
(the "[Class A] Note Underwriters"), and each of the [Class A] Note
Underwriters has severally agreed to purchase, the principal amount of the
[Class A] Notes set forth opposite its name below:
A-1 Notes
Principal
[Class A] Note Underwriters Amount
- --------------------------- -----------
=======
A-2 Notes
Principal
[Class A] Note Underwriters Amount
- --------------------------- ---------
=======
A-3 Notes
Principal
[Class A] Note Underwriters Amount
- --------------------------- ---------
-------
=======
The Seller has been advised by the [Class A] Note Underwriters that
they propose initially to offer the [Class A] 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 ____% per A-1 Note, _____% per A-2 Note
and _____% per A-3 Note. The [Class A] Note Underwriters may allow and such
dealers may reallow a concession not in excess of ____% per A-1 Note,
_____% per A-2 Note and _____% per A-3 Note to certain
S-30
<PAGE>
other dealers. After the initial public offering of the [Class A] Notes,
the public offering prices and such concessions may be changed.
In the ordinary course of their respective businesses, the [Class A]
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.
_________________, on behalf of the [Class A] Note Underwriters, may
engage in stabilizing transactions and syndicate covering transactions in
accordance with Rule 104 under the Exchange Act. Stabilizing transactions
permit bids to purchase the underlying security so long as the stabilizing
bids do not exceed a specified maximum. Syndicate covering transactions
involve purchases of the [Class A] Notes in the open market after the
distribution has been completed in order to cover syndicate short
positions. Such stabilizing transactions and syndicate covering
transactions may cause the price of the [Class A] Notes to be higher than
it would otherwise be in the absence of such transactions. These
transactions, if commenced, may be discontinued at any time.
[Class B Notes] [Certificates]
Subject to the terms and conditions set forth in an underwriting
agreement (the "[Class B Note] [Certificate] Underwriting Agreement"), the
Seller has agreed to cause the Trust to sell to each of the Underwriters
named below (the "[Class B] [Certificate] Note Underwriters"; and together
with the [Class A] Note Underwriters, the "Underwriters"), and each of the
[Class B] [Certificate] Note Underwriters has severally agreed to purchase,
the principal amount of [Class B Notes] [Certificates] set forth opposite
its name below:
Principal
[Class B Note] [Certificate] Underwriters Amount
- ----------------------------------------- ---------
$
=======
The Seller has been advised by the [Class B Note] [Certificate]
Underwriters that they propose initially to offer the [Class B Notes]
[Certificates] to the public at the prices set forth herein, and to certain
dealers at such prices less the initial concession not in excess of____%
per [Class B Note] [Certificate]. The [Class B Note] [Certificate]
Underwriters may allow and such dealers may reallow a concession not in
excess of ____% per [Class B Note] [Certificate] to certain other dealers.
After the initial public offering of the [Class B Notes] [Certificate], the
public offering prices and such concessions may be changed.
In the ordinary course of their respective businesses, the [Class B
Note] [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.
___________________, on behalf of the [Class B Note] [Certificates]
Underwriters, may engage in stabilizing transactions and syndicate covering
transactions in accordance with Rule 104 under the Exchange Act.
Stabilizing transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum. Syndicate
covering transactions involve purchases of the [Class B Notes]
[Certificates] in the open market after the distribution has been completed
in order to cover syndicate short positions. Such stabilizing transactions
and syndicate covering transactions may cause the price of the [Class B
Notes] [Certificates] to be higher than it would otherwise be in the
absence of such transactions. These transactions, if commenced, may be
discontinued at any time.
We will receive proceeds of approximately $______ from the sale of the
Class A Notes (representing ___% of the principal amount of each Class A
Certificate) after paying the underwriting discount of $______
(representing ___% of the principal amount of each Class A Note). [We will
receive proceeds of approximately $______ from the sale of the Class B
Notes (representing ___% of the principal amount of each Class B
Certificate) after paying the underwriting discount of $______
(representing ___% of the principal amount of each Class B Note).]
Additional offering expenses are estimated to be $______.
S-31
<PAGE>
LEGAL OPINIONS
Certain legal matters relating to the Notes 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 Notes 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 _______________, he owned _______ shares of common
stock and options to purchase _________ 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-32
<PAGE>
INDEX OF TERMS
A-1 Notes..................................................................S-1
A-2 Notes..................................................................S-1
A-3 Notes..................................................................S-1
APR........................................................................S-3
Certificateholders' Distributable Amount..................................S-26
Certificateholders' Interest Carryover Shortfall..........................S-26
Certificateholders' Interest Distributable Amount.........................S-26
Certificateholders' Principal Distributable Amount........................S-26
Certificates...............................................................S-1
Class A Noteholders' Distributable Amount.................................S-26
Class A Noteholders' Interest Distributable Amount........................S-26
Class A Notes..............................................................S-1
Class B Noteholders' Distributable Amount.................................S-26
Class B Noteholders' Interest Carryover Shortfall.........................S-26
Class B Noteholders' Interest Distributable Amount........................S-26
Class B Notes..............................................................S-1
Class Principal Distributable Amount......................................S-27
Collection Account.........................................................S-5
Collection Period.........................................................S-25
Contract Value......................................................S-10, S-27
CPR.......................................................................S-16
current Payment Date......................................................S-26
Cutoff Date...............................................................S-10
Determination Date........................................................S-25
disqualified person.......................................................S-29
equity interests..........................................................S-29
ERISA.....................................................................S-29
ERISA Considerations.......................................................S-6
Federal Tax Counsel........................................................S-5
Final Scheduled A-1 Maturity Date..........................................S-2
Final Scheduled A-2 Maturity Date..........................................S-2
Final Scheduled A-3 Maturity Date..........................................S-2
Final Scheduled Maturity Date..............................................S-2
Funding Period.............................................................S-3
Initial Cutoff Date........................................................S-3
Initial Cutoff Date APR...................................................S-27
Initial Pool Balance.................................................S-2, S-28
Initial Pre-Funded Amount..................................................S-3
Initial Receivables...................................................S-2, S-3
Liquidated Receivables....................................................S-25
Liquidation Proceeds......................................................S-25
Maximum Negative Carry Amount.............................................S-27
Negative Carry Account.....................................................S-3
Negative Carry Account Initial Deposit....................................S-27
Negative Carry Amount..................................................4, S-28
Note Balance...............................................................S-4
Note Percentage...........................................................S-28
Noteholders' Distributable Amount.........................................S-27
Notes......................................................................S-1
party in interest.........................................................S-29
S-33
<PAGE>
Plan......................................................................S-29
Pool Balance.........................................................S-2, S-27
Pre-Funded Amount..........................................................S-3
Pre-Funded Percentage................................................S-4, S-28
Principal Carryover Shortfall.............................................S-27
Principal Distributable Amount............................................S-27
Principal Distribution Amount.............................................S-27
prohibited transaction....................................................S-29
PTCE......................................................................S-29
Purchase Agreement........................................................S-23
qualified professional asset managers.....................................S-29
Rating Agencies............................................................S-6
Receivables................................................................S-3
Receivables Pool..........................................................S-10
Record Date................................................................S-1
Required Negative Carry Account Balance...................................S-28
Sale and Servicing Agreement..............................................S-23
Specified Spread Account Balance.....................................S-4, S-28
Spread Account.............................................................S-4
Spread Account Initial Deposit............................................S-28
Subsequent Cutoff Date....................................................S-24
Subsequent Cutoff Date APR................................................S-27
Subsequent Receivables.....................................................S-3
Subsequent Transfer Date..................................................S-24
Total Distribution Amount.................................................S-25
Transfer and Servicing Agreements.........................................S-23
Trust......................................................................S-1
Underwriters..............................................................S-31
Wisconsin Tax Counsel......................................................S-5
[Class A] Note Underwriters...............................................S-30
[Class A] Note Underwriting Agreement.....................................S-30
[Class B Note] [Certificate] Underwriting Agreement.......................S-31
[Class B] [Certificate] Note Underwriters.................................S-31
S-34
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Consider carefully the risk factors beginning on page 7 in this prospectus.
The Asset Backed Notes of a given series represent obligations of the
related trust only. The Asset Backed Certificates of such series represent
beneficial interests in the related trust only. Neither the Asset Backed
Notes nor the Asset Backed Certificates 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.
This prospectus may be used to offer and sell any series of securities only
if accompanied by the prospectus supplement for that series.
PROSPECTUS
Case Equipment Receivables Trusts
Asset Backed Notes
Asset Backed Certificates
CASE RECEIVABLES II INC.
Seller
CASE CREDIT CORPORATION
Servicer
The Trusts--
o A new trust will be formed to issue each series of Securities.
o The primary assets of each trust will be a pool of receivables
("Receivables") of one or more of the following types (as specified in
the related prospectus supplement):
o retail installment sale contracts or loans (the "Retail Installment
Contracts") secured by new or used agricultural and construction or
other equipment;
o leases ("Leases") of similar equipment;
o term loans ("Dealer Loans") to equipment dealers secured by rental
equipment, rolling stock or computer systems; and
o unsecured term loans ("Unsecured Dealer Loans") to equipment dealers.
o Each trust may also own monies on deposit in a trust account, which
will be used to purchase additional Receivables from time to time
during the period specified in the related prospectus supplement.
o In addition, each trust will hold security or ownership interests in
the equipment financed or leased under the trust's Receivables (except
for equipment financed under the Unsecured Dealer Loans), any proceeds
from claims on certain related insurance policies and amounts on
deposit in the trust accounts identified in the related prospectus
supplement.
The Securities--
o will represent indebtedness of the related trust (in the case of Asset
Backed Notes) or beneficial interests in the related trust (in the case
of Asset Backed Certificates);
o will be paid only from the assets of the related trust;
o if offered by this prospectus, will be rated in one of the four highest
long-term rating categories or the highest short-term rating category
by at least one nationally recognized rating agency;
o may benefit from one or more forms of credit enhancement; and
o will be issued as part of a designated series, which will include one
or more classes of Asset Backed Notes and one or more classes of Asset
Backed Certificates (collectively called "Securities").
Neither the SEC nor any state securities commission has approved these
Securities or determined that this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
_______ ___, 1998
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT
We tell you about the Securities in two separate documents that
progressively provide more detail: (a) this prospectus, which provides
general information, some of which may not apply to a particular series of
Securities, including your series; and (b) the accompanying prospectus
supplement, which will describe the specific terms of your series of
Securities, including:
o the timing of interest and principal payments;
o the priority of interest and principal payments;
o financial and other information about the Receivables;
o information about credit enhancement for each class;
o the ratings of each class; and o the method for selling the
Securities.
If the terms of a particular series of Securities vary between this
prospectus and the prospectus supplement, you should rely on the
information in the prospectus supplement.
You should rely only on the information provided in this prospectus and
the accompanying prospectus supplement, including the information
incorporated by reference. We have not authorized anyone to provide you
with different information. We are not offering the Securities in any state
where the offer is not permitted. We do not claim the accuracy of the
information in this prospectus or the accompanying prospectus supplement as
of any date other than the dates stated on their respective covers.
We include cross-references in this prospectus and in the accompanying
prospectus supplement to captions in these materials where you can find
further related discussions. The following Table of Contents and the Table
of Contents included in the accompanying prospectus supplement provide the
pages on which these captions are located.
You can find a listing of the pages where capitalized terms used in
this prospectus are defined under the caption "Index of Terms" beginning on
page 46 in this prospectus.
-----------------
2
<PAGE>
TABLE OF CONTENTS
Page
----
IMPORTANT NOTICE ABOUT INFORMATION
PRESENTED IN THIS PROSPECTUS AND
THE ACCOMPANYING PROSPECTUS
SUPPLEMENT................................................................2
PROSPECTUS SUMMARY ...........................................................4
Offered Securities........................................................4
The Trust Property........................................................5
Credit Enhancement........................................................5
Servicing and Administrative Arrangements.................................5
Optional Repurchase.......................................................5
Tax Status................................................................5
ERISA Considerations......................................................5
RISK FACTORS..................................................................7
Maturity and Prepayment Considerations...................................7
Possible Effects of a Case Credit or Seller
Bankruptcy..............................................................7
Possible Effects of a Dealer Bankruptcy...................................8
Possible Third Party Liabilities of Trusts................................8
Possible Effects of Receivable Defaults...................................8
THE TRUSTS ...................................................................9
The Trustee...............................................................9
THE RECEIVABLES POOLS .......................................................10
General..................................................................10
The Retail Equipment Financing Business..................................11
Delinquencies, Repossessions and Net
Losses ..................................................................12
WEIGHTED AVERAGE LIFE OF THE
SECURITIES ..............................................................13
POOL FACTORS AND TRADING
INFORMATION .............................................................13
USE OF PROCEEDS .............................................................14
THE SELLER, CASE CREDIT CORPORATION
AND CASE CORPORATION ....................................................14
Case Receivables II Inc. ................................................14
Case Credit Corporation..................................................14
Case Corporation.........................................................15
DESCRIPTION OF THE NOTES.....................................................15
General..................................................................15
Principal and Interest on the Notes......................................15
The Indenture............................................................16
The Indenture Trustee....................................................18
DESCRIPTION OF THE CERTIFICATES..............................................18
General..................................................................18
Distributions of Principal and Interest..................................19
CERTAIN INFORMATION REGARDING THE
SECURITIES ..............................................................19
Denominations............................................................19
Fixed Rate Securities ...................................................19
Floating Rate Securities.................................................19
Indexed Securities.......................................................20
Book-Entry Registration..................................................20
Definitive Securities....................................................23
List of Securityholders..................................................23
Reports to Securityholders...............................................24
DESCRIPTION OF THE TRANSFER AND
SERVICING AGREEMENTS ....................................................24
Sale and Assignment of Receivables.......................................25
Commercial Paper Program.................................................26
Accounts ................................................................27
Servicing Procedures ....................................................28
<PAGE>
Page
----
Collections..................................................................28
Servicing Compensation and Payment of
Expenses.............................................................28
Credit and Cash Flow Enhancement.........................................29
Net Deposits ............................................................29
Statements to Trustees and Trust.........................................30
Evidence as to Compliance................................................30
Certain Matters Regarding the Servicer...................................30
Servicer Default.........................................................30
Rights Upon Servicer Default ............................................31
Waiver of Past Defaults..................................................31
Amendment ...............................................................31
Payment of Notes.........................................................32
Termination..............................................................32
Administration Agreement.................................................32
CERTAIN LEGAL ASPECTS OF THE
RECEIVABLES..............................................................32
Bankruptcy Considerations Relating to Case
Credit...............................................................32
Bankruptcy Considerations Relating to Dealers............................33
Perfection and Priority With Respect to
Receivables..........................................................33
Security Interests in Financed Equipment.................................33
Security Interests in Leased Equipment. .................................34
Bankruptcy Considerations Relating to a
Lessee...............................................................35
Repossession ............................................................35
Notice of Sale; Redemption Rights .......................................35
Certain UCC Considerations ..............................................36
Vicarious Tort Liability.................................................36
Deficiency Judgments and Excess Proceeds;
Other Limitations ...................................................36
Consumer Protection Laws.................................................37
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES ............................................................37
Tax Characterization of the Trust........................................37
Tax Consequences to Holders of the Notes.................................37
Tax Consequences to Holders of the
Certificates.........................................................40
CERTAIN STATE TAX CONSEQUENCES...............................................43
ERISA CONSIDERATIONS.........................................................44
PLAN OF DISTRIBUTION.........................................................44
LEGAL OPINIONS...............................................................44
WHERE YOU CAN FIND MORE
INFORMATION..............................................................45
INDEX OF TERMS ..............................................................46
3
<PAGE>
PROSPECTUS SUMMARY
o This summary highlights selected information from this document and
does not contain all of the information that you need to consider in
making your investment decision. To understand all of the terms of an
offering of the Securities, read carefully this entire document and
the accompanying prospectus supplement.
o This summary provides an overview of certain calculations, cash flows
and other information to aid your understanding and is qualified by
the full description of these calculations, cash flows and other
information in this prospectus and the accompanying prospectus
supplement.
OFFERED SECURITIES
The Trusts
Each series of Securities will be issued by a separate trust (a "Trust").
The Notes
Each series of Securities will include one or more classes of asset backed
notes (the "Notes"). Each Note will represent the right to receive payments
of principal and interest as described in the related prospectus
supplement. Holders of Notes are called "Noteholders".
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"), except that any 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. Each class of
Notes may have a different Interest Rate, which may be fixed, variable or
adjustable, or any combination of these. Each prospectus supplement will
specify the Interest Rate for each class of Notes offered by that
prospectus supplement or the method for determining the Interest Rate.
If a series 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. In addition,
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.
The Certificates
Each series of Securities will also include one or more classes of asset
backed certificates (the "Certificates"). However, the Certificates
included in each series may or may not be offered under this prospectus and
the related prospectus supplement. Each Certificate will represent the
right to receive payments of principal and interest as described in the
related prospectus supplement. Holders of Certificates are called
"Certificateholders". Certificateholders and Noteholders are collectively
called "Securityholders". Each class of Certificates will have a stated
Certificate Balance (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"), except that any 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. 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
these. Each prospectus supplement will specify the Pass-Through Rate for
each class of Certificates offered by that prospectus supplement or the
method for determining the Pass-Through Rate.
4
<PAGE>
Payments on the Certificates issued by a Trust will be subordinated in
priority to payments on the related Notes. The details of the subordination
will be specified in the related prospectus supplement. In addition, if a
series 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. 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.
Registration and Clearance
We will specify in each prospectus supplement whether each class of
Securities offered under that prospectus supplement will be (a) cleared
through the Depository Trust Company ("DTC"), which is generally expected
to be the case, or (b) issued as definitive securities. No investor in any
class of Securities cleared through DTC will be entitled to receive a
definitive security, except under the limited circumstances described under
"Certain Information Regarding the Securities--Definitive Securities."
Investors in any class of Securities cleared through DTC may elect to hold
their Notes through DTC (in the United States) or Cedel or Euroclear (in
Europe).
Denominations
Securities will be available for purchase in the denominations specified in
the related prospectus supplement. If no denomination is specified, then
the Securities will be available for purchase in minimum denominations of
$1,000 and in greater whole-dollar denominations.
THE TRUST PROPERTY
The primary assets of each Trust will be a pool of Receivables
(collectively, "Contracts") of one or more of the following types (as
specified in the related prospectus supplement):
o Retail Installment Contracts secured by new or
used agricultural and construction or other
equipment;
o Leases of similar equipment;
o Term loans to dealers or brokers ("Dealers") secured by rental
equipment, rolling stock or computer systems ("Dealer Loans"); and
o Unsecured term loans to Dealers ("Unsecured
Dealer Loans").
In addition, each Trust will hold the security or ownership interests in
the equipment financed or leased under the Trust's Contracts (except for
equipment financed under the Unsecured Dealer Loans), any proceeds from
claims on certain related insurance policies and amounts on deposit in the
trust accounts identified in the related prospectus supplement.
Each Trust will purchase Receivables ("Initial Receivables") from Case
Receivables II Inc. (the "Seller") on the Closing Date specified with
respect to such Trust in the related prospectus supplement (the "Closing
Date"). In addition, to the extent provided in the related prospectus
supplement, the Trust will purchase additional Receivables (the "Subsequent
Receivables") from the Seller during a pre-funding period (the "Funding
Period"). In a transaction that includes a Funding Period, a portion of the
proceeds from the sale of the related Securities (referred to as the
"Pre-Funded Amount") will be held in a trust account (referred to as the
"Pre-Funding Account") and used to pay the purchase price for Subsequent
Receivables and related purposes.
The Receivables are:
o purchased by Case Credit Corporation ("Case
Credit") from Dealers;
o originated directly by retail outlets owned by Case
Corporation ("Case") and immediately assigned to
Case Credit; or
o originated directly by Case Credit.
<PAGE>
Case Credit generally sells its Retail Installment Contracts to the Seller
on a monthly basis, as described under "Description of the Transfer and
Servicing Agreements--Commercial Paper Program." Case Credit may also sell
Receivables to the Seller specifically 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 criteria described
herein and in the related prospectus supplement.
CREDIT ENHANCEMENT
Each class of Securities may benefit from one or more features that provide
additional payment protection to investors in that class. These features
are called "Credit Enhancement" and may include any one or more of the
following, as specified in the related prospectus supplement:
o subordination of one or more other classes of
Securities
o Spread Accounts or other cash deposits
o over-collateralization
o letters of credit
o credit or liquidity facilities
o surety bonds
o guaranteed investment contracts
o swaps
o other interest rate protection agreements
o repurchase obligations.
SERVICING AND ADMINISTRATIVE
ARRANGEMENTS
Case Credit will service each Trust's Receivables under a Sale and
Servicing Agreement to be entered into in connection with the formation of
that Trust. In limited circumstances, Case Credit may resign or be removed
as Servicer, in which case the Indenture Trustee for the Notes issued by
that Trust or a third party may be appointed as the new servicer. Case
Credit (or any such replacement servicer) will receive a servicing fee from
the related Trust. In addition, Case Credit will undertake certain
administrative duties with respect to each Trust.
OPTIONAL REPURCHASE
The Servicer has the option to purchase the Receivables of a Trust in the
manner and on the terms and conditions described under "Description of the
Transfer and Servicing Agreements--Termination."
TAX STATUS
For information concerning the application of the federal income tax laws
and Wisconsin income tax laws, including the characterization of the
Securities, see "Certain Federal Income Tax Consequences" and
"Certain State Tax Consequences".
ERISA CONSIDERATIONS
Subject to the considerations discussed under "ERISA Considerations" herein
and in the related prospectus supplement, the Notes of each series are
eligible for purchase by employee benefit plans.
5
<PAGE>
No Certificates of any series offered hereby may 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.
6
<PAGE>
RISK FACTORS
You should consider the following risk factors in deciding whether to
purchase the Securities.
Maturity and Prepayment
Considerations The Receivables may be prepaid, in full
or in part, voluntarily or as a result
of defaults, casualties to the related
equipment, death of an obligor or other
reasons. Also, the Servicer or the
Seller may be required to repurchase
one or more Receivables from a Trust in
certain circumstances, and the Servicer
will have the right to purchase all
remaining Receivables from a Trust
pursuant to its Clean-Up Call. See
"Description of the Transfer and
Servicing Agreements--Sale and
Assignment of Receivables." Each such
prepayment, repurchase or purchase will
shorten the average life of the related
Securities. Prepayment rates may be
influenced by a variety of factors and
cannot be predicted with any assurance
(although prepayments of agricultural
equipment retail installment sale
contracts, which will make up a
substantial portion of the Receivables
in many Trusts, have historically
tended to increase during periods in
which farmers have strong cash flows).
On the other hand, the payment schedule
under a Receivable may be extended or
revised under certain circumstances,
which may lengthen the average
remaining term of the Receivables and
the average life of the related
Securities. See "The Receivables
Pools--The Retail Equipment Financing
Business -- Extension/ Revision
Procedures."
You will bear any reinvestment risks
resulting from a faster or slower rate
of prepayment, repurchase or extension
of Receivables held by your Trust. If
you purchase a Security at a discount,
you should consider the risk that a
slower than anticipated rate of
principal payments on your Security
could result in an actual yield that is
less than the anticipated yield.
Conversely, if you purchase a Security
at a premium, you should consider the
risk that a faster than anticipated
rate of principal payments on your
Security could result in an actual
yield that is less than the anticipated
yield.
<PAGE>
Possible Effects of a Case Credit
or Seller Bankruptcy Case Credit will sell Receivables to the
Seller, and the Seller will in turn
sell Receivables to each Trust.
However, a court could conclude that
Case Credit or the Seller effectively
still owns the Receivables supporting
any series of Securities, either
because the sales referred to above
were not "true sales" or because the
court concludes that the Seller or the
Trust should be treated as the same
person as Case Credit or the Seller for
bankruptcy purposes. If this were to
occur, then you could experience delays
or reductions in payments as a result
of:
o the "automatic stay" which prevents
secured creditors from exercising
remedies against a debtor in
bankruptcy without permission from
the court and provisions of the U.S.
Bankruptcy Code that permit
substitution of collateral in
certain circumstances;
o certain tax or government liens on
Case Credit's or the Seller's
property (that arose prior to the
transfer of a Receivable to the
Trust) having a right to be paid
from collections before the
collections are used to make
payments on the Securities;
o rejection by Case Credit or its
bankruptcy trustee of any Lease that
was deemed to be a "true lease,"
which would result in the
termination of scheduled payments
under that Lease; and
o the fact that the Trust might not
have a perfected interest in (a)
certain equipment subject to
certificate of title statutes and
(b) any cash collections on the
Receivables held by Case Credit at
the time that a bankruptcy
proceeding begins.
7
<PAGE>
Possible Effects of a Dealer
Bankruptcy 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, Case Dealers have 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 assert that the sales
of Receivables to Case Credit are loans
to the Dealer secured by the
Receivables, which (if successful)
could result in payment delays or
losses on the affected Receivables. In
such circumstances, a Dealer or its
bankruptcy trustee might also be able
to reject any Leases originated by the
Dealer that were deemed to be "true
leases," resulting in the termination
of scheduled payments under those
Leases.
Possible Third Party
Liabilities of Trusts The sales of Receivables from Case Credit
to the Seller and from the Seller to
each Trust are intended, among other
things, to reduce the possibility that
cash flows from the Receivables will be
subject to claims other than the rights
of investors in the related Securities
and of the parties to the applicable
trust documents (primarily Case Credit,
the Seller and the related Trustee and
Indenture Trustee). However, to the
extent that Case Credit or a Dealer
violates certain Federal or state
consumer protection laws applicable to
the Receivables, a Trust could be
liable to the obligor, as an assignee
of any of the affected Receivables.
Under the related Transfer and
Servicing Agreements, the Seller must
repurchase any such Receivable from the
Trust. See "Certain Legal Aspects of
the Receivables--Consumer Protection
Laws." However, if the Seller fails for
any reason to perform its repurchase
obligation, you could experience delays
or reductions in payments on your
Securities as a result of any such
liabilities imposed upon your Trust.
Similarly, as to any Trust that holds
any equipment subject to Leases, state
laws differ as to whether anyone
suffering any injury to person or
property involving leased agricultural,
construction or other equipment may
bring an action upon which relief may
be granted against the owner of the
equipment by virtue of that ownership.
To the extent applicable law permits
such an action and such an action is
successful, the related Trust and its
assets may be subject to liability to
such an injured party. You could
experience delays or reductions in
payments on your Securities if
liability of this type were imposed on
your Trust, and the coverage provided
by any available insurance is
insufficient to cover such a loss. See
"Certain Legal Aspects of the
Receivables--Vicarious Tort Liability."
Possible Effects of Receivable
Defaults You will rely primarily upon
collections on the Receivables in your
Trust for payments on your Securities.
Your Securities may have the benefit of
a Spread Account, subordination of one
or more other classes of Securities
and/or one or more other forms of
Credit Enhancement specified in the
related prospectus supplement. This
Credit Enhancement will cover losses
and delinquencies on the Receivables up
to some level. However, if the level of
Receivables losses and delinquencies
exceeds the available Credit
Enhancement, you may experience delays
in payments due to you or may not
ultimately receive all interest and
principal due to you.
8
<PAGE>
THE TRUSTS
Each series of Securities will be issued by a separate Trust, which
will be formed pursuant to an agreement (each a "Trust Agreement") between
the Seller and a Trustee identified in the related prospectus supplement.
The primary assets of each Trust will be a pool of Receivables and the
obligations of the retail purchasers, borrowers, lessees and Dealers (the
"Obligors") 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"). If Leases are included in a Trust,
the Trust property will also include any termination value payment due at
the end of the lease term by any Obligor (including any Dealer). No Trust
will include in its property any rights to receive proceeds from the sale
or other disposition of leased equipment at the end of the lease term other
than termination value payments. However, any proceeds received through the
exercise of remedies in a default situation will be included to the same
extent as in the case with Retail Installment Contracts.
The Receivables were or will be originated by Dealers and purchased by
Case Credit pursuant to agreements with such Dealers ("Dealer Agreements"),
originated directly by retail outlets owned by Case and immediately
assigned to Case Credit or originated directly by Case Credit. The Initial
Receivables either were sold previously by Case Credit to the Seller on a
monthly basis 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
Program." On the applicable Closing Date, concurrently with the issuance of
the Notes and the Certificates of a given series, the Seller will sell the
Initial Receivables to the Trust. In addition, to the extent provided in
the related prospectus supplement, Subsequent Receivables will be conveyed
to the Trust as frequently as daily during a Funding Period.
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 equipment financed by
Retail Installment Contracts or securing Dealer Loans ("Financed
Equipment") and "finance leases" ("Finance Lease Equipment") held by the
Trust and security or ownership interests in equipment subject to "true
leases" (together with Finance Lease Equipment, "Leased Equipment") held by
the Trust; (iii) the rights to proceeds from claims on certain physical
damage and term life insurance policies covering the Financed Equipment,
the Leased 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.
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. However, unsecured notes held by each Trust will be held
by the applicable Indenture Trustee. 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 and
Leased Equipment which 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 or the
Leased Equipment in all states, may affect the Servicer's ability to
repossess and sell the equipment securing or otherwise subject to 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--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.
The Trustee
The trustee for each Trust (each, a "Trustee") 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
9
<PAGE>
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 must 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 must 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 evidence the financing or lease of new
and used agricultural, construction and other equipment or secured or
unsecured term loans to Dealers. They will be selected from the Seller's
portfolio using several criteria, including that, unless otherwise provided
in the related prospectus supplement, each Receivable (i) either (A) is
secured by, or evidences the lease of, new or used agricultural,
construction or other equipment or (B) is a term loan to a Dealer, (ii)
was originated in the United States, (iii) provides for payments that fully
amortize the amount financed over its original term to maturity (which
payments may, in the case of any Low Payment Lease, include a termination
value akin to a final "balloon" payment payable by either the Obligor or
the Dealer that originated the Lease), (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 which were purchased by Case Credit from Tenneco Credit
Corporation out of the $1.2 billion pool of retail receivables retained by
Tenneco Credit Corporation in connection with the acquisition by Case
Corporation and its subsidiaries of the farm and construction equipment
business of subsidiaries of Tenneco Inc. on June 23, 1994 (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 amount financed 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 (or other appropriate fraction) of the annual
percentage rate ("APR") of the loan multiplied by the unpaid amount
financed, 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." Leases that are
Precomputed Receivables may require a termination value payment (to be made
by the Obligor or the originating Dealer), which would generally be in a
different amount from the fixed periodic rental payments.
"Simple Interest Receivables" provide for the amortization of the
amount financed under each receivable over a series of fixed level periodic
payments. However, unlike the periodic payment under an Actuarial
Receivable, each periodic payment consists of an installment of interest
which is calculated on the basis of the outstanding principal balance of
the receivable multiplied by the stated APR and further 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 periodic 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 periodic
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 periodic 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,
10
<PAGE>
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."
The Receivables transferred to any Trust may include fixed rate
receivables and floating rate receivables. In addition, Receivables may
provide for different interest rates (or different formulae to calculate
the floating interest rate) during an introductory period or otherwise
during the life of the Receivable. Each prospectus supplement will include
information about any such features that apply to the Receivables in the
related Trust.
Each Lease transferred to any Trust will provide that the payments due
under that Lease are absolute and unconditional, notwithstanding any
damages to, or loss of, the Leased Equipment or any other event. The Leases
transferred to a Trust may include Leases referred to by Case Credit as
Full Payout Leases, Low Payment Leases or both. "Full Payout Leases" are
Leases with a termination value payment of $1 or less. "Low Payment Leases"
are Leases with a termination value payment of more than $1. The
termination value payment is a fixed dollar amount determined at the time a
Lease is entered into and specified in the Lease. Under both Full Payout
Leases and Low Payment Leases, the lessee has the right (but not the
obligation) to purchase the leased equipment at the end of the lease term
for an amount equal to the termination value payment. If a lessee does not
elect to purchase the leased equipment at the end of the lease term, then
the Dealer that originated the Lease is required to pay the termination
value payment and entitled to obtain the equipment from the lessee. In no
case, will a Trust (or Case Credit, as Servicer) obtain possession of any
leased equipment or be entitled to the proceeds from the sale of such
equipment (other than termination value payments) unless the equipment is
repossessed in a default situation. Consequently, no Securities offered by
this prospectus will rely for their payment on the residual value of leased
equipment.
Information with respect to each pool of Receivables will be set forth
in the related prospectus supplement, including, to the extent appropriate,
the types and composition of the Receivables, the distribution by APR (or
spread over a designated index rate), 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 in agricultural
and construction equipment manufactured or otherwise distributed by Case
("Case Dealers"). Case Credit also purchases Contracts from certain other
dealers and through brokers in agricultural, equipment and other equipment.
In addition, Case Credit finances Contracts originated through one retail
outlet directly owned by Case which are immediately thereafter assigned to
Case Credit and makes (or may in the future make) loans directly to
purchasers. In connection with the retail equipment financing business,
Case Credit makes term loans to Dealers secured by rental equipment,
rolling stock and computer systems and unsecured loans to Dealers. As of
December 31, 1997, there were approximately 1,000 independently owned Case
Dealer outlets 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 may include wheel
loaders, skid steer loaders, crawler dozers and loaders, excavators, rough
terrain forklifts, trenchers, irrigation equipment and loader/backhoes. The
other equipment financed by Case Credit may include horse trailers,
all-terrain vehicles, snowmobiles, forestry equipment, power generators and
marine vessels.
Origination Process. Each prospective customer is required to complete
a credit application which lists the applicant's liabilities, income,
credit history and other demographic and personal information. Credit
application information obtained by a Dealer or Case Credit, as the case
may be, is sent to one of four regional finance offices maintained by Case
Credit. The information 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 some cases, Case Credit
obtains a credit bureau report on the applicant from an independent credit
bureau or checks credit references provided by the applicant, typically
banks or finance companies or suppliers that have furnished credit to the
applicant. In certain cases, audited or certified financial statements of
the applicant are obtained. As part of the credit review process (other
than in connection with Dealer Loans and Unsecured Dealer Loans), certain
data regarding the applicant and additional information is analyzed using
Case Credit's credit scoring model. The model was developed by Fair, Isaac
and Company, Inc., based on Case Credit's experience using variables that
historically have been predictive of future loan performance. The credit
score is not determinative; the final credit decision is a subjective
determination based on all of the information gathered. Case Credit also
maintains five-year loan histories on all past and present Case Credit
customers which 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,
regardless of whether the applicant is purchasing or leasing equipment and
11
<PAGE>
regardless of
whether the related Contract will be purchased by Case Credit from a
Dealer, assigned by Case to Case Credit as a result of a sale or lease by a
Case-owned retail outlet or take the form of a direct loan by Case Credit
to a purchaser of Financed Equipment. Credit criteria similar to that used
to evaluate applicants for Retail Installment Contracts and Leases are applied
to applicants for Dealer Loans and Unsecured Dealer Loans.
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 (except that Case
Credit also makes (or may in the future make) loans directly to purchasers
and Dealers). Dealer Agreements consist of Retail Financing Agreements,
Assignment Agreements and Warranty Agreements. Retail Financing Agreements,
which are entered into by Case Dealers and some non-Case Dealers, are
master agreements: a single Retail Financing Agreement governs all
assignments of Contracts from a Dealer to Case Credit. Warranty Agreements
or Assignment Agreements are used with non-Case Dealers that have not
signed Retail Financing Agreements and are entered into on a Contract-by-
Contract basis. Some of the Contracts purchased by Case Credit from Dealers
provide for recourse to the originating Dealer for defaults by the obligor
under the Contract. A portion of such Contracts purchased from Case Dealers
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. 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 Receivables with a variety of
repayment or rental 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 Retail
Installment Contract or a Lease 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 and, in the case of a Lease,
liability insurance with respect to the financed or leased 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.
Any equipment securing or leased under 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. This may not, however, be the case with Dealer Loans, which are
generally based upon an analysis of the Dealer's overall financial
condition, rather than the value of any collateral.
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 which 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.
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 which Case Credit continues to service) will be
set forth in each prospectus supplement. This information may exclude any
category of Contracts not included in the related Trust. 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.
12
<PAGE>
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 Retail Installment
Contracts and Dealer Loans are prepayable at any time without penalty to
the Obligor. Although Leases do not generally permit voluntary prepayments
by their express terms, it is Case Credit's custom to permit voluntary
prepayments, and in its capacity as Servicer for each Trust Case Credit
will be permitted to continue this practice. 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 factors and cannot be predicted with any assurance (although prepayments
of agricultural equipment retail installment sale contracts, which will
make up a substantial portion of the Receivables in many Trusts, have
historically tended to increase during periods in which farmers have strong
cash flows). 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 must 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 must 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. 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 which the Servicer will compute with respect to such class of Notes
indicating the remaining outstanding principal balance of such class of
Notes, as of each 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 which the Servicer will
compute with respect to such class of Certificates indicating the remaining
Certificate Balance of such class of Certificates, as of each 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."
13
<PAGE>
USE OF PROCEEDS
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 deposit of the initial
Pre-Funded Amount into the Pre- Funding Account, if any, and (iii) to make
such other deposits in accounts of the related Trust as may be 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.
Case Receivables II Inc. (the "Seller"), a wholly owned subsidiary of
Case Credit will sell the Receivables to each Trust. The Seller 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 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 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 "Certain Legal Aspects of the Receivables--Bankruptcy
Considerations Relating to Case Credit."
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.
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 that it 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.
In such circumstances, certain of the Leases considered true leases under
the United States Bankruptcy Code could be rejected by the trustee or Case
Credit, as debtor in possession, resulting in the termination of scheduled
payments under any such true leases and possible reductions in
distributions to Securityholders if amounts available under any credit
enhancement is insufficient to cover such losses. 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 Corporation, a Delaware corporation (the "Servicer" or
"Case Credit") will service the Receivables owned by each Trust. Case
Credit is a wholly owned finance subsidiary of Case Corporation. Case
Credit and its wholly owned Canadian and Australian operating subsidiaries
provide and administer financing for the retail purchase or lease of new
and used Case agricultural, construction, and other equipment and other new
and used agricultural and construction equipment. Case offers various
retail financing to end-use customers through Case Credit to facilitate the
sale of its products in the United States, Canada and Australia. Case
Credit's business principally involves purchasing retail installment sale
contracts from Case Dealers. In addition, Case Credit facilitates and
finances the sale of insurance products to retail customers, provides
financing for Case dealers and Case rental equipment yards, and also
provides other retail financing programs for end-use customers in the
United States and Canada. Case Credit also provides various financing
options to dealers for a variety of purposes, including inventory, working
capital, real estate acquisitions, construction and remodeling, business
acquisitions, dealer systems and service and maintenance equipment.
14
<PAGE>
Case Credit's headquarters are located at 233 Lake Avenue, Racine,
Wisconsin 53403, and its telephone number is (414) 636-6011. Case Credit is
subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and in accordance therewith files
reports and other information with the Commission. For further information
regarding Case Credit, reference is made to such reports and other
information that are available as described under "Where You Can Find More
Information."
Case Corporation
Case Corporation, a Delaware corporation, is a leading worldwide
designer, manufacturer, marketer and distributor of farm equipment and
light- and medium-sized construction equipment. Case's market position is
particularly significant in several product categories, including
loader/backhoes, skid steer loaders, large, high-horsepower farm tractors
and self-propelled combines. As used herein, "Case" refers to Case and its
consolidated subsidiaries.
Case also manufactures and distributes replacement parts for various
models of its farm and construction equipment, many of which are
proprietary, to support products it has sold. Case distributes these parts
to dealers and distributors through a network of parts depots throughout
the world.
To facilitate the sale of its products, Case offers wholesale
financing to its dealers and various types of retail financing to qualified
end-users in the United States, Canada and Australia. Wholesale financing
consists primarily of floorplan financing and allows dealers to maintain a
representative inventory of products. Retail financing consists of the
financing of retail installment sales contracts, leases and similar
products for the benefit of end-use customers in conjunction with the
purchase of new and used equipment from Case dealers and company-owned
retail stores and is intended to be competitive with financing available
from third parties.
Case products are distributed through an extensive network of
independent dealers and distributors in more than 150 countries worldwide.
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 "Where You Can Find More
Information."
DESCRIPTION OF THE NOTES
General
Each Trust will issue one or more classes of Notes pursuant to the
terms of an indenture (each, an "Indenture") between the related Trust and
the related indenture trustee (each, an "Indenture Trustee"), a form of
which has been filed as an exhibit to the registration statement of which
this prospectus forms a part. In addition to the Notes offered hereby, each
Trust may issue one or more additional classes of notes that may be sold in
transactions exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act") or retained by the Seller or its affiliates.
Any such additional classes of notes may be issued under the related
Indenture or under a separate agreement. 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.
We will specify in each prospectus supplement whether each class of
Notes offered under that prospectus supplement will be (a) cleared through
DTC, which is generally expected to be the case, or (b) issued as
definitive securities. DTC or its nominee will be the holder of record of
all Notes in any class that is cleared through DTC. As to any such class of
Notes, 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. 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. 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
15
<PAGE>
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 which 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.
In the case of a series of Notes which 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 include 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.
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 which 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: (a) 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
Noteholders, provided that such action will not materially and adversely
affect the interest of any such Noteholder; or (b) substituting credit
enhancement for any class of Notes, provided that the applicable 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:
16
<PAGE>
(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 generally will (and, if so specified in the applicable prospectus
supplement, the amount of interest required to be paid to Noteholders of
such Series under the related Indenture may) be limited to amounts
available to be deposited in the applicable Note Distribution Account for
that purpose. Therefore, unless otherwise specified in the related
prospectus supplement, the failure to pay principal (or, when applicable,
interest) 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 (or of one or more particular
classes thereof, if so specified in the applicable prospectus supplement)
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. Noteholders' voting rights may vary by class.
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 which
might be incurred by it in complying with such request. Subject to the
provisions for indemnification and certain limitations contained in the
related Indenture, the holders of a majority in principal amount of the
outstanding Notes of a given series (or of one or more particular classes
thereof, if so specified in the applicable prospectus supplement) 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
17
<PAGE>
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 applicable 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.
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 must 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 must 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
Each Trust will issue one or more classes of Certificates 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 Certificates issued by each Trust may be offered hereby or may be
sold in transactions exempt from registration under the Securities Act or
retained by the Seller or its affiliates. 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.
18
<PAGE>
We will specify in each prospectus supplement whether each class of
Certificates offered under that prospectus supplement will be (a) cleared
through DTC, which is generally expected to be the case, or (b) issued as
definitive securities. DTC or its nominee will be the holder of record of
all Certificates in any class that is cleared through DTC.
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 which 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 which 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
Denominations
Securities will be available for purchase in the denominations
specified in the related prospectus supplement. If no denomination is
specified, then the Securities will be available for purchase in minimum
denominations of $1,000 and in greater whole-dollar denominations.
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 equals one one-hundredth of a percentage point)
that may be
19
<PAGE>
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") which 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 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
If so specified in the related prospectus supplement, investors may
hold their Securities through DTC (in the United States) or Cedel or
Euroclear (in Europe) if they are participants of such systems, or
indirectly through organizations that are participants in such systems.
Cede & Co., as nominee for DTC, will hold the global Securities. Cedel and
Euroclear
20
<PAGE>
will hold omnibus positions on behalf of the Cedel Participants and the
Euroclear Participants, respectively, through customers' securities
accounts in Cedel's and Euroclear's names on the books of their respective
depositaries (collectively, the "Depositaries") which in turn will hold
such positions in customers' securities accounts in the Depositaries' names
on the books of DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds securities for its Participants ("DTC
Participants") and facilitates the clearance and settlement among DTC
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic book-entry changes in DTC
Participants' accounts, thereby eliminating the need for physical movement
of securities certificates. DTC Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Indirect access to the DTC system is also available to
others such as securities brokers and dealers, banks, and trust companies
that clear through or maintain a custodial relationship with a DTC
Participant, either directly or indirectly ("Indirect Participants"). The
rules applicable to DTC and DTC Participants are on file with the
Securities and Exchange Commission.
Transfers between DTC Participants will occur in accordance with DTC
rules. Transfers between Cedel Participants and Euroclear Participants will
occur in the ordinary way in accordance with their applicable rules and
operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
participants or Euroclear Participants, on the other, will be effected in
DTC in accordance with DTC rules on behalf of the relevant European
international clearing system by its Depositary; however, such cross-
market transactions will require delivery of instructions to the relevant
European international clearing system by the counterparty in such system
in accordance with its rules and procedures and within its established
deadlines (European time). The relevant European international clearing
system will, if the transaction meets its settlement requirements, deliver
instructions to its Depositary to take action to effect final settlement on
its behalf by delivering or receiving securities in DTC, and making or
receiving payment in accordance with normal procedures for same-day funds
settlement applicable to DTC. Cedel Participants and Euroclear Participants
may not deliver instructions directly to the Depositaries.
Because of time-zone differences, credits of securities in Cedel or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, dated the business
day following the DTC settlement date, and such credits or any transactions
in such securities settled during such processing will be reported to the
relevant Cedel Participant or Euroclear Participant on such business day.
Cash received in Cedel or Euroclear as a result of sales of securities by
or through a Cedel Participant or a Euroclear Participant to a DTC
Participant will be received with value on the DTC settlement date but will
be available in the relevant Cedel or Euroclear cash account only as of the
business day following settlement in DTC.
Purchases of Securities under the DTC system must be made by or
through DTC Participants, which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual Securityholder is in
turn to be recorded on the DTC Participants' and Indirect Participants'
records. Securityholders will not receive written confirmation from DTC of
their purchase, but Securityholders are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the DTC Participant or Indirect
Participant through which the Securityholder entered into the transaction.
Transfers of ownership interests in the Securities are to be accomplished
by entries made on the books of DTC Participants acting on behalf of
Securityholders. Securityholders will not receive certificates representing
their ownership interest in Securities, except in the event that use of the
book-entry system for the Securities is discontinued. 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, unless and 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.
To facilitate subsequent transfers, all Securities deposited by DTC
Participants with DTC are registered in the name of DTC's nominee, Cede.
The deposit of Securities with DTC and their registration in the name of
Cede effects no change in beneficial ownership. DTC has no knowledge of the
actual Securityholders of the Securities; DTC's records reflect only the
identity of the DTC Participants to whose accounts such Securities are
credited, which may or may not be the Securityholders. The DTC Participants
will remain responsible for keeping account of their holdings on behalf of
their customers.
Conveyance of notices and other communications by DTC to DTC
Participants, by DTC Participants to Indirect Participants, and by DTC
Participants and Indirect Participants to Securityholders will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
21
<PAGE>
Neither DTC nor Cede will consent or vote with respect to Securities.
Under its usual procedures, DTC mails an omnibus proxy to the issuer as
soon as possible after the record date, which assigns Cede's consenting or
voting rights to those DTC Participants to whose accounts the Securities
are credited on the record date (identified in a listing attached thereto).
Principal and interest payments on the Securities will be made to DTC.
DTC's practice is to credit Participants' accounts on the applicable
Distribution Date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive
payment on such Distribution Date. Payments by DTC Participants to
Securityholders will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name" and will be the
responsibility of such DTC Participant and not of DTC, the Trustee or the
Seller, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to DTC is the
responsibility of the Trustee, disbursement of such payments to DTC
Participants shall be the responsibility of DTC, and disbursement of such
payments to Securityholders shall be the responsibility of DTC Participants
and Indirect Participants.
DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
the Seller or the Trustee. Under such circumstances, in the event that a
successor securities depository is not obtained, Definitive Securities are
required to be printed and delivered. The Seller may decide to discontinue
use of the system of book-entry transfers through DTC (or a successor
securities depository). In that event, Definitive Securities will be
delivered to Securityholders. See "Certain Information Regarding the
Securities--Definitive Securities."
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Seller believes to be
reliable, but the Seller takes no responsibility for the accuracy thereof.
Cedel Bank, societe anonyme ("Cedel") is incorporated under the laws
of Luxembourg as a professional depository. Cedel holds securities for its
participating organizations ("Cedel Participants") and facilitates the
clearance and settlement of securities transactions between Cedel
Participants through electronic book-entry changes in accounts of Cedel
Participants, thereby eliminating the need for physical movement of
certificates. Transactions may be settled in Cedel in any of 32 currencies,
including United States dollars. Cedel provides to its Cedel Participants,
among other things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and
borrowing. Cedel interfaces with domestic markets in several countries. As
a professional depository, Cedel is subject to regulation by the Luxembourg
Monetary Institute. Cedel Participants are recognized financial
institutions around the world, including underwriters, securities brokers
and dealers, banks, trust companies, clearing corporations and certain
other organizations and may include the underwriters of any series of
Securities. Indirect access to Cedel is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with a Cedel Participant, either directly or
indirectly.
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System ("Euroclear Participants") and to
clear and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment, thereby
eliminating the need for physical movement of certificates and any risk
from lack of simultaneous transfers of securities and cash. Transactions
may now be settled in any of 32 currencies, including United States
dollars. The Euroclear System includes various other services, including
securities lending and borrowing and interfaces with domestic markets in 25
countries generally similar to the arrangements for cross-market transfers
with DTC described above. The Euroclear System is operated by Morgan
Guaranty Trust Company of New York, Brussels, Belgium office (the
"Euroclear Operator" or "Euroclear"), under contract with Euroclear
Clearance System, Societe Cooperative, a Belgian cooperative corporation
(the "Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear
cash accounts are accounts with the Euroclear Operator, not the
Cooperative. The Cooperative Board establishes policy for the Euroclear
System. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial
intermediaries and may include the underwriters of any series of
Securities. Indirect access to the Euroclear System is also available to
other firms that maintain a custodial relationship with a Euroclear
Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such,
it is regulated and examined by the Board of Governors of the Federal
Reserve System and the New York State Banking Department, as well as the
Belgian Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of
Euroclear and the related operating procedures of the Euroclear System
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System, and receipts of payments
with respect to securities in the Euroclear System. All securities in the
Euroclear System are held on a fungible basis without attribution of
specific certificates to specific securities clearance accounts. The
Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants and has no record of or relationship with persons
holding through Euroclear Participants.
22
<PAGE>
Distributions with respect to Securities held through Cedel or
Euroclear will be credited to the cash accounts of Cedel Participants or
Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its Depositary. Such distributions
will be subject to tax reporting in accordance with relevant United States
tax laws and regulations. See "Federal Income Tax Consequences." Cedel or
the Euroclear Operator, as the case may be, will take any other action
permitted to be taken by a Securityholder under a related Agreement on
behalf of a Cedel Participant or Euroclear Participant only in accordance
with its relevant rules and procedures and subject to its Depositary's
ability to effect such actions on its behalf through DTC.
Although DTC, Cedel and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Securities among
participants of DTC, Cedel and Euroclear, they are under no obligation to
perform or continue to perform such procedures and such procedures may be
discontinued at any time.
Definitive Securities
The Notes or Certificates that are initially cleared through DTC will
be issued in fully registered, certificated form ("Definitive Notes" and
"Definitive Certificates," respectively, and collectively referred to
herein as "Definitive Securities") to investors or their respective
nominees, rather than to DTC or its nominee, only if (i) the Administrator
advises the related Indenture Trustee or the related Trustee, as applicable
(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 (or on Notes or Certificates initially issued as Definitive
Securities) will 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
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.
23
<PAGE>
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 net losses on Receivables, 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 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) the agreements
(each, a "Sale and Servicing Agreement") pursuant to which Trusts 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 Retail Installment Contracts from Case Credit and other
agreements related to the Seller'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
24
<PAGE>
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, if Case Credit is selling to the Seller any
Receivables 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
and security or ownership interests in the related Leased Equipment,
pursuant to a purchase agreement (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 and
ownership interests, together with its entire interest in designated Retail
Installment Contracts 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 delivered
at the closing under the related Sale and Servicing Agreement (a "Schedule
of Receivables"). In connection with the sale of Unsecured Dealer Loans to
the Trust, the Seller will deliver the related notes to the Related
Trustee. The related Trustee will, concurrently with such transfer and
assignment, execute and deliver the related Notes and Certificates. 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 and initial deposits in other trust accounts. 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 and liability insurance, in the case of a Lease,
with respect to the Financed Equipment or Leased 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 such Receivable is or will be
secured by a first priority perfected security interest in the Financed
Equipment or Leased Equipment in favor of Case Credit (except that no such
representation or warranty need be made as to any Dealer Loan or Unsecured
Dealer Loan or as to any Lease that is a "true lease"); (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, leasing, 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.
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) month
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 (other than
notes evidencing Unsecured Dealer Loans) and any other documents relating
to the Receivables. Notes evidencing Unsecured Dealer Loans will be
delivered to the related Indenture Trustee. The obligors on the Receivables
are not notified of the sale of the Receivables from Case Credit to the
Seller or from the Seller to the Trust. 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.
Pursuant to each Sale and Servicing Agreement, the Servicer will have
the right (but no obligation) to purchase all of the remaining Receivables
held by the Trust after the aggregate Contract Values (as defined in the
related prospectus supplement) of the remaining Receivables fall below 10%
of the Initial Pool Balance (as defined in the related prospectus
supplement). This right is referred to as the Servicer's "Clean-Up Call."
25
<PAGE>
Commercial Paper Program
In connection with an asset-backed commercial paper program
established in August 1994, Case Credit and the Seller entered into a
Receivables Purchase Agreement dated as of August 1, 1994 (as amended, the
"Liquidity Receivables Purchase Agreement"). Case Credit intends generally
to sell to the Seller on the 15th day of each month all Retail Installment
Contracts meeting certain eligibility requirements which Case Credit
purchased from Case Dealers or from Case in the preceding calendar month.
Under the Liquidity Receivables Purchase Agreement, if Case Credit elects
to sell any Retail Installment Contracts to the Seller in a month, Case
Credit is obligated to sell to the Seller all Retail Installment Contracts
purchased by Case Credit from Case Dealers or from Case 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 Retail Installment Contracts to be sold that are
not adverse to the interests of the Seller.
On each monthly settlement date under the Liquidity Receivables
Purchase Agreement, Case Credit will sell and assign to the Seller, without
recourse, its entire interest in designated Retail Installment Contracts,
including security interests in the related Financed Equipment, and the
Seller 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.
In the Liquidity Receivables Purchase Agreement, Case Credit will
represent and warrant to the Seller on each monthly purchase date as to
designated Retail Installment Contracts being purchased by the Seller on
such purchase date, among other things, that: (i) each designated Retail
Installment Contract meets the applicable eligibility requirements; (ii)
the information provided with respect to the designated Retail Installment
Contract is correct in all material respects; (iii) the Obligor on each
designated Retail Installment Contract 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 Retail Installment Contracts 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 such Retail Installment Contract 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 Retail Installment Contract,
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 the Seller any Retail Installment Contract materially and adversely
affected by such breach at a price equal to the Contract Value of such
Retail Installment Contract on the settlement date immediately succeeding
the month in which such repurchase obligation arises. The repurchase
obligation constitutes the sole remedy available to the Seller for any such
breach.
The Seller and Case Equipment Loan Trust 1994-B have entered into a
Loan and Security Agreement dated as of August 1, 1994 (as amended, 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
"Seller Loan") to the Seller on a monthly basis and The Seller has agreed
to grant to Case Equipment Loan Trust 1994-B a security interest in the
Seller's entire interest in all Retail Installment Contracts purchased by
the Seller 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 "Seller Collateral"). Case
Equipment Loan Trust 1994-B will have funds available to lend to the Seller
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 The Chase
Manhattan Bank, as Administrative Agent.
The Seller Collateral shall consist primarily of (i) all of the Retail
Installment Contracts acquired by the Seller from Case Credit pursuant to
the Liquidity Receivables Purchase Agreement from time to time which 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 Retail Installment Contracts, (iii) funds on deposit in the certain
accounts, (iv) all right, title and interest of the Seller in and to the
Liquidity Receivables Purchase Agreement and the Servicing Agreement dated
as of August 1, 1994 as amended, between Case Credit, as Servicer, and the
Seller, (v) all right, title and interest of the Seller in and to certain
interest rate caps required to be maintained by the Seller under the Loan
and Security Agreement and (vi) the proceeds of the foregoing.
Under the Loan and Security Agreement, the Seller has the right to
have Retail Installment Contracts released from the lien of the Loan and
Security Agreement for the purpose of transferring such Retail Installment
Contracts (or interests in such Retail Installment Contracts) if, among
other requirements, prior to any such transfer, the Seller 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
26
<PAGE>
outstanding principal amount of the Seller Loan will not exceed the Net
Pool Balance (as defined in the Loan and Security Agreement).
In connection with any release of Retail Installment Contracts from
the lien of the Loan and Security Agreement, the Seller will be required to
deposit into the related collection account an amount equal to the
aggregate Contract Value of such Retail Installment Contracts 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.
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 generally limited to investments acceptable to the
applicable rating agencies as being consistent with the rating of such
Securities and include: (a) direct obligations of, 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 applicable 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 applicable 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
applicable 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 applicable 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 applicable
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
27
<PAGE>
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 applicable 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 securities of such depository institution have a credit rating from
each applicable rating agency in one of its generic rating categories which
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) which has either (A) a long-term unsecured debt rating or
certificate of deposit rating acceptable to the applicable rating agencies
or (B) a short-term unsecured debt rating or certificate of deposit rating
acceptable to the applicable 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, construction and other equipment retail installment sale
contracts and leases 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 specified in the related
prospectus supplement unless the Servicer purchases the Receivable as
described below. Some of such arrangements (including 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 or the Leased Equipment related to the respective
Receivable at public or private sale, or take any other action permitted by
applicable law. See "Certain Legal Aspects of the Receivables." When
appropriate, in connection with its servicing obligations, the Servicer may
require the applicable Indenture Trustee to deliver all or a portion of one
or more notes evidencing Unsecured Dealer Loans. The Servicer will return
any such notes to the applicable Indenture Trustee when the need therefor
by the Servicer no longer exists, unless the Unsecured Dealer Loan has been
paid in full. The Servicer will hold any such notes exclusively as agent
for the related Indenture Trustee.
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 applicable 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 for the related Securities. 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
With respect to each Trust, the Servicer will be entitled to receive
the Servicing Fee for each Collection Period in an amount equal to a
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 periods) will be paid solely from the
sources, and at the priority, specified in the related prospectus
supplement.
The Servicing Fee will compensate the Servicer for performing the
functions of a third party servicer of agricultural, construction and other
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,
28
<PAGE>
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.
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. 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. 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. The credit
enhancement for a class or series of Securities generally 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 which
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 class or series of Securities, Securityholders of any
such class or series will be subject to the risk that such credit
enhancement will be exhausted by the claims of Securityholders of other
classes or series.
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 applicable 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 .Any Spread
Account may initially be funded by a 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 applicable 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 "Description of the Transfer and Servicing
Agreements--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.
29
<PAGE>
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 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 of
the related series, 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
30
<PAGE>
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; 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").
Rights Upon Servicer Default
If a Servicer Default under a Sale and Servicing Agreement occurs and
remains unremedied, the related Indenture Trustee or holders of Notes of
the related series evidencing not less than 25% in outstanding principal
amount of such Notes (or of one or more particular classes or such Notes,
if specified in the related prospectus supplement) 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 so long as any Notes of
the same series remain outstanding.
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 applicable 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 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.
31
<PAGE>
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.
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 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 (including as a result of the exercise by the
Servicer of its Clean-Up Call).
Administration Agreement
Case Credit will enter into an agreement (an "Administration
Agreement") with each Trust and the related Indenture Trustee pursuant to
which Case Credit will act as administrator (in such capacity, the
"Administrator") for such Trust. The Administrator will 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
Bankruptcy Considerations Relating to Case Credit.
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.
In addition, 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.
Also, under such circumstances, Case Credit's bankruptcy trustee (or Case
Credit as debtor-in-possession) will, for a period of time, have the
opportunity to reject any Lease that is deemed a "true lease," which would
result in a cancellation of the scheduled payments due thereafter under
such Lease. 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 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.
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 UCC, would be included in the bankruptcy
estate of a
32
<PAGE>
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 UCC, 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.
Bankruptcy Considerations Relating to Dealers.
A substantial portion of the Receivables was originated by Case
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 Case Dealers provide for recourse
to the originating Dealer for defaults by the Obligors. In addition, the
Case Dealers retain the right to repurchase at any time the Receivables
originated by them. In the event of a Case Dealer's bankruptcy, a creditor
or bankruptcy trustee of the Case Dealer or the Case Dealer as a debtor in
possession might attempt to characterize the sales of Receivables to Case
Credit as loans to the Case 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. Furthermore, in the event of a
Dealer's bankruptcy, a Dealer or its bankruptcy trustee might also be able
to reject any Leases originated by the Dealer that were deemed to be "true
leases" resulting in the termination of scheduled payments under those
Leases.
Perfection and Priority With Respect to Receivables
A purchaser of the Retail Installment Contracts or Leases who
gives new value and takes possession of the instruments which evidence the
Retail Installment Contracts or Leases (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
Retail Installment Contracts or Leases. 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. Any such sale of Retail Installment
Contracts or Leases that had been sold to a Trust would be a violation of
Case Credit's contractual obligations.
Security Interests in Financed Equipment.
In states in which retail installment sale contracts such as the
Retail Installment Contracts evidence the credit sale of agricultural,
construction and other equipment by dealers, brokers or manufacturers to
obligors, the contracts also constitute personal property security
agreements and include grants of security interests in the equipment under
the applicable UCC. In addition, a Lease that is a finance lease should
generally be treated as a personal property security agreement for purposes
of the 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,
construction or other equipment may be governed by certificate of title
registration laws of the state in which such equipment is located.
Case Credit confirms that appropriate action has been taken under the
laws of each state in which the Financed Equipment or Finance Lease
Equipment is located to perfect Case Credit's security interest in the
Financed Equipment and Finance Lease Equipment. The Seller is required to
repurchase from each Trust any Receivable (other than a Lease that is a "true
lease" or an Unsecured Dealer Loan) as to which necessary perfection actions
have not been taken prior to the time of sale to the Trust, if the failure to
take such actions will materially adversely affect the interest of such Trust
in such Receivable and such failure is not cured within a specified grace
period. Similarly, Case Credit is required to repurchase any such Receivable if
the failure occurred prior to the sale of the Receivable from Case Credit to
the Seller. In addition, under each Sale and Servicing Agreement, Case Credit,
as the Servicer, is required (at its own expense) to take appropriate steps to
maintain perfection of security interests in the Financed Equipment and the
Finance Lease Equipment and is obligated to purchase the related Receivable if
it fails to do so. However, because Case Credit does not obtain subordination
agreements from other secured lenders when making Dealer Loans, the
security interests obtained in connection therewith may not have first
priority status.
Due to the administrative burden and expense, no action will
be taken to record the transfer of security interests from Case Credit to
the Seller or from the Seller to the Trust. In most states, an assignment
like the sales under the Purchase Agreement and Sale and Servicing
Agreement for each Trust is effective to convey a security interest,
without any action to record the transfer of record. In such states, the
proper initial filing of the financing statement relating to the equipment,
or, if applicable, the notation of Case Credit'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. However, by not identifying a
Trust as the secured party on the financing
33
<PAGE>
statement or certificate of title, the security interest of such Trust in
Financed Equipment could be defeated through fraud or negligence.
In addition, 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. Also, error, fraud or forgery by the equipment owner or the
Servicer or administrative error by state or local agencies could impair a
Trust's security interest. Neither the Seller nor the Servicer must
repurchase a Receivable if any of the occurrences described above (other
than any action by the Servicer) 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.
Under the laws of most states, the perfected security interest in
equipment would continue for four months after the equipment 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 a certificate 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.
Security Interests in Leased Equipment.
When Leases are sold to a Trust, the security or ownership interest
held by the Seller in any related Leased Equipment will be assigned by the
Seller to such Trust. Each Lease is either a "true lease" or a lease
intended for security (often referred to as a "finance lease"). Whether the
Seller is deemed to hold a security interest or an ownership interest in
particular Leased Equipment depends in part upon whether the related Lease
is a "true lease" or not.
"true lease" = the lessor (i.e., the originating Dealer and its assigns)
is deemed to be the beneficial owner of the leased equipment.
"finance lease" (not a true lease) = the lessee is deemed to be the
beneficial owner, and the lessor (or its assignee) is deemed to hold
a security interest in the leased equipment.
34
<PAGE>
Under applicable state law standards, Full Payout Leases should be
deemed to be finance leases. The treatment of certain Low Payment Leases as
finance leases or true leases under applicable state law is less certain,
and the applicable prospectus supplement will specify the extent to which
any Low Payment Leases included in the property of the related Trust are
thought to be finance leases or true leases or are of uncertain
classification.
Case Credit requires Dealers that originate Leases (including both
Full Payout Leases and Low Payment Leases) to obtain a precautionary first
priority perfected security interest in the related Leased Equipment (in
case the Leases are deemed to be a finance lease). These security interests
are transferred to Case Credit when it purchases the related Leases. When
Case Credit originates a Lease directly, it also obtains a precautionary
first priority perfected security interest in the related Leased Equipment.
For Full Payout Leases and any Low Payment Leases that are deemed to be
finance leases, Case Credit and its assigns will have a very similar
position to the one described above with respect to Retail Installment
Contracts. The Seller must repurchase any Full Payout Lease (and any Low
Payment Lease that is represented to be a finance lease in the related Sale
and Servicing Agreement) that is sold to a Trust if a first priority
perfected security interest in the name of Case Credit in the Leased
Equipment securing such Lease did not exist as of the date such Lease was
purchased by such Trust, if such breach will materially adversely affect
the interest of such Trust in such Lease and such failure is not corrected
within a specified grace period.
Case Credit also obtains a perfected security interest in Leased
Equipment against originating Case Dealers in the event that the Leased
Equipment is deemed to be owned by the Dealer (which would be the case for
any Low Payment Lease that is deemed to be a true lease) and the transfer
of such Leased Equipment from the Dealer to Case Credit is not deemed to be
a true sale. However, that security interest may not in all cases have
first priority status. The related prospectus supplement will specify if
any Low Payment Leases will be included in the property of any Trust and,
if so, whether any filings will be made to perfect a first priority
security interest in the related Leased Equipment against Case
35
<PAGE>
Credit and the Seller, in case the transfer of such Leased Equipment from
Case Credit to the Seller, or from the Seller to the applicable Trust,
respectively, is deemed not to be a true sale. Due to administrative burden
and expense, it is anticipated that such filings (if any) will cover only a
portion of the Leased Equipment. Competing liens arising in favor of
creditors of the originating Dealer, Case Credit or the Seller could take
priority over the interests of the applicable Trust in such Leased
Equipment if such Dealer, Case Credit or the Seller were not deemed to have
made a true sale and any security interest in such Leased Equipment granted
to Case Credit, the Seller or the Trust, respectively, was not perfected or
did not have first priority status. Also, Case Credit does not obtain a
perfected security interest in Leased Equipment against originating
non-Case Dealers.
Bankruptcy Considerations Relating to a Lessee
If the Obligor under any Lease included in the property of a Trust
becomes a debtor in federal bankruptcy proceedings or any similar
applicable state law proceedings, the Trust may be delayed or prevented
from enforcing certain of its rights under the Leases and obtaining
possession of the Leased Equipment from the Obligor. The precise treatment
of a Lease in bankruptcy proceedings generally will depend upon whether the
bankruptcy court finds the Lease to be a true lease or a finance lease.
If a given Lease is a "finance lease," its treatment in bankruptcy
will be similar to the treatment of a Retail Installment Contract. The
Trust will have a bankruptcy claim equal to the outstanding amount of the
deemed "loan" to the Obligor , which claim will generally have the benefit
of a perfected security interest in the related Finance Lease Equipment
(subject to the qualifications set out under "--Security Interests in the
Equipment" above. If a given Lease is a true lease, the Obligor's
bankruptcy trustee (or the Obligor as debtor-in-possession) will, for a
period of time, have the opportunity to either assume or reject the Lease.
The precise length of this period of time will be difficult to predict in
any given case, and the bankruptcy trustee (or the Obligor as
debtor-in-possession) will have possession of the Leased Equipment during
such period.
If the Lease is assumed, the bankruptcy trustee (or the Obligor as
debtor-in-possession) must:
o cure any default (other than a default based on the Obligor's
bankruptcy or financial condition, and possibly other non-monetary
defaults); or
o provide adequate assurance of a prompt cure; and,
o if there has been a prepetition default, provide adequate assurance of
future performance under the Lease.
If the Lease is rejected:
o the scheduled payments due thereafter under such Lease will be canceled;
o the Trust will generally be able to obtain possession of the Leased
Equipment; and
o the Trust will be entitled to assert a claim for damages resulting
from the rejection of the Lease, which claim would be unsecured.
Repossession
In the event of default by equipment purchasers, the holder of the
retail installment sale contract (or a lease that is treated as a personal
property security interest) 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 or leased
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.
36
<PAGE>
Certain UCC Considerations
Certain states have adopted a version of Article 2A ("Article 2A") of
the UCC that purports to codify many provisions of existing common law.
Although there is little precedent regarding how Article 2A will be
interpreted, it may, among other things, limit the enforceability of any
"unconscionable" lease or "unconscionable" provision in a lease, provide a
lessee with remedies, including the right to cancel the lease, for certain
lessor breaches or defaults, and may add to or modify the terms of
"consumer leases" and leases where the lessee is a "merchant lessee."
However, Case Credit will represent in each Sale and Servicing Agreement
that (i) to the best of its knowledge, each Obligor has accepted the
equipment leased to it and, after reasonable opportunity to inspect and
test, has not notified Case Credit of any defects therein. Article 2A does,
however, recognize typical commercial lease "hell or high water" rental
payment clauses and validates reasonable liquidated damages provisions in
the event of lessor or lessee defaults. Article 2A also recognizes the
concept of freedom of contract and permits the parties in a commercial
context a wide degree of latitude to vary provisions of the law.
Vicarious Tort Liability
Although each Trust will or may own the Leased Equipment related to
each Lease purchased by that Trust that is treated as a true lease, the
Leased Equipment will be operated by the related lessees and their
respective invitees. State laws differ as to whether anyone suffering
injury to person or property involving leased agricultural, construction or
other equipment may bring an action upon which relief may be granted
against the owner of the equipment by virtue of that ownership. To the
extent applicable law permits such an action and such an action is
successful, the related Trust and its assets may be subject to liability to
such an injured party. If vicarious liability were imposed on a Trust as
owner of Leased Equipment, and the coverage provided by any available
insurance is insufficient to cover such a loss, you could incur a loss on
your investment.
Lessees are required to obtain and maintain physical damage insurance
and liability insurance. Dealers are responsible for verifying physical
damage insurance and liability insurance with respect to the Leased
Equipment at the time the Lease is originated. If a Dealer fails to verify
insurance coverage and the lessee did not obtain insurance coverage at the
time the Lease was originated, the Dealer will be required to repurchase
such Lease. If any such insurance has lapsed or has not been maintained in
full force and effect, the Dealers will not be obligated to repurchase such
Lease.
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. As to Leases, some jurisdictions
require that a lessee be notified of a default and given a time period
within which to cure the default prior to repossession of leased equipment.
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
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.
37
<PAGE>
Consumer Protection Laws
Numerous Federal and state consumer protection laws and related
regulations impose substantial requirements upon lenders, lessors 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 and
lessors 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. Under the
Sale and Servicing Agreement, the Seller makes similar warranties to the
Trustee. 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; provided however, that 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. If such claim existed at the
time Case Credit sold such Receivable to the Seller, such violation would
also constitute a breach of the warranties of Case Credit under the
Liquidity Receivables Purchase Agreement or Purchase Agreement and would
create an obligation of Case Credit to repurchase the Receivable unless the
breach is cured. See "Description of the Transfer and Servicing
Agreements--Sale and Assignment of Receivables."
38
<PAGE>
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.
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 upon the
assumption of compliance by all parties with the terms of the Trust
Agreement and related documents.
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 upon 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,
39
<PAGE>
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 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. In the case of an individual taxpayer, any capital
gain on the sale of a Note will be taxed at a maximum rate of 39.6% if the
Note is held for not more than 12 months, at 28% if the Note is held for
more than 12 months, but not more than 18 months, and at 20% if the Note is
held for more than 18 months.
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) satisfies the statement requirement set forth
in section 871(h) and section 881(c) of the Code and the regulations
thereunder. To satisfy this requirement, the foreign person, or a financial
institution holding the Note on behalf of such foreign person, must
provide, in accordance with specified procedures, a paying agent of the
Trust with a statement to the effect that the foreign person is not a
United States person. Currently these requirements will be met if (x) the
foreign person provides his name and address, and certifies, under
penalties of perjury, that he is not a United States person (which
certification may be made on an IRS Form W-8) or (y) a financial
institution holding the Note on behalf of the foreign person certifies,
under penalties of perjury, that such statement has been received by it and
furnishes a paying agent with a copy thereof. Under recently finalized
Treasury regulations (the "Final Regulations"), the statement requirement
may also be satisfied with other documentary evidence with respect to an
offshore account or through certain foreign intermediaries. The Final
Regulations will generally be effective for payments made after December
31, 1999.
If such interest is not "portfolio interest," then it will be subject
to a 30% withholding tax unless the foreign person provides the Trust or
its paying agent, as the case may be, with a properly executed (i) IRS Form
1001 (or successor form) claiming an exemption from withholding tax or a
reduction in withholding tax under the benefit of a tax treaty or (ii) IRS
Form 4224 (or successor form) stating that interest paid on the Note is not
subject to withholding tax because it is effectively connected with the
foreign person's conduct of a trade or business in the United States. Under
the Final Regulations, a foreign person will generally be required to
provide IRS Form W-8 in lieu of IRS Form 1001 and IRS Form 4224, although
alternative documentation may be applicable in certain situations.
If a foreign person is engaged in a trade or business and interest on
the Note is effectively connected with the conduct of such trade or
business in the United States, the foreign person, although exempt from the
withholding tax discussed above, will be subject to United States federal
income tax on such interest on a net income basis in the same manner as if
it were a United States person. In addition, if such foreign person is a
foreign corporation, it may be subject to a branch profits tax equal to 30%
(or lower treaty rate) of its effectively connected earnings and profits
for the taxable year, subject to adjustments.
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
40
<PAGE>
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. The
Final Regulations make certain modifications to the backup withholding and
information reporting rules. Prospective investors are urged to consult
their own tax advisors regarding the Final Regulations.
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. In such a
case, the Trust would 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 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
The following discussion only applies to the extent Certificates are
offered in a related prospectus supplement. Until that time, because the
Certificates will be held solely by the Seller or one of its affiliates,
under current Treasury regulations, the Trust will be disregarded as an
entity separate from its owner (i.e., the Seller or one of its affiliates)
for federal income tax purposes.
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. 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 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
41
<PAGE>
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 upon 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. Under current Treasury regulations, if such a
termination occurs, the Trust will be considered to have contributed the
assets of the Trust (the "Old Partnership") to a new partnership (the "New
Partnership") in exchange for interests in the New Partnership. Such
interest would be deemed distributed to the partners of the Old Partnership
in liquidation thereof. 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 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.
42
<PAGE>
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 Seller 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 upon 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 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
43
<PAGE>
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. The Final
Regulations make certain modifications to the backup withholding and
information reporting rules. Prospective investors are urged to consult
their own tax advisors regarding the Final Regulations. 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. The discussion regarding
Certificates only applies to the extent the Certificates are not held
solely by the Seller or one of its affiliates. 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.
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, would not be
taxable as a corporation because it would meet certain qualifying income
tests), the Trust would not be taxable as a corporation 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 would 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 taxable as a corporation for Federal tax purposes:
(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.
44
<PAGE>
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 which is
treated as indebtedness under applicable local law and which 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 which
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.
45
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
The Seller, as originator of each Trust filed a registration statement
relating to the Securities with the Securities and Exchange Commission (the
"SEC"). This prospectus is part of the registration statement, but the
registration statement includes additional information.
The Seller will file with the SEC all required annual, monthly and
special SEC reports and other information about any Trust it originates.
You may read and copy any reports, statements or other information we
file at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can request copies of these documents, upon
payment of a duplicating fee, by writing to the SEC. Please call the SEC at
(800) SEC-0330 for further information on the operation of the public
reference rooms. Our SEC filings are also available to the public on the
SEC Internet site (http://www.sec.gov.).
The SEC allows us to "incorporate by reference" information that the
Seller files with it, which means that the Seller can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus.
Information that the Seller files later with the SEC will automatically
update the information in this prospectus. In all cases, you should rely on
the later information over different information included in this
prospectus or the accompanying prospectus supplement. The Seller
incorporates by reference any future annual, monthly and special SEC
reports and proxy materials filed by or on behalf of any Trust until we
terminate offering the Securities.
The Seller's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (File No. 33-99298) was filed with the SEC pursuant to
the Exchange Act and is incorporated into this prospectus by reference and
made a part hereof. Since that time, the Seller has not been, and is not
currently, required to file reports pursuant to Section 13(a) or 15(d) of
the Exchange Act, except for the filing of Current Reports on Form 8-K in
connection with the trusts it originates. The Seller's Current Reports on
Form 8-K dated March 7, 1996, May 10, 1996, September 19, 1996, January 13,
1997, March 18, 1997, June 11, 1997, September 10, 1997, September 22, 1997,
December 5, 1997 and February 9, 1998 are incorporated into this prospectus by
reference and made a part hereof.
As a recipient of this prospectus, you may request a copy of any
document the Seller incorporates by reference, except exhibits to the
documents (unless the exhibits are specifically incorporated by reference),
at no cost, by writing or calling: Case Receivables II Inc., 233 Lake
Avenue, Racine, Wisconsin 53403, Attention: Vice President (Telephone
414-636-6564). You may access the Servicer's Internet site at
(http://www.casecorp.com).
46
<PAGE>
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.
Page
10 percent shareholder......................................................39
accounts....................................................................32
Actuarial Receivables.......................................................10
Administration Agreement....................................................32
Administration Fee..........................................................32
Administrator...............................................................32
Applicable Trustee..........................................................23
APR.........................................................................10
Article 2A..................................................................36
automatic stay...............................................................7
banking organization........................................................21
Base Rate...................................................................19
Benefit Plan................................................................44
Calculation Agent...........................................................20
capital assets..............................................................37
Case.....................................................................5, 15
Case Credit..............................................................5, 14
Case Dealers................................................................11
Cedel.......................................................................22
Cedel Participants..........................................................22
Certificate Balance..........................................................4
Certificate Distribution Account............................................27
Certificate Pool Factor.....................................................13
Certificateholders.......................................................4, 21
Certificates.................................................................4
chattel paper...............................................................33
Clean-Up Call...............................................................25
clearing corporation........................................................21
Closing Date.................................................................5
Code........................................................................37
Collection Account..........................................................27
Collection Period...........................................................28
Commodity Indexed Securities................................................20
consumer leases.............................................................36
Contracts.................................................................1, 5
Cooperative.................................................................22
Credit Enhancement...........................................................5
Currency Indexed Securities.................................................20
Cutoff Date..................................................................9
Dealer Agreements............................................................9
Dealer Loans..............................................................1, 5
Dealers......................................................................5
Definitive Certificates.....................................................23
Definitive Notes............................................................23
Definitive Securities........................................................3
Depositaries..................................................................1
disqualified persons..........................................................4
DTC...........................................................................4
DTC Participants..............................................................1
Eligible Deposit Account......................................................8
Eligible Institution..........................................................8
Eligible Investments..........................................................7
ERISA.........................................................................6
ERISA Considerations.......................................................5, 6
Euroclear....................................................................22
Euroclear Operator...........................................................22
Euroclear Participants.......................................................22
Events of Default............................................................16
Exchange Act.................................................................15
47
<PAGE>
Page
Face Amount..................................................................20
Federal Tax Counsel..........................................................37
Final Regulations............................................................39
finance lease................................................................34
Finance Lease Equipment.......................................................9
Financed Equipment............................................................9
Fixed Rate Securities........................................................19
Floating Rate Securities.....................................................19
foreign person...............................................................39
Full Payout Leases...........................................................11
Funding Period................................................................5
guaranteed payments..........................................................40
Indenture....................................................................15
Indenture Trustee............................................................15
Index........................................................................20
Indexed Commodity............................................................20
Indexed Currency.............................................................20
Indexed Principal Amount.....................................................20
Indexed Securities...........................................................20
Indirect Participants........................................................21
Initial Receivables...........................................................5
Insolvency Event.............................................................31
Insolvency Laws..........................................................14, 32
Interest Rate.................................................................4
Interest Reset Period........................................................19
Investment Earnings..........................................................27
IRS..........................................................................37
Leased Equipment..............................................................9
Leases........................................................................1
LIBOR........................................................................20
Liquidity Receivables Purchase Agreement.....................................26
loan.........................................................................35
Loan and Security Agreement..................................................26
Low Payment Leases...........................................................11
merchant lessee..............................................................36
New Partnership..............................................................41
Note Distribution Account....................................................27
Note Pool Factor.............................................................13
Noteholders...............................................................4, 21
Notes......................................................................1, 4
Obligors......................................................................9
OID..........................................................................38
OID Regulations..............................................................38
Old Partnership..............................................................41
Participants.................................................................15
parties in interest..........................................................44
Pass-Through Rate.............................................................4
Plan Assets Regulation.......................................................44
Pool Balance.................................................................13
portfolio interest...........................................................39
Pre-Funded Amount.............................................................5
Pre-Funding Account...........................................................5
Precomputed Receivables......................................................10
Precomputed Simple Rebate Receivables........................................11
prepayments..................................................................13
prohibited transaction.......................................................44
Purchase Agreement...........................................................25
Purchase Amount..............................................................25
rebate.......................................................................10
Receivables................................................................1, 9
refund.......................................................................10
Related Documents............................................................18
related person...............................................................39
Reorganization...............................................................10
48
<PAGE>
Page
reserve account..............................................................12
Retail Installment Contracts..................................................1
Rule of 78's Receivables.....................................................10
Sale and Servicing Agreement.................................................24
Schedule of Receivables......................................................25
SEC..........................................................................45
Securities.................................................................1, 4
Securities Act...............................................................15
Securityholders...........................................................4, 21
Seller....................................................................5, 14
Seller Collateral............................................................26
Seller Loan..................................................................26
Servicer.....................................................................14
Servicer Default.............................................................30
Servicing Fee................................................................28
Servicing Fee Rate...........................................................28
Short-Term Note..............................................................38
Simple Interest Receivables..................................................10
skip payment.................................................................12
skipped......................................................................12
Specified Party..............................................................30
Spread........................................................................9
Spread Account................................................................9
Spread Multiplier.............................................................0
Standard Precomputed Receivables.............................................11
Stock Index..................................................................20
Stock Indexed Securities.....................................................20
Strip Certificates............................................................4
Strip Notes...................................................................4
Subsequent Receivables........................................................5
Subsequent Transfer Date.....................................................25
sum of monthly payments......................................................10
sum of periodic balances.....................................................10
Terms and Conditions.........................................................22
The Trust....................................................................18
Transfer and Servicing Agreements............................................24
true lease............................................................7, 33, 34
true leases...................................................................9
true sales....................................................................7
Trust.........................................................................4
Trust Accounts...............................................................27
Trust Agreement...............................................................9
Trustee.......................................................................9
UCC..........................................................................25
Underwriting Agreements......................................................44
unearned.....................................................................10
unrelated debt-financed income...............................................41
Unsecured Dealer Loans.....................................................1, 5
Wisconsin Tax Counsel........................................................43
49
<PAGE>
Case Equipment Receivables Trusts
Asset Backed Notes
Asset Backed Certificates
Case Receivables II Inc.
Seller
Case Credit Corporation
Servicer
$________ Class A Notes
$___ A-1 Notes
$___ A-2 Notes
$___ A-3 Notes
$_______ Class B [Notes/Certificates]
----------------------------
PROSPECTUS SUPPLEMENT
----------------------------
Underwriters
[ ]
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We
have not authorized anyone to provide you with different information.
We are not offering the Class A Notes or the Class B [Notes/Certificates]
in any state where the offer is not permitted.
We do not claim the accuracy of the information in this prospectus
supplement and the accompanying prospectus as of any date other than the
dates stated on their respective covers.
Dealers will deliver a prospectus supplement and prospectus when acting as
underwriters of the Class A Notes or the Class B [Notes/Certificates] and
with respect to their unsold allotments or subscriptions. In addition, all
dealers selling the Class A Notes or the Class B [Notes/Certificates] will
deliver a prospectus supplement and prospectus until __________.
50
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses in connection with the offering of the Securities
being registered herein are as follows:
SEC filing fee............................................ $ 733,162.52
Legal fees and expenses................................... 175,000.00
Accounting fees and expenses.............................. 210,000.00
Rating agency fees........................................ 420,000.00
Trustee fees and expenses................................. 14,000.00
Indenture Trustee fees and expenses....................... 7,000.00
Blue Sky expenses......................................... 28,000.00
Printing and engraving.................................... 210,000.00
Miscellaneous............................................. 2,837.48
--------
Total................................................ $ 1,800,000.00
============
Item 15. Indemnification of Directors and Officers.
The By-Laws of Case Corporation (the "Company") include the following
provisions:
Section 15.1. Right to Indemnification. The Company shall indemnify
and hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was or is made
or is threatened to be made a party or is otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative or
investigative (a "proceeding"), by reason of the fact that he, or a person
for whom he is the legal representative, is or was a director or officer of
the Company or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust, enterprise or nonprofit entity,
including service with respect to employee benefit plans (an "indemnitee"),
against all liability and loss suffered and expenses (including attorneys'
fees) reasonably incurred by such indemnitee. Subject to Section 14.3
hereof, the Company shall be required to indemnify an indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee
only if the initiation of such proceeding (or part thereof) by the
indemnitee was authorized by the Board of Directors of the Company.
Section 15.2. Prepayment of Expenses. The Company shall pay the
expenses (including attorneys' fees) incurred by an indemnitee in defending
any proceeding in advance of its final disposition, provided, however, that
the payment of expenses incurred by a director or officer in advance of the
final disposition of the proceeding shall be made only upon receipt of an
undertaking by the director or officer to repay all amounts advanced if it
should be ultimately determined that the director or officer is not
entitled to be indemnified under this Section 15 or otherwise.
Section 15.3. Claims. If a claim for indemnification or payment of
expenses under this Section 14 is not paid in full within ninety days after
a written claim therefor by the indemnitee has been received by the
Company, the indemnitee may file suit to recover the unpaid amount of such
claim and, if successful in whole or in part, shall be entitled to be paid
the expense of prosecuting such claim. In any such action the Company shall
have the burden of proving that the indemnitee was not entitled to the
requested indemnification or payment of expenses under applicable law.
Section 15.4. Nonexclusivity of Rights. The rights conferred on any
person by this Section 14 shall not be exclusive of any other rights which
such person may have or hereafter acquire under any statute, provision of
the certificate of incorporation, these By-Laws, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 15.5. Other Indemnification. The Company's obligation, if any,
to indemnify or advance expenses to any person who was or is serving at its
request as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, enterprise or nonprofit entity shall be
reduced by any amount such person may collect as indemnification from such
other corporation, partnership, joint venture, trust, enterprise or
nonprofit entity.
Section 15.6. Amendment or Repeal. Any repeal or modification of the
foregoing provisions of Section 14 shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
The Company has purchased insurance that purports to insure it against
certain costs of indemnification that may be incurred by it pursuant to the
foregoing By-Law provisions, and to insure the officers and directors of
the
II-1
<PAGE>
Company, and of its subsidiary companies, against certain liabilities
incurred by them in the discharge of their function as such officers and
directors except for liabilities resulting from their own malfeasance.
Item 16. Exhibits.
1(a)* --Form of Underwriting Agreement for Notes
1(b)* --Form of Underwriting Agreement for Certificates
3(a)* --Certificate of Incorporation of Case Receivables II Inc.
3(b)* --By-Laws of Case Receivables II Inc.
3(c) --Form of Certificate of Trust of Case Equipment Loan Trusts
(included as part of Exhibit 4(b))
4(a) --Form of Indenture between the Trust and the Indenture Trustee
4(b) --Form of Trust Agreement between Case Receivables II Inc. and
the Trustee
4(c) --Form of Class A-1 Note (included as part of Exhibit 4(a))
4(d) --Form of Class A-2 Note (included as part of Exhibit 4(a))
4(e) --Form of Class A-3 Note (included as part of Exhibit 4(a))
4(f) --Form of Class B Note (included as part of Exhibit 4(a))
4(g) --Form of Certificate (included as part of Exhibit 4(b))
5 --Opinion of Richard S. Brennan with respect to legality
8(a) --Opinion of Mayer, Brown & Platt with respect to Federal
income tax matters
8(b) --Opinion of Foley & Lardner with respect to Wisconsin tax
matters 10* --Receivables Purchase Agreement dated as of
August 1, 1994, between Case Credit Corporation and Case
Receivables II Inc.
23(a) --Consent of Richard S. Brennan (included as part of Exhibit 5)
23(b) --Consent of Mayer, Brown & Platt (included as part of Exhibit
8(a))
23(c) --Consent of Foley & Lardner (included as part of Exhibit 8(b))
99(a) --Form of Sale and Servicing Agreement between Case
Receivables II Inc., the Trust and Case Credit Corporation
99(b) --Form of Administration Agreement between the Trust, Case
Credit Corporation and the Indenture Trustee
99(c) --Form of Purchase Agreement between Case Credit Corporation
and Case Receivables II Inc.
- --------------------
* Incorporated by reference to Registrants' Registration Statement
No. 33-84922.
Item 17. Undertakings
(a) As to Rule 415: The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective
amendment to this registration statement;
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this registration
statement (or the most recent post-effective amendment
hereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar volume of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) to include any material information with respect
to the plan of distribution not previously disclosed in this
registration statement or any material change to such
information in this registration statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as
amended, that are incorporated by reference in this registration statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) As to documents subsequently filed that are incorporated by
reference: The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, as amended,
each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934, as amended, that is
incorporated by reference in this registration statement shall be deemed to
be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) As to indemnification: Insofar as indemnification for
liabilities arising under the Securities Act of 1933, as amended, may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described in Item 15 herein, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
(d) As to information omitted in reliance on Rule 430A: The
undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, as amended, the information omitted from the
form of prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus filed
by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act of 1933, as amended, shall be deemed to be part
of this registration statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, as amended, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Racine, Wisconsin, on the date of
May 6, 1998.
CASE RECEIVABLES II INC.
By: /s/ KENNETH R. GANGL
--------------------------
Kenneth R. Gangl
President
By: /s/ THEODORE R. FRENCH
------------------------
Theodore R. French
Senior Vice President
KNOW ALL MEN BY THESE PRESENTS that each person whose signature
appears below constitutes and appoints Kenneth R. Gangl and Theodore R.
French, and either of them, such person's true and lawful attorneys-in-fact
and agents, with full power of substitution and revocation, for such person
and in such person's name, place and stead, in any and all capacities to
sign any and all amendments (including post-effective amendments to this
Registration Statement) and to file the same with all exhibits thereto, and
the other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act
and things requisite and necessary to be done, as fully to all intents and
purposes as such person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title
Date
/s/ KENNETH R. GANGL Principal Executive Officer May 6, 1998
- ----------------------------------
Kenneth R. Gangl
/s/ THEODORE R. FRENCH Principal Financial Officer May 6, 1998
- ----------------------------------- and Director
Theodore R. French
/s/ ROBERT A. WEGNER Principal Accounting Office May 6, 1998
- -----------------------------------
Robert A. Wegner
/s/ MICHAEL FREDRICH Director May 6, 1998
- ------------------------------------
Michael Fredrich
/s/ THOMAS RETTLER Director May 6, 1998
- ------------------------------------
Thomas Rettler
/s/ JEAN-PIERRE ROSSO Director May 6, 1998
- ------------------------------------
Jean-Pierre Rosso
II-4
<PAGE>
EXHIBITS
3(c) --Form of Certificate of Trust of Case Equipment Loan Trusts
(included as part of Exhibit 4(b))
4(a) --Form of Indenture between the Trust and the Indenture Trustee
4(b) --Form of Trust Agreement between Case Receivables II Inc. and
the Trustee
4(c) --Form of Class A-1 Note (included as part of Exhibit 4(a))
4(d) --Form of Class A-2 Note (included as part of Exhibit 4(a))
4(e) --Form of Class A-3 Note (included as part of Exhibit 4(a))
4(f) --Form of Class B Note (included as part of Exhibit 4(a))
4(g) --Form of Certificate (included as part of Exhibit 4(b))
5 --Opinion of Richard S. Brennan with respect to legality
8(a) --Opinion of Mayer, Brown & Platt with respect to Federal
income tax matters
8(b) --Opinion of Foley & Lardner with respect to Wisconsin tax
matters
23(a) --Consent of Richard S. Brennan (included as
part of Exhibit 5)
23(b) --Consent of Mayer, Brown & Platt (included as part of
Exhibit 8(a))
23(c) --Consent of Foley & Lardner (included
as part of Exhibit 8(b))
99(a) --Form of Sale and Servicing
Agreement between Case Receivables II Inc.,
the Trust and Case Credit Corporation
99(b) --Form of Administration Agreement between the Trust, Case
Credit Corporation and the Indenture Trustee
99(c) --Form of Purchase Agreement between Case Credit Corporation
and Case Receivables II Inc.
===============================================================================
CASE EQUIPMENT LOAN TRUST 199_-_
INDENTURE
between
CASE EQUIPMENT LOAN TRUST 199_-_
and
[HARRIS TRUST AND SAVINGS BANK],
as Indenture Trustee.
Dated as of _______ __, 199__
=============================================================================
<PAGE>
Table of Contents
Page
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions.....................................................2
SECTION 1.2. Incorporation by Reference of Trust Indenture Act...............3
SECTION 1.3. Rules of Construction...........................................3
ARTICLE II
The Notes
SECTION 2.1. Form............................................................3
SECTION 2.2. Execution, Authentication and Delivery..........................4
SECTION 2.3. Temporary Notes.................................................4
SECTION 2.4. Registration; Registration of Transfer and Exchange.............5
SECTION 2.5. Mutilated, Destroyed, Lost or Stolen Notes......................6
SECTION 2.6. Persons Deemed Owner............................................7
SECTION 2.7. Payment of Principal and Interest; Defaulted Interest...........7
SECTION 2.8. Cancellation....................................................9
SECTION 2.9. Release of Collateral...........................................9
SECTION 2.10. Book-Entry Notes................................................9
SECTION 2.11. Notices to Clearing Agency....................................10
SECTION 2.12. Definitive Notes..............................................10
<PAGE>
ARTICLE III
Covenants
SECTION 3.1. Payment of Principal and Interest..............................11
SECTION 3.2. Maintenance of Office or Agency................................11
SECTION 3.3. Money for Payments To Be Held in Trust.........................11
SECTION 3.4. Existence......................................................13
SECTION 3.5. Protection of the Trust Estate.................................13
SECTION 3.6. Opinions as to the Trust Estate................................14
SECTION 3.7. Performance of Obligations; Servicing of Receivables...........14
SECTION 3.8. Negative Covenants.............................................17
SECTION 3.9. Annual Statement as to Compliance..............................17
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Term............18
SECTION 3.11. Successor or Transferee.......................................19
SECTION 3.12. No Other Business.............................................20
SECTION 3.13. No Borrowing..................................................20
SECTION 3.14. Servicer's Obligations........................................20
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.............20
SECTION 3.16. Capital Expenditures..........................................20
SECTION 3.17. Removal of Administrator......................................20
SECTION 3.18. Restricted Payments...........................................21
SECTION 3.19. Notice of Events of Default...................................21
SECTION 3.20. Further Instruments and Acts..................................21
ii
<PAGE>
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture........................21
SECTION 4.2. Application of Trust Money.....................................23
SECTION 4.3. Repayment of Moneys Held by Paying Agent.......................23
ARTICLE V
Remedies
SECTION 5.1. Events of Default..............................................23
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.............24
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.........................................25
SECTION 5.4. Remedies; Priorities...........................................28
SECTION 5.5. Optional Preservation of the Receivables.......................29
SECTION 5.6. Limitation of Suits............................................30
SECTION 5.7. Unconditional Rights of Noteholders To Receive Principal
and Interest................................................30
SECTION 5.8. Restoration of Rights and Remedies.............................31
SECTION 5.9. Rights and Remedies Cumulative.................................31
SECTION 5.10. Delay or Omission Not a Waiver................................31
SECTION 5.11. Control by Noteholders........................................31
SECTION 5.12. Waiver of Past Defaults.......................................32
SECTION 5.13. Undertaking for Costs.........................................32
SECTION 5.14. Waiver of Stay or Extension Laws..............................33
SECTION 5.15. Action on Notes...............................................33
SECTION 5.16. Performance and Enforcement of Certain Obligations............33
iii
<PAGE>
ARTICLE VI
The Indenture Trustee
SECTION 6.1. Duties of the Indenture Trustee................................34
SECTION 6.2. Rights of Indenture Trustee....................................36
SECTION 6.3. Individual Rights of the Indenture Trustee.....................37
SECTION 6.4. Indenture Trustee's Disclaimer.................................37
SECTION 6.5. Notice of Defaults.............................................37
SECTION 6.6. Reports by Indenture Trustee to the Holders....................37
SECTION 6.7. Compensation and Indemnity.....................................38
SECTION 6.8. Replacement of the Indenture Trustee...........................38
SECTION 6.9. Successor Indenture Trustee by Merger..........................39
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.................40
SECTION 6.11. Eligibility; Disqualification.................................41
SECTION 6.12. Preferential Collection of Claims Against the Issuer..........43
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders
.................................................43
SECTION 7.2. Preservation of Information; Communications to Noteholders.....43
SECTION 7.3. Reports by Issuer..............................................43
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1. Collection of Money............................................44
SECTION 8.2. Trust Accounts.................................................44
18333305.3 42998 1411C 95202263
iv
<PAGE>
SECTION 8.3. General Provisions Regarding Accounts..........................46
SECTION 8.4. Release of Trust Estate........................................46
SECTION 8.5. Opinion of Counsel.............................................47
ARTICLE IX
Supplemental Indentures
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.........47
SECTION 9.2. Supplemental Indentures With Consent of Noteholders............49
SECTION 9.3. Execution of Supplemental Indentures...........................50
SECTION 9.4. Effect of Supplemental Indenture...............................51
SECTION 9.5. Conformity with Trust Indenture Act............................51
SECTION 9.6. Reference in Notes to Supplemental Indentures..................51
ARTICLE X
Redemption of Notes
SECTION 10.1. Redemption....................................................51
SECTION 10.2. Form of Redemption Notice.....................................52
SECTION 10.3. Notes Payable on Redemption Date..............................53
ARTICLE XI
Miscellaneous
SECTION 11.1. Compliance Certificates and Opinions, etc.....................53
SECTION 11.2. Form of Documents Delivered to Indenture Trustee..............55
SECTION 11.3. Acts of Noteholders...........................................56
SECTION 11.4. Notices, etc., to the Indenture Trustee, Issuer and Rating
Agencies.....................................................57
SECTION 11.5. Notices to Noteholders; Waiver................................57
v
<PAGE>
SECTION 11.6. Alternate Payment and Notice Provisions.......................58
SECTION 11.7. Conflict with Trust Indenture Act.............................58
SECTION 11.8. Effect of Headings and Table of Contents......................59
SECTION 11.9. Successors and Assigns........................................59
SECTION 11.10. Severability.................................................59
SECTION 11.11. Benefits of Indenture........................................59
SECTION 11.12. Legal Holidays...............................................59
SECTION 11.13. Governing Law................................................59
SECTION 11.14. Counterparts.................................................59
SECTION 11.15. Recording of Indenture.......................................59
SECTION 11.16. Trust Obligation.............................................60
SECTION 11.17. No Petition..................................................60
SECTION 11.18. Inspection...................................................61
EXHIBITS
EXHIBIT A-1 Form of A-1 Notes
EXHIBIT A-2 Form of A-2 Notes
EXHIBIT A-3 Form of A-3 Notes
EXHIBIT A-4 Form of A-4 Notes
EXHIBIT A-5 Form of Class B Notes
EXHIBIT B Form of Section 3.9 Officers' Certificate
vi
<PAGE>
INDENTURE, dated as of _______ __, 199__, between CASE EQUIPMENT
LOAN TRUST 199_-_, a Delaware business trust (the "Issuer"), and [HARRIS
TRUST AND SAVINGS BANK], an Illinois banking corporation ("Harris"), as
trustee and not in its individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party,
for the equal and ratable benefit of the Holders of the Issuer's _____%
Class A-1 Asset Backed Notes (each an "A-1 Note"), _____% Class A-2 Asset
Backed Notes (each an "A-2 Note"), _____% Class A-3 Asset Backed Notes
(each an "A-3 Note"), _____% Class A-4 Asset Backed Notes (each an "A-4
Note") and _____% Class B Notes (each a "Class B Note"; and together with
the A-1 Notes, the A-2 Notes, the A-3 Notes, and the A-4 Notes, the
"Notes").
GRANTING CLAUSE
The Issuer hereby Grants to Harris at the Closing Date, as
Indenture Trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in, to and under the following, whether
now existing or hereafter arising or acquired (collectively, the
"Collateral"):
(a) the Receivables, including all documents constituting
chattel paper included therewith, and all obligations of the
Obligors thereunder, including all moneys paid thereunder on or
after the Initial Cutoff Date or the applicable Subsequent Cutoff
Date;
(b) the security interests in the Financed Equipment
granted by Obligors pursuant to the Receivables and any other
interest of the Issuer in the Financed Equipment;
(c) any proceeds with respect to the Receivables from
claims on insurance policies covering Financed Equipment or
Obligors;
(d) the Liquidity Receivables Purchase Agreement (only
with respect to Contracts included in the Receivables) and the
Purchase Agreement, including the right of the Issuer to cause
Credit to repurchase Receivables from the Seller under the
circumstances described therein;
(e) any proceeds from recourse to Dealers with respect to
the Receivables other than any interest in the Dealers' reserve
accounts maintained with Credit;
(f) any Financed Equipment that shall have secured a
Receivable and that shall have been acquired by or on behalf of
the Trust;
1
<PAGE>
(g) all funds on deposit from time to time in the Trust
Accounts, including the Spread Account Initial Deposit, the
Negative Carry Account Initial Deposit and the Pre-Funded Amount,
and in all investments and proceeds thereof (including all income
thereon);
(h) the Sale and Servicing Agreement (including all
rights of the Seller under the Liquidity Receivables Purchase
Agreement and the Purchase Agreement assigned to the Issuer
pursuant to the Sale and Servicing Agreement); and
(i) all present and future claims, demands, causes and
choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including
all proceeds of the conversion, voluntary or involuntary, into
cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards,
rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property that
at any time constitute all or part of or are included in the
proceeds of any and all of the foregoing.
The foregoing Grant is made in trust to secure (x) first, the
payment of principal of and interest on, and any other amounts owing in
respect of, the Class A Notes, equally and ratably without prejudice,
priority or distinction, and (y) second, the payment of principal of and
interest on, and any other amounts owing in respect of, the Class B Notes,
equally and ratably without prejudice, priority or distinction, and to
secure compliance with this Indenture.
(1) Harris, as Indenture Trustee on behalf of the Noteholders,
acknowledges such Grant, and (2) as Indenture Trustee on behalf of the
Noteholders accepts the trusts under this Indenture in accordance with this
Indenture and agrees to perform its duties required in this Indenture to
the best of its ability to the end that the interests of the Noteholders
may be adequately and effectively protected.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions. Capitalized terms used but not otherwise
defined herein are defined in Appendix A hereto.
2
<PAGE>
SECTION 1.2. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The
following terms, where used in the TIA, shall have the following meanings
for the purposes hereof:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission
rule have the meaning assigned to them by such definitions.
SECTION 1.3. Rules of Construction. Unless the context otherwise
requires: (i) a term has the meaning assigned to it; (ii) an accounting
term not otherwise defined has the meaning assigned to it in accordance
with generally accepted accounting principles as in effect on the date
hereof; (iii) "or" is not exclusive; (iv) "including" means "including,
without limitation"; and (v) words in the singular include the plural and
words in the plural include the singular.
ARTICLE II
The Notes
SECTION 2.1. Form. The A-1 Notes, A-2 Notes, A-3 Notes, A-4 Notes
and Class B Notes, together with the Indenture Trustee's certificate of
authentication, shall be in substantially the forms set forth in Exhibits
A-1, A-2, A-3, A-4 and A-5 respectively, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted
by this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon, as may,
consistently herewith, be determined by the officers executing such Notes,
as evidenced by their execution
3
<PAGE>
of the Notes. Any portion of the text of any Note may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the
Note.
The Definitive Notes shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods (with or
without steel engraved borders), all as determined by the officers
executing such Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms
of the Notes set forth in Exhibits A-1, A-2, A-3, A-4 and A-5 are part of
the terms of this Indenture.
SECTION 2.2. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at the time of signature Authorized Officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of
such Notes or did not hold such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and
deliver A-1 Notes, A-2 Notes, A-3 Notes, A-4 Notes and Class B Notes for
original issue in an aggregate principal amount of $____________,
$____________, $____________, $____________ and $____________,
respectively. The Outstanding Amount of A-1 Notes, A-2 Notes, A-3 Notes,
A-4 Notes and Class B Notes at any time may not exceed such respective
amounts except as provided in Section 2.5.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000
and in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate of authentication shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
SECTION 2.3. Temporary Notes. Pending the preparation of Definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order, the
Indenture
4
<PAGE>
Trustee shall authenticate and deliver, temporary Notes that are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor
of the Definitive Notes in lieu of which they are issued and with such
variations not inconsistent with this Indenture as the officers executing
such Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the temporary Notes shall be exchangeable for Definitive
Notes upon surrender of the temporary Notes at the office or agency of the
Issuer to be maintained as provided in Section 3.2, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes,
the Issuer shall execute and the Indenture Trustee shall authenticate and
deliver in exchange therefor a like principal amount of Definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in
all respects be entitled to the same benefits under this Indenture as if
they were Definitive Notes.
SECTION 2.4. Registration; Registration of Transfer and Exchange.
The Issuer shall cause to be kept a register (the "Note Register") in
which, subject to such reasonable regulations as it may prescribe, the
Issuer shall provide for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee shall be the "Note Registrar" for
the purpose of registering Notes and transfers of Notes as herein provided.
Upon any resignation of any Note Registrar, the Issuer shall promptly
appoint a successor or, if it elects not to make such an appointment,
assume the duties of the Note Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as the Note Registrar, the Issuer will give the Indenture Trustee
prompt written notice of the appointment of such Note Registrar and of the
location, and any change in the location, of the Note Register, and the
Indenture Trustee shall have the right to inspect the Note Register at all
reasonable times, to obtain copies thereof and to rely upon a certificate
executed on behalf of the Note Registrar by an Executive Officer thereof as
to the names and addresses of the Holders of the Notes and the principal
amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.2,
if the requirements of Section 8-401(1) of the UCC are met, the Issuer
shall execute, the Indenture Trustee shall authenticate and the Noteholder
shall obtain from the Indenture Trustee, in the name of the designated
transferee or transferees, one or more new Notes in any authorized
denominations of a like aggregate principal amount.
5
<PAGE>
At the option of the Holder, Notes may be exchanged for other new
Notes of the same Class in any authorized denominations of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such
office or agency. Whenever any Notes are so surrendered for exchange, if
the requirements of Section 8-401(1) of the UCC are met, the Issuer shall
execute, the Indenture Trustee shall authenticate and the Noteholder shall
obtain from the Indenture Trustee, the Notes that the Noteholder making the
exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same
debt and entitled to the same benefits under this Indenture as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer
or exchange shall be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized
in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Exchange Act.
No service charge shall be made to a Holder for any registration
of transfer or exchange of Notes, but the Issuer may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Notes, other than exchanges pursuant to Section 2.3 or 9.6 not involving
any transfer.
SECTION 2.5. Mutilated, Destroyed, Lost or Stolen Notes. If: (i)
any mutilated Note is surrendered to the Indenture Trustee, or the
Indenture Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, and (ii) there is delivered to the Indenture
Trustee such security or indemnity as may be required by the Indenture
Trustee and the Issuer to hold the Indenture Trustee and the Issuer,
respectively, harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by
a bona fide purchaser, and provided that the requirements of Section 8-405
of the UCC are met, the Issuer shall execute, and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Note, a replacement
Note of the same Class; provided, however, that if any such destroyed, lost
or stolen Note, but not a mutilated Note, shall have become, or within
seven days shall be, due and payable, or shall have been called for
redemption, instead of issuing a
6
<PAGE>
replacement Note, the Issuer may pay such destroyed, lost or stolen Note
when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note (or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence), a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered (or payment made) or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss,
damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other reasonable expenses (including
the fees and expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall
constitute an original additional contractual obligation of the Issuer,
whether or not the mutilated, destroyed, lost or stolen Note shall be at
any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Notes
duly issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name any Note is registered (as of the day of determination) as the
owner of such Note for the purpose of receiving payments of principal of
and interest, if any, on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Issuer, the Indenture
Trustee nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.
SECTION 2.7. Payment of Principal and Interest; Defaulted
Interest. (a) The A-1 Notes, A-2 Notes, A-3 Notes, A-4 Notes and Class B
Notes shall accrue interest at the A-1 Note Rate, the A-2 Note Rate, the
A-3 Note Rate, the A-4 Note Rate and the Class B Note Rate, respectively,
and such interest shall be
7
<PAGE>
payable on each Payment Date, subject to Section 3.1. Any installment of
interest or principal, if any, payable on any Note that is punctually paid
or duly provided for by the Issuer on the applicable Payment Date shall be
paid to the Person in whose name such Note (or one or more Predecessor
Notes) is registered on the Record Date by check mailed first-class,
postage prepaid, to such Person's address as it appears on the Note
Register on such Record Date. However, unless Definitive Notes have been
issued, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payment will be made by wire transfer in immediately available funds
to the account designated by such nominee. Notwithstanding the above, the
final installment of principal payable with respect to such Note (and
except for the Redemption Price for any Note called for redemption pursuant
to Section 10.1(a)) shall be payable as provided in clause (b)(ii). The
funds represented by any such checks returned undelivered shall be held in
accordance with Section 3.3.
(b)(i) The principal of each Note shall be payable in installments
on each Payment Date as provided in this Indenture. Notwithstanding the
foregoing, the entire Outstanding Amount shall be due and payable, ratably
to all Noteholders, on: (A) the date on which an Event of Default shall
have occurred and be continuing if the Indenture Trustee or the Holders of
Notes representing not less than a majority of the Outstanding Amount of
the Notes have declared the Notes to be immediately due and payable in the
manner provided in Section 5.2, and (B) if any Notes remain Outstanding, on
and after the _________ ________ Payment Date. In all other circumstances,
all principal payments on each Class of Notes shall be made pro rata to the
Noteholders of such Class entitled thereto.
(ii) The Indenture Trustee shall notify the Person in
whose name a Note is registered at the close of business on the
Record Date preceding the Payment Date on which the Issuer expects
that the final installment of principal of and interest on such
Note will be paid. Such notice shall be mailed no later than five
days prior to such final Payment Date and shall specify that such
final installment will be payable only upon presentation and
surrender of such Note and shall specify the place where such Note
may be presented and surrendered for payment of such installment.
Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes,
the Issuer shall pay, in any lawful manner, defaulted interest (plus
interest on such defaulted interest to the extent lawful) at the applicable
interest rate from the Payment Date for which such payment is in default.
The Issuer may pay such defaulted interest to the Persons who are
Noteholders on a subsequent special record date, which date shall be at
least five Business Days prior to the special payment date. The
8
<PAGE>
Issuer shall fix or cause to be fixed any such special record date and
special payment date, and, at least 15 days before any such special record
date, shall mail to each Noteholder a notice that states the special record
date, the special payment date and the amount of defaulted interest to be
paid.
SECTION 2.8. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to
any Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly canceled by the Indenture Trustee. The Issuer
may at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder that the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Indenture Trustee. No Notes shall be authenticated
in lieu of or in exchange for any Notes canceled as provided in this
Section except as expressly permitted by this Indenture. All canceled Notes
may be held or disposed of by the Indenture Trustee in accordance with its
standard retention or disposal policy as in effect at the time unless the
Issuer shall direct by an Issuer Order that they be returned to it;
provided, that such Issuer Order is timely and the Notes have not been
previously disposed of by the Indenture Trustee.
SECTION 2.9. Release of Collateral. Subject to Section 11.1 and
the Basic Documents, the Indenture Trustee shall release property from the
Lien of this Indenture only upon receipt of an Issuer Request accompanied
by an Officers' Certificate, an Opinion of Counsel and Independent
Certificates in accordance with TIA ss.ss.314(c) and 314(d)(l), or an
Opinion of Counsel in lieu of such Independent Certificates to the effect
that the TIA does not require any such Independent Certificates.
SECTION 2.10. Book-Entry Notes. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company (the initial
Clearing Agency), or its custodian, by, or on behalf of, the Issuer. Such
Notes shall initially be registered on the Note Register in the name of
Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner
of such Note will receive a Definitive Note representing such Note Owner's
interest in such Note, except as provided in Section 2.12. Unless and until
definitive, fully registered Notes (the "Definitive Notes") representing
Notes have been issued to Note Owners:
(i) this Section shall be in full force and effect;
(ii) the Note Registrar and the Indenture Trustee may
deal with the Clearing Agency for all purposes (including the
payment of principal of
9
<PAGE>
and interest on the Notes) as the authorized representative of the
Not Owners;
(iii) to the extent that this Section conflicts with any
other provisions of this Indenture, this Section shall control;
(iv) the rights of Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Note Owners and the
Clearing Agency and/or the Clearing Agency Participants pursuant
to the Note Depository Agreement. Unless and until Definitive
Notes are issued, the Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to
such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions
to be taken based upon instructions or directions of Holders of
Notes evidencing a specified percentage of the Outstanding Amount
of the Notes (or a Class of Notes), the Clearing Agency shall be
deemed to represent such percentage only to the extent that it has
received instructions to such effect from Note Owners and/or
Clearing Agency Participants owning or representing, respectively,
such required percentage of the beneficial interest in the Notes
(or Class of Notes) and has delivered such instructions to the
Indenture Trustee.
SECTION 2.11. Notices to Clearing Agency. Whenever a notice or
other communication to the Noteholders is required under this Indenture,
unless and until Definitive Notes have been issued to Note Owners, the
Indenture Trustee shall give all such notices and communications to the
Clearing Agency.
SECTION 2.12. Definitive Notes. If: (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to
the Notes, and the Administrator is unable to locate a qualified successor,
(ii) the Administrator at its option advises the Indenture Trustee in
writing that it elects to terminate the book-entry system through the
Clearing Agency or (iii) after the occurrence of an Event of Default
or a Servicer Default, Note Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of the Notes
advise the Clearing Agency in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best
interests of the Note Owners, then the Clearing Agency has undertaken to
notify all Note Owners and the Indenture Trustee of the occurrence of any
such event and of the availability of Definitive Notes to Note Owners
requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by
10
<PAGE>
the Clearing Agency, accompanied by registration instructions, the Issuer
shall execute, and the Indenture Trustee shall authenticate, the Definitive
Notes in accordance with the instructions of the Clearing Agency. None of
the Issuer, the Note Registrar or the Indenture Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on,
and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Notes, the Indenture Trustee shall recognize the Holders of
the Definitive Notes as Noteholders.
ARTICLE III
Covenants
SECTION 3.1. Payment of Principal and Interest. The Issuer will
duly and punctually pay the principal and interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting
the foregoing, subject to Section 8.2(c), the Issuer will cause to be
distributed all amounts on deposit in the Note Distribution Account on a
Payment Date deposited therein for the benefit of the Notes pursuant to the
Sale and Servicing Agreement to Holders of the Notes. Amounts properly
withheld under the Code or any applicable State law by any Person from a
payment to any Noteholder of interest and/or principal shall be considered
as having been paid by the Issuer to such Noteholder for all purposes of
this Indenture.
SECTION 3.2. Maintenance of Office or Agency. The Issuer will
maintain in the Borough of Manhattan, The City of New York, an office or
agency where Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. The Issuer hereby initially
appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Indenture
Trustee of the location, and of any change in the location, of any such
office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the
address thereof, such surrenders, notices and demands may be made or served
at the Corporate Trust Office, and the Issuer hereby appoints the Indenture
Trustee as its agent to receive all such surrenders, notices and demands.
SECTION 3.3. Money for Payments To Be Held in Trust. As provided
in Section 8.2(a) and (b), all payments of amounts due and payable with
respect to any Notes that are to be made from amounts withdrawn from the
Collection Account and the Note Distribution Account pursuant to Section
8.2(c) shall be made on behalf of the Issuer by the Indenture Trustee or by
another Paying Agent, and no amounts so withdrawn from the Collection
Account and the Note
11
<PAGE>
Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section.
On or before each Payment Date and Redemption Date, the Issuer
shall deposit or cause to be deposited in the Note Distribution Account an
aggregate sum sufficient to pay the amounts then becoming due under the
Notes, such sum to be held in trust for the benefit of the Persons entitled
thereto and (unless the Paying Agent is the Indenture Trustee) shall
promptly notify the Indenture Trustee of its action or failure so to act.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in
which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to
the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts
due with respect to the Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and pay such
sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by
the Issuer (or any other obligor upon the Notes) of which it has
actual knowledge in the making of any payment required to be made
with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee,
forthwith pay to the Indenture Trustee all sums so held in trust
by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith
pay to the Indenture Trustee all sums held by it in trust for the
payment of Notes if at any time it ceases to meet the standards
required to be met by a Paying Agent; and
(v) comply with all requirements of the Code and any
applicable State law with respect to the withholding from any
payments made by it on any Notes of any applicable withholding
taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order, direct any Paying Agent to pay to the Indenture Trustee all
sums held in trust by such Paying Agent, such sums to be held by the
Indenture Trustee upon the same trusts
12
<PAGE>
as those upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent
shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed
for two years after such amount has become due and payable shall be
discharged from such trust and be paid to the Issuer on Issuer Request; and
the Holder of such Note shall thereafter, as an unsecured general creditor,
look only to the Issuer for payment thereof (but only to the extent of the
amounts so paid to the Issuer), and all liability of the Indenture Trustee
or such Paying Agent with respect to such trust money shall thereupon
cease; provided, however, that the Indenture Trustee or such Paying Agent,
before being required to make any such repayment, shall at the expense and
direction of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business
Day and of general circulation in The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the
Issuer. The Indenture Trustee shall also adopt and employ, at the expense
of the Issuer, any other reasonable means of notification of such repayment
(including mailing notice of such repayment to Holders whose Notes have
been called but have not been surrendered for redemption or whose right to
or interest in moneys due and payable but not claimed is determinable from
the records of the Indenture Trustee or of any Paying Agent, at the last
address of record for each such Holder).
SECTION 3.4. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the
jurisdiction of its organization and will obtain and preserve its
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5. Protection of the Trust Estate. The Issuer will from
time to time execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the Lien and security interest
(and the priority thereof) of this Indenture or carry out more
effectively the purposes hereof;
13
<PAGE>
(ii) perfect, publish notice of or protect the validity
of any Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and
the rights of the Indenture Trustee and the Noteholders in such
Trust Estate against the claims of all Persons.
The Issuer hereby designates the Indenture Trustee as its agent and
attorney-in-fact to execute any financing statement, continuation
statement, instrument of further assurance or other instrument required to
be executed to accomplish the foregoing.
SECTION 3.6. Opinions as to the Trust Estate. (a) On the Closing
Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action
has been taken with respect to the recording and filing of this Indenture,
any indentures supplemental hereto and any other requisite documents, and
with respect to the execution and filing of any financing statements and
continuation statements, as are necessary to perfect and make effective the
Lien and security interest created by this Indenture and reciting the
details of such action, or stating that, in the opinion of such counsel, no
such action is necessary to make such Lien and security interest effective.
(b) On or before April 30 in each calendar year, the Issuer shall
furnish to the Indenture Trustee an Opinion of Counsel either stating that,
in the opinion of such counsel, such action has been taken with respect to
the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents, and with
respect to the execution and filing of any financing statements and
continuation statements, as is necessary to maintain the Lien and security
interest of this Indenture and reciting the details of such action, or
stating that in the opinion of such counsel no such action is necessary to
maintain such Lien and security interest. Such Opinion of Counsel shall
also describe the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite
documents, and the execution and filing of any financing statements and
continuation statements, that will, in the opinion of such counsel, be
required to maintain the Lien and security interest of this Indenture until
April 30 in the following calendar year.
SECTION 3.7. Performance of Obligations; Servicing of Receivables. (a)
The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person
from any material covenants or obligations under any instrument or agreement
14
<PAGE>
included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except
as expressly provided in this Indenture, the Sale and Servicing Agreement
or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Indenture Trustee in an Officers'
Certificate of the Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Servicer and the
Administrator to assist the Issuer in performing its duties under this
Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents
and in the instruments and agreements included in the Trust Estate,
including filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by this Indenture and the Sale
and Servicing Agreement in accordance with and within the time periods
provided for herein and therein. Except as otherwise expressly provided
therein, the Issuer shall not waive, amend, modify, supplement or terminate
any Basic Document or any provision thereof without the consent of the
Indenture Trustee or the Holders of at least a majority of the Outstanding
Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a
Servicer Default, the Issuer shall promptly notify the Indenture Trustee
and the Rating Agencies thereof, and shall specify in such notice the
action, if any, the Issuer is taking with respect to such default. If a
Servicer Default shall arise from the failure of the Servicer to perform
any of its duties or obligations under the Sale and Servicing Agreement
with respect to the Receivables, the Issuer shall take all reasonable steps
available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of
termination to the Servicer of the Servicer's rights and powers pursuant to
Section 8.1 of the Sale and Servicing Agreement, the Issuer shall appoint a
successor servicer (the "Successor Servicer"), and such Successor Servicer
shall accept its appointment by a written assumption in a form acceptable
to the Indenture Trustee. In the event that a Successor Servicer has not
been appointed and accepted its appointment at the time when the previous
Servicer ceases to act as Servicer, the Indenture Trustee without further
action shall automatically be appointed the Successor Servicer. The
Indenture Trustee may resign as the Servicer by giving written notice of
such resignation to the Issuer and in such event will be released from such
duties and obligations, such release not to be effective until the date a
Successor Servicer enters into a servicing agreement with the Issuer as
provided below. Upon delivery of any such notice to the Issuer,
15
<PAGE>
the Issuer shall obtain a new servicer as the Successor Servicer under
the Sale and Servicing Agreement. Any Successor Servicer other than the
Indenture Trustee shall: (i) be an established financial institution
having a net worth of not less than $50,000,000 and whose regular
business includes the servicing of receivables and (ii) enter into a servicing
agreement with the Issuer having substantially the same provisions as the
provisions of the Sale and Servicing Agreement applicable to the Servicer. If
within 30 days after the delivery of the notice referred to above, the Issuer
shall not have obtained such a Successor Servicer, the Indenture Trustee may
appoint, or may petition a court of competent jurisdiction to appoint, a
Successor Servicer. In connection with any such appointment, the Indenture
Trustee may make such arrangements for the compensation of such Successor
Servicer as it and such Successor Servicer shall agree, subject to the
limitations set forth below and in the Sale and Servicing Agreement, and in
accordance with Section 8.2 of the Sale and Servicing Agreement, the Issuer
shall enter into an agreement with such Successor Servicer for the servicing of
the Receivables (such agreement to be in form and substance satisfactory to
the Indenture Trustee). If the Indenture Trustee shall succeed to the
previous Servicer's duties as servicer of the Receivables as provided
herein, it shall do so in its individual capacity and not in its capacity
as Indenture Trustee and, accordingly, the provisions of Article VI shall
be inapplicable to the Indenture Trustee in its duties as the Successor
Servicer and the servicing of the Receivables. In case the Indenture
Trustee shall become the Successor Servicer under the Sale and Servicing
Agreement, the Indenture Trustee shall be entitled to appoint as Servicer
any one of its Affiliates; provided, that it shall be fully liable for the
actions and omissions of such Affiliate in its capacity as Successor
Servicer.
(f) Upon any termination of the Servicer's rights and powers
pursuant to the Sale and Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee. As soon as a Successor Servicer is appointed,
the Issuer shall notify the Indenture Trustee of such appointment,
specifying in such notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
Granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without
the prior written consent of the Indenture Trustee or the Holders of at
least a majority of the Outstanding Amount, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment,
modification, supplement, termination, waiver or surrender of, the terms of
any Collateral (except to the extent otherwise provided in the Sale and
Servicing Agreement) or the Basic Documents, or waive timely performance or
observance by the Servicer or the Seller under the Sale and Servicing
Agreement or Credit under the Purchase Agreement; provided, however, that
no such amendment shall: (i) increase or reduce in any manner the
16
<PAGE>
amount of, or accelerate or delay the timing of, distributions that are
required to be made for the benefit of the Noteholders, or (ii) reduce the
aforesaid percentage of the Notes that are required to consent to any such
amendment, in either case without the consent of the Holders of all the
Outstanding Notes. If any such amendment, modification, supplement or
waiver shall be so consented to by the Indenture Trustee or such Holders,
the Issuer agrees, promptly following a request by the Indenture Trustee to
do so, to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as the Indenture
Trustee may deem necessary or appropriate in the circumstances.
SECTION 3.8. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture, the
Purchase Agreement or the Sale and Servicing Agreement, sell,
transfer, exchange or otherwise dispose of any of the properties
or assets of the Issuer, including those included in the Trust
Estate, unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code or
applicable State law) or assert any claim against any present or
former Noteholder by reason of the payment of the taxes levied or
assessed upon any part of the Trust Estate; or
(iii)(A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the Lien of this Indenture to
be amended, hypothecated, subordinated, terminated or discharged,
or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except
as may be expressly permitted hereby, (B) permit any Lien (other
than the Lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Estate or any part
thereof or any interest therein or the proceeds thereof or (C)
permit the Lien of this Indenture not to constitute a valid first
priority (other than with respect to any tax lien, mechanics' lien
or other lien not considered a Lien) security interest in the
Trust Estate.
SECTION 3.9. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee, within 120 days after the end of each
fiscal year of the Issuer (commencing with the fiscal year 199__), an
Officers' Certificate, substantially in the form of Exhibit B, stating
that:
17
<PAGE>
(i) a review of the activities of the Issuer during such
year and of performance under this Indenture has been made under
such Authorized Officers' supervision; and
(ii) to the best of such Authorized Officers' knowledge,
based on such review, the Issuer has complied with all conditions
and covenants under this Indenture throughout such year or, if
there has been a default in the compliance of any such condition
or covenant, specifying each such default known to such Authorized
Officers and the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized
and existing under the laws of the United States of America or any
State and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed,
all as provided herein;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be
continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee)
to the effect that such transaction will not have any material
adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the Lien and
security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation or merger and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating
18
<PAGE>
to such transaction have been complied with (including any filing
required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties
or assets, including those included in the Trust Estate, to any Person,
unless:
(i) the Person that acquires by conveyance or transfer
the properties and assets of the Issuer the conveyance or transfer
of which is hereby restricted shall: (A) be a United States
citizen or a Person organized and existing under the laws of the
United States of America or any State, (B) expressly assumes, by
an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee,
the due and punctual payment of the principal of and interest on
all Notes and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly
agrees by means of such supplemental indenture that all right,
title and interest so conveyed or transferred shall be subject and
subordinate to the rights of Holders of the Notes, (D) unless
otherwise provided in such supplemental indenture, expressly
agrees to indemnify, defend and hold harmless the Issuer against
and from any loss, liability or expense arising under or related
to this Indenture and the Notes and (E) expressly agrees by means
of such supplemental indenture that such Person (or if a group of
Persons, then one specified Person) shall make all filings with
the Commission (and any other appropriate Person) required by the
Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be
continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee)
to the effect that such transaction will not have any material
adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the Lien and
security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such conveyance or transfer and such supplemental
indenture comply with this
19
<PAGE>
Article and that all conditions precedent herein provided for
relating to such transaction have been complied with (including
any filing required by the Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation
or merger of the Issuer in accordance with Section 3.10(a), the Person
formed by or surviving such consolidation or merger (if other than the
Issuer) shall succeed to, and be substituted for, and may exercise every
right and power of, the Issuer under this Indenture with the same effect as
if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties
of the Issuer pursuant to Section 3.10(b), the Issuer will be released from
every covenant and agreement of this Indenture to be observed or performed
on the part of the Issuer with respect to the Notes immediately upon the
delivery of written notice to the Indenture Trustee stating that the Issuer
is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in
any business other than financing, purchasing, owning, selling and managing
of the Receivables in the manner contemplated by this Indenture and the
Basic Documents and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with Sections 4.8, 4.9, 4.10, 4.11 and 5.9 of the Sale and
Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Sale and Servicing Agreement or this
Indenture, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability
of so doing or otherwise), endorse or otherwise become contingently liable,
directly or indirectly, in connection with the obligations, stocks or
dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other
Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
20
<PAGE>
SECTION 3.17. Removal of Administrator. So long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause
unless the Rating Agency Condition shall have been satisfied in connection
with such removal.
SECTION 3.18. Restricted Payments. The Issuer shall not, directly
or indirectly: (i) pay any dividend or make any distribution (by reduction
of capital or otherwise), whether in cash, property, securities or a
combination thereof, to the Trustee or any owner of a beneficial interest
in the Issuer or otherwise with respect to any ownership or equity interest
or security in or of the Issuer or to the Servicer or the Administrator,
(ii) redeem, purchase, retire or otherwise acquire for value any such
ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; provided, however, that the
Issuer may make, or cause to be made, distributions to the Servicer, the
Trustee, the Certificateholders and the Administrator as contemplated by,
and to the extent funds are available for such purpose under, the Sale and
Servicing Agreement. The Issuer will not, directly or indirectly, make
payments to or distributions from the Collection Account except in
accordance with this Indenture and the Basic Documents.
SECTION 3.19. Notice of Events of Default. The Issuer shall give
the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder, each default on the part of the Servicer or the
Seller of its obligations under the Sale and Servicing Agreement and each
default on the part of Credit of its obligations under the Purchase
Agreement.
SECTION 3.20. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the Notes
except as to: (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon,
(iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12 and 3.13, (v) the rights,
obligations and immunities of the Indenture Trustee hereunder (including
the rights of the Indenture Trustee under Section 6.7 and the obligations
of the Indenture Trustee under Section 4.2) and (vi) the rights of
21
<PAGE>
Noteholders as beneficiaries hereof with respect to the property so
deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes, when:
(A) either:
(1) all Notes theretofore authenticated and
delivered (other than: (i) Notes that have been
destroyed, lost or stolen and that have been replaced or
paid as provided in Section 2.5 and (ii) Notes for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as
provided in Section 3.3) have been delivered to the
Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the
Indenture Trustee for cancellation:
(i) have become due and payable,
(ii) will become due and payable on the
Final Scheduled Maturity Date within one year,
or
(iii) are to be called for redemption
within one year under arrangements satisfactory
to the Indenture Trustee for the giving of
notice of redemption by the Indenture Trustee in
the name, and at the expense, of the Issuer,
and the Issuer, in the case of clause (2)(i), (ii) or
(iii), has irrevocably deposited or caused to be
irrevocably deposited with the Indenture Trustee cash or
direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the
date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the
entire indebtedness on such Notes not theretofore
delivered to the Indenture Trustee for cancellation when
due to the Final Scheduled Maturity Date or Redemption
Date (if Notes shall have been called for redemption
pursuant to Section 10.1(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer; and
22
<PAGE>
(C) the Issuer has delivered to the Indenture Trustee an
Officers' Certificate, an Opinion of Counsel and (if required by
the TIA or the Indenture Trustee) an Independent Certificate from
a firm of certified public accountants, each meeting the
applicable requirements of Section 11.1(a) and, subject to Section
11.2, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture
have been complied with.
SECTION 4.2. Application of Trust Money. All moneys deposited with
the Indenture Trustee pursuant to Section 4.1 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as
the Indenture Trustee may determine, to the Holders of the particular Notes
for the payment or redemption of which such moneys have been deposited with
the Indenture Trustee, of all sums due and to become due thereon for
principal and interest; but such moneys need not be segregated from other
funds except to the extent required herein or in the Sale and Servicing
Agreement or as required by law.
SECTION 4.3. Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with
respect to the Notes, all moneys then held by any Paying Agent other than
the Indenture Trustee under this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid to the Indenture Trustee to be
held and applied according to Section 3.3, and thereupon such Paying Agent
shall be released from all further liability with respect to such moneys.
ARTICLE V
Remedies
SECTION 5.1. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):
(i) default in the payment of any interest on any Note
when the same becomes due and payable, and such default shall
continue for a period of five days;
(ii) default in the payment of the principal of any Note
when the same becomes due and payable;
23
<PAGE>
(iii) default in the observance or performance of any
covenant or agreement of the Issuer made in this Indenture (other
than a covenant or agreement a default in the observance or
performance of which is elsewhere in this Section specifically
dealt with), or any representation or warranty of the Issuer made
in this Indenture or in any certificate or other writing delivered
pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same
shall have been made, and such default shall continue or not be
cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been
eliminated or otherwise cured, for a period of 30 days after there
shall have been given, by registered or certified mail, to the
Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the Holders of at least 25% of the Outstanding Amount
of the Notes, a written notice specifying such default or
incorrect representation or warranty and requiring it to be
remedied and stating that such notice is a notice of Default
hereunder;
(iv) the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the Issuer
or any substantial part of the Trust Estate in an involuntary case
under any applicable Federal or State bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of the Issuer or for any substantial part of
the Trust Estate, or ordering the winding-up or liquidation of the
Issuer's affairs, and such decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case
under any applicable Federal or State bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by
the Issuer to the entry of an order for relief in an involuntary
case under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of
the Issuer or for any substantial part of the Trust Estate, or the
making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts
as such debts become due, or the taking of action by the Issuer in
furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five
days after the Issuer or the Administrator obtains actual knowledge
thereof, written notice in the form of an Officers' Certificate of any
event that, with the giving of notice or the lapse of time or both, would
become an Event of Default under clause (iii), its
24
<PAGE>
status and what action the Issuer is taking or proposes to take with
respect thereto.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default should occur and be continuing, then and in every
such case the Indenture Trustee or the Holders of Notes representing not
less than a majority of the Outstanding Amount may declare all the Notes to
be immediately due and payable, by a notice in writing to the Issuer (and
to the Indenture Trustee if given by Noteholders), and upon any such
declaration the Outstanding Amount, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately
due and payable.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, the Holders of Notes representing not less than a majority of the
Outstanding Amount, by written notice to the Issuer and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on
all Notes and all other amounts that would then be due
hereunder or upon such Notes if the Event of Default
giving rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of
the principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section
5.12.
No such rescission shall affect any subsequent default or impair
any right consequent thereto.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee. (a) The Issuer covenants that if an Event of Default
described in Section 5.1(i) or (ii) occurs, the Issuer will, upon demand of
the Indenture Trustee, pay to it, for the benefit of the Holders of Notes,
the whole amount then due and payable on such Notes for principal and
interest, with interest upon the
25
<PAGE>
overdue principal at the applicable interest rate, and, to the extent
payment at such rate of interest shall be legally enforceable, upon overdue
installments of interest, at the applicable interest rate, and in addition
thereto such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and
counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts
upon such demand, the Indenture Trustee, in its own name and as trustee of
an express trust, may institute a Proceeding for the collection of the sums
so due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Issuer or other obligor upon
such Notes and collect in the manner provided by law out of the property of
the Issuer or other obligor upon such Notes, wherever situated, the moneys
adjudged or decreed to be payable.
(c) In case an Event of Default occurs and is continuing, the
Indenture Trustee may, as more particularly provided in Section 5.4, in its
discretion, proceed to protect and enforce its rights and the rights of the
Noteholders, by such appropriate Proceedings as the Indenture Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other
proper remedy or legal or equitable right vested in the Indenture Trustee
by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable Federal or State bankruptcy, insolvency
or other similar law, or in case a receiver, assignee, trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its
property or such other obligor or Person, or in case of any other
comparable judicial Proceedings relative to the Issuer or other obligor
upon the Notes, or to the creditors or property of the Issuer or such other
obligor, the Indenture Trustee, irrespective of whether the principal of
any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee
shall have made any demand pursuant to this Section, shall be entitled and
empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of
the Notes and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for reasonable compensation
to the Indenture Trustee and each predecessor
26
<PAGE>
Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or
bad faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law or regulations,
to vote on behalf of the Holders of the Notes in any election of a
trustee, a standby trustee or any Person performing similar
functions in any such Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all
amounts received with respect to the claims of the Noteholders and
of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee or the Holders of Notes allowed in
any judicial Proceedings relative to the Issuer, its creditors and
its property;
and any trustee, receiver, liquidator, assignee, custodian, sequestrator or
other similar official in any such Proceeding is hereby authorized by each
of such Noteholders to make payments to the Indenture Trustee, and, in the
event that the Indenture Trustee shall consent to the making of payments
directly to such Noteholders, to pay to the Indenture Trustee such amounts
as shall be sufficient to cover reasonable compensation to the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and
all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt
on behalf of any Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof or to authorize the Indenture Trustee to vote in respect of the
claim of any Noteholder in any such proceeding except, as aforesaid, to
vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture
Trustee without the possession of any of the Notes or the production
thereof in any trial or other Proceedings relative thereto, and any such
action or Proceedings instituted by the
27
<PAGE>
Indenture Trustee shall be brought in its own name and as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys,
shall be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also
any Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Holders of the Notes, and it
shall not be necessary to make any Noteholder a party to any such
Proceedings.
SECTION 5.4. Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more
of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee
of an express trust for the collection of all amounts then payable
on the Notes or under this Indenture with respect thereto, whether
by declaration or otherwise, enforce any judgment obtained, and
collect from the Issuer and any other obligor upon such Notes
moneys adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to
the Trust Estate;
(iii) exercise any remedies of a secured party under the
UCC and take any other appropriate action to protect and enforce
the rights and remedies of the Indenture Trustee and the Holders
of the Notes;
(iv) sell the Trust Estate, or any portion thereof or
rights or interest therein, at one or more public or private sales
called and conducted in any manner permitted by law; and
(v) make demand upon the Servicer, by written notice,
that the Servicer deliver to the Indenture Trustee all Receivable
Files;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an
Event of Default described in Section 5.1(i) or (ii), unless: (A) all the
Noteholders consent thereto, (B) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to discharge in full all
amounts then due and unpaid upon such Notes for principal and interest or
(C) the Indenture Trustee determines that the Trust Estate will not
continue to provide sufficient funds for the payment of principal of and
interest on the Notes as they would have become due if the Notes had not
28
<PAGE>
been declared due and payable, and the Indenture Trustee obtains the
consent of Holders of 66-2/3% of the Outstanding Amount. In determining
such sufficiency or insufficiency with respect to clauses (B) and (C), the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property
pursuant to this Article V, it shall pay out such money or property in the
following order:
FIRST: to the Indenture Trustee for amounts due under Section
6.7;
SECOND: to Class A Noteholders for amounts due and unpaid on the
Class A Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on
the Class A Notes for interest;
THIRD: to Class B Noteholders for amounts due and unpaid on the
Class B Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on
the Class B Notes for interest;
FOURTH: to Class A Noteholders for amounts due and unpaid on the
Class A Notes for principal, ratably, without preference or
priority of any kind, according to the amounts to the amounts due
and payable on the Class A Notes for principal;
FIFTH: to Class B Noteholders for amounts due and unpaid on the
Class B Notes for principal, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Class B
Notes for principal; and
SIXTH: to the Issuer for distribution to the Certificateholders.
The Indenture Trustee may fix a special record date and special
payment date for any payment to Noteholders pursuant to this Section. At
least 15 days before such special record date, the Issuer shall mail to
each Noteholder and the Indenture Trustee a notice that states the special
record date, the special payment date and the amount to be paid.
SECTION 5.5. Optional Preservation of the Receivables. If the Notes
have been declared to be due and payable under Section 5.2 following an Event
of Default, and such declaration and its consequences have not been rescinded
and
29
<PAGE>
annulled, the Indenture Trustee may, but need not, elect to maintain
possession of the Trust Estate. It is the desire of the parties hereto and
the Noteholders that there be at all times sufficient funds for the payment
of principal of and interest on the Notes, and the Indenture Trustee shall
take such desire into account when determining whether or not to maintain
possession of the Trust Estate. In determining whether to maintain
possession of the Trust Estate, the Indenture Trustee may, but need not,
obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such
purpose.
SECTION 5.6. Limitation of Suits. No Holder of any Note shall have
any right to institute any Proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for
any other remedy hereunder, unless:
(i) such Holder has previously given written notice to
the Indenture Trustee of a continuing Event of Default;
(ii) the Holder(s) of not less than 25% of the
Outstanding Amount of the Notes have made written request to the
Indenture Trustee to institute such Proceeding in respect of such
Event of Default in its own name as Indenture Trustee hereunder;
(iii) such Holder(s) have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt
of such notice, request and offer of indemnity has failed to
institute such Proceeding; and
(v) no direction inconsistent with such written request
has been given to the Indenture Trustee during such 60-day period
by the Holders of a majority of the Outstanding Amount of the
Notes;
it being understood and intended that no one or more Holder(s) of Notes
shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holder(s) of Notes or to obtain or to seek to obtain
priority or preference over any other Holder(s) or to enforce any right
under this Indenture, except in the manner herein provided.
30
<PAGE>
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders,
each representing less than a majority of the Outstanding Amount of the
Notes, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of
this Indenture.
SECTION 5.7. Unconditional Rights of Noteholders To Receive
Principal and Interest. Notwithstanding any other provisions in this
Indenture, the Holder of any Note shall have the right, which is absolute
and unconditional, to receive payment of the principal of and interest, if
any, on such Note on or after the respective due dates thereof expressed in
such Note or in this Indenture (or, in the case of redemption, on or after
the Redemption Date) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder.
SECTION 5.8. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any
right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely
to the Indenture Trustee or to such Noteholder, then and in every such case
the Issuer, the Indenture Trustee and the Noteholders shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of
the Indenture Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
SECTION 5.9. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission
of the Indenture Trustee or any Holder of Notes to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by
the Indenture Trustee or by the Noteholders, as the case may be.
31
<PAGE>
SECTION 5.11. Control by Noteholders. The Holders of not less than
a majority of the Outstanding Amount of the Notes shall have the right to
direct the time, method and place of conducting any Proceeding for any
remedy available to the Indenture Trustee with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee; provided,
that:
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any
direction to the Indenture Trustee to sell or liquidate the Trust
Estate shall be by all the Noteholders;
(iii) if the conditions set forth in Section 5.5 have
been satisfied and the Indenture Trustee elects to retain the
Trust Estate pursuant to such Section, then any direction to the
Indenture Trustee by Holders of Notes representing less than 100%
of the Outstanding Amount of the Notes to sell or liquidate the
Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not inconsistent
with such direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee need
not take any action that it determines might involve it in liability or
might materially adversely affect the rights of any Noteholder(s) not
consenting to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the time a
judgment or decree for payment of money due has been obtained as described
in Section 5.3, the Holders of Notes of not less than a majority of the
Outstanding Amount of the Notes may waive any past Default or Event of
Default and its consequences except a Default: (a) in payment of principal
of or interest on any of the Notes or (b) in respect of a covenant or
provision hereof that cannot be modified or amended without the consent of
the Holder of each Note. In the case of any such waiver, the Issuer, the
Indenture Trustee and the Holders of the Notes shall be restored to their
former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured and not to
have occurred, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other Default or impair any right
consequent thereto.
32
<PAGE>
SECTION 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof
shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Indenture Trustee for any action
taken, suffered or omitted by it as Indenture Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorney's fees, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section
shall not apply to: (a) any suit instituted by the Indenture Trustee, (b)
any suit instituted by any Noteholder(s) holding in the aggregate more than
10% of the Outstanding Amount of the Notes or (c) any suit instituted by
any Noteholder for the enforcement of the payment of principal of or
interest on any Note on or after the respective due dates expressed in such
Note and in this Indenture (or, in the case of redemption, on or after the
Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead or in any manner whatsoever, claim or take
the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee, but will
suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to
seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under
or with respect to this Indenture. Neither the Lien of this Indenture nor
any rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against
the Issuer or by the levy of any execution under such judgment upon any
portion of the Trust Estate or upon any of the assets of the Issuer. Any
money or property collected by the Indenture Trustee shall be applied in
accordance with Section 5.4(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to do so and at
the Administrator's expense, the Issuer shall take all such lawful action
as the Indenture Trustee may request to compel or secure the performance
and observance by the Seller and the Servicer, as applicable, of each of
their obligations to the Issuer under or in connection with the Sale and
Servicing
33
<PAGE>
Agreement or to the Seller under or in connection with the Purchase
Agreement in accordance with the terms thereof, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer
under or in connection with the Sale and Servicing Agreement (or the Seller
under or in connection with the Purchase Agreement) to the extent and in
the manner directed by the Indenture Trustee, including the transmission of
notices of default on the part of the Seller or the Servicer thereunder and
the institution of legal or administrative actions or proceedings to compel
or secure performance by the Seller or the Servicer of each of their
obligations under the Sale and Servicing Agreement or the Purchase
Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in
writing) of the Holders of not less than 66-2/3% of the Outstanding Amount
of the Notes shall, exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Seller or the Servicer under or in
connection with the Sale and Servicing Agreement, including the right or
power to take any action to compel or secure performance or observance by
the Seller or the Servicer of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Servicing Agreement, and any right
of the Issuer to take such action shall be suspended.
(c) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in
writing) of the Holders of not less than 66-2/3% of the Outstanding Amount
of the Notes shall, exercise all rights, remedies, powers, privileges and
claims of the Seller against Credit under or in connection with the
Purchase Agreement, including the right or power to take any action to
compel or secure performance or observance by Credit of each of its
obligations to the Seller thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Purchase
Agreement, and any right of the Seller to take such action shall be
suspended.
ARTICLE VI
The Indenture Trustee
SECTION 6.1. Duties of the Indenture Trustee. (a) If an Event of
Default has occurred and is continuing, the Indenture Trustee shall
exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
34
<PAGE>
(b) Except during the continuance of an Event of Default actually
known to a Responsible Officer:
(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read
into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Indenture Trustee
and conforming to the requirements of this Indenture; provided,
however, in the case of any such certificates or opinions that by
any provision hereof are specifically required to be furnished to
the Indenture Trustee, the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own
wilful misconduct, except that:
(i) this clause (c) does not limit the effect of clause (b)
of this Section;
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer
unless it is proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to the
Indenture;
(iv) the Indenture Trustee shall not be charged with
knowledge of an Event of Default or Servicer Default unless a
Responsible Officer obtains actual knowledge of such event or the
Indenture Trustee receives written notice of such event from the
Seller, Servicer or Note Owners owning Notes aggregating not less
than 10% of the Outstanding Amount of the Notes; and
(v) the Indenture Trustee shall have no duty to monitor the
performance of the Issuer, the Trustee, the Seller or the Servicer, nor
shall it have any liability in connection with malfeasance or
nonfeasance by the Issuer, the Trustee, the Seller or the Servicer.
The Indenture Trustee shall have no liablilty in connection with
35
<PAGE>
with compliance of the Issuer, the Trustee, the Seller or the
Servicer with statutory or regulatory requirements related to the
Receivables. The Indenture Trustee shall not make or be deemed to
have made any representations or warranties with respect to the
Receivables or the validity or sufficiency of any assignment of the
Receivables to the Trust Estate or the Indenture Trustee.
(d) Every provision of this Indenture that in any way relates to
the Indenture Trustee is subject to clauses (a), (b), (c) and (g).
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing
with the Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law, this
Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers if it shall have reasonable grounds
to believe that repayments of such funds or adequate indemnity satisfactory
to it against any loss, liability or expense is not reasonably assured to
it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to this Section and the TIA.
SECTION 6.2. Rights of Indenture Trustee. (a) The Indenture
Trustee may conclusively rely and shall be fully protected in acting on any
document believed by it to be genuine and to have been signed or presented
by the proper Person. The Indenture Trustee need not investigate any fact
or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The
Indenture Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on the Officers' Certificate or Opinion of
Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, a custodian or a nominee, and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of,
or for the
36
<PAGE>
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes to be authorized or
within its rights or powers; provided, however, that the Indenture
Trustee's conduct does not constitute wilful misconduct, negligence or bad
faith.
(e) The Indenture Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) The Indenture Trustee shall not be required to make any
initial or periodic examination of any files or records related to the
Receivables for the purpose of establishing the presence or absence of
defects, the compliance by the Issuer with its representations and
warranties or for any other purpose.
(g) In the event that the Indenture Trustee is also acting as
Paying Agent or Note Registrar hereunder, the rights and protections
afforded to the Indenture Trustee pursuant to this Article VI shall also be
afforded to the Indenture Trustee in its capacity as such Paying Agent or
Note Registrar.
SECTION 6.3. Individual Rights of the Indenture Trustee. The
Indenture Trustee shall not, in its individual capacity, but may in a
fiduciary capacity, become the owner of Notes or otherwise extend credit to
the Issuer. The Indenture Trustee may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not the Indenture
Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying agent
may do the same with like rights. However, the Indenture Trustee must
comply with Sections 6.11 and 6.12.
SECTION 6.4. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for, and makes no representation as to the
validity or adequacy of, this Indenture or the Notes; shall not be
accountable for the Issuer's use of the proceeds from the Notes; and shall
not be responsible for any statement of the Issuer in this Indenture or in
any document issued in connection with the sale of the Notes or in the
Notes other than the Indenture Trustee's certificate of authentication.
SECTION 6.5. Notice of Defaults. If a Default occurs and is
continuing and is known to a Responsible Officer, the Indenture Trustee
shall mail to each Noteholder notice of the Default within 90 days after it
occurs. Except in the case of a Default in payment of principal of or
interest on any Note (including payments pursuant to the mandatory redemption
37
<PAGE>
provisions of such Note), the Indenture Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of Noteholders.
SECTION 6.6. Reports by Indenture Trustee to the Holders. The
Indenture Trustee shall deliver to each Noteholder such information as may
be required to enable such Holder to prepare its Federal, State and other
income tax returns. Within 60 days after each December 31, the Indenture
Trustee shall mail to each Noteholder a brief report as of such December 31
that complies with TIA ss. 313(a) (if required by said section).
SECTION 6.7. Compensation and Indemnity. The Issuer shall, or
shall cause the Servicer to, pay to the Indenture Trustee from time to time
reasonable compensation for its services. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee
of an express trust. The Issuer shall, or shall cause the Servicer to,
reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture
Trustee's agents, counsel, accountants and experts. The Issuer shall or
shall cause the Servicer to indemnify the Indenture Trustee and its
officers, directors, employees and agents against any and all loss,
liability or expense (including attorneys' fees) incurred by them in
connection with the administration of this trust and the performance of its
duties hereunder. The Indenture Trustee shall notify the Issuer and the
Servicer promptly of any claim for which it may seek indemnity. Failure by
the Indenture Trustee to so notify the Issuer and the Servicer shall not
relieve the Issuer or the Servicer of its obligations hereunder. The Issuer
shall, or shall cause the Servicer to, defend the claim and the Indenture
Trustee may have separate counsel and the Issuer shall, or shall cause the
Servicer to, pay the fees and expenses of such counsel. Neither the Issuer
nor the Servicer need reimburse any expense or indemnify against any loss,
liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant
to this Section shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of a Default
specified in Section 5.1(iv) or (v), the expenses are intended to
constitute expenses of administration under Title 11 of the United States
Code or any other applicable Federal or State bankruptcy, insolvency or
similar law.
SECTION 6.8. Replacement of the Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
38
<PAGE>
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.8. The Indenture
Trustee may resign at any time by so notifying the Issuer in writing. The
Holders of not less than a majority of the Outstanding Amount of the Notes
may remove the Indenture Trustee by so notifying the Indenture Trustee in
writing and may appoint a successor Indenture Trustee. The Issuer shall
remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver or other public officer takes charge of
the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture
Trustee in such event being referred to herein as the retiring Indenture
Trustee), the Issuer shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance
of its appointment to the retiring Indenture Trustee and to the Issuer.
Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all
the rights, powers and duties of the Indenture Trustee under this
Indenture. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
If a successor Indenture Trustee does not take office within 60
days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, the Issuer or the Holders of not less than a
majority of the Outstanding Amount of the Notes may petition any court of
competent jurisdiction for the appointment of a successor Indenture
Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture
Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant
to this Section, the Issuer's and the Administrator's obligations under
Section 6.7 shall
39
<PAGE>
continue for the benefit of the retiring Indenture Trustee. The retiring
Indenture Trustee shall have no liability for any act or omission by any
successor Trustee.
SECTION 6.9. Successor Indenture Trustee by Merger. If the
Indenture Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture
Trustee. The Indenture Trustee shall provide the Rating Agencies and the
Issuer prior written notice of any such transaction; provided, that such
corporation or banking association shall be otherwise qualified and
eligible under Section 6.11.
In case at the time such successor(s) by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor trustee
hereunder or in the name of the successor to the Indenture Trustee; and in
all such cases such certificates of authentication shall have the full
force and effect to the same extent given to the certificate of
authentication of the Indenture Trustee anywhere in the Notes or in this
Indenture.
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for
the purpose of meeting any legal requirement of any jurisdiction in which
any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Person(s) to act as co-trustee(s), or separate
trustee(s), of all or any part of the Trust Estate, and to vest in such
Person(s), in such capacity and for the benefit of the Noteholders, such
title to the Trust Estate, or any part thereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and
trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the
terms of eligibility as a successor trustee under Section 6.11 and no
notice to Noteholders of the appointment of any co-trustee or separate
trustee shall be required under Section 6.8.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Indenture Trustee shall be conferred or
imposed upon and
40
<PAGE>
exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Indenture Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any
particular act(s) are to be performed, the Indenture Trustee shall
be incompetent or unqualified to perform such act(s), in which
event such rights, powers, duties and obligations (including the
holding of title to the Trust Estate or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove, in its sole discretion, any separate
trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article VI. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Indenture Trustee or separately, as
may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the
conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Indenture Trustee, to the
extent permitted by law, without the appointment of a new or successor
trustee.
(e) The Indenture Trustee shall have no obligation to determine
whether a co-trustee or separate trustee is legally required in any
jurisdiction in which any part of the Trust Estate may be located.
41
<PAGE>
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA ss. 310(a) and Section
26(a)(1) of the Investment Company Act of 1940, as amended. The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition and it
shall have a long term senior, unsecured debt rating of "Baa3" or better by
Moody's (or, if not rated by Moody's, a comparable rating by another
statistical rating agency). The Indenture Trustee shall comply with TIA ss.
310(b), including the optional provision permitted by the second sentence
of TIA ss. 310(b)(9); provided, however, that there shall be excluded from
the operation of TIA ss. 310(b)(1) any indenture(s) under which other
securities of the Issuer are outstanding if the requirements for such
exclusion set forth in TIA ss. 310(b)(1) are met.
If a default occurs under this Indenture, and the Indenture
Trustee is deemed to have a conflicting interest as a result of acting as
trustee for both the Class A Notes and the Class B Notes, a successor
Indenture Trustee shall be appointed for one or both of such Classes, so
that there will be separate Indenture Trustees for the Class A Notes and
the Class B Notes. No such event shall alter the voting rights of the Class
A Noteholders or Class B Noteholders under this Indenture or any other
Basic Document. However, so long as any amounts remain unpaid with respect
to the Class A Notes, only the Indenture Trustee for the Class A
Noteholders will have the right to exercise remedies under this Indenture
(but subject to the express provisions of Section 5.4 and to the right of
the Class B Noteholders to receive their share of any proceeds of
enforcement, subject to the subordination of the Class B Notes to the Class
A Notes as described herein). Upon repayment of the Class A Notes in full,
all rights to exercise remedies under the Indenture will transfer to the
Indenture Trustee for the Class B Notes.
In the case of the appointment hereunder of a successor Indenture
Trustee with respect to any Class of Notes, the Issuer, the retiring
Indenture Trustee and the successor Indenture Trustee with respect to such
Class of Notes shall execute and deliver an indenture supplemental hereto
wherein the each successor Indenture Trustee shall accept such appointment
and which (i) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, the successor
Indenture Trustee all the rights, powers, trusts and duties of the retiring
Indenture Trustee with respect to the Notes of the Class to which the
appointment of such successor Indenture Trustee relates, (ii) if the
retiring Indenture Trustee is not retiring with respect to all Classes of
Notes, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Indenture Trustee with respect to the Notes of each Class as to
which the retiring Indenture Trustee is not retiring shall continue to be
vested in the retiring Indenture Trustee, and (iii) shall add to or change
any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the
42
<PAGE>
trusts hereunder by more than one Indenture Trustee, it being understood
that nothing herein or in such supplemental indenture shall constitute such
Indenture Trustees co-trustees of the same trust and that each such
Indenture Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Indenture Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Indenture Trustee
shall become effective to the extent provided therein.
SECTION 6.12. Preferential Collection of Claims Against the
Issuer. The Indenture Trustee shall comply with TIA ss. 311(a), excluding
any creditor relationship listed in TIA ss. 311(b). An Indenture Trustee
who has resigned or been removed shall be subject to TIA ss. 311(a) to the
extent indicated.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders. The Issuer will furnish or cause to be furnished
to the Indenture Trustee: (a) not more than five days after the earlier of:
(i) each Record Date and (ii) three months after the last Record Date, a
list, in such form as the Indenture Trustee may reasonably require, of the
names and addresses of the Holders of Notes as of such Record Date, and (b)
at such other times as the Indenture Trustee may request in writing, within
30 days after receipt by the Issuer of any such request, a list of similar
form and content as of a date not more than 10 days prior to the time such
list is furnished; provided, however, that so long as the Indenture Trustee
is the Note Registrar, no such list shall be required to be furnished.
SECTION 7.2. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders of
Notes contained in the most recent list furnished to the Indenture Trustee
as provided in Section 7.1 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) Three or more Noteholders, or one or more Holder(s) of Notes
evidencing at least 25% of the Outstanding Amount of the Notes, may
communicate pursuant to TIA ss. 312(b) with other Noteholders with respect
to their rights under this Indenture or under the Notes.
43
<PAGE>
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss. 312(c).
SECTION 7.3. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after
the Issuer is required to file the same with the Commission,
copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing
as the Commission may from time to time by rules and regulations
prescribe) that the Issuer may be required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Commission, in accordance with the
rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and
covenants of this Indenture (with a copy of any such filings being
delivered promptly to the Indenture Trustee); and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
ss. 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i)
and (ii) as may be required by the rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of,
and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture. The Indenture Trustee shall apply all such money received by it
as provided in this Indenture. Except as otherwise expressly provided in
this Indenture, if any default occurs in the making of any payment or
performance under any agreement or instrument that is part of the
Collateral and the Trust Estate, the Indenture Trustee may take such action
as may be appropriate to enforce such payment or performance,
44
<PAGE>
including the institution and prosecution of appropriate Proceedings. Any
such action shall be without prejudice to any right to claim a Default or
Event of Default under this Indenture and any right to proceed thereafter
as provided in Article V.
SECTION 8.2. Trust Accounts. (a) On or prior to the Closing Date,
the Issuer shall cause the Servicer to establish and maintain, in the name
of the Indenture Trustee, for the benefit of the Noteholders and the
Certificateholders, the Trust Accounts as provided in Section 5.1 of the
Sale and Servicing Agreement.
(b) On or before each Payment Date, the Total Distribution Amount
with respect to the preceding Collection Period will be deposited in the
Collection Account as provided in Section 5.2 of the Sale and Servicing
Agreement. On or before each Payment Date, the Noteholders' Distributable
Amount with respect to the preceding Collection Period will be transferred
to the Note Distribution Account as provided in Sections 5.5 and 5.6 of the
Sale and Servicing Agreement.
(c) On each Payment Date and Redemption Date, the Indenture
Trustee shall distribute all amounts on deposit in the Note Distribution
Account to Noteholders to the extent of amounts due and unpaid on the Notes
for principal and interest in the following amounts and in the following
order of priority (except as otherwise provided in Section 5.4(b)):
(i) the Class A Noteholders' Interest Distributable
Amount; provided, that if there are not sufficient funds in the
Note Distribution Account to pay the entire amount of accrued and
unpaid interest then due on such Notes, the amount in the Note
Distribution Account shall be applied to the payment of such
interest on such Notes pro rata on the basis of the total such
interest due on such Notes;
(ii) only to the extent of funds withdrawn from the
Pre-Funding Account and deposited in the Note Distribution Account
by the Indenture Trustee pursuant to Section 5.7(b) of the Sale
and Servicing Agreement: (A) first, to the Holders of A-1 Notes,
(B) second, to the Holders of A-2 Notes, (C) third, to the Holders
of A-3 Notes, and (D) fourth, the remainder to the Holders of A-4
Notes;
(iii) the Class B Noteholders' Interest Distributable
Amount;
(iv) the Class Principal Distributable Amount for each
Class of Notes in the following priority: A-1 Notes, A-2 Notes,
A-3 Notes, A-4 Notes and Class B Notes (provided that after an
Event of Default and
45
<PAGE>
acceleration of the Notes (and, if any Notes remain outstanding,
on and after the Final Scheduled Maturity Date), amounts available
for distribution pursuant to this clause (iv) shall be paid first
to all Holders of Class A Notes ratably according to the amounts
due and payable on the Class A Notes for principal until paid in
full and then to the Class B Noteholders until the outstanding
principal amount of the Class B Notes has been paid in full; and
(v) thereafter, any excess shall be deposited to the
Certificate Distribution Account.
SECTION 8.3. General Provisions Regarding Accounts. (a) So long as
no Default or Event of Default shall have occurred and be continuing, all
or a portion of the funds in the Trust Accounts shall be invested in
Eligible Investments and reinvested by the Indenture Trustee upon Issuer
Order, subject to the provisions of Section 5.1(b) of the Sale and
Servicing Agreement. All income or other gain from investments of moneys
deposited in the Trust Accounts shall be deposited by the Indenture Trustee
in the Collection Account, and any loss or expenses resulting from such
investments shall be charged to such account. The Issuer will not direct
the Indenture Trustee to make any investment of any funds or to sell any
investment held in any of the Trust Accounts unless the security interest
granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the
Indenture Trustee to make any such investment or sale, if requested by the
Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an
Opinion of Counsel to such effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in
any way be held liable for the selection of Eligible Investments or by
reason of any insufficiency in any of the Trust Accounts resulting from any
loss on any Eligible Investment included therein, except for losses
attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial
capacity as principal obligor and not as trustee, in accordance with their
terms.
(c) If: (i) the Issuer shall have failed to give investment
directions for any funds on deposit in the Trust Accounts to the Indenture
Trustee by 11:00 a.m. (New York City time) (or such other time as may be
agreed by the Issuer and the Indenture Trustee) on any Business Day; or
(ii) a Default or Event of Default shall have occurred and be continuing
with respect to the Notes but the Notes shall not have been declared due
and payable pursuant to Section 5.2, or, if such Notes shall have been
declared due and payable following an Event of Default, amounts collected
or receivable from the Trust Estate are being applied in
46
<PAGE>
accordance with Section 5.4(b) as if there had not been such a declaration;
then the Indenture Trustee shall, to the fullest extent practicable, invest
and reinvest funds in the Trust Accounts in the Eligible Investments
identified in clause (d) of the definition of Eligible Investments.
SECTION 8.4. Release of Trust Estate. (a) Subject to the payment
of its fees and expenses pursuant to Section 6.7, the Indenture Trustee
may, and when required by this Indenture shall, execute instruments to
release property from the Lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances that
are not inconsistent with this Indenture. No party relying upon an
instrument executed by the Indenture Trustee as provided in this Article
shall be bound to ascertain the Indenture Trustee's authority, inquire into
the satisfaction of any conditions precedent or see to the application of
any moneys.
(b) The Indenture Trustee shall, at such time as there are no
Notes Outstanding and all sums due to the Indenture Trustee pursuant to
Section 6.7 have been paid, release any remaining portion of the Trust
Estate that secured the Notes from the Lien of this Indenture and release
to the Issuer or any other Person entitled thereto any funds then on
deposit in the Trust Accounts. The Indenture Trustee shall release property
from the Lien of this Indenture pursuant to this paragraph only upon
receipt of an Issuer Request accompanied by an Officers' Certificate, an
Opinion of Counsel and (if required by the TIA) Independent Certificates in
accordance with TIA ss.ss. 314(c) and 314(d)(1) meeting the applicable
requirements of Section 11.1.
SECTION 8.5. Opinion of Counsel. The Indenture Trustee shall
receive at least seven days' notice when requested by the Issuer to take
any action pursuant to Section 8.4(a), accompanied by copies of any
instruments involved, and the Indenture Trustee shall also require, as a
condition to such action, an Opinion of Counsel stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such action have
been complied with and such action will not materially and adversely impair
the security for the Notes or the rights of the Noteholders in
contravention of this Indenture; provided, however, that such Opinion of
Counsel shall not be required to express an opinion as to the fair value of
the Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate
or other instrument delivered to the Indenture Trustee in connection with
any such action.
47
<PAGE>
ARTICLE IX
Supplemental Indentures
SECTION 9.1. Supplemental Indentures Without Consent of
Noteholders. (a) Without the consent of the Holders of Notes but with prior
written notice to the Rating Agencies, the Issuer and the Indenture
Trustee, when authorized by an Issuer Order, at any time and from time to
time, may enter into one or more indentures supplemental hereto (which
shall conform to the Trust Indenture Act as in force at the date of the
execution thereof), in form satisfactory to the Indenture Trustee, for any
of the following purposes:
(i) to correct or amplify the description of any property
at any time subject to the Lien of this Indenture, or better to
assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subjected to the Lien of this Indenture,
or to subject to the Lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer, and
the assumption by any such successor of the covenants of the
Issuer herein and in the Notes;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of Notes, or to surrender any right or
power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to replace the Spread Account with another form of
credit enhancement; provided, the Rating Agency Condition is
satisfied;
(vi) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any
supplemental indenture or to make any other provisions with
respect to matters or questions arising under this Indenture or in
any supplemental indenture; provided, that such action shall not
materially adversely affect the interests of the Holders of Notes;
(vii) to evidence and provide for the acceptance of the
appointment hereunder by a successor or additional trustee with
respect to the Notes or any class thereof and to add to or change
any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts
48
<PAGE>
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(viii) to modify, eliminate or add to the provisions of
this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
Federal statute hereafter enacted and to add to this Indenture
such other provisions as may be expressly required by the TIA.
The Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, without the consent of the any of the Holders of Notes
but with prior written notice to the Rating Agencies, enter into an
indenture or indentures supplemental hereto to cure any ambiguity, to
correct or supplement any provisions in this Indenture or for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of this Indenture or of modifying in any manner the rights
of the Holders of Notes under this Indenture; provided, however, that such
action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Noteholder.
SECTION 9.2. Supplemental Indentures With Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Order,
may, with prior written notice to the Rating Agencies and with the consent
of the Holders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes, by Act of such Holders delivered to the
Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Notes under this
Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Note affected
thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal
amount thereof, the interest rate thereon or the Redemption Price
with respect thereto, change the provisions of this Indenture
relating to the application of collections on, or the proceeds of
the sale of, the Trust Estate to the payment of principal of or
interest on the Notes, or change any place of payment where, or
the coin or currency in which, any Note or the interest thereon is
payable, or impair the right to institute suit for the enforcement
of the provisions of
49
<PAGE>
this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any such
amount due on or after the respective due dates thereof (or, in
the case of redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount, 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
this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to
the definition of "Outstanding";
(iv) reduce the percentage of the Outstanding Amount
required to direct the Indenture Trustee to direct the Issuer to
sell or liquidate the Trust Estate pursuant to Section 5.4;
(v) modify any provision of this Section except to
increase any percentage specified herein or to provide that
certain additional provisions of this Indenture or the Basic
Documents cannot be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in
such manner as to affect the calculation of the amount of any
payment of interest or principal due on any Note on any Payment
Date (including the calculation of any of the individual
components of such calculation) or to affect the rights of the
Holders of Notes to the benefit of any provisions for the
mandatory redemption of the Notes contained herein; or
(vii) permit the creation of any Lien ranking prior to or
on a parity with the Lien of this Indenture with respect to any
part of the Trust Estate or, except as otherwise permitted or
contemplated herein, terminate the Lien of this Indenture on any
property at any time subject hereto or deprive any Holder of Notes
of the security provided by the Lien of this Indenture.
It shall not be necessary for any Act of the Noteholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the
substance thereof. The manner of obtaining such consents (and any other
consents of Noteholders provided for in this Indenture or in any other
Basic Document) and of evidencing the
50
<PAGE>
authorization of the execution thereof by Noteholders shall be subject to
such reasonable requirements as the Indenture Trustee may provide.
Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section, the
Indenture Trustee shall mail to the Holders of the Notes to which such
amendment or supplemental indenture relates a notice setting forth in
general terms the substance of such supplemental indenture. Any failure of
the Indenture Trustee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 9.3. Execution of Supplemental Indentures. In executing,
or permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to
receive, and, subject to Sections 6.1 and 6.2, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Indenture Trustee, the Issuer and
the Holders of the Notes shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of
this Indenture for any and all purposes.
SECTION 9.5. Conformity with Trust Indenture Act. Every amendment
of this Indenture and every supplemental indenture executed pursuant to
this Article IX shall conform to the requirements of the Trust Indenture
Act as then in effect so long as this Indenture shall then be qualified
under the Trust Indenture Act.
SECTION 9.6. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and if required by the Indenture
Trustee shall, bear a notation in form approved by the Indenture Trustee as
to any matter provided for in such supplemental indenture. If the Issuer or
the Indenture Trustee shall so
51
<PAGE>
determine, new Notes so modified as to conform, in the opinion of the
Indenture Trustee and the Issuer, to any such supplemental indenture may be
prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
Redemption of Notes
SECTION 10.1. Redemption. (a) The Notes are subject to redemption
in whole, but not in part, at the direction of the Servicer pursuant to
Section 9.1(a) of the Sale and Servicing Agreement, on any Payment Date on
which the Servicer exercises its option to purchase the Trust Estate
pursuant to said Section 9.1(a), for a purchase price equal to the
Redemption Price; provided, however, that the Issuer has available funds
sufficient to pay the Redemption Price. The Servicer or the Issuer shall
furnish the Rating Agencies notice of such redemption. If such Notes are to
be redeemed pursuant to this Section 10.1(a), the Servicer or the Issuer
shall furnish notice of such election to the Indenture Trustee not later
than 25 days prior to the Redemption Date and the Issuer shall deposit with
the Indenture Trustee in the Note Distribution Account the Redemption Price
of the Notes to be redeemed.
(b) In the event that the assets of the Trust are sold pursuant to
Section 9.2 of the Trust Agreement, all amounts on deposit in the Note
Distribution Account shall be paid to the Noteholders up to the Outstanding
Amount and all accrued and unpaid interest thereon. If amounts are to be
paid to Noteholders pursuant to this Section 10.1(b), the Servicer or the
Issuer shall, to the extent practicable, furnish notice of such event to
the Indenture Trustee not later than 25 days prior to the Redemption Date
whereupon all such amounts shall be payable on the Redemption Date.
(c) If the Pre-Funded Amount has not been reduced to zero on the
Payment Date on which the Funding Period ends (or, if the Funding Period
does not end on a Payment Date, on the first Payment Date following the end
of the Funding Period), after giving effect to any reductions in the
Pre-Funded Amount on such Payment Date or Determination Date pursuant to
Section 5.7(a) of the Sale and Servicing Agreement, the Notes will be
redeemed in part as described in Section 8.2(c)(ii) in a principal amount
described therein.
SECTION 10.2. Form of Redemption Notice. (a) Notice of redemption
under Section 10.1(a) shall be given by the Indenture Trustee by
first-class mail, postage prepaid, mailed not less than five days prior to
the applicable Redemption Date to each Holder of Notes, as of the close of
business on the Record Date
52
<PAGE>
preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the place where such Notes are to be surrendered
for payment of the Redemption Price (which shall be the office or
agency of the Issuer to be maintained as provided in Section 3.2);
and
(iv) CUSIP numbers.
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Note
shall not impair or affect the validity of the redemption of any other
Note.
(b) Prior notice of redemption under Section 10.1(b) is not required
to be given to Noteholders.
SECTION 10.3. Notes Payable on Redemption Date. The Notes or
portions thereof to be redeemed shall, following notice of redemption
pursuant to this Article, become due and payable on the Redemption Date at
the Redemption Price and (unless the Issuer shall default in the payment of
the Redemption Price) no interest shall accrue on the Redemption Price for
any period after the date to which accrued interest is calculated for
purposes of calculating the Redemption Price.
ARTICLE XI
Miscellaneous
SECTION 11.1. Compliance Certificates and Opinions, etc. (a) Upon
any application or request by the Issuer to the Indenture Trustee to take
any action under this Indenture, the Issuer shall furnish to the Indenture
Trustee: (i) an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any, have
been complied with and (iii) (if required by the TIA) an Independent
Certificate from a firm of certified public accountants meeting the
53
<PAGE>
applicable requirements of this Section, except that, in the case of any
such application or request as to which the furnishing of such documents is
specifically required by this Indenture, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(w) a statement that each signatory of such certificate
or opinion has read or has caused to be read such covenant or
condition and the definitions herein relating thereto;
(x) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(y) a statement that, in the opinion of each such
signatory, such signatory has made (or has caused to be made) such
examination or investigation as is necessary to enable such
signatory to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(z) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been complied with.
(b)(i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the Lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.1(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee an Officers' Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of
such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officers' Certificate described in clause
(i), the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value
to the Issuer of the Collateral or other property or securities to
be so deposited and of all other such Collateral or other property
or securities made the basis of any such withdrawal or release
since the commencement of the then-current fiscal year of the
Issuer, as set forth in the certificates delivered pursuant to
clause (i) and this clause (ii), is 10% or more of the Outstanding
Amount of the Notes, but such a certificate need not be furnished
with respect to any Collateral or other property or securities so
deposited if the fair value thereof to the
54
<PAGE>
Issuer as set forth in the related Officers' Certificate is less
than $25,000 or less than one percent of the then Outstanding
Amount of the Notes.
(iii) Other than with respect to property as contemplated
by clause (v), whenever any Collateral or other property or
securities are to be released from the Lien of this Indenture, the
Issuer shall also furnish to the Indenture Trustee an Officers'
Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of
such release) of the Collateral or other property or securities
proposed to be released and stating that in the opinion of such
person the proposed release will not impair the security under
this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officers' Certificate certifying or stating
the opinion of any signer thereof as to the matters described in
clause (iii), the Issuer shall also furnish to the Indenture
Trustee an Independent Certificate as to the same matters if the
fair value to the Issuer of the Collateral or other property or
securities and of all other property, other than property as
contemplated by clause (v), or securities released from the Lien
of this Indenture since the commencement of the then-current
fiscal year, as set forth in the certificates required by clause
(iii) and this clause (iv), equals 10% or more of the Outstanding
Amount of the Notes, but such certificate need not be furnished in
the case of any release of Collateral or other property or
securities if the fair value thereof to the Issuer as set forth in
the related Officers' Certificate is less than $25,000 or less
than one percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of
this Section, the Issuer may, without compliance with the
requirements of the other provisions of this Section: (A) collect,
liquidate, sell or otherwise dispose of Receivables and Financed
Equipment as and to the extent permitted or required by the Basic
Documents and (B) make cash payments out of the Trust Accounts as
and to the extent permitted or required by the Basic Documents so
long as the Issuer shall deliver to the Indenture Trustee every
six months, commencing ___________ __, 199__, an Officers'
Certificate of the Issuer stating that all such dispositions of
Collateral that occurred since the execution of the previous such
Officers' Certificate (or for the first such Officers'
Certificate, since the Closing Date) were in the ordinary course
of the Issuer's business and that the proceeds thereof were
applied in accordance with the Basic Documents.
55
<PAGE>
SECTION 11.2. Form of Documents Delivered to Indenture Trustee. In
any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but
one such Person may certify or give an opinion with respect to some matters
and one or more other such Persons as to other matters, and any such Person
may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the certificate,
opinion or representations with respect to the matters upon which his
certificate or opinion is based is/are erroneous. Any such certificate of
an Authorized Officer or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Servicer, the Seller, the
Issuer or the Administrator, stating that the information with respect to
such factual matters is in the possession of the Servicer, the Seller, the
Issuer or the Administrator, as applicable, unless such Authorized Officer
or counsel knows, or in the exercise of reasonable care should know, that
the certificate, opinion or representations with respect to such matters
is/are erroneous.
Where any Person is required or permitted to make, give or execute
two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need not,
be consolidated and form one instrument.
Whenever in this Indenture, in connection with any application,
certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term
hereof, it is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of such certificate
or report (as the case may be), of the facts and opinions stated in such
document shall in such case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to
affect the Indenture Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in
Article VI.
SECTION 11.3. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided
by this Indenture to be given or taken by Noteholders may be embodied in
and evidenced by one or more instrument(s) of substantially similar tenor
signed by such
56
<PAGE>
Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided, such action shall become effective
when such instrument(s) are delivered to the Indenture Trustee, and, where
it is hereby expressly required, to the Issuer. Such instrument(s) (and the
action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Noteholders signing such instrument(s).
Proof of execution of any such instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Indenture and
(subject to Section 6.1) conclusive in favor of the Indenture Trustee and
the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture
Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or Act by the Holder of any Notes shall bind the Holder of
every Note issued upon the registration thereof, in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done
by the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 11.4. Notices, etc., to the Indenture Trustee, Issuer and
Rating Agencies. Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders, or other documents provided or
permitted by this Indenture, shall be in writing and, if such request,
demand, authorization, direction, notice, consent, waiver or Act of
Noteholders is to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the
Issuer, shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the Indenture
Trustee at its Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee or by any
Noteholder, shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage prepaid, to the Issuer
addressed to: Case Equipment Loan Trust 199_-_, in care of
[Trustee], ______________________, Attention:
______________________, and to Case Credit Corporation, as
Administrator, 233 Lake Avenue, Racine, Wisconsin 53403,
Attention: Treasurer, or at any other address previously furnished
in writing to the Indenture Trustee by the Issuer or the
Administrator. The Issuer shall
57
<PAGE>
promptly transmit any notice received by it from the Noteholders to
the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer,
the Indenture Trustee or the Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to their
respective addresses set forth in Section 10.3 of the Sale and Servicing
Agreement.
SECTION 11.5. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class, postage prepaid to each Noteholder
affected by such event, at his address as it appears on the Note Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice nor
any defect in any notice so mailed to any particular Noteholder shall
affect the sufficiency of such notice with respect to other Noteholders,
and any notice that is mailed in the manner herein provided shall
conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Noteholders shall be filed
with the Indenture Trustee but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such a
waiver.
In case, by reason of the suspension of regular mail service, it
shall be impractical to mail notice of any event to Noteholders when such
notice is required to be given pursuant to this Indenture, then any manner
of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance
constitute a Default or Event of Default.
SECTION 11.6. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or
any Paying Agent to such Holder, that is different from the methods
provided for in this Indenture or the Notes for such payments or notices.
The Issuer will furnish
58
<PAGE>
to the Indenture Trustee a copy of each such agreement and the Indenture
Trustee will cause payments to be made and notices to be given in
accordance with such agreements.
SECTION 11.7. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by the Trust Indenture Act, such
required provision shall control.
The provisions of TIA ss.ss. 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.8. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.9. Successors and Assigns. All covenants and agreements
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture
Trustee in this Indenture shall bind its successors, co-trustees and agents
of the Indenture Trustee.
SECTION 11.10. Severability. Any provision of this Indenture or
the Notes that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or of
the Notes, as applicable, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or
in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, the Noteholders, any other
party secured hereunder and any other Person with an ownership interest in
any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 11.12. Legal Holidays. In any case where the date on which
any payment is due shall not be a Business Day, then (notwithstanding any
other provision of the Notes or this Indenture) payment need not be made on
such date, but may be made on the next Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
59
<PAGE>
SECTION 11.13. Governing Law. This Indenture shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which when so executed shall be deemed to
be an original, but all such counterparts shall together constitute but one
and the same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is
subject to recording in any public recording offices, such recording is to
be effected by the Issuer and, at its expense, accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any
other Person secured hereunder or for the enforcement of any right or
remedy granted to the Indenture Trustee under this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the
Trustee or the Indenture Trustee on the Notes or under this Indenture or
any certificate or other writing delivered in connection herewith or
therewith, against: (i) the Indenture Trustee or the Trustee in their
individual capacities, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, officer, director,
employee or agent of: (a) the Indenture Trustee or the Trustee in their
individual capacities, (b) any owner of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or (c) of any successor or
assign of the Indenture Trustee or the Trustee in their individual
capacities, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Trustee have no such
obligations in their individual capacities) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided
by applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any
duties or obligations of the Issuer hereunder, the Trustee shall be subject
to, and entitled to the benefits of, Articles VI, VII and VIII of the Trust
Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering
into this Indenture, and each Noteholder, by accepting a Note, hereby
covenant and agree that they will not at any time institute against the
Seller or the Issuer, or join in any institution against the Seller or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States
Federal or State bankruptcy or similar law in connection with any
60
<PAGE>
obligations relating to the Notes, this Indenture or any of the Basic
Documents. The foregoing shall not limit the rights of the Indenture
Trustee to file any claim in or otherwise take any action with
respect to any insolvency proceeding that was instituted against the
Issuer by any Person other than the Indenture Trustee.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Indenture Trustee,
during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies
and extracts therefrom, to cause such books to be audited by Independent
certified public accountants, and to discuss the Issuer's affairs, finances
and accounts with the Issuer's officers, employees and Independent
certified public accountants, all at such reasonable times and as often as
may be reasonably requested. The Indenture Trustee shall and shall cause
its representatives to hold in confidence all such information; provided,
however, that the foregoing shall not be construed to prohibit: (i)
disclosure of any and all information that is or becomes publicly know, or
information obtained by the Indenture Trustee from sources other than the
Issuer or Servicer, (ii) disclosure of any and all information: (A) if
required to do so by any applicable statute, law, rule or regulation, (B)
to any government agency or regulatory or self-regulatory body having or
claiming authority to regulate or oversee any aspects of the Indenture
Trustee's business or that of its Affiliates, (C) pursuant to any subpoena,
civil investigative demand or similar demand or request of any court,
regulatory authority, arbitrator or arbitration to which the Indenture
Trustee or an Affiliate or any officer, director, employee or shareholder
thereof is subject, (D) in any preliminary or final offering circular,
registration statement or contract or other document pertaining to the
transactions contemplated by the Indenture and approved in advance by the
Issuer or (E) to any Affiliate, independent or internal auditor, agent,
employee or attorney of the Indenture Trustee having a need to know the
same; provided, that the Indenture Trustee advises such recipient of the
confidential nature of the information being disclosed and such recipient
agrees to keep such information confidential, (iii) any other disclosure
authorized by the Issuer or the Servicer or (iv) disclosure to the other
parties to the transactions contemplated by the Basic Documents.
61
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed by their respective officers duly authorized as of the
day and year first above written.
CASE EQUIPMENT LOAN TRUST 199_-_;
By: [TRUSTEE]
not in its individual capacity but solely as Trustee
By:-----------------------------------------
Name:-----------------------------------
Title:----------------------------------
[HARRIS TRUST AND SAVINGS BANK],
not in its individual capacity but solely
as Indenture Trustee
By:------------------------------------------
Name: Keith Richardson
Title: Assistant Vice President
62
<PAGE>
EXHIBIT A-1
to Indenture
FORM OF A-1 NOTES
-----------------
REGISTERED $__________1/
No. R-___ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ON THE FACE HEREOF.
CASE EQUIPMENT LOAN TRUST 199_-_
_____% CLASS A-1 ASSET BACKED NOTES
Case Equipment Loan Trust 199_-_, a trust organized and existing
under the laws of the State of Delaware (including any successor, the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of __________________ DOLLARS
($___________), partially payable on each Payment Date in an amount equal
to the aggregate amount, if any, payable from the Note Distribution Account
in respect of principal on the A-1 Notes pursuant to Section 3.1 of the
Indenture; provided, however, that the entire unpaid principal amount of
this Note shall be due and payable on the earlier of the March 1999 Payment
Date and the Redemption Date, if any, pursuant to Section 10.1(a) of the
Indenture. The Issuer will pay interest on this Note at the rate per annum
shown above, on each Payment Date until the
- --------
1/Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE>
principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Payment Date
(after giving effect to all payments of principal made on the preceding
Payment Date), subject to certain limitations contained in Section 3.1 of
the Indenture. Interest on this Note will accrue for each Payment Date from
the most recent Payment Date on which interest has been paid to but
excluding the then current Payment Date or, if no interest has yet been
paid, from the date hereof. Interest will be computed on the basis of
actual days elapsed and a 360-day year. Such principal of and interest on
this Note shall be paid in the manner specified in the Indenture.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made
by the Issuer with respect to this Note shall be applied first to interest
due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Dated: ___________, 199__
CASE EQUIPMENT LOAN TRUST 199_-_
By: [TRUSTEE]
not in its individual capacity but solely
as Trustee under the Trust Agreement
By:
Name:________________________________________
Title:_______________________________________
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: ___________, 199__
[HARRIS TRUST AND SAVINGS BANK], not in its
individual capacity but solely as Indenture Trustee
By:_______________________________________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its _____% Class A-1 Asset Backed Notes (herein
called the "A-1 Notes" or the "Notes"), all issued under an Indenture dated
as of _______ __, 199__ (such Indenture, as supplemented or amended, is
herein called the "Indenture"), between the Issuer and [HARRIS TRUST AND
SAVINGS BANK], not in its individual capacity but solely as trustee (the
"Indenture Trustee", which term includes any successor Indenture Trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights
and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture.
All terms used in this Note that are not otherwise defined herein and that
are defined in the Indenture shall have the meanings assigned to them in or
pursuant to the Indenture.
The Notes, the A-2 Notes, the A-3 Notes and the A-4 Notes are and
will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture.
The Issuer shall pay interest on overdue installments of interest
at the A-1 Note Rate to the extent lawful.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in
connection therewith, against: (i) the Indenture Trustee or the Trustee in
their individual capacities, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of: (a) the Indenture Trustee or the Trustee in their
individual capacities, (b) any holder of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of (c) any successor or
assign of the Indenture Trustee or the Trustee in their individual
capacities, except as any such Person may have expressly agreed and except
that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing
to such entity.
It is the intent of the Seller, the Servicer, the Noteholders and
the Note Owners that, for purposes of Federal and State income tax and any
other tax measured in whole or in part by income, the Notes will qualify as
indebtedness of the Trust. Each Noteholder or Note Owner, by acceptance of
a Note, or, in
<PAGE>
the case of a Note Owner, a beneficial interest in a Note, agrees to treat,
and to take no action inconsistent with the treatment of, the Notes for
such tax purposes as indebtedness of the Trust.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such Noteholder will
not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy,
reorganization or arrangement, insolvency or liquidation proceedings under
any United States Federal or State bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest
on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither [HARRIS TRUST AND
SAVINGS BANK], in its individual capacity, any owner of a beneficial
interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees, successors or
assigns shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on, or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in this Note or the Indenture, it being expressly understood that
said covenants, obligations and indemnifications have been made by the
Indenture Trustee for the sole purposes of binding the interests of the
Indenture Trustee in the assets of the Issuer. The Holder of this Note by
the acceptance hereof, and each Note Owner by the acceptance of a
beneficial interest herein, each agrees that, except as expressly provided
in the Basic Documents, in the case of an Event of Default under the
Indenture, the Holder and Note Owner shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however,
that nothing contained herein shall be taken to prevent recourse to, and
enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto_____________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: _____________ _______________________________ */
Signature Guaranteed:
- ----------------------------------------
Signatures must be
guaranteed by an "eligible
guarantor institution"
meeting the requirements of
the Note Registrar, which
requirements include
membership or participation
in STAMP or such other
"signature guarantee
program" as may be
determined by the Note
Registrar in addition to,
or in substitution for,
STAMP, all in accordance
with the Securities
Exchange Act of 1934, as
amended.
- -------------------------
*/ NOTE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the
within Note in every particular without alteration, enlargement or
any change whatsoever.
<PAGE>
EXHIBIT A-2
to Indenture
FORM OF A-2 NOTES
------------------
REGISTERED $____________2/
No. R-___ CUSIP NO. ___________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CASE EQUIPMENT LOAN TRUST 199_-_
_______% CLASS A-2 ASSET BACKED NOTES
Case Equipment Loan Trust 199_-_, a trust organized and existing
under the laws of the State of Delaware (including any successor, the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of __________________ DOLLARS
($___________), partially payable on each Payment Date in an amount equal
to the aggregate amount, if any, payable from the Note Distribution Account
in respect of principal on the A-2 Notes pursuant to Section 3.1 of the
Indenture; provided, however, that the entire unpaid principal amount of
this Note shall be due and payable on the earlier of the _________
_________ Payment Date and the Redemption Date, if any, pursuant to Section
10.1(a) of the Indenture. No payments of principal of the Notes will be
made until the principal of the A-1 Notes has been paid in full. The
- --------
2/Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
1
<PAGE>
Issuer will pay interest on this Note at the rate per annum shown above, on
each Payment Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on
the preceding Payment Date (after giving effect to all payments of
principal made on the preceding Payment Date), subject to certain
limitations contained in Section 3.1 of the Indenture. Interest on this
Note will accrue for each Payment Date from the most recent Payment Date on
which interest has been paid to but excluding the then current Payment Date
or, if no interest has yet been paid, from the date hereof. Interest will
be computed on the basis of actual days elapsed and a 360- day year. Such
principal of and interest on this Note shall be paid in the manner
specified in the Indenture.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made
by the Issuer with respect to this Note shall be applied first to interest
due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Dated: ____________, 199__
CASE EQUIPMENT LOAN TRUST 199_-_
By: [TRUSTEE]
not in its individual capacity but
solely as Trustee under the Trust Agreement
By:______________________________________________
Name:________________________________________
Title:_______________________________________
2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: _______________, 199__
[HARRIS TRUST AND SAVINGS BANK], not in its
individual capacity but solely as Indenture Trustee
By:___________________________________________
Authorized Signatory
3
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its ______% Class A-2 Asset Backed Notes (herein
called the "A-2 Notes" or the "Notes"), all issued under an Indenture dated
as of _______ __, 199__ (such Indenture, as supplemented or amended, is
herein called the "Indenture"), between the Issuer and [HARRIS TRUST AND
SAVINGS BANK], not in its individual capacity but solely as trustee (the
"Indenture Trustee", which term includes any successor Indenture Trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights
and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture.
All terms used in this Note that are not otherwise defined herein and that
are defined in the Indenture shall have the meanings assigned to them in or
pursuant to the Indenture.
The Notes, the A-1 Notes, the A-3 Notes and the A-4 Notes are and
will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture.
The Issuer shall pay interest on overdue installments of interest
at the A-2 Note Rate to the extent lawful.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in
connection therewith, against: (i) the Indenture Trustee or the Trustee in
their individual capacities, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of: (a) the Indenture Trustee or the Trustee in their
individual capacities, (b) any holder of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of (c) any successor or
assign of the Indenture Trustee or the Trustee in their individual
capacities, except as any such Person may have expressly agreed and except
that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing
to such entity.
It is the intent of the Seller, the Servicer, the Noteholders and
the Note Owners that, for purposes of Federal and State income tax and any
other tax measured in whole or in part by income, the Notes will qualify as
indebtedness of the Trust. Each Noteholder or Note Owner, by acceptance of
a Note, or, in the case of a Note Owner, a beneficial interest in a Note,
1
<PAGE>
agrees to treat, and to take no action inconsistent with the treatment
of, the Notes for such tax purposes as indebtedness of the Trust.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such Noteholder will
not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy,
reorganization or arrangement, insolvency or liquidation proceedings under
any United States Federal or State bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest
on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither [HARRIS TRUST AND
SAVINGS BANK], in its individual capacity, any owner of a beneficial
interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees, successors or
assigns shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on, or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in this Note or the Indenture, it being expressly understood that
said covenants, obligations and indemnifications have been made by the
Indenture Trustee for the sole purposes of binding the interests of the
Indenture Trustee in the assets of the Issuer. The Holder of this Note by
the acceptance hereof, and each Note Owner by the acceptance of a
beneficial interest herein, each agrees that, except as expressly provided
in the Basic Documents, in the case of an Event of Default under the
Indenture, the Holder and Note Owner shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however,
that nothing contained herein shall be taken to prevent recourse to, and
enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
2
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_____________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto ___________________________________________________
______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: _____________ _______________________________ */
Signature Guaranteed:
- ----------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Note Registrar,
which requirements include membership
or participation in STAMP or such other
"signature guarantee
program" as may be
determined by the Note
Registrar in addition to,
or in substitution for,
STAMP, all in accordance
with the Securities
Exchange Act of 1934, as
amended.
- -------------------------
*/ NOTE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the
within Note in every particular without alteration, enlargement or
any change whatsoever.
<PAGE>
EXHIBIT A-3
to Indenture
FORM OF A-3 NOTES
REGISTERED $____________3/
No. R-___ CUSIP NO. ___________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CASE EQUIPMENT LOAN TRUST 199_-_
______% CLASS A-3 ASSET BACKED NOTES
Case Equipment Loan Trust 199_-_, a trust organized and existing
under the laws of the State of Delaware (including any successor, the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of __________________ DOLLARS
($___________), partially payable on each Payment Date in an amount equal
to the aggregate amount, if any, payable from the Note Distribution Account
in respect of principal on the A-3 Notes pursuant to Section 3.1 of the
Indenture; provided, however, that the entire unpaid principal amount of
this Note shall be due and payable on the earlier of the _________ ________
Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a)
of the Indenture. No payments of principal of the Notes will be made until
the principal of the A-1 Notes and the A-2 Notes has
- --------
3/Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE>
been paid in full. The Issuer will pay interest on this Note at the rate
per annum shown above, on each Payment Date until the principal of this
Note is paid or made available for payment, on the principal amount of this
Note outstanding on the preceding Payment Date (after giving effect to all
payments of principal made on the preceding Payment Date), subject to
certain limitations contained in Section 3.1 of the Indenture. Interest on
this Note will accrue for each Payment Date from the most recent Payment
Date on which interest has been paid to but excluding the then current
Payment Date or, if no interest has yet been paid, from the date hereof.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. Such principal of and interest on this Note shall be paid in the
manner specified in the Indenture.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made
by the Issuer with respect to this Note shall be applied first to interest
due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Dated: __________, 199__
CASE EQUIPMENT LOAN TRUST 199_-_
By: [TRUSTEE]
not in its individual capacity but solely as Trustee
under the Trust Agreement
By:___________________________________________
Name:_____________________________________
Title:____________________________________
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: ___________, 199__
[HARRIS TRUST AND SAVINGS BANK], not in its
individual capacity but solely as Indenture Trustee
By:____________________________________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its ______% Class A-3 Asset Backed Notes (herein
called the "A-3 Notes" or the "Notes"), all issued under an Indenture dated
as of _______ __, 199__ (such Indenture, as supplemented or amended, is
herein called the "Indenture"), between the Issuer and [HARRIS TRUST AND
SAVINGS BANK], not in its individual capacity but solely as trustee (the
"Indenture Trustee", which term includes any successor Indenture Trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights
and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture.
All terms used in this Note that are not otherwise defined herein and that
are defined in the Indenture shall have the meanings assigned to them in or
pursuant to the Indenture.
The Notes, the A-1 Notes, the A-2 Notes and the A-4 Notes are and
will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture.
The Issuer shall pay interest on overdue installments of interest
at the A-3 Note Rate to the extent lawful.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in
connection therewith, against: (i) the Indenture Trustee or the Trustee in
their individual capacities, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of: (a) the Indenture Trustee or the Trustee in their
individual capacities, (b) any holder of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of (c) any successor or
assign of the Indenture Trustee or the Trustee in their individual
capacities, except as any such Person may have expressly agreed and except
that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing
to such entity.
It is the intent of the Seller, the Servicer, the Noteholders and
the Note Owners that, for purposes of Federal and State income tax and any
other tax measured in whole or in part by income, the Notes will qualify as
indebtedness of the Trust. Each Noteholder or Note Owner, by acceptance of
a Note, or, in
<PAGE>
the case of a Note Owner, a beneficial interest in a Note, agrees to treat,
and to take no action inconsistent with the treatment of, the Notes for
such tax purposes as indebtedness of the Trust.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such Noteholder will
not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy,
reorganization or arrangement, insolvency or liquidation proceedings under
any United States Federal or State bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest
on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither [HARRIS TRUST AND
SAVINGS BANK], in its individual capacity, any owner of a beneficial
interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees, successors or
assigns shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on, or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in this Note or the Indenture, it being expressly understood that
said covenants, obligations and indemnifications have been made by the
Indenture Trustee for the sole purposes of binding the interests of the
Indenture Trustee in the assets of the Issuer. The Holder of this Note by
the acceptance hereof, and each Note Owner by the acceptance of a
beneficial interest herein, each agrees that, except as expressly provided
in the Basic Documents, in the case of an Event of Default under the
Indenture, the Holder and Note Owner shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however,
that nothing contained herein shall be taken to prevent recourse to, and
enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto ___________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: _____________ _______________________________ */
Signature Guaranteed:
- ----------------------------------------
Signatures must be
guaranteed by an "eligible
guarantor institution"
meeting the requirements of
the Note Registrar, which
requirements include membership or
participation in STAMP or such other
"signature guarantee
program" as may be
determined by the Note
Registrar in addition to,
or in substitution for,
STAMP, all in accordance
with the Securities
Exchange Act of 1934, as
amended.
- -------------------------
*/ NOTE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the
within Note in every particular without alteration, enlargement or
any change whatsoever.
<PAGE>
EXHIBIT A-4
to Indenture
FORM OF A-4 NOTES
REGISTERED __________4/
No. R-___ CUSIP NO. ___________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF
THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CASE EQUIPMENT LOAN TRUST 199_-_
______% CLASS A-4 ASSET BACKED NOTES
Case Equipment Loan Trust 199_-_, a trust organized and existing
under the laws of the State of Delaware (including any successor, the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of __________________ DOLLARS
($___________), partially payable on each Payment Date in an amount equal
to the aggregate amount, if any, payable from the Note Distribution Account
in respect of principal on the A-4 Notes pursuant to Section 3.1 of the
Indenture; provided, however, that the entire unpaid principal amount of
this Note shall be due and payable on the earlier of the _________ _______
Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a)
of the Indenture. No payments of principal of the Notes will be made until
the principal of the A-1 Notes, the A-2 Notes and the
- --------
4/Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE>
A-3 Notes has been paid in full. The Issuer will pay interest on this Note
at the rate per annum shown above, on each Payment Date until the principal
of this Note is paid or made available for payment, on the principal amount
of this Note outstanding on the preceding Payment Date (after giving effect
to all payments of principal made on the preceding Payment Date), subject
to certain limitations contained in Section 3.1 of the Indenture. Interest
on this Note will accrue for each Payment Date from the most recent Payment
Date on which interest has been paid to but excluding the then current
Payment Date or, if no interest has yet been paid, from the date hereof.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. Such principal of and interest on this Note shall be paid in the
manner specified in the Indenture.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made
by the Issuer with respect to this Note shall be applied first to interest
due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Dated: __________, 199__
CASE EQUIPMENT LOAN TRUST 199_-_
By: [TRUSTEE]
not in its individual capacity but solely
as Trustee under the Trust Agreement
By:_____________________________________________
Name:_______________________________________
Title:______________________________________
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: ___________, 199__
[HARRIS TRUST AND SAVINGS BANK], not in its
individual capacity but solely as Indenture Trustee
By:________________________________________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its ______% Class A-4 Asset Backed Notes (herein
called the "A-4 Notes" or the "Notes"), all issued under an Indenture dated
as of _______ __, 199__ (such Indenture, as supplemented or amended, is
herein called the "Indenture"), between the Issuer and [HARRIS TRUST AND
SAVINGS BANK], not in its individual capacity but solely as trustee (the
"Indenture Trustee", which term includes any successor Indenture Trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights
and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture.
All terms used in this Note that are not otherwise defined herein and that
are defined in the Indenture shall have the meanings assigned to them in or
pursuant to the Indenture.
The Notes, the A-1 Notes, the A-2 Notes and the A-3 Notes are and
will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture.
The Issuer shall pay interest on overdue installments of interest
at the A-4 Note Rate to the extent lawful.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in
connection therewith, against: (i) the Indenture Trustee or the Trustee in
their individual capacities, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of: (a) the Indenture Trustee or the Trustee in their
individual capacities, (b) any holder of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of (c) any successor or
assign of the Indenture Trustee or the Trustee in their individual
capacities, except as any such Person may have expressly agreed and except
that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing
to such entity.
It is the intent of the Seller, the Servicer, the Noteholders and
the Note Owners that, for purposes of Federal and State income tax and any
other tax measured in whole or in part by income, the Notes will qualify as
indebtedness of the Trust. Each Noteholder or Note Owner, by acceptance of
a Note, or, in
<PAGE>
the case of a Note Owner, a beneficial interest in a Note, agrees to treat,
and to take no action inconsistent with the treatment of, the Notes for
such tax purposes as indebtedness of the Trust.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such Noteholder will
not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy,
reorganization or arrangement, insolvency or liquidation proceedings under
any United States Federal or State bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest
on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither [HARRIS TRUST AND
SAVINGS BANK], in its individual capacity, any owner of a beneficial
interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees, successors or
assigns shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on, or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in this Note or the Indenture, it being expressly understood that
said covenants, obligations and indemnifications have been made by the
Indenture Trustee for the sole purposes of binding the interests of the
Indenture Trustee in the assets of the Issuer. The Holder of this Note by
the acceptance hereof, and each Note Owner by the acceptance of a
beneficial interest herein, each agrees that, except as expressly provided
in the Basic Documents, in the case of an Event of Default under the
Indenture, the Holder and Note Owner shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however,
that nothing contained herein shall be taken to prevent recourse to, and
enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto____________________________________________________
______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: _____________ _______________________________ */
Signature Guaranteed:
- ----------------------------------------
Signatures must be
guaranteed by an "eligible
guarantor institution"
meeting the requirements of
the Note Registrar, which
requirements include
membership or participation
in STAMP or such other
"signature guarantee
program" as may be
determined by the Note
Registrar in addition to,
or in substitution for,
STAMP, all in accordance
with the Securities
Exchange Act of 1934, as
amended.
- -------------------------
*/ NOTE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the
within Note in every particular without alteration, enlargement or
any change whatsoever.
<PAGE>
EXHIBIT A-5
to Indenture
FORM OF CLASS B NOTES
----------------------
REGISTERED $____________5/
No. R-___ CUSIP NO. ___________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT
OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
CASE EQUIPMENT LOAN TRUST 199_-_
_______% CLASS B ASSET BACKED NOTES
Case Equipment Loan Trust 199_-_, a trust organized and existing
under the laws of the State of Delaware (including any successor, the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of __________________ DOLLARS
($___________), partially payable on each Payment Date in an amount equal
to the aggregate amount, if any, payable from the Note Distribution Account
in respect of principal on the Class B Notes pursuant to Section 3.1 of the
Indenture; provided, however, that the entire unpaid principal amount of
this Note shall be due and payable on the earlier of the __________ ______
Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a)
of the Indenture. The Issuer will pay interest on this Note at the rate per
annum shown above, on each Payment Date until the
- --------
5/Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE>
principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Payment Date
(after giving effect to all payments of principal made on the preceding
Payment Date), subject to certain limitations contained in Section 3.1 of
the Indenture. Interest on this Note will accrue for each Payment Date from
the most recent Payment Date on which interest has been paid to but
excluding the then current Payment Date or, if no interest has yet been
paid, from the date hereof. Interest will be computed on the basis of a
360-day year of twelve 30-day months. Such principal of and interest on
this Note shall be paid in the manner specified in the Indenture.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made
by the Issuer with respect to this Note shall be applied first to interest
due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Dated: __________, 199__
CASE EQUIPMENT LOAN TRUST 199_-_
By: [TRUSTEE]
not in its individual capacity but solely as Trustee
under the Trust Agreement
By:_______________________________________________
Name:_________________________________________
Title:________________________________________
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: ___________, 199__
[HARRIS TRUST AND SAVINGS BANK], not in its
individual capacity but solely as Indenture Trustee
By:_______________________________________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its ______% Class B Asset Backed Notes (herein called
the "Class B Notes" or the "Notes"), all issued under an Indenture dated as
of _______ __, 199__ (such Indenture, as supplemented or amended, is herein
called the "Indenture"), between the Issuer and [HARRIS TRUST AND SAVINGS
BANK], not in its individual capacity but solely as trustee (the "Indenture
Trustee", which term includes any successor Indenture Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders
of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are not otherwise defined herein and that are
defined in the Indenture shall have the meanings assigned to them in or
pursuant to the Indenture.
The Class B Notes are and will be equally and ratably secured by
the collateral pledged as security therefor as provided in the Indenture,
but the interest of the Class B Noteholders in such collateral is
subordinated and second to the rights of the Class A Noteholders.
The Issuer shall pay interest on overdue installments of interest
at the Class B Note Rate to the extent lawful.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in
connection therewith, against: (i) the Indenture Trustee or the Trustee in
their individual capacities, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of: (a) the Indenture Trustee or the Trustee in their
individual capacities, (b) any holder of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of (c) any successor or
assign of the Indenture Trustee or the Trustee in their individual
capacities, except as any such Person may have expressly agreed and except
that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing
to such entity.
It is the intent of the Seller, the Servicer, the Noteholders and
the Note Owners that, for purposes of Federal and State income tax and any
other tax measured in whole or in part by income, the Notes will qualify as
indebtedness
<PAGE>
of the Trust. Each Noteholder or Note Owner, by acceptance of a Note, or,
in the case of a Note Owner, a beneficial interest in a Note, agrees to
treat, and to take no action inconsistent with the treatment of, the Notes
for such tax purposes as indebtedness of the Trust.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such Noteholder will
not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy,
reorganization or arrangement, insolvency or liquidation proceedings under
any United States Federal or State bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest
on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither [HARRIS TRUST AND
SAVINGS BANK], in its individual capacity, any owner of a beneficial
interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees, successors or
assigns shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on, or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in this Note or the Indenture, it being expressly understood that
said covenants, obligations and indemnifications have been made by the
Indenture Trustee for the sole purposes of binding the interests of the
Indenture Trustee in the assets of the Issuer. The Holder of this Note by
the acceptance hereof, and each Note Owner by the acceptance of a
beneficial interest herein, each agrees that, except as expressly provided
in the Basic Documents, in the case of an Event of Default under the
Indenture, the Holder and Note Owner shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however,
that nothing contained herein shall be taken to prevent recourse to, and
enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto____________________________________________________
______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: _____________ _______________________________ */
Signature Guaranteed:
- ----------------------------------------
Signatures must be
guaranteed by an "eligible
guarantor institution"
meeting the requirements of
the Note Registrar, which
requirements include
membership or participation
in STAMP or such other
"signature guarantee
program" as may be
determined by the Note
Registrar in addition to,
or in substitution for,
STAMP, all in accordance
with the Securities
Exchange Act of 1934, as
amended.
- -------------------------
*/ NOTE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the
within Note in every particular without alteration, enlargement or
any change whatsoever.
<PAGE>
EXHIBIT B
to Indenture
FORM OF SECTION 3.9 OFFICERS' CERTIFICATE
____________, 199_
[HARRIS TRUST AND SAVINGS BANK]
311 West Monroe, 12th Floor
Chicago, Illinois 60603
Attention: Indenture Trust Administration
Pursuant to Section 3.9 of the Indenture, dated as of _______ __,
199__ (the "Indenture"), between Case Equipment Loan Trust 199_-_ (the
"Issuer") and [HARRIS TRUST AND SAVINGS BANK], as Indenture Trustee, the
undersigned hereby certify that:
(a) a review of the activities of the Issuer during the
previous fiscal year and of performance under the Indenture has
been made under the supervision of the undersigned; and
(b) to the best knowledge of the undersigned, based on
such review, the Issuer has complied with all conditions and
covenants under the Indenture throughout such year. [or, if there
has been a default in the compliance of any such condition or
covenant, this certificate is to specify each such default known
to the undersigned and the nature and status thereof]
CASE EQUIPMENT LOAN TRUST 199_-_
By:_______________________________________________
Name:___________________________________________
Title:__________________________________________
By:________________________________________________
Name:____________________________________________
Title:___________________________________________
<PAGE>
APPENDIX A
Definitions
"A-1 Note" means any of the Issuer's ______% Class A-1 Asset
Backed Notes.
"A-1 Note Final Scheduled Maturity Date" means the ____________
_____ Payment Date.
"A-1 Note Rate" means _____% per annum, computed on the basis of
actual days elapsed and a 360-day year.
"A-1 Noteholders" means the holders of record of the A-1 Notes.
"A-2 Note" means any of the Issuer's ______% Class A-2 Asset
Backed Notes.
"A-2 Note Final Scheduled Maturity Date" means the _____ ________
Payment Date.
"A-2 Note Rate" means ______% per annum, computed on the basis of
actual days elapsed and a 360-day year.
"A-2 Noteholders" means the holders of record of the A-2 Notes.
"A-3 Note" means any of the Issuer's ______% Class A-3 Asset
Backed Notes.
"A-3 Note Final Scheduled Maturity Date" means the ______ _____
Payment Date.
"A-3 Note Rate" means ______% per annum, computed on the basis of
a 360-day year of twelve 30-day months.
"A-3 Noteholders" means the holders of record of the A-3 Notes.
"A-4 Note" means any of the Issuer's ______% Class A-4 Asset
Backed Notes.
"A-4 Note Rate" means ______% per annum, computed on the basis of
a 360-day year of twelve 30-day months.
A-1
<PAGE>
"A-4 Noteholders" means the holders of record of the A-4 Notes.
"Act" is defined in Section 11.3(a) of the Indenture.
"Administration Agreement" means the Administration Agreement,
dated as of _____ __, 199__, among the Administrator, the Issuer and the
Indenture Trustee.
"Administration Fee" is defined in the Administration Agreement.
"Administrator" means Case Credit Corporation, a Delaware
corporation, or any successor Administrator under the Administration
Agreement.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this Sale and Servicing Agreement, as the same
may be amended and supplemented from time to time.
"Amount Financed" with respect to a Receivable means the amount
advanced under the Receivable toward the purchase price of the Financed
Equipment and any related costs and any insurance financed thereby.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
rate of finance charges stated in the related Contract.
"Authorized Officer" means, with respect to the Issuer, any
officer of the Trustee who is authorized to act for the Trustee in matters
relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Trustee to the Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter) and, so long as the Administration Agreement is in effect, any
Vice President or more senior officer of the Administrator who is
authorized to act for the Administrator in matters relating to the Issuer
and to be acted upon by the Administrator pursuant to the Administration
Agreement and who is identified on the list of Authorized Officers
delivered by the Administrator to the Indenture Trustee on the Closing Date
(in each case as such list may be modified or supplemented from time to
time thereafter).
A-2
<PAGE>
"Basic Documents" means the Certificate of Trust, the Trust
Agreement, the Purchase Agreement, the Sale and Servicing Agreement, the
Administration Agreement, the Note Depositary Agreement and other documents
and certificates delivered in connection therewith.
"Benefit Plan" is defined in Section 3.4 of the Trust Agreement.
"Book-Entry Notes" means a beneficial interest in the Notes of a
particular Class, ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 2.10 of the
Indenture.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banking institutions or trust companies in The City of New
York and The City of Chicago, Illinois are authorized or obligated by law,
regulation or executive order to remain closed.
"Case" means Case Corporation, a Delaware corporation, and its
successors and assigns.
"Certificate Balance" equals, initially, $__________ and,
thereafter, equals such amount reduced by all amounts allocable to
principal previously distributed to Certificateholders.
"Certificate Distribution Account" is defined in Section 5.1 of the
Trust Agreement.
"Certificate of Trust" means the Certificate of Trust
substantially in the form of Exhibit B to the Trust Agreement to be filed
for the Trust pursuant to Section 3810(a) of the Trust Statute.
"Certificate Pool Factor" means, as of the close of business on
any Payment Date, the Certificate Balance divided by the initial
Certificate Balance (carried out to the seventh decimal place). The
Certificate Pool Factor is 1.0000000 as of the Closing Date, and,
thereafter, will decline to reflect reductions in the Certificate Balance.
"Certificate Register" and "Certificate Registrar" means the
register mentioned and the registrar appointed pursuant to Section 3.4 of
the Trust Agreement.
"Certificated Security" has the meaning assigned thereto in
Section 8- 102(a)(4) of Article 8 of the UCC.
A-3
<PAGE>
"Certificateholder" means a Person in whose name a Trust Certificate
is registered.
"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 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 (a)
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), except that during the Funding Period no interest will
accrue on the Pre-Funded Percentage of the Certificate Balance plus (b) the
Certificateholders' Interest Carryover Shortfall for the current Payment
Date.
"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, on any
Payment Date, the remainder, if any, of the Principal Distributable Amount
for that Payment Date after subtracting the Class Principal Distributable
Amount for each Class of Notes; provided that (a) in no event shall the
Certificateholders' Principal Distributable Amount exceed the outstanding
principal amount of Certificates, and (b) on the Final Scheduled Maturity
Date, the Certificateholders' 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 and the Certificate Distribution Account on such Payment Date and
allocable to principal) to reduce the outstanding principal amount of
Certificates to zero.
A-4
<PAGE>
"Certificates" means the Trust Certificates (as defined in the Trust
Agreement).
"Class" means any class of Notes.
"Class A Noteholder" means any holder of a Class A Note.
"Class A Noteholders' Distributable Amount" means, with respect to
any Payment Date, the sum of the Class A Noteholders' Interest
Distributable Amount, plus the Class Principal Distributable Amount for
each class of Class A Notes.
"Class A Noteholders' Interest Carryover Shortfall" means, with
respect to any Payment Date (the "current Payment Date"), the excess of the
Class A Noteholders' Interest Distributable Amount for the preceding
Payment Date over the amount in respect of interest on the Class A 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 Class A Notes, from such preceding Payment Date to but
excluding the current Payment Date.
"Class A Noteholders' Interest Distributable Amount" means, with
respect to any Payment Date (the "current Payment Date"), an amount equal
to the sum of (a) the aggregate amount of interest accrued on the Class A
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 for
the A-1 Notes and A-2 Notes (based on the actual number of days elapsed and
a 360-day year) and for the A-3 Notes and the A-4 Notes (based on a 360-day
year of twelve 30-day months) plus (b) the Class A Noteholders' Interest
Carryover Shortfall for the current Payment Date.
"Class A Notes" means the A-1 Notes, the A-2 Notes, the A-3 Notes
and the A-4 Notes.
"Class B Note" means any of the Issuer's ______% Class B Asset
Backed Notes.
"Class B Note Rate" means ______% per annum, computed on the basis
of a 360-day year of twelve 30-day months.
"Class B Noteholder" means any holder of a Class B Note.
A-5
<PAGE>
"Class B Noteholders' Distributable Amount" means, with respect to
any Payment Date, the sum of the Class B Noteholders' Interest
Distributable Amount and the Class Principal Distributable Amount for the
Class B Notes.
"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: (a) the aggregate amount of interest accrued on the Class B
Notes at the Class B Rate 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 plus (b) the Class B Noteholders'
Interest Carryover Shortfall for the current Payment Date.
"Class Principal Distributable Amount" means, with respect to any
Class of Notes on a Payment Date, the remainder, if any, of the Principal
Distributable Amount for that Payment Date after subtracting the Class
Principal Distributable Amount for each Class of Notes having priority of
payment over such Class of Notes; provided that (a) in no event shall the
Class Principal Distributable Amount for any Class exceed the outstanding
principal amount of that Class, (b) on the Final Scheduled A-1 Maturity
Date, the Class Principal Distributable Amount for the A-1 Notes 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 A-1 Notes to zero and (c) on the
applicable final scheduled maturity date, the Class Principal Distributable
Amount for each other Class of Notes 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 such
Class of Notes to zero. For purposes of the foregoing, the various Classes
of Notes shall have the following priority (beginning with the highest
priority and descending to the lowest): the A-1 Notes, the A-2 Notes, the
A-3 Notes and the Class B Notes.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act that has been
designated as the "Clearing Agency" for purposes of the Indenture.
A-6
<PAGE>
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means ____________ __, 199__.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Collateral" is defined in the Granting Clause of the Indenture.
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 5.1(a) of the Sale and
Servicing Agreement.
"Collection Period" means, with respect to any Payment Date, the
period from and including the end of the preceding Collection Period (or,
if for the first Payment Date, the day after the Initial Cutoff Date) to
but excluding the sixth (6th) day of the calendar month in which the
Payment Date occurs.
"Commission" means the Securities and Exchange Commission.
"Contract" means a Retail Installment Contract, a Lease or a Dealer
Loan.
"Contract Value" means, with respect to any day (including the
Initial Cutoff Date or any Subsequent Cutoff Date), the sum of (a) the
present value of the future Scheduled Payments discounted monthly at an
annual rate equal to (i) in the case of the Initial Receivables, the
Initial Cutoff Date APR and (ii) in the case of the Subsequent Receivables,
the applicable Subsequent Cutoff Date APR, plus (b) the amount of any past
due payments. There shall be deemed to be no Scheduled Payments due on a
Liquidated Receivable.
"Control" with respect to any Federal Book Entry Security, the
Indenture Trustee shall have obtained control if:
(i) the Indenture Trustee is a participant in the book
entry system maintained by the Federal Reserve Bank that is acting
as fiscal agent for the issuer of such Federal Book Entry
Security, and such Federal Reserve Bank has indicated by book
entry that such Federal Book Entry Security has been credited to
the Indenture Trustee's securities account in such book entry
system; or
(ii) (a) the Indenture Trustee (1) is registered on the
records of a Securities Intermediary as the person having a
Securities Entitlement in
A-7
<PAGE>
respect of such Federal Book Entry Security against such
Securities Intermediary; or (2) has obtained the agreement, in
writing, of the Securities Intermediary for such Securities
Entitlement that such Securities Intermediary will comply with
Entitlement Orders of the Indenture Trustee without further
consent of any other Person; and (b) the Securities Intermediary
is a participant in the book entry system maintained by the
Federal Reserve Bank that is acting as fiscal agent for the issuer
of such Federal Book Entry Security; and (c) such Federal Reserve
Bank has indicated by book entry that such Federal Book Entry
Security has been credited to the Securities Intermediary's
securities account in such book entry system.
"Corporate Trust Office" means, (a) with respect to the Indenture
Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which
office at the date of the Indenture is located at [311 West Monroe Street,
12th Floor, Chicago, Illinois 60606], Attention: [Indenture Trust
Administration (facsimile no. (312) 461- 3525)]; or at such other address
as the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Seller, or the principal corporate trust office of any
successor Indenture Trustee (the address of which the successor Indenture
Trustee will notify the Noteholders and the Seller), and (b) with respect
to the Trustee, the principal corporate trust office of the Trustee located
at _________________________________, Attention: _______________________;
or at such other address as the Trustee may designate from time to time by
notice to the Certificateholders and the Depositor, or the principal
corporate trust office of any successor Trustee (the address of which the
successor Trustee will notify the Certificateholders and the Depositor).
"Credit" means Case Credit Corporation, a Delaware corporation, and its
successors and assigns.
"Dealer" means the dealer (which may include retail outlets owned
by Case) or broker who originated and assigned the respective Receivable to
Credit under a Dealer Agreement.
"Dealer Agreement" means the retail financing agreement, warranty
agreement or other agreement between the applicable Dealer and Credit which
governs the terms of sales of Receivables from that Dealer to Case Credit.
"Dealer Loan" means a secured or unsecured term loan to an equipment
dealer.
"Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
A-8
<PAGE>
"Definitive Notes" is defined in Section 2.10 of the Indenture.
"Delivery" means, when used with respect to Trust Account Property:
(i) with respect to a Certificated Security, transfer of
such Certificated Security to the Indenture Trustee or its nominee
or custodian by physical delivery to the Indenture Trustee or its
nominee or custodian, endorsed to, or registered in the name of,
the Indenture Trustee or its nominee or custodian or endorsed in
blank; and
(ii) with respect to any such Trust Account Property that
constitutes an Uncertificated Security (including any investments
in money market mutual funds, but excluding any Federal Book Entry
Security), (A) registration of the Indenture Trustee as the
registered owner by the issuer, or (B) satisfaction of the
requirements for obtaining "control" pursuant to Section
8-106(c)(2) of Article 8 of the UCC.
"Depositor" means the Seller in its capacity as Depositor under the
Trust Agreement.
"Determination Date" means, with respect to any Transfer Date, the
second Business Day prior to such Transfer Date.
"Eligible Deposit Account" means either: (a) a segregated account
with an Eligible Institution or any other segregated account, the deposit
of funds in which satisfies the Rating Agency Condition 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
State (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long
as any of the securities of such depository institution have a credit
rating from each Rating Agency in one of its generic rating categories that
signifies investment grade.
"Eligible Institution" means: (a) the corporate trust department
of the Indenture Trustee or the Trustee or (b) a depository institution
organized under the laws of the United States of America or any State (or
any domestic branch of a foreign bank), which: (i) has either a long-term
or short-term senior unsecured debt rating or certificate of deposit rating
acceptable to the Rating Agencies and (ii) whose deposits are insured by
the FDIC.
"Eligible Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or
registered form that evidence:
A-9
<PAGE>
(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 (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 shall 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) 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); provided, that during the Funding
Period no investments in money market funds shall be made with
funds in any Trust Account other than the Collection Account;
(e) bankers' acceptances issued by any depository
institution or trust company referred to in clause (b);
(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 investments described in clauses (d) and
(g) shall be made only so long as making such investments will not
require the Issuer to register as an investment company under the
Investment Company Act of 1940, as amended.
A-10
<PAGE>
"Entitlement Order" has the meaning assigned thereto in Section 8-
102(a)(8) of Article 8 of the UCC.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Event of Default" is defined in Section 5.1 of the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or
the Treasurer of such corporation; and with respect to any partnership, any
general partner thereof.
"Expenses" is defined in Section 8.2 of the Trust Agreement.
"Federal Book Entry Security" means an obligation (i) issued by
the U.S. Treasury, the Federal Home Loan Mortgage Corporation or the
Federal National Mortgage Association, or any other direct obligation of,
or obligation fully guaranteed as to timely payment or principal and
interest by, the United States of America, that is a book-entry security
held through the Federal Reserve System pursuant to Federal book entry
regulations, and (ii) the perfection of a security interest in which is
governed pursuant to federal regulations by Article 8 of the UCC.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor.
"Final Scheduled Maturity Date" means the _____ _____ Payment Date.
"Financed Equipment" means property, including any agricultural or
construction equipment, together with all accessions thereto, securing an
Obligor's indebtedness under a Retail Installment Contract, a Dealer Loan
or a Lease that is treated as a security agreement under applicable state
law.
"Financial Asset" has the meaning assigned thereto in Section
8-102(a)(9) of Revised Article 8.
"First-Tier Assignment" means the document of assignment attached
to the Purchase Agreement as Exhibit A.
A-11
<PAGE>
"First-Tier Subsequent Transfer Assignment" is defined in Section
4.1(b)(i) of the Purchase Agreement.
"Funding Period" means the period from and including the Closing
Date and ending on the earliest of: (a) 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 date on which an Event of Default or a Servicer
Default occurs, (c) the date on which an Insolvency Event occurs with
respect to the Seller or the Servicer and (d) the close of business on the
________________ 199__ Payment Date.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create and grant a Lien upon and
a security interest in and right of set-off against, deposit, set over and
confirm pursuant to the Indenture, and other forms of the verb "to Grant"
shall have correlative meanings. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but
none of the obligations) of the Granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give
receipt for principal and interest payments in respect of the Collateral
and all other moneys payable thereunder, to give and receive notices and
other communications, to make waivers or other agreements, to exercise all
rights and options, to bring Proceedings in the name of the Granting party
or otherwise and generally to do and receive anything that the Granting
party is or may be entitled to do or receive thereunder or with respect
thereto.
"Harris" means [Harris Trust and Savings Bank], an [Illinois] banking
corporation.
"Holder" means (a) with respect to a Note, the Person in whose
name a Note is registered on the Note Register and (b) with respect to a
Certificate, a Certificateholder, as the context may require.
"Indemnified Parties" is defined in Section 8.2 of the Trust Agreement.
"Indenture" means the Indenture, dated _____ __, 199__, between
the Issuer and the Indenture Trustee, as the same may be amended and
supplemented from time to time.
"Indenture Trustee" means [Harris Trust and Savings Bank], an
[Illinois] banking corporation, not in its individual capacity but solely
as Indenture Trustee under the Indenture, or any successor Indenture
Trustee under the Indenture.
A-12
<PAGE>
"Independent" means, when used with respect to any specified
Person, that the Person: (a) is in fact independent of the Issuer, any
other obligor upon the Notes, the Seller and any Affiliate of any of the
foregoing Persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor,
the Seller or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Seller or any
Affiliate of any of the foregoing Persons as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing
similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.1
of the Indenture, made by an Independent appraiser or other expert
appointed by an Issuer Order and approved by the Indenture Trustee in the
exercise of reasonable care, and such opinion or certificate shall state
that the signer has read the definition of "Independent" in the Indenture
and that the signer is Independent within the meaning thereof.
"Initial Certificate Balance" means the amount specified as the
Initial Certificate Balance in a letter of instruction from the Depositor
to the Trustee.
"Initial Class B Percentage" means ____%, which is the percentage
equivalent of (a) the initial balance of the Class B Notes divided by (b)
the Pool Balance as of the Initial Cutoff Date plus the Pre-Funded Amount
as of the Closing Date.
"Initial Cutoff Date" means _______________ ___, 199__.
"Initial Cutoff Date APR" means ______%, which is the weighted
average APR of the Initial Receivables as of the Initial Cutoff Date.
"Initial Pool Balance" means: (i) the Pool Balance as of the
Initial Cutoff Date, which is $__________plus (ii) the aggregate Contract
Value of all Subsequent Receivables sold to the Issuer as of their
respective Subsequent Cutoff Dates.
"Initial Purchase Price" is defined in Section 2.1 of the Purchase
Agreement.
"Initial Receivable" means any Contract included in the schedule
delivered by the Servicer to the Trustee on the Closing Date (which
schedule may be in the form of microfiche).
A-13
<PAGE>
"Insolvency Event" means, with respect to a specified Person: (a)
the filing of a decree or order for relief by a court having jurisdiction
in the premises in respect of such Person or any substantial part of its
property in an involuntary case under any applicable Federal or State
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial
part of its property, or ordering the winding-up or liquidation of such
Person's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days, or (b) the commencement by such
Person of a voluntary case under any applicable Federal or State
bankruptcy, insolvency or other similar law now or hereafter in effect, or
the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for
any substantial part of its property, or the making by such Person of any
general assignment for the benefit of creditors, or the failure by such
Person generally to pay its debts as such debts become due, or the taking
of action by such Person in furtherance of any of the foregoing.
"Insolvency Proceeds" is defined in Section 9.1(b) of the Sale and
Servicing Agreement.
"Instruments" has the meaning assigned thereto in Section 9-105(l)(i)
of Article 8 of the UCC.
"Investment Earnings" means, with respect to any Payment Date, the
interest and other investment earnings (net of losses and investment
expenses) on amounts on deposit in the Trust Accounts to be deposited into
the Collection Account on the related Transfer Date pursuant to Section
5.1(b) of the Sale and Servicing Agreement.
"Investment Property" is defined in Section 9-115(1)(f) of the UCC.
"Issuer" means Case Equipment Loan Trust 199_-_ until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained in the Indenture and required by the TIA, each other
obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or
request, respectively, signed in the name of the Issuer by any one of its
Authorized Officers and delivered to the Indenture Trustee.
"Lease" means a lease of agricultural or construction [or specify
other] equipment.
A-14
<PAGE>
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any
liens that attach to the related Receivable by operation of law as a result
of any act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable liquidated by the
Servicer through the sale or other disposition of the related Financed
Equipment (if any) or that the Servicer has, after using all reasonable
efforts to realize upon the Financed Equipment (if any), determined to
charge off without realizing upon the Financed Equipment (if any).
"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the moneys collected in respect thereof from whatever source
(including the proceeds of insurance policies with respect to the related
Financed Equipment [if any] or Obligor and payments made by a Dealer
pursuant to the related Dealer Agreement with respect to such Receivable
(other than amounts paid from Dealer reserve accounts maintained with
Credit)), other than Recoveries, net of the sum of any amounts expended by
the Servicer in connection with such liquidation and any amounts required
by law to be remitted to the Obligor on such Liquidated Receivable.
"Liquidity Receivables Purchase Agreement" is defined in the Recitals
of the Purchase Agreement.
"Maximum Negative Carry Amount" means the product of: (i) the
difference between: (a) the weighted average of the interest rates on the
A-1 Notes, the A-2 Notes, the A-3 Notes, the A-4 Notes and the Class B
Notes, minus (b) [___]%, multiplied by (ii) the Note Percentage of the
amount on deposit in the Pre-Funding 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).
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Negative Carry Account" means the account designated as such,
established and maintained pursuant to Section 5.1(a) of the Sale and
Servicing Agreement.
"Negative Carry Account Initial Deposit" means $__________.
"Negative Carry Amount" means an amount for each Collection Period
calculated by the Servicer as the difference (if positive) between: (a) the
product of: (i) the sum of the Class A Noteholders' Interest Distributable
Amount and the Class B Noteholders' Interest Distributable Amount
multiplied by (ii) the Pre- Funded Percentage as of the immediately prior
Payment Date (or, in the case of the first Payment Date, the Closing Date)
minus (b) the Pre-Funding Account Investment Earnings.
"Note Balance" means the aggregate Outstanding Amount of the Notes
from time to time.
"Note Depository Agreement" means the agreement among the Issuer,
the Indenture Trustee, the Administrator and The Depository Trust Company,
as the initial Clearing Agency, dated as of the Closing Date.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1(a) of the Sale and
Servicing Agreement.
"Note Owner" means, with respect to a Book-Entry Note, the Person
who is the owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account with
the Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of the
Clearing Agency).
"Note Percentage" means the percentage equivalent to a fraction
the numerator of which is the Note Balance and the denominator of which is
the sum of the Note Balance and the Certificate Balance.
"Note Pool Factor" means, as of the close of business on any
Payment Date with respect to any Class of Notes, the Outstanding Amount of
that Class of Notes divided by the original Outstanding Amount of that
Class of Notes (carried out to the seventh decimal place). The Note Pool
Factor for each Class will be 1.0000000 as of the Closing Date, and,
thereafter, will decline to reflect reductions in the Outstanding Amount of
the Notes.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.4 of the Indenture.
"Noteholders" means the Class A Noteholders and the Class B
Noteholders.
"Noteholders' Distributable Amount" means, with respect to any Payment
Date, the sum of: (a) the Class A Noteholders' Distributable Amount and (b) the
Class B Noteholders' Distributable Amount.
"Notes" means the Class A Notes and the Class B Notes.
A-15
<PAGE>
"Obligor" on a Receivable means the purchaser or co-purchasers of
the Financed Equipment and any other Person who owes payments under the
Receivable.
"Officers' Certificate" means a certificate signed by at least one
of the Chairman of the Board, the President, the Vice Chairman of the
Board, an Executive Vice President, any Vice President, a Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary of the Seller or the
Servicer, as appropriate.
"Opinion of Counsel" means a written opinion of counsel (who may,
except as otherwise expressly provided in this Agreement, be an employee of
or counsel to the Seller or the Servicer), which counsel and opinion shall
be acceptable to the Indenture Trustee, the Trustee or the Rating Agencies,
as applicable.
"Originator" means Case Credit Corporation, a Delaware corporation, its
successors and assigns.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which
money in the necessary amount has been theretofore deposited with
the Indenture Trustee or any Paying Agent in trust for the Holders
of such Notes (provided, however, that if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant
to the Indenture); and
(iii) Notes in exchange for or in lieu of other Notes
that have been authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a bona fide purchaser;
provided, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any
Basic Document, Notes owned by the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Notes that a Responsible Officer of the Indenture Trustee actually knows to
be so owned shall be so disregarded. Notes so owned that have been
A-16
<PAGE>
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, the Seller or any Affiliate of
any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all
Notes, or Class of Notes, as applicable, Outstanding at the date of
determination.
"Owned Contracts" is defined in the Recitals of the Purchase
Agreement.
"Pass-Through Rate" means, with respect to the Certificates, ______%
per annum.
"Paying Agent" means (a) with respect to the Notes, the Indenture
Trustee or any other Person that meets the eligibility standards for the
Indenture Trustee specified in Section 6.11 of the Indenture and is
authorized by the Issuer to make the payments to and distributions from the
Collection Account and the Note Distribution Account, including payment of
principal of or interest on the Notes on behalf of the Issuer, and (b) with
respect to the Certificates, any paying agent or co-paying agent appointed
pursuant to Section 3.9 of the Trust Agreement, and shall initially be
[Trustee].
"Payment Date" means, with respect to each Collection Period, the
fifteenth day of the calendar month in which that Collection Period ends,
or, if such day is not a Business Day, the next Business Day, commencing on
__________ [15], 199__.
"Person" means any individual, corporation, limited liability
company, estate, partnership, joint venture, association, joint stock
company, trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision thereof.
"Pool Balance" means, as of the opening of business on the first
day of any Collection Period, the sum of the aggregate Contract Values of
the Receivables as of such day, 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 Realized Losses on Receivables liquidated during such
preceding Collection Period.
"Precomputed Receivable" means any Receivable under which the
portion of a payment allocable to earned interest (which may be referred to
in the related Contract as an add-on finance charge) and the portion
allocable to the Amount Financed are determined according to the sum of
periodic balances, the sum of monthly payments or any equivalent method or
are monthly actuarial receivables.
A-17
<PAGE>
"Predecessor Note" means, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition,
any Note authenticated and delivered under Section 2.5 of the Indenture in
lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"Pre-Funded Amount" means, with respect to any date, the amount on
deposit in the Pre-Funding Account on such date.
"Pre-Funded Percentage" means, for each Collection Period, the
quotient (expressed as a percentage) of: (i) the Pre-Funded Amount divided
by (ii) the sum of the Pool Balance and the Pre-Funded Amount, after taking
into account all transfers of Subsequent Receivables during such Collection
Period.
"Pre-Funding Account" means the account designated as such,
established and maintained pursuant to Section 5.1(a) of the Sale and
Servicing Agreement.
"Pre-Funding Account Investment Earnings" means, with respect to
any Payment Date, the interest and other investment earnings (net of losses
and investment expenses) on amounts on deposit in the Pre-Funding Account
to be deposited into the Collection Account on the related Transfer Date
pursuant to Section 5.1(b) of the Sale and Servicing Agreement.
"Principal Balance" of a Precomputed Receivable, as of the close
of business on the last day of a Collection Period, means the Amount
Financed minus the sum of: (i) that portion of all Scheduled Payments due
on or prior to such day allocable to principal using the actuarial or
constant yield method, (ii) any refunded portion of insurance premiums
included in the Amount Financed, (iii) any payment of the Purchase Amount
with respect to the Precomputed Receivable allocable to principal and (iv)
any prepayment in full or any partial prepayments applied to reduce the
Principal Balance of the Precomputed Receivable.
"Principal Carryover Shortfall" means, with respect to each
Payment Date, the excess of the 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 Notes on such
preceding Payment Date.
"Principal Distributable Amount" means, with respect to each
Payment Date, the sum of (a) the Principal Distribution Amount plus (b) the
Principal Carryover Shortfall.
A-18
<PAGE>
"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.
"Prospectus" means the Prospectus dated ___________ __, 199__, and
the prospectus supplement dated ___________ __, 199__, relating to the
Notes.
"Proceeding" means any suit in equity, action at law or other judicial
or
administrative proceeding.
"Purchase Agreement" means the Purchase Agreement dated as of
_____ __, 199__, between the Seller and Credit, as the same may be amended
and supplemented from time to time, which term shall also include, as the
context requires, the Liquidity Receivables Purchase Agreement.
"Purchase Amount" means, as of the close of business on the last
day of a Collection Period, an amount equal to the Contract Value of the
applicable Receivable as of the first day of the immediately following
Collection Period plus interest accrued and unpaid thereon as of such last
day at a rate per annum equal to: (a) in the case of the Initial
Receivables, the Initial Cutoff Date APR and (b) in the case of the
Subsequent Receivables, the applicable Subsequent Cutoff Date APR.
"Purchased Contracts" is defined in the Recitals of the Purchase
Agreement.
"Purchased Receivable" means a Receivable purchased as of the
close of business on the last day of a Collection Period by the Servicer
pursuant to Section 4.6 of the Sale and Servicing Agreement or by the
Seller pursuant to Section 3.2 of the Sale and Servicing Agreement, or as
of the first day of a Collection Period by the Servicer pursuant to Section
9.1(a) of the Sale and Servicing Agreement.
"Purchaser" means Case Receivables II Inc., a Delaware
corporation, its successors and assigns.
"Rating Agency" means each of Moody's and Standard & Poor's. If
either of such organizations or its successor is no longer in existence,
the Seller shall designate a nationally recognized statistical rating
organization or other comparable Person as a substitute Rating Agency,
notice of which designation shall be given to the Indenture Trustee, the
Trustee and the Servicer.
A-19
<PAGE>
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency shall have been given 10 days' prior notice thereof and
that each of the Rating Agencies shall have notified the Seller, the
Servicer, the Trustee and the Indenture Trustee in writing that such action
will not result in a reduction or withdrawal of the then current rating of
any Class of the Notes or the Certificates.
"Realized Losses" means the excess of the Principal Balance of
Liquidated Receivable plus accrued but unpaid interest thereon over
Liquidation Proceeds.
"Receivable" means any Contract listed on the Schedule of Receivables.
"Receivable Files" means the documents specified in Section 3.3 of the
Sale and Servicing Agreement
"Record Date" means, with respect to a Payment Date or Redemption
Date, the close of business on the fourteenth day of the calendar month in
which such Payment Date or Redemption Date occurs, 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.
"Recoveries" means, with respect to any Liquidated Receivable,
monies collected in respect thereof, from whatever source (other than from
the sale or other disposition of the Financed Equipment), during any
Collection Period following the Collection Period in which such Receivable
became a Liquidated Receivable.
"Redemption Date" means: (i) the Payment Date specified by the
Servicer or the Issuer pursuant to Section 10.1(a) or (b) of the Indenture,
as applicable, or (ii) in the case of a redemption of Notes pursuant to
Section 10.1(c) of the Indenture, the Payment Date specified in Section
5.7(b) of the Sale and Servicing Agreement on which the Indenture Trustee
shall withdraw the Pre-Funded Percentage for the Notes of any amount
remaining in the Pre-Funding Account on such Payment Date and deposit such
amount in the Note Distribution Account.
"Redemption Price" means the unpaid principal amount of the Notes
redeemed, plus accrued and unpaid interest thereon at the applicable
interest rate to but excluding the Redemption Date.
"Registered Holder" means the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"Remaining Pre-Funded Amount" has the meaning assigned thereto in
Section 5.7(b) of the Sale and Servicing Agreement.
18333307.3 43098 1134C 95202263
A-20
<PAGE>
"Repurchase Event" is defined in Section 6.2 of the Purchase
Agreement.
"Required Negative Carry Account Balance" means, as of the
beginning of each Collection Period, an amount equal to the lesser of: (a)
the Negative Carry Account Initial Deposit minus all previous withdrawals
from the Negative Carry Account and (b) the Maximum Negative Carry Amount
as of such day.
"Responsible Officer" means, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture
Trustee, including any Vice President, Assistant Vice President, Secretary
or Assistant Secretary, or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Retail Installment Contract" means an equipment retail
installment contract secured by Financed Equipment.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement, dated as of _____ __, 199__, among the Issuer, the Seller and
the Servicer.
"Secretary of State" means the Secretary of State of the State of
Delaware.
"Schedule of Receivables" means, collectively, the listing of the
Receivables attached to the First-Tier Assignment and Second-Tier
Assignment, and the listings of Receivables attached to each First-Tier
Subsequent Transfer Assignment and Second-Tier Subsequent Transfer
Assignment.
"Scheduled Payment" on a Precomputed Receivable means that portion
of the payment required to be made by the Obligor during any Collection
Period sufficient to amortize the Principal Balance under the actuarial
method over the term of the Receivable and to provide interest at the APR.
"Second-Tier Assignment" has the meaning assigned thereto in
Section 2.1 of the Sale and Servicing Agreement.
"Second-Tier Subsequent Transfer Assignment" has the meaning
assigned thereto in Section 2.2(b)(i) of the Sale and Servicing Agreement.
"Securities Account" has the meaning assigned thereto in Section
8-501(a) of Article 8 of the UCC.
"Securities Entitlement" has the meaning assigned thereto in
Section 8- 102(a)(17) of Article 8 of the UCC.
A-21
<PAGE>
"Securities Intermediary" is defined in Section 8-102(a)(14) of
Article 8 of the UCC.
"Seller" means Case Receivables II Inc., a Delaware corporation,
and its successors in interest to the extent permitted hereunder.
"Servicer" means Credit, as the servicer of the Receivables, and
each successor to Credit (in the same capacity) pursuant to Section 7.3 or
8.2 of the Sale and Servicing Agreement.
"Servicer Default" means an event specified in Section 8.1 of the
Sale and Servicing Agreement.
"Servicer's Certificate" means an Officers' Certificate of the
Servicer delivered pursuant to Section 4.8 of the Sale and Servicing
Agreement, substantially in the form of Exhibit C thereto.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during the respective Collection Period, determined pursuant to
Section 4.7 of the Sale and Servicing Agreement.
"Specified Spread Account Balance" means, with respect to any
Payment Date, the lesser of (a) [____]% of the Initial Pool Balance and (b)
the Note Balance.
"Spread Account" means the account designated as such, established
and maintained pursuant to Section 5.1(a) of the Sale and Servicing
Agreement.
"Spread Account Initial Deposit" means, initially, $__________
and, with respect to each Subsequent Transfer Date, cash or Eligible
Investments having a value approximately equal to [2.00]% of the aggregate
Contract Value of the Subsequent Receivables conveyed to the Issuer on such
Subsequent Transfer Date.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., or its successor.
"State" means any one of the 50 states of the United States of America
or the District of Columbia.
"Subsequent Cutoff Date" means, with respect to any Subsequent
Receivables, the close of business on the last day of the calendar month
preceding the related Subsequent Transfer Date.
A-22
<PAGE>
"Subsequent Cutoff Date APR" means, with respect to any Subsequent
Cutoff Date, the weighted average APR of the Subsequent Receivables being
purchased as of such Subsequent Cutoff Date.
"Subsequent Purchase Price" is defined in Section 2.5(b) of the
Purchase Agreement.
"Subsequent Receivables" means the Receivables transferred to the
Issuer pursuant to Section 2.2 of the Sale and Servicing Agreement, which
shall be listed on Schedule A to the related Second-Tier Subsequent
Transfer Assignment.
"Subsequent Transfer Date" means any Business Day during the
Funding Period on which Subsequent Receivables are to be transferred to the
Issuer and a Second-Tier Subsequent Transfer Assignment is executed and
delivered to the Trustee and the Indenture Trustee pursuant to Section 2.2
of the Sale and Servicing Agreement.
"Successor Servicer" is defined in Section 3.7(e) of the Indenture.
"TIA" means the Trust Indenture Act.
"Total Distribution Amount" means, with respect to any Payment
Date, the aggregate amount of collections on or with respect to 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 before that Payment Date)
with respect to the related Collection Period plus the Negative Carry
Amount for such Collection Period. Collections on or with respect to the
Receivables include all payments made by or on behalf of the Obligors
(including any late fees, prepayment charges, extension fees and other
administrative fees or similar charges allowed by applicable law with
respect to the Receivables), Liquidation Proceeds, the Purchase Amount of
each Receivable that became a Purchased Receivable in respect of the
related Collection Period (to the extent deposited into the Collection
Account), Investment Earnings for such Payment Date and payments made by a
Dealer pursuant to the related Dealer Agreement with respect to such
Receivable (other than amounts paid from Dealer reserve accounts maintained
with Credit); provided, however, that the Total Distribution Amount shall
not include: (i) all payments or 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 Recoveries
or (iii) amounts released from the Pre-Funding Account.
"Transfer Date" means the Business Day preceding the fifteenth day
of each calendar month.
A-23
<PAGE>
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the
form of deposit accounts, physical property, book-entry securities,
uncertificated securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section
5.1(b) of the Sale and Servicing Agreement.
"Trust Agreement" means the Trust Agreement dated as of _____ __,
199__, between the Seller and the Trustee, as the same may be amended and
supplemented from time to time.
"Trust Certificate" means a certificate evidencing the beneficial
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit A to the Trust Agreement.
"Trust Estate" means (a) with respect to the Indenture. all the
money, instruments, rights and other property that are subject or intended
to be subject to the Lien and security interest of the Indenture for the
benefit of the Noteholders (including all property and interests Granted to
the Indenture Trustee), including all proceeds thereof, and (b) with
respect to the Trust Agreement, all right, title and interest of the Trust
in and to the property and rights assigned to the Trust pursuant to Article
II of the Sale and Servicing Agreement, all funds on deposit from time to
time in the Trust Accounts and the Certificate Distribution Account and all
other property of the Trust from time to time, including any rights of the
Trustee and the Trust pursuant to the Sale and Servicing Agreement and the
Administration Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as in
force on the date of the Indenture unless otherwise specifically provided.
"Trust Officer" means, in the case of the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee,
including any Vice President, Assistant Vice President, Secretary,
Assistant Secretary or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also, with respect to a particular matter,
any other officer to whom such matter is referred because of
A-24
<PAGE>
such officer's knowledge of and familiarity with the particular subject
and, with respect to the Trustee, any officer in the Corporate Trustee
Administration Department of the Trustee with direct responsibility for the
administration of the Trust Agreement and the Basic Documents on behalf of
the Trustee.
"Trust Statute" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code ss. 3801 et seq., as the same may be amended from time to
time.
"Trustee" means [Trustee], a ___________ banking corporation, not
in its individual capacity but solely as trustee under the Trust Agreement,
and any successor Trustee thereunder.
"Uncertificated Security" has the meaning assigned thereto in
Section 8- 102(a)(18) of Article 8 of the UCC.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code as in effect in the relevant jurisdiction, as amended from
time to time.
"Underwriting Agreement" means the two Underwriting Agreements,
each dated __________ __, 199__, among ___________________, as
representative of the several underwriters named therein, the Purchaser and
Credit.
A-25
===============================================================================
CASE EQUIPMENT LOAN TRUST 199_-_
TRUST AGREEMENT
between
CASE RECEIVABLES II INC.
and
[TRUSTEE],
as Trustee
Dated as of _________ __, 199__
===============================================================================
<PAGE>
Table of Contents
Page
ARTICLE I
Definitions..................................1
SECTION 1.1. Definitions.............................................1
SECTION 1.2. Other Definitional Provisions..........................1
ARTICLE II
Organization.................................2
SECTION 2.1. Name...................................................2
SECTION 2.2. Office.................................................2
SECTION 2.3. Purposes and Powers....................................2
SECTION 2.4. Appointment of Trustee.................................3
SECTION 2.5. Initial Capital Contribution of Trust Estate...........3
SECTION 2.6. Declaration of Trust...................................3
SECTION 2.7 Liability of the Certificateholders....................4
SECTION 2.8. Title to Trust Property................................4
SECTION 2.9. Situs of Trust.........................................4
SECTION 2.10. Representations and Warranties of the Depositor.......4
SECTION 2.11. Federal Income Tax Allocations........................5
ARTICLE III
Trust Certificates and Transfer of ...................6
SECTION 3.1. Initial Ownership......................................6
SECTION 3.2. The Trust Certificates.................................6
SECTION 3.3. Authentication of Trust Certificates...................7
SECTION 3.4. Registration of Transfer and Exchange of Trust
Certificates..........................................7
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Trust
Certificates..........................................8
SECTION 3.6. Persons Deemed Certificateholders......................9
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses.............................................9
SECTION 3.8. Maintenance of Office or Agency................ .......9
SECTION 3.9. Appointment of Paying Agent...........................10
ARTICLE IV
Actions by Trustee..............................10
SECTION 4.1. Prior Notice to Certificateholders with Respect
to Certain Matters...............................10
i
<PAGE>
SECTION 4.2. Action by Certificateholders with Respect to Certain
Matters..............................................11
SECTION 4.3. Action by Certificateholders with Respect to
Bankruptcy...........................................11
SECTION 4.4. Restrictions on Certificateholders' Power.............11
SECTION 4.5. Majority Control......................................12
ARTICLE V
Application of Trust Funds; Certain Duties............12
SECTION 5.1. Establishment of Trust Account........................12
SECTION 5.2. Applications of Trust Funds...........................12
SECTION 5.3. Method of Payment.....................................13
SECTION 5.4. No Segregation of Moneys; No Interest.................13
SECTION 5.5. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue
Service and Others................. .....13
SECTION 5.6. Signature on Returns; Tax Matters Partner.............14
ARTICLE VI
Authority and Duties of Trustee.......................14
SECTION 6.1. General Authority.....................................14
SECTION 6.2. General Duties........................................14
SECTION 6.3. Action upon Instruction...............................14
SECTION 6.4. No Duties Except as Specified in this Agreement or
in Instructions......................................15
SECTION 6.5. No Action Except Under Specified Documents or
Instructions........................................16
SECTION 6.6. Restrictions..........................................16
ARTICLE VII
Concerning Trustee..............................16
SECTION 7.1. Acceptance of Trusts and Duties.......................16
SECTION 7.2. Furnishing of Documents...............................18
SECTION 7.3. Representations and Warranties........................18
SECTION 7.4. Reliance; Advice of Counsel...........................18
SECTION 7.5. Not Acting in Individual Capacity.....................19
SECTION 7.6. Trustee Not Liable for Trust Certificates or
Receivables..........................................19
SECTION 7.7. Trustee May Not Own Notes.............................19
ii
<PAGE>
ARTICLE VIII
Compensation of Trustee...........................20
SECTION 8.1. Trustee's Fees and Expenses...........................20
SECTION 8.2. Indemnification.......................................20
SECTION 8.3. Payments to the Trustee...............................20
ARTICLE IX
Termination of Trust Agreement......................21
SECTION 9.1. Termination of Trust Agreement........................21
ARTICLE X
Successor Trustees and Additional Trustees............22
SECTION 10.1. Eligibility Requirements for Trustee.................22
SECTION 10.2. Resignation or Removal of Trustee....................22
SECTION 10.3. Successor Trustee....................................23
SECTION 10.4. Merger or Consolidation of Trustee...................23
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee........24
ARTICLE XI
Miscellaneous...............................25
SECTION 11.1. Supplements and Amendments.............................25
SECTION 11.2. No Legal Title to Trust Estate in
Certificateholders.................................26
SECTION 11.3. Limitations on Rights of Others......................26
SECTION 11.4. Notices..............................................26
SECTION 11.5. Severability.........................................27
SECTION 11.6. Separate Counterparts................................27
SECTION 11.7. Successors and Assigns...............................27
SECTION 11.8. Covenants of the Depositor...........................27
SECTION 11.9. No Petition..........................................28
SECTION 11.10. No Recourse..........................................28
SECTION 11.11. Headings.............................................28
SECTION 11.12. Governing Law........................................28
SECTION 11.13. Administrator........................................28
iii
<PAGE>
EXHIBITS
EXHIBIT A Form of Trust Certificate
EXHIBIT B Form of Certificate of Trust
1
iv
<PAGE>
TRUST AGREEMENT (as amended or supplemented from time to time,
this "Agreement") dated as of _________ __, 199__, between CASE RECEIVABLES
II INC., a Delaware corporation, as Depositor, and [TRUSTEE], a
______________ banking corporation, as Trustee.
ARTICLE I
Definitions
SECTION 1.1. Definitions. Capitalized terms used herein and not
otherwise defined herein are defined in Appendix A to the Indenture, dated
as of the date hereof, between Case Equipment Loan Trust 199_-_ and [Harris
Trust and Savings Bank].
SECTION 1.2. Other Definitional Provisions. (a) All terms defined in
this Agreement shall have the defined meanings when used in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.
(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles in effect on the date hereof. To the extent that the definitions
of accounting terms in this Agreement or in any such certificate or other
document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement
or in any such certificate or other document shall control.
(c) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation".
(d) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
1
<PAGE>
ARTICLE II
Organization
SECTION 2.1. Name. The Trust created hereby shall be known as
"Case Equipment Loan Trust 199_-_", in which name the Trustee may conduct
the business of the Trust, make and execute contracts and other instruments
on behalf of the Trust and sue and be sued.
SECTION 2.2. Office. The office of the Trust shall be in care of
the Trustee at the Corporate Trust Office or at such other address in
Delaware as the Trustee may designate by written notice to the
Certificateholders and the Depositor.
SECTION 2.3. Purposes and Powers. The purpose of the Trust is, and
the Trust shall have the power and authority to, engage in the following
activities:
(a) to issue the Notes pursuant to the Indenture and the
Trust Certificates pursuant to this Agreement and to sell the
Notes and the Trust Certificates in one or more transactions;
(b) with the proceeds of the sale of the Notes and the
Trust Certificates, to fund the Pre-Funding Account and to
purchase the Receivables pursuant to the Sale and Servicing
Agreement;
(c) to assign, grant, transfer, pledge, mortgage and
convey the Trust Estate pursuant to the Indenture and to hold,
manage and distribute to the Certificateholders pursuant to the
Sale and Servicing Agreement any portion of the Trust Estate
released from the Lien of, and remitted to the Trust pursuant to,
the Indenture;
(d) to enter into and perform its obligations under the
Basic Documents to which it is to be a party;
(e) to engage in those activities, including entering
into agreements, that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected
therewith; and
(f) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection
with conservation of the Trust Estate and the making of
distributions to the Certificateholders and the Noteholders.
2
<PAGE>
The Trust shall not engage in any activity other than in connection with
the foregoing or other than as required or authorized by this Agreement or
the Basic Documents.
SECTION 2.4. Appointment of Trustee. The Depositor hereby appoints
the Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
SECTION 2.5. Initial Capital Contribution of Trust Estate. The
Depositor hereby contributes to the Trustee, as of the date hereof, the sum
of $1.00. The Trustee hereby acknowledges receipt in trust from the
Depositor, as of the date hereof, of the foregoing contribution, which
shall constitute the initial Trust Estate and shall be deposited in the
Certificate Distribution Account. The Depositor shall pay organizational
expenses of the Trust as they may arise or shall, upon the request of the
Trustee, promptly reimburse the Trustee for any such expenses paid by the
Trustee. The Depositor may also take steps necessary, including the
execution and filing of any necessary filings, to ensure that the Trust is
in compliance with any applicable state securities law.
SECTION 2.6. Declaration of Trust. The Trustee hereby declares
that it will hold the Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the
Certificateholders, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that the Trust
constitute a business trust under the Trust Statute and that this Agreement
constitutes the governing instrument of such business trust. It is the
intention of the parties hereto that, solely for income and franchise tax
purposes, until the Certificates are held by other than the Seller, the
Trust will be disregarded as an entity separate from its Owner and the
Notes being debt of the Seller. At such time that the Certificates are held
by more than one person, it is the intention of the parties hereto that,
solely for income and franchise tax purposes, the Trust shall be treated as
a partnership, with the assets of the partnership being the Receivables and
other 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 the Notes being debt of the
partnership. The parties agree that, unless otherwise required by
appropriate tax authorities, until the Certificates are held by more than
one person the Trust will not file or cause to be filed annual or other
necessary returns, reports and other forms consistent with the
characterization of the Trust as an entity not separate from its Owner.
Effective as of the date hereof, the Trustee shall have all rights, powers
and duties set forth herein and in the Trust Statute with respect to
accomplishing the purposes of the Trust.
3
<PAGE>
SECTION 2.7. Liability of the Certificateholders. No
Certificateholder shall have any personal liability for any liability or
obligation of the Trust.
SECTION 2.8. Title to Trust Property. Legal title to all the Trust
Estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part
of the Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Trustee, a co-trustee and/or a
separate trustee, as the case may be.
SECTION 2.9. Situs of Trust. The Trust will be located and
administered in the State of [Delaware]. All bank accounts maintained by
the Trustee on behalf of the Trust shall be located in the [State of
Delaware or the State of New York]. The Trust shall not have any employees
in any state other than [Delaware]; provided, however, that nothing herein
shall restrict or prohibit the Trustee from having employees within or
without the State of Delaware. Payments will be received by the Trust only
in [Delaware or New York], and payments will be made by the Trust only from
[Delaware or New York].
SECTION 2.10. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Trustee that:
(a) The Depositor is duly organized and validly existing
as a corporation in good standing under the laws of the State of
Delaware, with power and authority to own its properties and to
conduct its business as such properties are currently owned and
such business is presently conducted.
(b) The Depositor is duly qualified to do business as a
foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which
the ownership or lease of property or the conduct of its business
shall require such qualifications.
(c) The Depositor has the power and authority to execute
and deliver this Agreement and to carry out its terms; the
Depositor has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the Trust
and the Depositor shall have duly authorized such sale and
assignment and deposit to the Trust by all necessary corporate
action; and the execution, delivery and performance of this
Agreement have been duly authorized by the Depositor by all
necessary corporate action.
4
<PAGE>
(d) The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of
time) a default under, the certificate of incorporation or by-laws
of the Depositor, or any indenture, agreement or other instrument
to which the Depositor is a party or by which it is bound; or
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement
or other instrument (other than pursuant to the Basic Documents);
or violate any law or, to the best of the Depositor's knowledge,
any order, rule or regulation applicable to the Depositor of any
court or of any Federal or State regulatory body, administrative
agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties.
SECTION 2.11. Federal Income Tax Allocations. If Certificates are
held by more than one person, interest payments on the Certificates at the
Pass- Through Rate (including interest on amounts previously due on the
Certificates but not yet distributed) shall be treated as "guaranteed
payments" under Section 707(c) of the Code. Net income of the Trust for any
month as determined for Federal income tax purposes (and each item of
income, gain, loss and deduction entering into the computation thereof)
shall be allocated:
(a) among the Certificateholders as of the close of
business on the last day of such month, in proportion to their
ownership of principal amount of Trust Certificates on such date,
an amount of net income up to the sum of: (i) the portion of the
market discount on the Receivables accrued during such month that
is allocable to the excess, if any, of the Initial Certificate
Balance over their initial aggregate issue price, and (ii) any
other amounts of income payable to the Certificateholders for such
month; and such sum of amounts specified in clauses (i) and (ii)
of this sentence shall be reduced by any amortization by the Trust
of premium on Receivables that corresponds to any excess of the
issue price of Trust Certificates over their principal amount; and
(b) to the Depositor, and other holders of interests in
the Spread Account, to the extent of any remaining net income, in
accordance with their respective interests therein.
If the net income of the Trust for any month is insufficient for the
allocations described in clause (a), subsequent net income shall first be
allocated to make up such shortfall before being allocated as provided in
the preceding sentence. Net losses of the Trust, if any, for any month as
determined for Federal income tax purposes (and each item of income, gain,
5
<PAGE>
loss and deduction entering into the computation thereof) shall be
allocated to the Depositor (or other holders of interests in the Spread
Account) to the extent the Depositor (or such holders) are reasonably
expected to bear the economic burden of such net losses, and any remaining
net losses shall be allocated among the remaining Certificateholders as of
the close of business on the last day of such month in proportion to their
ownership of principal amount of Trust Certificates on such day. The
Depositor is authorized to modify the allocations in this paragraph if
necessary or appropriate, in its sole discretion, for the allocations to
fairly reflect the economic income, gain or loss to the Depositor (or other
holders of interests in the Spread Account) or to the Certificateholders,
or as otherwise required by the Code. Notwithstanding anything provided in
this Section 2.11, if the Certificates are held solely by the Seller, the
application of this Section 2.11 shall be disregarded.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.1. Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5, and until the
issuance of the Trust Certificates, the Depositor shall be the sole
beneficiary of the Trust.
SECTION 3.2. The Trust Certificates. The Trust Certificates shall
be issued in denominations of $1,000 or in integral multiples of $1,000 in
excess thereof; provided that one Trust Certificate may be issued that
includes any residual portion of the Initial Certificate Balance in a
denomination other than an integral multiple of $1,000. The Trust
Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Trustee. Trust
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures shall have been affixed, authorized
to sign on behalf of the Trust, shall be, when authenticated pursuant to
Section 3.3, validly issued and entitled to the benefits of this Agreement,
notwithstanding that such individuals or any of them shall have ceased to
be so authorized prior to the authentication and delivery of such Trust
Certificates or did not hold such offices at the date of authentication and
delivery of such Trust Certificates.
SECTION 3.3. Authentication of Trust Certificates. Concurrently
with the sale of the Receivables to the Trust pursuant to the Sale and
Servicing Agreement, the Trustee shall cause the Trust Certificates in an
aggregate principal amount equal to the Initial Certificate Balance to be
executed on behalf of the
6
<PAGE>
Trust, authenticated and delivered to or upon the written order of the
Depositor, signed by its chairman of the board, its president or any vice
president, without further corporate action by the Depositor, in authorized
denominations. No Trust Certificate shall entitle its Holder to any benefit
under this Agreement, or shall be valid for any purpose, unless there shall
appear on such Trust Certificate a certificate of authentication
substantially in the form set forth in Exhibit A, executed by the Trustee
by the manual signature of one of its authorized signatories; such
certificate of authentication shall constitute conclusive evidence, and the
only evidence, that such Trust Certificate shall have been duly
authenticated and delivered hereunder. All Trust Certificates shall be
dated the date of their authentication. No further Trust Certificates shall
be issued except pursuant to Section 3.4 or 3.5 hereunder.
SECTION 3.4. Registration of Transfer and Exchange of Trust
Certificates. The Trust shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 3.8, a register (the "Certificate
Register") in which, subject to such reasonable regulations as it may
prescribe, the Issuer shall provide for the registration of Trust
Certificates and of transfers and exchanges of Trust Certificates. The
Paying Agent shall be the "Certificate Registrar" for the purpose of
registering Trust Certificates and the transfers of Trust Certificates as
herein provided. Upon any resignation of any Certificate Registrar, the
Depositor shall promptly appoint a successor or, if it elects not to make
such an appointment, assume the duties of the Certificate Registrar.
Upon surrender for registration of transfer of any Trust
Certificate at the office or agency maintained pursuant to Section 3.8, if
the requirements of Section 8-401(l) of the UCC are met, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Trust Certificates in authorized
denominations of a like aggregate principal amount.
At the option of a Holder, Trust Certificates may be exchanged for
other Trust Certificates of authorized denominations, of a like aggregate
principal amount, upon surrender of the Trust Certificates to be exchanged
at the office or agency maintained pursuant to Section 3.8. Whenever any
Trust Certificates are so surrendered for exchange, if the requirements of
Section 8-401(l) of the UCC are met, the Trustee shall execute,
authenticate and deliver the Trust Certificates that the Certificateholder
making the exchange is entitled to receive.
All Trust Certificates issued upon any registration of transfer or
exchange of Trust Certificates shall be entitled to the same benefits under
this Agreement as the Trust Certificates surrendered upon such registration
of transfer or exchange.
7
<PAGE>
Every Trust Certificate presented or surrendered for registration
of transfer or exchange shall be duly endorsed by, or be accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by, the Holder thereof or his attorney
duly authorized in writing. No transfer of a Trust Certificate shall be
registered unless the transferee shall have provided (i) an opinion of
counsel that no registration is required under the Securities Act of 1933,
as amended, or applicable state laws, and (ii) an Officer's Certificate as
to compliance with Section 6.6 of the Sale and Servicing Agreement. Each
Trust Certificate surrendered for registration of transfer or exchange
shall be canceled and subsequently disposed of by the Trustee in accordance
with its customary practice.
No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Trust Certificates, but the Trustee
or the Certificate Registrar may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Trust
Certificates.
The Trust Certificates and any beneficial interest in such Trust
Certificates may not be acquired by: (a) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of
Title I of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or
(c) any entity whose underlying assets include plan assets by reason of a
plan's investment in the entity (each a "Benefit Plan"). By accepting and
holding a Trust Certificate or an interest therein, the Holder thereof
shall be deemed to have represented and warranted that it is not a Benefit
Plan. The Trustee shall have no obligation to determine whether or not a
Holder of a Trust Certificate is or is not a Benefit Plan.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Trust
Certificates. If: (a) any mutilated Trust Certificate shall be surrendered
to the Certificate Registrar, or if the Certificate Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Certificate (provided, that the Trustee shall not be required to verify the
evidence provided to it), and (b) there shall be delivered to the
Certificate Registrar and the Trustee such security or indemnity as may be
required by them to hold each of them harmless, then, in the absence of
notice that such Trust Certificate shall have been acquired by a bona fide
purchaser, and provided that the requirements of Section 8-405 of the UCC
are met, the Trustee on behalf of the Trust shall execute, authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Trust Certificate, a replacement Trust Certificate of like tenor
and denomination.
8
<PAGE>
In connection with the issuance of any replacement Trust
Certificate under this Section, the Trustee and the Certificate Registrar
may require the payment by the Certificateholder of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
connection therewith.
Any replacement Trust Certificate issued pursuant to this Section
in replacement of any mutilated, destroyed, lost or stolen Trust
Certificate shall constitute conclusive evidence of ownership in the Trust,
as if originally issued, whether or not the mutilated, lost, stolen or
destroyed Trust Certificate shall be found at any time, and shall be
entitled to all the benefits of this Agreement.
SECTION 3.6. Persons Deemed Certificateholders. Prior to due
presentation of a Trust Certificate for registration of transfer of any
Trust Certificate, the Trustee or the Certificate Registrar may treat the
Person in whose name any Trust Certificate shall be registered in the
Certificate Register (as of the day of determination) as the owner of such
Trust Certificate for the purpose of receiving distributions pursuant to
Section 5.2 and for all other purposes whatsoever, and neither the Trustee
nor the Certificate Registrar shall be bound by any notice to the contrary.
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses. The Trustee shall furnish or cause to be furnished to the
Servicer and the Depositor, within 15 days after receipt by the Trustee of
a request therefor from the Servicer or the Depositor in writing, a list,
in such form as the Servicer or the Depositor may reasonably require, of
the names and addresses of the Certificateholders as of the most recent
Record Date. If three or more Certificateholders or one or more Holder(s)
of Trust Certificates evidencing not less than 25% of the Certificate
Balance apply in writing to the Trustee, and such application states that
the applicants desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Trust
Certificates and such application shall be accompanied by a copy of the
communication that such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application,
afford such applicants access during normal business hours to the current
list of Certificateholders. Each Holder, by receiving and holding a Trust
Certificate, shall be deemed to have agreed not to hold any of the
Depositor, the Certificate Registrar or the Trustee accountable by reason
of the disclosure of its name and address, regardless of the source from
which such information was derived.
SECTION 3.8. Maintenance of Office or Agency. The Trustee shall
maintain in _____________________________ an office or offices or agency or
agencies where Trust Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee
in respect of the Trust Certificates and the Basic Documents may be served.
The Trustee initially designated [Trustee], __________________________,
Attention: ________________________________ as its principal corporate
trust office for
9
<PAGE>
such purposes. The Trustee shall give prompt written notice to the
Depositor and to the Certificateholders of any change in the location of
the Certificate Register or any such office or agency.
SECTION 3.9. Appointment of Paying Agent. The Paying Agent shall
make distributions to Certificateholders from the Certificate Distribution
Account pursuant to Section 5.2 and shall report the amounts of such
distributions to the Trustee. Any Paying Agent shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above. The Trustee may
revoke such power and remove the Paying Agent if the Trustee determines in
its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The Paying Agent
shall initially be the Trustee, and any co-paying agent chosen by and
acceptable to the Trustee. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Trustee. In the event that
the Trustee shall not be the Paying Agent, the Trustee shall appoint a
successor to act as Paying Agent (which shall be a bank or trust company).
The Trustee shall cause such successor Paying Agent or any additional
Paying Agent appointed by the Trustee to execute and deliver to the Trustee
an instrument in which such successor Paying Agent or additional Paying
Agent shall agree with the Trustee that as Paying Agent, such successor
Paying Agent or additional Paying Agent will hold all sums, if any, held by
it for payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Paying Agent shall return all unclaimed funds to
the Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Trustee. The provisions of
Sections 7.1, 7.3, 7.4 and 8.1 shall apply to the Trustee also in its role
as Paying Agent, for so long as the Trustee shall act as Paying Agent and,
to the extent applicable, to any other paying agent appointed hereunder.
Any reference in this Agreement to the Paying Agent shall include any
co-paying agent unless the context requires otherwise.
ARTICLE IV
Actions by Trustee
SECTION 4.1. Prior Notice to Certificateholders with Respect to
Certain Matters. With respect to the following matters, the Trustee shall
not take action unless, at least 30 days before the taking of such action,
the Trustee shall have notified the Certificateholders in writing of the
proposed action and the Certificateholders shall not have notified the
Trustee in writing prior to the 30th day after such notice is given that
such Certificateholders have withheld consent or shall not have provided
alternative direction:
10
<PAGE>
(a) the initiation of any claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the
collection of the Receivables) and the compromise of any action,
claim or lawsuit brought by or against the Trust (except with
respect to the aforementioned claims or lawsuits for collection of
Receivables);
(b) the election by the Trust to file an amendment to the
Certificate of Trust;
(c) the amendment of the Indenture in circumstances where
the consent of any Noteholder is required;
(d) the amendment of the Indenture in circumstances where
the consent of any Noteholder is not required and such amendment
materially adversely affects the interest of the
Certificateholders;
(e) the amendment, change or modification of the
Administration Agreement, except to cure any ambiguity or to amend
or supplement any provision in a manner, or add any provision,
that would not materially adversely affect the interests of the
Certificateholders; or
(f) the appointment pursuant to the Indenture of a
successor Note Registrar, Paying Agent or Indenture Trustee, or
pursuant to this Agreement of a successor Certificate Registrar,
or the consent to the assignment by the Note Registrar, Paying
Agent or Indenture Trustee or Certificate Registrar of its
obligations under the Indenture or this Agreement, as applicable.
SECTION 4.2. Action by Certificateholders with Respect to Certain
Matters. The Trustee shall not have the power, except upon the direction of
the Certificateholders, to: (a) remove the Administrator under the
Administration Agreement, (b) appoint a successor Administrator, (c) remove
the Servicer under the Sale and Servicing Agreement or (d) except as
expressly provided in the Basic Documents, sell the Receivables after the
termination of the Indenture. The Trustee shall take the actions referred
to in the preceding sentence only upon written instructions signed by the
Certificateholders.
SECTION 4.3. Action by Certificateholders with Respect to
Bankruptcy. The Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust without the unanimous prior
approval of all Certificateholders and the delivery to the Trustee by each
such Certificateholder of a certificate certifying that such
Certificateholder reasonably believes that the Trust is insolvent.
SECTION 4.4. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Trustee to take or refrain from
taking any
11
<PAGE>
action if such action or inaction would be contrary to any obligation of
the Trust or the Trustee under this Agreement or any of the Basic Documents
or would be contrary to Section 2.3, nor shall the Trustee be obligated to
follow any such direction, if given.
SECTION 4.5. Majority Control. Except as expressly provided
herein, any action that may be taken by the Certificateholders under this
Agreement may be taken by the Holders of Trust Certificates evidencing not
less than a majority of the Certificate Balance. Except as expressly
provided herein, any written notice of the Certificateholders delivered
pursuant to this Agreement shall be effective if signed by Holders of Trust
Certificates evidencing not less than a majority of the Certificate Balance
at the time of the delivery of such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.1. Establishment of Trust Account. The Trustee, for the
benefit of the Certificateholders, shall establish and maintain in the name
of the Trust an Eligible Deposit Account (the "Certificate Distribution
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders.
The Trust shall possess all right, title and interest in all funds
on deposit from time to time in the Certificate Distribution Account and in
all proceeds thereof. Except as otherwise expressly provided herein, the
Certificate Distribution Account shall be under the sole dominion and
control of the Trustee for the benefit of the Certificateholders. If, at
any time, the Certificate Distribution Account ceases to be an Eligible
Deposit Account, the Trustee (or the Depositor on behalf of the Trustee, if
the Certificate Distribution Account is not then held by the Trustee or an
affiliate thereof) shall, within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which the Rating Agency Condition
shall be satisfied), establish a new Certificate Distribution Account as an
Eligible Deposit Account and shall transfer any cash and/or any investments
to such new Certificate Distribution Account.
SECTION 5.2. Applications of Trust Funds. (a) On each Payment
Date, the Trustee will distribute to Certificateholders, on a pro rata
basis, amounts deposited in the Certificate Distribution Account pursuant
to Sections 5.5, 5.6 and 5.7 of the Sale and Servicing Agreement.
(b) On each Payment Date, the Trustee shall send to each
Certificateholder the statement provided to the Trustee by the Servicer
pursuant to Section 5.10 of the Sale and Servicing Agreement.
12
<PAGE>
(c) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to a Certificateholder, such tax
shall reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section. The Trustee is hereby authorized and directed
to retain from amounts otherwise distributable to the Certificateholders
sufficient funds for the payment of any tax that is legally owed by the
Trust (but such authorization shall not prevent the Trustee from contesting
any such tax in appropriate proceedings, and withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings). The
amount of any withholding tax imposed with respect to a Certificateholder
shall be treated as cash distributed to such Certificateholder at the time
it is withheld by the Trust. If there is a possibility that withholding tax
is payable with respect to a distribution (such as a distribution to a
non-U.S. Certificateholder), the Trustee may, in its sole discretion,
withhold such amounts in accordance with this paragraph (c). In the event
that a Certificateholder wishes to apply for a refund of any such
withholding tax, the Trustee shall reasonably cooperate with such
Certificateholder in making such claim so long as such Certificateholder
agrees to reimburse the Trustee for any out-of-pocket expenses incurred.
SECTION 5.3. Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Payment Date
shall be made to each Certificateholder of record on the preceding Record
Date either by wire transfer, in immediately available funds, to the
account of such Holder at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided to the
Certificate Registrar appropriate written instructions at least five
Business Days prior to such Payment Date and such Holder's Trust
Certificates aggregate not less than $1,000,000, or, if not, by check
mailed to such Certificateholder at the address of such Holder appearing in
the Certificate Register.
SECTION 5.4. No Segregation of Moneys; No Interest. Subject to
Sections 5.1 and 5.2, moneys received by the Trustee hereunder need not be
segregated in any manner except to the extent required by law or the Sale
and Servicing Agreement and may be deposited under such general conditions
as may be prescribed by law, and the Trustee shall not be liable for any
interest thereon.
SECTION 5.5. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. The Trustee
shall: (a) maintain (or cause to be maintained) the books of the Trust on a
calendar year basis on the accrual method of accounting, (b) deliver to
each Certificateholder, as may be required by the Code and applicable
Treasury Regulations, such information as may be required (including
Schedule K-1) to enable each Certificateholder to prepare its Federal,
State and local income tax returns, (c) file such tax returns relating to
the Trust (including a partnership information return on Internal Revenue
Service Form 1065 or its successor), and make such elections as may from
time to time be required or appropriate under any
13
<PAGE>
applicable State or Federal statute or rule or regulation thereunder so as
to maintain the Trust's characterization as a partnership for Federal
income tax purposes, (d) cause such tax returns to be signed in the manner
required by law and (e) collect or cause to be collected any withholding
tax as described in and in accordance with Section 5.2(c) with respect to
income or distributions to Certificateholders. The Trustee shall elect
under Section 1278 of the Code to include in income currently any market
discount that accrues with respect to the Receivables and shall elect under
Section 171 of the Code to amortize any bond premium with respect to the
Receivables. The Trustee shall not make the election provided under Section
754 of the Code.
SECTION 5.6. Signature on Returns; Tax Matters Partner. (a) The
Trustee shall sign on behalf of the Trust the tax returns of the Trust,
unless applicable law requires a Certificateholder to sign such documents,
in which case such documents shall be signed by the Depositor.
(b) The Depositor shall be designated the "tax matters partner" of
the Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable
Treasury Regulations.
ARTICLE VI
Authority and Duties of Trustee
SECTION 6.1. General Authority. The Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is
to be a party and each certificate or other document attached as an exhibit
to or contemplated by the Basic Documents to which the Trust is to be a
party, in each case in such form as the Depositor shall approve as
evidenced conclusively by the Trustee's execution thereof, and, on behalf
of the Trust, to direct the Indenture Trustee to authenticate and deliver
the Notes in the aggregate principal amount specified in a letter of
instruction from the Depositor to the Trustee. In addition to the
foregoing, the Trustee is authorized, but shall not be obligated, to take
all actions required of the Trust pursuant to the Basic Documents. The
Trustee is further authorized from time to time to take such action as the
Administrator recommends with respect to the Basic Documents.
SECTION 6.2. General Duties. It shall be the duty of the Trustee
to discharge (or cause to be discharged) all of its responsibilities
pursuant to this Agreement and the Basic Documents to which the Trust is a
party and to administer the Trust in the interest of the
Certificateholders, subject to the Basic Documents and in accordance with
this Agreement. Notwithstanding the foregoing, the Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under the
Basic Documents to the extent the Administrator has agreed in the
Administration Agreement to perform any act or
14
<PAGE>
to discharge any duty of the Trustee hereunder or under any Basic Document,
and the Trustee shall not be held liable for the default or failure of the
Administrator to carry out its obligations under the Administration
Agreement.
SECTION 6.3. Action upon Instruction. (a) Subject to Article IV
and in accordance with the Basic Documents, the Certificateholders may by
written instruction direct the Trustee in the management of the Trust. Such
direction may be exercised at any time by written instruction of the
Certificateholders pursuant to Article IV.
(b) The Trustee shall not be required to take any action hereunder
or under any Basic Document if the Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is
likely to result in liability on the part of the Trustee or is contrary to
the terms hereof or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Trustee is unable to decide between alternative
courses of action permitted or required by this Agreement or any Basic
Document, the Trustee shall promptly give notice (in such form as shall be
appropriate under the circumstances) to the Certificateholders requesting
instruction as to the course of action to be adopted, and to the extent the
Trustee acts in good faith in accordance with any written instruction of
the Certificateholders received, the Trustee shall not be liable on account
of such action to any Person. If the Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty
to, take or refrain from taking such action, not inconsistent with this
Agreement or the Basic Documents, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to any
Person for such action or inaction.
(d) In the event that the Trustee is unsure as to the application
of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Trustee or is silent or is
incomplete as to the course of action that the Trustee is required to take
with respect to a particular set of facts, the Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction and, to the extent that the
Trustee acts or refrains from acting in good faith in accordance with any
such instruction received, the Trustee shall not be liable, on account of
such action or inaction, to any Person. If the Trustee shall not have
received appropriate instruction within 10 days of such notice (or within
such shorter period of time as reasonably may be specified in such notice
or may be necessary under the circumstances) it may, but shall be under no
duty to, take or refrain from taking such action, not inconsistent with
this Agreement or the Basic
15
<PAGE>
Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such
action or inaction.
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions. The Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of or
otherwise deal with the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated
hereby to which the Trustee is a party, except as expressly provided by
this Agreement or in any document or written instruction received by the
Trustee pursuant to Section 6.3; and no implied duties or obligations shall
be read into this Agreement or any Basic Document against the Trustee. The
Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or Lien granted
to it hereunder or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Agreement or any Basic
Document. The Trustee nevertheless agrees that it will, at its own cost and
expense, promptly take all action as may be necessary to discharge any
Liens on any part of the Trust Estate that result from actions by, or
claims against, the Trustee that are not related to the ownership or the
administration of the Trust Estate.
SECTION 6.5. No Action Except Under Specified Documents or
Instructions. The Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Trust Estate except: (i) in
accordance with the powers granted to and the authority conferred upon the
Trustee pursuant to this Agreement, (ii) in accordance with the Basic
Documents and (iii) in accordance with any document or instruction
delivered to the Trustee pursuant to Section 6.3.
SECTION 6.6. Restrictions. The Trustee shall not take any action:
(a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Trustee, would
result in the Trust's becoming taxable as a corporation for Federal income
tax purposes. The Certificateholders shall not direct the Trustee to take
action that would violate this Section.
ARTICLE VII
Concerning the Trustee
SECTION 7.1. Acceptance of Trusts and Duties. The Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Agreement. The
Trustee also agrees to disburse all moneys actually received by it
constituting part of the Trust Estate upon the terms of the Basic Documents
and this Agreement. The Trustee shall not be answerable or accountable
hereunder or under any Basic Document under any
18333291.2 42898 1350C 95202263
16
<PAGE>
circumstances, except: (i) for its own willful misconduct or negligence or
(ii) in the case of the inaccuracy of any representation or warranty
contained in Section 7.3 expressly made by the Trustee. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
(a) the Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer of the
Trustee unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts;
(b) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the
instructions of the Administrator, the Servicer or any
Certificateholder;
(c) no provision of this Agreement or any Basic Document
shall require the Trustee to expend or risk funds or otherwise
incur any financial liability in the performance of any of its
rights or powers hereunder or under any Basic Document, if the
Trustee shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or liability
is not reasonably assured or provided to it;
(d) under no circumstances shall the Trustee be liable
for indebtedness evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes;
(e) the Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for
the due execution hereof by the Depositor or for the form,
character, genuineness, sufficiency, value or validity of any of
the Trust Estate or for or in respect of the validity or
sufficiency of the Basic Documents, other than the certificate of
authentication on the Trust Certificates, and the Trustee shall in
no event assume or incur any liability, duty or obligation to any
Noteholder or to any Certificateholder, other than as expressly
provided for herein and in the Basic Documents;
(f) the Trustee shall not be liable for the default or
misconduct of the Administrator, the Seller, the Indenture Trustee
or the Servicer under any of the Basic Documents or otherwise and
the Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the Basic
Documents that are required to be performed by the Administrator
under the Administration Agreement, the Indenture Trustee under
the Indenture or the Servicer under the Sale and Servicing
Agreement; and
(g) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct
18333291.2 42898 1350C 95202263
17
<PAGE>
or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request,
order or direction of any of the Certificateholders unless such
Certificateholders have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Trustee therein or
thereby. The right of the Trustee to perform any discretionary act
enumerated in this Agreement or in any Basic Document shall not be
construed as a duty, and the Trustee shall not be answerable for
other than its negligence or willful misconduct in the performance
of any such act.
SECTION 7.2. Furnishing of Documents. The Trustee shall furnish to
the Certificateholders promptly upon receipt of a written request therefor,
and at the expense of the Certificateholders, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
any other instruments furnished to the Trustee under the Basic Documents.
SECTION 7.3. Representations and Warranties. The Trustee hereby
represents and warrants to the Depositor, for the benefit of the
Certificateholders, that:
(a) it is a banking corporation duly organized and
validly existing in good standing under the laws of ___________,
with the requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement,
(b) it has taken all corporate action necessary to
authorize the execution and delivery by it of this Agreement, and
this Agreement will be executed and delivered by one of its
officers who is duly authorized to execute and deliver this
Agreement on its behalf, and
(c) the consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of
time) a default under, the certificate of incorporation or by-laws
of the Trustee, or any indenture, agreement or other instrument to
which the Trustee is a party or by which it is bound; or violate
any Federal or state law governing the banking or trust powers of
the Trustee; or, to the best of the Trustee's knowledge, violate
any order, rule or regulation applicable to the Trustee of any
court or of any Federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction
over the Trustee or its properties.
SECTION 7.4. Reliance; Advice of Counsel. (a) The Trustee shall incur
no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or
other document or
18
<PAGE>
paper believed by it to be genuine and believed by it to be signed by the
proper party or parties. The Trustee may accept a certified copy of a
resolution of the board of directors or other governing body of any party
as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or
matter the method of the determination of which is not specifically
prescribed herein, the Trustee may for all purposes hereof rely on a
certificate, signed by the president, any vice president, the treasurer or
other authorized officers of the relevant party as to such fact or matter,
and such certificate shall constitute full protection to the Trustee for
any action taken or omitted to be taken by it in good faith in reliance
thereon.
(b) In the exercise or administration of the trusts hereunder and
in the performance of its duties and obligations under this Agreement or
the Basic Documents, the Trustee: (i) may act directly or through its
agents or attorneys pursuant to agreements entered into with any of them,
and the Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys if such agents or attorneys shall have been selected by
the Trustee with reasonable care, and (ii) may consult with counsel,
accountants and other skilled Persons to be selected with reasonable care
and employed by it. The Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written
opinion or advice of any such counsel, accountants or other such Persons
and which opinion or advice states that such action is not contrary to this
Agreement or any Basic Document.
SECTION 7.5. Not Acting in Individual Capacity. Except as provided
in this Article VII, in accepting the trusts hereby created [Trustee] acts
solely as Trustee hereunder and not in its individual capacity and all
Persons having any claim against the Trustee by reason of the transactions
contemplated by this Agreement or any Basic Document shall look only to the
Trust Estate for payment or satisfaction thereof.
SECTION 7.6. Trustee Not Liable for Trust Certificates or
Receivables. The recitals contained herein and in the Certificates (other
than the signature and counter-signature of the Trustee on the Trust
Certificates) shall be taken as the statements of the Depositor, and the
Trustee assumes no responsibility for the correctness thereof. The Trustee
makes no representations as to the validity or sufficiency of this
Agreement, of any Basic Document, of the Trust Certificates (other than the
signature and countersignature, if any, of the Trustee on the Trust
Certificates) or of the Notes, or of any Receivable or related documents.
The Trustee shall at no time have any responsibility or liability for or
with respect to the legality, validity and enforceability of any
Receivable, or the perfection and priority of any security interest created
by any Receivable in any of the Financed Equipment or the maintenance of
any such perfection and priority, or for or with respect to the sufficiency
of the Trust Estate or its ability to generate the payments to be
distributed to Certificateholders under this Agreement or the Noteholders
under the Indenture, including: (a) the existence, condition and
19
<PAGE>
ownership of any Financed Equipment, (b) the existence and enforceability
of any insurance thereon, (c) the existence and contents of any Receivable
on any computer or other record thereof, (d) the validity of the assignment
of any Receivable to the Trust or of any intervening assignment, (e) the
completeness of any Receivable, (f) the performance or enforcement of any
Receivable, and (g) the compliance by the Depositor or the Servicer with
any warranty or representation made under any Basic Document or in any
related document or the accuracy of any such warranty or representation or
any action of the Administrator, the Indenture Trustee or the Servicer or
any subservicer taken in the name of the Trustee.
SECTION 7.7. Trustee May Not Own Notes. The Trustee shall not, in
its individual capacity, but may in a fiduciary capacity, become the owner
or pledgee of Notes or otherwise extend credit to the Issuer. The Trustee
may otherwise deal with the Depositor, the Administrator, the Indenture
Trustee and the Servicer with the same rights as it would have if it were
not the Trustee.
ARTICLE VIII
Compensation of Trustee
SECTION 8.1. Trustee's Fees and Expenses. The Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Depositor and the
Trustee, and the Trustee shall be entitled to be reimbursed by the
Depositor for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder.
SECTION 8.2. Indemnification. The Depositor shall be liable as
primary obligor for, and shall indemnify the Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnified Parties") from
and against, any and all liabilities, obligations, losses, damages, taxes,
claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses) of any kind
and nature whatsoever (collectively, "Expenses"), which may at any time be
imposed on, incurred by or asserted against the Trustee or any other
Indemnified Party in any way relating to or arising out of this Agreement,
the Basic Documents, the Trust Estate, the administration of the Trust
Estate or the action or inaction of the Trustee hereunder, except only that
the Depositor shall not be liable for or required to indemnify an
Indemnified Party from and against Expenses arising or resulting from: (a)
such Indemnified Party's willful misconduct or negligence or (b) with
respect to the Trustee, the inaccuracy of any representation or warranty
contained in Section 7.3 expressly made by the Trustee. The indemnities
contained in this
20
<PAGE>
Section shall survive the resignation or termination of the Trustee or the
termination of this Agreement. In any event of any claim, action or
proceeding for which indemnity will be sought pursuant to this Section, the
Trustee's choice of legal counsel shall be subject to the approval of the
Depositor, which approval shall not be unreasonably withheld.
SECTION 8.3. Payments to the Trustee. Any amounts paid to the
Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Trust Estate immediately after such payment. The Trustee shall also be
entitled to interest on all advances at a rate equal to: (a) the rate
publicly announced by [Trustee], as its prime rate from time to time plus
(b) 3.5%.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.1. Termination of Trust Agreement. (a) This Agreement
(other than Article VIII) and the Trust shall terminate and be of no
further force or effect upon the final distribution by the Trustee of all
moneys or other property or proceeds of the Trust Estate in accordance with
the Indenture, the Sale and Servicing Agreement and Article V. The
bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder shall not: (x) operate to terminate this Agreement or the
Trust, (y) entitle such Certificateholder's legal representatives or heirs
to claim an accounting or to take any action or proceeding in any court for
a partition or winding up of all or any part of the Trust or Trust Estate
or (z) otherwise affect the rights, obligations and liabilities of the
parties hereto.
(b) Except as provided in Section 9.1(a), neither the Depositor
nor any Certificateholder shall be entitled to revoke or terminate the
Trust.
(c) Notice of any termination of the Trust, specifying the Payment
Date upon which the Certificateholders shall surrender their Trust
Certificates to the Paying Agent for payment of the final distribution and
cancellation, shall be given promptly by the Trustee by letter to
Certificateholders mailed within five Business Days of receipt of notice of
such termination from the Servicer given pursuant to Section 9.1(c) of the
Sale and Servicing Agreement stating: (i) the Payment Date upon which final
payment of the Trust Certificates shall be made upon presentation and
surrender of the Trust Certificates at the office of the Paying Agent
therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Payment Date is not
applicable, payments being made only upon presentation and surrender of the
Trust Certificates at the office of the Paying Agent therein specified. The
Trustee shall give such notice to the Certificate Registrar (if other than
the Trustee) and the Paying Agent at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Trust
Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Payment Date pursuant to
Section 5.2.
21
<PAGE>
In the event that all of the Certificateholders shall not
surrender their Trust Certificates for cancellation within six months after
the date specified in the above mentioned written notice, the Trustee shall
give a second written notice to the remaining Certificateholders to
surrender their Trust Certificates for cancellation and to receive the
final distribution with respect thereto. If within one year after the
second notice all the Trust Certificates shall not have been surrendered
for cancellation, the Trustee may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Trust Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement. Any funds remaining in the Trust after
exhaustion of such remedies shall be distributed by the Trustee to the
Depositor.
(d) Upon the termination of the Trust, the Trustee shall cause the
Certificate of Trust to be canceled by filing a certificate of cancellation
with the Secretary of State in accordance with the provisions of Section
3810 (or successor section) of the Trust Statute.
ARTICLE X
Successor Trustees and Additional Trustees
SECTION 10.1. Eligibility Requirements for Trustee. The Trustee
shall at all times: (a) be a corporation satisfying the provisions of
Section 26(a)(1) of the Investment Company Act of 1940, as amended, (b) be
authorized to exercise corporate trust powers, (c) have a combined capital
and surplus of at least $50,000,000 and be subject to supervision or
examination by Federal or State authorities, and (d) have (or have a parent
that has) a rating of at least "Baa3" by Moody's. If such corporation shall
publish reports of condition at least annually, pursuant to law or the
requirements of the aforesaid supervising or examining authority, then for
the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. At all times, at
least one Trustee of the Trust shall satisfy the requirements of Section
3807(a) of the Trust Statute. In case at any time the Trustee shall cease
to be eligible in accordance with this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 10.2.
SECTION 10.2. Resignation or Removal of Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Administrator. Upon receiving such
notice of resignation, the Administrator shall promptly appoint a successor
Trustee by
22
<PAGE>
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor Trustee.
If no successor Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in
accordance with Section 10.1 and shall fail to resign after written request
therefor by the Administrator, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Administrator may remove the Trustee. If the
Administrator shall remove the Trustee under the authority of the preceding
sentence, the Administrator shall promptly appoint a successor Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Trustee so removed and one copy to the successor
Trustee and payment of all fees owed to the outgoing Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to this Section shall not become effective until
acceptance of appointment by the successor Trustee pursuant to Section 10.3
and payment of all fees and expenses owed to the outgoing Trustee. The
Administrator shall provide notice of such resignation or removal of the
Trustee to each of the Rating Agencies.
SECTION 10.3. Successor Trustee. Any successor Trustee appointed
pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Administrator and to its predecessor Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal
of the predecessor Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties, and obligations of its
predecessor under this Agreement, with like effect as if originally named
as the Trustee. The predecessor Trustee shall upon payment of its fees and
expenses deliver to the successor Trustee all documents and statements and
monies held by it under this Agreement; and the Administrator and the
predecessor Trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting
and confirming in the successor Trustee all such rights, powers, duties and
obligations.
No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall
be eligible pursuant to Section 10.1.
23
<PAGE>
Upon acceptance of appointment by a successor Trustee pursuant to
this Section, the Administrator shall mail notice of such appointment to
all Certificateholders, the Indenture Trustee, the Noteholders and the
Rating Agencies. If the Administrator shall fail to mail such notice within
10 days after acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of
the Administrator.
SECTION 10.4. Merger or Consolidation of Trustee. Any corporation
or other entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder;
provided, such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding; and provided further, that the Trustee shall mail notice
of such merger or consolidation to the Rating Agencies.
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Financed Equipment may at the time be located,
the Administrator and the Trustee acting jointly shall have the power and
may execute and deliver all instruments to appoint one or more Person(s)
approved by the Trustee to act as co-trustee(s), jointly with the Trustee,
or separate trustee(s), of all or any part of the Trust Estate, and to vest
in such Person(s), in such capacity and for the benefit of the
Certificateholders, such title to the Trust Estate, or any part thereof,
and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Administrator and the Trustee may
consider necessary or desirable. If the Administrator shall not have joined
in such appointment within 15 days after the receipt by it of a request so
to do, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be required to
meet the terms of eligibility as a successor trustee pursuant to Section
10.1 and no notice of the appointment of any co-trustee or separate trustee
shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee
or co-trustee is not authorized to act separately without the
Trustee joining in such act), except to the extent that under any
law of any jurisdiction in which any
24
<PAGE>
particular act(s) are to be performed, the Trustee shall be
incompetent or unqualified to perform such act(s), in which event
such rights, powers, duties and obligations (including the holding
of title to the Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) the Administrator and the Trustee acting jointly
may at any time accept the resignation of or remove any separate
trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the
estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject
to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Trustee. Each such instrument
shall be filed with the Trustee and a copy thereof given to the
Administrator.
Any separate trustee or co-trustee may at any time appoint the
Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and
be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
The Trustee shall have no obligation to determine whether a
co-trustee or separate trustee is legally required in any jurisdiction in
which any part of the Trust Estate may be located.
ARTICLE XI
Miscellaneous
SECTION 11.1. Supplements and Amendments. This Agreement may be
amended from time to time by a written amendment duly executed and delivered
by the Depositor and the Trustee, with prior written notice to the Rating
25
<PAGE>
Agencies, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this
Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the
Depositor and the Trustee, with prior written notice to the Rating
Agencies, with the written consent of (x) Noteholders holding Notes
evidencing not less than a majority of the Note Balance and (y) the Holders
of Certificates evidencing not less than 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 this Agreement or of
modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall: (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that
shall be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the
Outstanding Amount and the Certificate Balance required to consent to any
such amendment, without the consent of the holders of all the outstanding
Notes and Certificates.
Promptly after the execution of any such amendment or consent (or,
in the case of the Rating Agencies, 10 days prior thereto), the Trustee
shall furnish written notification of the substance of such amendment or
consent to each Certificateholder, the Indenture Trustee and each of the
Rating Agencies.
It shall not be necessary for the consent of Certificateholders,
the Noteholders or the Indenture Trustee pursuant to this Section to
approve the particular form of any proposed amendment or consent, but it
shall be sufficient if such consent shall approve the substance thereof.
The manner of obtaining such consents (and any other consents of
Certificateholders provided for in this Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate
of Trust, the Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent
to the execution and delivery of such amendment have been satisfied. The
Trustee may, but shall
26
<PAGE>
not be obligated to, enter into any such amendment that affects the
Trustee's own rights, duties or immunities under this Agreement or
otherwise.
SECTION 11.2. No Legal Title to Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to
any part of the Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided ownership interest
therein only in accordance with Articles V and IX. No transfer, by
operation of law or otherwise, of any right, title or interest of the
Certificateholders in, to and under their ownership interest in the Trust
Estate shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal
title to any part of the Trust Estate.
SECTION 11.3. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Trustee, the Depositor,
the Certificateholders, the Administrator and, to the extent expressly
provided herein, the Indenture Trustee and the Noteholders, and nothing in
this Agreement, whether express or implied, shall be construed to give to
any other Person any legal or equitable right, remedy or claim in the Trust
Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 11.4. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing, personally
delivered or mailed by certified mail, postage prepaid and return receipt
requested, and shall be deemed to have been duly given upon receipt: (i) if
to the Trustee or the Paying Agent, addressed to the Corporate Trust
Office, and (ii) if to the Depositor, addressed to Case Receivables II
Inc., 233 Lake Avenue, Racine, Wisconsin 53403, Attention: Corporate
Secretary; or, as to each party, at such other address as shall be
designated by such party in a written notice to the other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. Any notice
so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.5. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 11.6. Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
27
<PAGE>
and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.7. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Depositor and its successors, the Trustee and its successors and each
Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other
instrument or action by an Certificateholder shall bind the successors and
assigns of such Certificateholder.
SECTION 11.8. Covenants of the Depositor. If: (a) the Certificate
Balance shall be reduced by Realized Losses and (b) any litigation with
claims in excess of $1,000,000 to which the Depositor is a party that shall
be reasonably likely to result in a material judgment against the Depositor
that the Depositor will not be able to satisfy shall be commenced by a
Certificateholder during the period beginning nine months following the
commencement of such litigation and continuing until such litigation is
dismissed or otherwise terminated (and, if such litigation has resulted in
a final judgment against the Depositor, such judgment has been satisfied),
the Depositor shall not pay any dividend to Credit, or make any
distribution on or in respect of its capital stock to Credit, or repay the
principal amount of any indebtedness of the Depositor held by Credit,
unless: (i) after giving effect to such payment, distribution or repayment,
the Depositor's liquid assets shall not be less than the amount of actual
damages claimed in such litigation or (ii) the Rating Agency Condition
shall have been satisfied with respect to any such payment, distribution or
repayment. The Depositor will not at any time institute against the Trust
any bankruptcy proceedings under any United States Federal or State
bankruptcy or similar law in connection with any obligations relating to
the Trust Certificates, the Notes, the Trust Agreement or any of the Basic
Documents.
SECTION 11.9. No Petition. The Trustee on behalf of the Trust, by
entering into this Agreement, each Certificateholder, by accepting a Trust
Certificate, and the Indenture Trustee and each Noteholder, by accepting
the benefits of this Agreement, hereby covenant and agree that they will
not at any time institute against the Depositor or the Trust, or join in
any institution against the Depositor or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or
other proceedings under any Federal or State bankruptcy or similar law in
connection with any obligations relating to the Trust Certificates, the
Notes, this Agreement or any of the Basic Documents.
SECTION 11.10. No Recourse. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust
Certificates represent beneficial interests in the Trust only and do not
represent interests in or obligations of the Seller, the Servicer, the
Administrator, the Trustee, the Indenture Trustee or any Affiliate thereof
and no recourse may be had against
28
<PAGE>
such parties or their assets, except as may be expressly set forth or
contemplated in this Agreement, the Trust Certificates or the Basic
Documents.
SECTION 11.11. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 11.12. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Delaware, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 11.13. Administrator. The Administrator is authorized to
execute on behalf of the Trust all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Trust
to prepare, file or deliver pursuant to this Agreement and the Basic
Documents. Upon written request, the Trustee shall execute and deliver to
the Administrator a power of attorney appointing the Administrator its
agent and attorney-in-fact to execute all such documents, reports, filings,
instruments, certificates and opinions.
29
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
[TRUSTEE],
as Trustee
By:-------------------------------
Name:
Title:
CASE RECEIVABLES II INC.,
as Depositor
By:-------------------------------
Name:
Title:
S-1
<PAGE>
EXHIBIT A
to Trust Agreement
FORM OF TRUST CERTIFICATES
---------------------------
REGISTERED $___________1
NUMBER R-___ CUSIP NO. 147440___
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York Corporation
("DTC"), to the Issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede &
Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A
BENEFIT PLAN (AS DEFINED BELOW).
CASE EQUIPMENT LOAN TRUST 199_-_
______% ASSET BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below,
the property of which includes a pool of retail installment sale contracts
secured by new and used agricultural and construction equipment and sold to
the Trust by Case Receivables II Inc.
(This Trust Certificate does not represent an interest in or obligation of
Case Receivables II Inc., Case Credit Corporation or Case Corporation, or
any of their respective affiliates, except to the extent described below.)
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a _____________
DOLLAR ($___________) nonassessable, fully-paid, fractional undivided
interest in the Case Equipment Loan Trust 199_-_ (the "Trust") formed by
Case Receivables II Inc., a Delaware corporation (the "Seller").
The Trust was created pursuant to a Trust Agreement dated as of _________
__, 199__ (the "Trust Agreement"), between the Seller and [Trustee], as
trustee (the "Trustee"). To the extent not otherwise defined herein, the
capitalized terms used
- --------
1Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
A-1
<PAGE>
herein have the meanings assigned to them in the Trust Agreement or the
Sale and Servicing Agreement (the "Sale and Servicing Agreement") dated as
of _________ __, 199__, among the Trust, the Seller and Case Credit
Corporation, as servicer (the "Servicer"), as applicable. This Certificate
is one of the duly authorized Certificates designated as "_____% Asset
Backed Certificates" (herein called the "Trust Certificates"). Issued under
the: (a) Indenture dated as of _________ __, 199__, between the Trust and
[Harris Trust and Savings Bank], as Indenture Trustee, are notes designated
as "______% Class A-1 Asset Backed Notes," "______% Class A-2 Asset Backed
Notes," "_______% Class A-3 Asset Backed Notes," "______% Class A-4 Asset
Backed Notes" and "______% Class B Asset Backed Notes" (collectively, the
"Notes"). This Trust Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the holder of this Trust Certificate by virtue of the acceptance
hereof assents and by which holder is bound.
Each Holder of this Trust Certificate acknowledges and agrees that
its rights to receive distributions in respect of this Trust Certificate
are subordinated to the rights of the Noteholders as described in the Sale
and Servicing Agreement and the Indenture.
It is the intent of the Seller, Servicer and the
Certificateholders that, for purposes of Federal income, State and local
income and franchise and any other income taxes measured in whole or in
part by income, until the Trust Certificates are held by other than the
Seller, the Trust will be disregarded as an entity separate from its owner.
At such time that the Trust Certificates are held by more than one person,
it is the intent of the Seller, Servicer and the Certificateholders that,
for purposes of Federal income, State and local income and franchise and
any other income taxes measured in whole or in part by income, the Trust
will be treated as a partnership, the assets of which are the assets held
by the Trust, and the Certificateholders (including the Depositor (and its
transferees and assigns) in its capacity as recipient of distributions from
the Spread Account) will be treated as partners in that partnership. The
Depositor and the other Certificateholders, by acceptance of a Trust
Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Trust Certificates as such for tax purposes.
Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time
institute against the Seller or the Trust, or join in any institution
against the Seller or the Trust of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings
under any United States Federal or State bankruptcy or similar law in
connection with any obligations relating to the Trust Certificates, the
Notes, the Trust Agreement or any of the Basic Documents.
The Trust Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, Case Credit Corporation, the Trustee
or any affiliate of any of them and no recourse may be had against such parties
A-2
<PAGE>
or their assets, except as may be expressly set forth or contemplated
herein or in the Trust Agreement or the Basic Documents.
The Certificates may not be acquired by or for the account of: (i)
an employee benefit plan (as defined in Section 3(3) of ERISA) that is
subject to the provisions of Title 1 of ERISA, (ii) a plan described in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended, or
(iii) any entity whose underlying assets include plan assets by reason of a
plan's investment in the entity (a "Benefit Plan"). By accepting and
holding this Certificate, each of the Holder shall be deemed to have
represented and warranted that it is not a Benefit Plan.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Trust Certificate shall not entitle the holder hereof to any benefit under
the Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.
This Trust Certificate shall be construed in accordance with the
laws of the State of Delaware, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
A-3
<PAGE>
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in
its individual capacity has caused this Trust Certificate to be duly
executed.
CASE EQUIPMENT LOAN TRUST 199_-_
By: [TRUSTEE],
not in its individual capacity, but
solely as Trustee
By:----------------------------------------
Name:-----------------------------------
Title:----------------------------------
A-4
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned
Trust Agreement.
[TRUSTEE],
as Trustee
By:---------------------------------
Authorized Officer
Date: __________ ____, 199_
A-5
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE
- -------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- -------------------------------------------------------------------------------
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- -------------------------------------------------------------------Attorney to
transfer said Trust Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated: ------------------------------*
Signature Guaranteed:
-----------------------------*
*NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Trust Certificate in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by a member firm of the New York Stock
Exchange or a commercial bank or trust company.
A-6
<PAGE>
EXHIBIT B
to Trust Agreement
CERTIFICATE OF TRUST OF
CASE EQUIPMENT LOAN TRUST 199_-_
-----------------------------------
This Certificate of Trust of CASE EQUIPMENT LOAN TRUST 199_-_ (the
"Trust"), dated as of ____________ __, 199_, is being duly executed and
filed by [Trustee], a ____________ banking corporation, as trustee, to form
a trust under the Delaware Business Trust Act (12 Del. Code ss. 3801 et
seq.).
1. Name. The name of the trust formed hereby is CASE EQUIPMENT
LOAN TRUST 199_-_.
2. Delaware Trustee. The name and business address of the trustee
of the Trust in the State of Delaware is [Trustee]
- -----------------------------.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
[TRUSTEE],
not in its individual capacity, but solely as trustee
under a Trust Agreement dated as of _________ __,
199__
By:----------------------------------
Name:-------------------------------
Title:------------------------------
18333291.2 42898 1350C 95202263
A-1
<PAGE>
Page 1
May 7, 1998
Case Credit Corporation
5729 Washington Avenue
Racine, Wisconsin 53406
Case Receivables II Inc.
700 State Street
Racine, Wisconsin 53404
Ladies and Gentlemen:
As General Counsel and Secretary of Case Corporation, and as counsel for
its subsidiaries, including Case Receivables II Inc., a Delaware
corporation (the "Seller"), and Case Credit Corporation, a Delaware
corporation (the "Servicer"), I am familiar with the registration statement
on Form S-3 (the "Registration Statement") to be filed by the Seller with
the Securities and Exchange Commission in connection with the registration
by the Seller of Asset Backed Securities (the "Securities") in an aggregate
principal amount of $3,000,000,000. As described in the Registration
Statement, the Securities will be issued from time to time in series, with
each series to be issued by a Delaware business trust (each, a "Trust") to
be formed by the Seller pursuant to a Trust Agreement (each, a "Trust
Agreement") between the Seller and a Trustee. With respect to each series,
the Securities will be issued pursuant to: (a) a Trust Agreement or (b) an
Indenture (each, an "Indenture") between the related Trust and an Indenture
Trustee, and the Securities will be sold from time to time pursuant to
certain underwriting agreements (the "Underwriting Agreements") between the
Seller and the various underwriters named therein.
I, or members of my staff, have examined and relied upon the Registration
Statement and, in each case as filed with the Registration Statement, the
form of Sale and Servicing Agreement among a Trust, the Seller and the
Servicer, the form of Indenture (including forms of notes included as
exhibits thereto), the form of Trust Agreement (including the form of
Certificate of Trust to be filed pursuant to the Delaware Business Trust
Act and the form of certificate filed as an exhibit thereto) and the forms
of Underwriting Agreements for the notes and the certificates (the
"Operative Agreements"). Terms used herein without definition have the
meanings given to such terms in the Registration Statement.
I, or members of my staff, are familiar with the certificates of
incorporation of the Seller and the Servicer and have examined all
statutes, corporate records and other instruments that I, or members of my
staff, have deemed necessary to examine for the purposes of this opinion.
Based on and subject to the foregoing, I am of the opinion that, with
respect to the Securities of any series, when : (a) the Registration
Statement becomes effective pursuant to the provisions of the Securities
Act of 1933, as amended, (b) the amount, price, interest rate and other
principal terms of
<PAGE>
Page 2
such Securities have been fixed by or pursuant to authorization of the
Board of Directors of the Seller, (c) the Operative Documents relating to
such series have each been duly completed, executed and delivered by the
parties thereto substantially in the form filed as an exhibit to the
Registration Statement reflecting the terms established as described above,
(d) the Certificate of Trust for the related Trust has been duly executed
by the Trustee and timely filed with the Secretary of State of Delaware,
(e) the related Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended, (f) such Securities have been duly executed and
issued by the related Trust and authenticated by the Trustee or the
Indenture Trustee, as applicable, and sold by the Seller, and (g) payment
of the agreed consideration for such Securities shall have been received by
the Trust, all in accordance with the terms and conditions of the related
Operative Documents and in the manner described in the Registration
Statement: (i) such Certificates will have been duly authorized by all
necessary action of the Trust and will be legally issued, fully paid and
nonassessable (except to the extent the Certificate retained by the Seller
is assessable pursuant to Section 2.7 of the Trust Agreement) and (ii) such
Notes will have been duly authorized by all necessary action of the Trust
and will be legally issued and binding obligations of the Trust and
entitled to the benefits afforded by the related Indenture.
My opinions expressed herein are limited to the federal laws of the United
States, the laws of the State of Illinois and the business trust laws of
the State of Delaware. As to matters governed by the laws of the State of
New York, I have assumed with your permission that the laws of such state
are identical to the laws of the State of Illinois.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
use of my name therein.
Sincerely,
/s/ Richard S. Brennan
Richard S. Brennan
[Mayer, Brown & Platt Letterhead]
May 6, 1998
Case Receivables II Inc.
5729 Washington Avenue
Racine, Wisconsin 53406
Re: Case Receivables II Inc.
Registration Statement on
Form S-3 (Registration No.)
Ladies and Gentlemen:
We have acted as special Federal tax counsel for Case Receivables
II Inc., a Delaware corporation (the "Company"), in connection with the
above-captioned Registration Statement (such registration statement,
together with the exhibits and any amendments thereto, the "Registration
Statement"), filed by the Company with the Securities and Exchange
Commission in connection with the registration by the Company of Asset
Backed Notes (the "Notes") and Asset Backed Certificates (the
"Certificates") with a proposed maximum aggregate offering price of
$3,000,000,000. As described in the Registration Statement, the Notes and
the Certificates will be issued from time to time in series, with each
series being issued by a Delaware business trust (each, a "Trust") to be
formed by the Company pursuant to a Trust Agreement (each, a "Trust
Agreement") between the Company and a trustee. For each series, the Notes
will be issued pursuant to an Indenture (the "Indenture") between the
related Trust and an indenture trustee and a Sale and Servicing Agreement
among the related Trust, the Company and Case Credit Corporation, as
servicer (each, a "Sale and Servicing Agreement"), and the Certificates
will be issued pursuant to a Trust Agreement and such Sale and Servicing
Agreement.
In that connection, we are generally familiar with the proceedings
required to be taken in connection with the proposed authorization,
issuance and sale of any series of Notes and Certificates and have examined
copies of such documents, corporate records and other instruments as we
have deemed necessary or appropriate for the purposes of this opinion,
including the Registration Statement and, in each case as filed as an
exhibit to the Registration Statement, the form of Sale and Servicing, the
form of Indenture (including the form of Notes included as exhibits
thereto), the form of Trust Agreement (including the form of Certificate
included as an exhibit thereto and including the form of Certificate of
Trust to be filed with the Delaware Secretary of State) and the form of
Purchase Agreement between the Company and Case Credit Corporation
(collectively, the "Operative Documents").
<PAGE>
Case Receivables II Inc.
May 6, 1998
Page 2
Based on the foregoing and assuming that the Operative Documents
with respect to each series are executed and delivered in substantially the
form we have examined and that the transactions contemplated to occur under
the Operative Documents in fact occur in accordance with the terms thereof,
we hereby confirm that, if we are acting as Federal Tax Counsel with
respect to an issuance of Notes and Certificates, the statements set forth
in the Prospectus forming part of the Registration Statement under the
captions "PROSPECTUS SUMMARY--Tax Status" (to the extent they relate to
federal income tax consequences), "PROSPECTUS SUMMARY--ERISA
Considerations", "CERTAIN FEDERAL INCOME TAX CONSEQUENCES" and "ERISA
CONSIDERATIONS" (as modified by the statements, if any, set forth under
those same headings in the related Prospectus Supplement) accurately
reflect our opinion.
We know that we are referred to under the headings "SUMMARY OF
TERMS--Tax Status" and "LEGAL OPINIONS" in the form of Prospectus
Supplement included in the Registration Statement, and we hereby consent to
the use of our name therein and to the use of this opinion for filing with
the Registration Statement as Exhibit 8(a) thereto.
Very truly yours,
/s/ Mayer, Brown & Platt
MAYER, BROWN & PLATT
FOLEY & LARDNER LETTERHEAD
May 7, 1998
Case Receivables II Inc.
233 Lake Avenue
Racine, WI 53403
Re: Case Receivables II Inc.
Registration Statement on Form S-3
(Registration No.)
-------------------------------------
Dear Sirs:
We have acted as special Wisconsin tax counsel for Case
Receivables II Inc., a Delaware corporation (the "Company"), in connection
with the above-captioned Registration Statement (such registration
statement together with the exhibits and any amendments thereto, the
"Registration Statement"), to be filed by the Company with the Securities
and Exchange Commission in connection with the registration by the Company
of Asset Backed Notes (the "Notes") and Asset Backed Certificates (the
"Certificates") with an aggregate principal amount of $3,000,000,000. As
described in the Registration Statement, the Notes and the Certificates
will be issued from time to time in series, with each series being issued
by a Delaware business trust to be formed by the Company pursuant to a
Trust Agreement between the Company and a trustee. For each series, the
Notes will be issued pursuant to an Indenture between the trust and an
indenture trustee and a sale and servicing agreement among the trust, the
Company and Case Credit Corporation, as Servicer, and the Certificates will
be issued pursuant to a trust agreement and such sale and servicing
agreement.
We hereby confirm that, if we are acting as Wisconsin tax counsel
with respect to an issuance of Notes and Certificates, the statements set
forth in the Prospectus forming part of the Registration Statement under
the heading "CERTAIN STATE TAX CONSEQUENCES" as modified by the statements,
if any, set forth under that same heading in a related prospectus
supplement accurately reflect our opinion.
<PAGE>
Case Receivables II Inc.
May 7, 1998
Page 2
We know that we are referred to under the heading of "CERTAIN
STATE TAX CONSEQUENCES" in the Prospectus forming part of the Registration
Statement and we hereby consent to the use of our name therein and to the
use of this opinion for filing with the Registration Statement as Exhibit
8(b) thereto. By giving this consent, we do not admit that we are experts
within the meaning of Section 11 of the Securities Act of 1933, as amended,
or within the category of persons whose consent is required by Section 7 of
said Act.
Very truly yours,
/s/ Foley & Lardner
FOLEY & LARDNER
<PAGE>
- --------------------------------------------------------------------------------
CASE EQUIPMENT LOAN TRUST 199_-_
SALE AND SERVICING AGREEMENT
among
CASE EQUIPMENT LOAN TRUST 199_-_,
as Issuer,
and
CASE RECEIVABLES II INC.,
as Seller,
and
CASE CREDIT CORPORATION,
as Servicer.
Dated as of _____ __, 19__
- --------------------------------------------------------------------------------
<PAGE>
|| TABLE OF CONTENTS
Page
ARTICLE I
Definitions.................................1
SECTION 1.1. Definitions...........................................1
SECTION 1.2. Other Definitional Provisions.........................1
ARTICLE II
Conveyance of Receivables..........................2
SECTION 2.1. Conveyance of Initial Receivables.....................2
SECTION 2.2. Conveyance of Subsequent Receivables..................3
ARTICLE III
The Receivables...............................6
SECTION 3.1. Representations and Warranties of Seller..............6
SECTION 3.2. Repurchase upon Breach................................7
SECTION 3.3. Custody of Receivable Files...........................8
SECTION 3.4. Duties of Servicer as Custodian.......................8
SECTION 3.5. Instructions; Authority To Act........................9
SECTION 3.6. Custodian's Indemnification...........................9
SECTION 3.7. Effective Period and Termination......................9
ARTICLE IV
Administration and Servicing of Receivables.................10
SECTION 4.1. Duties of Servicer...................................10
SECTION 4.2. Collection and Allocation of Receivable Payments.....11
SECTION 4.3. Realization upon Receivables.........................11
SECTION 4.4. Maintenance of Security Interests in Financed
Equipment..........................................11
SECTION 4.5. Covenants of Servicer................................12
SECTION 4.6. Purchase of Receivables upon Breach..................12
SECTION 4.7. Servicing Fee........................................12
SECTION 4.8. Servicer's Certificate...............................12
SECTION 4.9. Annual Statement as to Compliance; Notice
of Default.........,,,.............................13
SECTION 4.10. Annual Independent Certified Public Accountants'
Report.............................................13
SECTION 4.11. Access to Certain Documentation and Information
Regarding Receivables..............................14
SECTION 4.12. Servicer Expenses...................................14
SECTION 4.13. Appointment of Subservicer..........................14
<PAGE>
Page
ARTICLE V
Distributions: Spread Account;
Statements to Certificateholders and Noteholders...............14
SECTION 5.1. Establishment of Trust Accounts......................14
SECTION 5.2. Collections..........................................17
SECTION 5.3. Application of Collections...........................17
SECTION 5.4. Additional Deposits..................................17
SECTION 5.5. Distributions........................................18
SECTION 5.6. Spread Account.......................................19
SECTION 5.7. Pre-Funding Account..................................20
SECTION 5.8. Negative Carry Account...............................21
SECTION 5.9. [Intentionally Omitted]..............................21
SECTION 5.10. Statements to Certificateholders and Noteholders....21
SECTION 5.11. Net Deposits........................................22
ARTICLE VI
The Seller................................23
SECTION 6.1. Representations of Seller............................23
SECTION 6.2. Corporate Existence..................................24
SECTION 6.3. Liability of Seller; Indemnitie......................25
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller..............................26
SECTION 6.5. Limitation on Liability of Seller and Others.........26
SECTION 6.6. Seller May Own Certificates or Notes.................27
ARTICLE VII
The Servicer................................27
SECTION 7.1. Representations of Servicer..........................27
SECTION 7.2. Indemnities of Servicer..............................29
SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer............................30
SECTION 7.4. Limitation on Liability of Servicer and Others.......31
SECTION 7.5. Credit Not to Resign as Servicer.....................32
SECTION 7.6. Servicer to Act as Administrator.....................32
ARTICLE VIII
Default.....................................32
ii
<PAGE>
Page
SECTION 8.1. Servicer Default.....................................32
SECTION 8.2. Appointment of Successor Servicer....................33
SECTION 8.3. Notification to Noteholders and
Certificateholders..................................34
SECTION 8.4. Waiver of Past Defaults..............................35
ARTICLE IX
Termination................................35
SECTION 9.1. Optional Purchase of All Receivables.................35
ARTICLE X
Miscellaneous Provisions...................37
SECTION 10.1. Amendment...........................................37
SECTION 10.2. Protection of Title to Trust........................38
SECTION 10.3. Notices.............................................40
SECTION 10.4. Assignment..........................................41
SECTION 10.5. Limitations on Rights of Others.....................41
SECTION 10.6. Severability........................................41
SECTION 10.7. Separate Counterparts...............................41
SECTION 10.8. Headings............................................41
SECTION 10.9. Governing Law.......................................41
SECTION 10.10. Assignment to Indenture Trustee....................41
SECTION 10.11. Nonpetition Covenants..............................42
SECTION 10.12. Limitation of Liability of Trustee and
Indenture Trustee................................42
||
iii
<PAGE>
SCHEDULES AND EXHIBITS
SCHEDULE A Location of Receivables Files
EXHIBIT A Form of Noteholder's Statement Pursuant to Section 5.10(a)
EXHIBIT B Form of Certificateholder's Statement Pursuant to Section 5.10(a)
EXHIBIT C Form of Servicer's Certificate
EXHIBIT D Form of Second-Tier Assignment
EXHIBIT E Form of Second-Tier Subsequent Transfer Assignment
EXHIBIT F Form of Accountants' Letter in Connection with Second-Tier
Subsequent Transfer Assignment
iv
<PAGE>
SALE AND SERVICING AGREEMENT (as amended or otherwise modified,
this "Agreement") dated as of _____ __, 19__, among CASE EQUIPMENT LOAN
TRUST 199_-_, a Delaware business trust (the "Issuer"), CASE RECEIVABLES II
INC., a Delaware corporation (the "Seller"), and CASE CREDIT CORPORATION, a
Delaware corporation (the "Servicer").
RECITALS
WHEREAS, the Issuer desires to purchase a portfolio of Contracts
purchased or originated by Case Credit Corporation ("Credit"), in the
ordinary course of business and sold to the Seller on a monthly basis
pursuant to a Receivables Purchase Agreement, dated as of August 1, 1994,
between Credit and the Seller (as it may be amended and supplemented from
time to time, the "Liquidity Receivables Purchase Agreement") and/or a
Purchase Agreement dated the date hereof between Credit and the Seller;
WHEREAS, the Seller is willing to sell such Contracts to the Issuer;
and
WHEREAS, Credit is willing to service such Contracts.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Definitions. Capitalized terms used herein and not
otherwise defined herein are defined in Appendix A to the Indenture, dated
as of the date hereof, between Case Equipment Loan Trust 199_-_ and [Harris
Trust and Savings Bank].
SECTION 1.2. Other Definitional Provisions. (a) All terms defined
in this Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto unless otherwise defined
therein.
(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to
1
<PAGE>
the extent not defined, shall have the respective meanings given to them
under generally accepted accounting principles as in effect on the date
hereof. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent
with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(c) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section, Schedule
and Exhibit references contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term "including" shall mean "including, without
limitation,".
(d) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
(e) Interest shall be computed on the basis of a 360-day year of
twelve 30-day months for all purposes of this Agreement.
ARTICLE II
Conveyance of Receivables
SECTION 2.1. Conveyance of Initial Receivables. In consideration
of the Issuer's delivery to or upon the order of the Seller on the Closing
Date of the net proceeds from the sale of the Notes and the Certificates
and the other amounts to be distributed from time to time to the Seller in
accordance with this Agreement, the Seller does hereby sell, transfer,
assign, set over and otherwise convey to the Issuer, without recourse
(subject to the obligations herein), all of its right, title and interest
in, to and under:
(a) the Initial Receivables, including all documents
constituting chattel paper included therewith, and all obligations
of the Obligors thereunder, including all moneys paid thereunder
on or after the Initial Cutoff Date;
(b) the security interests in the Financed Equipment
granted by Obligors pursuant to the Initial Receivables and any
other interest of the Seller in such Financed Equipment;
2
<PAGE>
(c) any proceeds with respect to the Initial Receivables
from claims on insurance policies covering Financed Equipment or
Obligors;
(d) the Liquidity Receivables Purchase Agreement (only
with respect to Owned Contracts included in the Initial
Receivables) and the Purchase Agreement, including the right of
the Seller to cause Credit to repurchase Initial Receivables from
the Seller under the circumstances described therein;
(e) any proceeds from recourse to Dealers with respect to
the Initial Receivables other than any interest in the Dealers'
reserve accounts maintained with Credit;
(f) any Financed Equipment that shall have secured an
Initial Receivable and that shall have been acquired by or on
behalf of the Trust;
(g) all funds on deposit from time to time in the Trust
Accounts, including the Spread Account Initial Deposit, the
Negative Carry Account Initial Deposit and the Pre-Funded Amount,
and in all investments and proceeds thereof (including all income
thereon); and
(h) the proceeds of any and all of the foregoing (other
than Recoveries).
The above assignment shall be evidenced by a duly executed written
assignment in substantially the form of Exhibit D (the "Second-Tier
Assignment").
SECTION 2.2. Conveyance of Subsequent Receivables. (a) Subject to
the conditions set forth in clause (b) below, in consideration of the
Trustee's delivery on the related Subsequent Transfer Date to or upon the
order of the Seller of the amount described in Section 5.7(a) to be
delivered to the Seller, the Seller does hereby sell, transfer, assign, set
over and otherwise convey to the Issuer, without recourse (subject to the
obligations herein), all of its right, title and interest in, to and under:
(i) the Subsequent Receivables listed on Schedule A to
the related Second-Tier Subsequent Transfer Assignment, including
all documents constituting chattel paper included therewith, and
all obligations of the Obligors thereunder, including all moneys
paid thereunder on or after the related Subsequent Cutoff Date;
(ii) the security interests in the Financed Equipment
granted by Obligors pursuant to such Subsequent Receivables and
any other interest of the Seller in such Financed Equipment;
3
<PAGE>
(iii) any proceeds with respect to such Subsequent
Receivables from claims on insurance policies covering Financed
Equipment or Obligors;
(iv) the Purchase Agreement, including the right of the
Seller to cause Credit to repurchase Subsequent Receivables from
the Seller under the circumstances described therein;
(v) any proceeds with respect to such Subsequent
Receivables from recourse to Dealers other than any interest in
the Dealers' reserve accounts maintained with Credit;
(vi) any Financed Equipment that shall have secured any
such Subsequent Receivable and that shall have been acquired by or
on behalf of the Trust; and
(vii) the proceeds of any and all of the foregoing (other
than Recoveries).
(b) The Seller shall transfer to the Issuer the Subsequent
Receivables and the other property and rights related thereto described in
clause (a) only upon the satisfaction of each of the following conditions
precedent on or prior to the related Subsequent Transfer Date:
(i) the Seller shall have delivered to the Trustee and
the Indenture Trustee a duly executed written assignment in
substantially the form of Exhibit E (the "Second-Tier Subsequent
Transfer Assignment"), which shall include a Schedule A to the
Second-Tier Subsequent Transfer
Assignment listing the Subsequent Receivables;
(ii) the Seller shall, to the extent required by Section
5.2, have deposited in the Collection Account all collections in
respect of the Subsequent Receivables;
(iii) as of such Subsequent Transfer Date: (A) the Seller
was not insolvent and will not become insolvent as a result of the
transfer of Subsequent Receivables on such Subsequent Transfer
Date, (B) the Seller did not intend to incur or believe that it
would incur debts that would be beyond the Seller's ability to pay
as such debts matured, (C) such transfer was not made with actual
intent to hinder, delay or defraud any Person and (D) the assets
of the Seller did not constitute unreasonably small capital to
carry out its business as conducted;
4
<PAGE>
(iv) the applicable Spread Account Initial Deposit for
such Subsequent Transfer Date shall have been made;
(v) [intentionally deleted];
(vi) the Receivables in the Trust, including the
Subsequent Receivables to be conveyed to the Trust on such
Subsequent Transfer Date, shall meet the following criteria: (A)
the weighted average original term of the Receivables in the Trust
will not be greater than ___ months, and (B) not more than ___% of
the aggregate Contract Value of the Receivables in the Trust will
represent Contracts for the financing of construction equipment;
(vii) the Funding Period shall not have terminated;
(viii) each of the representations and warranties made by
the Seller pursuant to Section 3.1 of this Agreement and by the
Originator pursuant to Section 3.2(b) of the Purchase Agreement,
in each case with respect to the Subsequent Receivables, shall be
true and correct as of such Subsequent Transfer Date, and the
Seller shall have performed all obligations to be performed by it
hereunder on or prior to such Subsequent Transfer Date;
(ix) the Seller shall, at its own expense, on or prior to
such Subsequent Transfer Date, indicate in its computer files that
the Subsequent Receivables identified in the related Second-Tier
Subsequent Transfer Assignment have been sold to the Issuer
pursuant to this Agreement and the Second-Tier Subsequent Transfer
Assignment;
(x) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the Issuer in
the Trust Estate and the first perfected security interest of the
Indenture Trustee in the Collateral;
(xi) no selection procedures believed by the Seller to be
adverse to the interests of the Trust, the Noteholders or the
Certificateholders shall have been utilized in selecting the
Subsequent Receivables;
(xii) the addition of the Subsequent Receivables will not
result in a material adverse tax consequence to the Trust, the
Noteholders or the Certificateholders;
(xiii) the Seller shall have provided the Indenture
Trustee, the Trustee and the Rating Agencies a statement listing
the aggregate Contract Value of such Subsequent Receivables and
any other information
5
<PAGE>
reasonably requested by any of the foregoing with respect to such
Subsequent Receivables;
(xiv) the Seller shall have delivered: (A) to the Rating
Agencies, an Opinion of Counsel with respect to the transfer of
such Subsequent Receivables substantially in the form of the
Opinion of Counsel delivered to the Rating Agencies on the Closing
Date and (B) to the Trustee and the Indenture Trustee, the Opinion
of Counsel required by Section 10.2(i)(1);
(xv) the Seller shall have delivered to the Trustee and
the Indenture Trustee a letter of a firm of independent certified
public accountants confirming the satisfaction of the conditions
set forth in clause (vi) with respect to the Subsequent
Receivables, and covering substantially the same matters with
respect to the Subsequent Receivables as are set forth in Exhibit
F hereto;
(xvi) the Seller shall have delivered to the Indenture
Trustee and the Trustee an Officers' Certificate confirming the
satisfaction of each condition specified in this clause (b)
(substantially in the form attached hereto as Annex A to the
Second-Tier Subsequent Transfer Assignment); and
(xvii) Moody's shall have received written notification
from the Seller of the addition of all such Subsequent
Receivables.
(c) The Seller covenants to transfer to the Issuer pursuant to
clause (a) Subsequent Receivables with an aggregate Contract Value equal to
$-------------.
ARTICLE III
The Receivables
SECTION 3.1. Representations and Warranties of Seller. The Seller
makes the following representations and warranties as to the Receivables on
which the Issuer is deemed to have relied in acquiring the Receivables.
Such representations and warranties speak as of the execution and delivery
of this Agreement and as of the Closing Date, in the case of the Initial
Receivables, and as of the applicable Subsequent Transfer Date, in the case
of the Subsequent Receivables, but shall survive the sale, transfer and
assignment of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
6
<PAGE>
(a) Title. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Receivables from
the Seller to the Issuer and that the beneficial interest in and title to
the Receivables not be part of the debtor's estate in the event of the
filing of a bankruptcy petition by or against the Seller under any
bankruptcy or similar law. No Receivable has been sold, transferred,
assigned or pledged by the Seller to any Person other than the Issuer.
Immediately prior to the transfer and assignment herein contemplated, the
Seller had good title to each Receivable, free and clear of all Liens and,
immediately upon the transfer thereof, the Issuer shall have good title to
each Receivable, free and clear of all Liens; and the transfer and
assignment of the Receivables to the Issuer has been perfected under the
UCC.
(b) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Issuer a first priority perfected
ownership interest in the Receivables, and to give the Indenture Trustee a
first priority perfected security interest therein, have been made.
SECTION 3.2. Repurchase upon Breach. (a) The Seller, the Servicer
or the Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the
discovery of any breach of the Seller's representations and warranties made
pursuant to Section 3.1 or Section 6.1 or Credit's representations and
warranties made pursuant to Section 3.2(b) of the Liquidity Receivables
Purchase Agreement or Section 3.2(b) of the Purchase Agreement. Unless any
such breach shall have been cured by the last day of the second (or, if the
Seller elects, the first) Collection Period after such breach is discovered
by the Trustee or in which the Trustee receives written notice from the
Seller or the Servicer of such breach, the Seller shall be obligated, and,
if necessary, the Seller or the Trustee shall enforce the obligation of
Credit under the Liquidity Receivables Purchase Agreement or the Purchase
Agreement, as applicable, to repurchase any Receivable materially and
adversely affected by any such breach as of such last day. As consideration
for the repurchase of the Receivable, the Seller shall remit the Purchase
Amount in the manner specified in Section 5.4; provided, however, that the
obligation of the Seller to repurchase any Receivable arising solely as a
result of a breach of Credit's representations and warranties pursuant to
Section 3.2(b) of the Liquidity Receivables Purchase Agreement or Section
3.2(b) of the Purchase Agreement is subject to the receipt by the Seller of
the Purchase Amount from Credit. Subject to the provisions of Section 6.3,
the sole remedy of the Issuer, the Trustee, the Indenture Trustee, the
Noteholders or the Certificateholders with respect to a breach of the
representations and warranties pursuant to Section 3.1 and the agreement
contained in this Section shall be to require the Seller to repurchase
Receivables pursuant to this Section, subject to the conditions contained
herein, and to enforce Credit's obligation to the Seller to repurchase such
Receivables
7
<PAGE>
pursuant to the Liquidity Receivables Purchase Agreement or the Purchase
Agreement, as applicable.
(b) With respect to all Receivables repurchased by the Seller
pursuant to this Agreement, the Issuer shall sell, transfer, assign, set
over and otherwise convey to the Seller, without recourse, representation
or warranty, all of the Issuer's right, title and interest in, to and under
such Receivables, and all security and documents relating thereto.
SECTION 3.3. Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs,
the Issuer hereby revocably appoints the Servicer, and the Servicer hereby
accepts such appointment, to act for the benefit of the Issuer and the
Indenture Trustee as custodian of the following documents or instruments,
which are hereby constructively delivered to the Indenture Trustee, as
pledgee of the Issuer (or, in the case of the Subsequent Receivables, will
as of the applicable Subsequent Transfer Date be constructively delivered
to the Indenture Trustee, as pledgee of the Issuer) with respect to each
Receivable:
(a) the original fully executed copy of the Receivable;
(b) a record or facsimile of the original credit
application fully executed by the Obligor;
(c) the original certificate of title or file stamped
copy of the UCC financing statement or such other documents that
the Servicer shall keep on file, in accordance with its customary
procedures, evidencing the security interest of Credit in the
Financed Equipment; and
(d) any and all other documents that the Servicer or the
Seller shall keep on file, in accordance with its customary
procedures, relating to a Receivable, an Obligor or any of the
Financed Equipment.
SECTION 3.4. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall hold the Receivable Files for
the benefit of the Issuer and the Indenture Trustee and maintain such
accurate and complete accounts, records and computer systems pertaining to
each Receivable File as shall enable the Issuer to comply with this
Agreement. In performing its duties as custodian, the Servicer shall act
with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to the receivable files relating to all
comparable equipment receivables that the Servicer services for itself or
others. The Servicer shall conduct, or cause to be conducted, periodic
audits of the Receivable Files and the related accounts, records and
computer
8
<PAGE>
systems, in such a manner as shall enable the Issuer or the Indenture
Trustee to verify the accuracy of the Servicer's record keeping. The
Servicer shall promptly report to the Issuer and the Indenture Trustee any
failure on its part to hold the Receivable Files and maintain its accounts,
records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be
deemed to require an initial review or any periodic review by the Issuer,
the Trustee or the Indenture Trustee of the Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule A
to this Agreement or at such other office as shall be specified to the
Issuer and the Indenture Trustee by written notice not later than 90 days
after any change in location. The Servicer shall make available for
inspection by the Seller, the Issuer and the Indenture Trustee or their
respective duly authorized representatives, attorneys or auditors a list of
locations of the Receivable Files and the related accounts, records and
computer systems maintained by the Servicer at such times during normal
business hours as the Seller, the Issuer or the Indenture Trustee shall
instruct.
SECTION 3.5. Instructions; Authority To Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trust Officer of
the Indenture Trustee.
SECTION 3.6. Custodian's Indemnification. The Servicer as
custodian shall indemnify the Trust, the Trustee and the Indenture Trustee
(and each of their officers, directors, employees and agents) for any and
all liabilities, obligations, losses, compensatory damages, payments, costs
or expenses of any kind whatsoever that may be imposed on, incurred by or
asserted against the Trust, the Trustee or the Indenture Trustee (or any of
their officers, directors and agents) as the result of any improper act or
omission in any way relating to the maintenance and custody by the Servicer
as custodian of the Receivable Files; provided, however, that the Servicer
shall not be liable: (a) to the Trustee for any portion of any such amount
resulting from the willful misfeasance, bad faith or negligence of the
Trustee and (b) to the Indenture Trustee for any portion of any such amount
resulting from the wilful misfeasance, bad faith or negligence of the
Indenture Trustee.
SECTION 3.7. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Initial Cutoff
Date and shall continue in full force and effect until terminated pursuant
to this Section. If any Servicer shall resign as Servicer in accordance
with this Agreement or if all of the rights and obligations of any Servicer
shall have been terminated under Section 8.1, the appointment of such
Servicer as custodian shall be terminated by:
9
<PAGE>
(a) the Indenture Trustee, (b) the Noteholders of Notes evidencing not less
than 25% of the Note Balance, (c) with the consent of Noteholders of Notes
evidencing not less than 25% of the Note Balance, the Trustee or (d)
Certificateholders evidencing not less than 25% of the Certificate Balance,
in the same manner as the Indenture Trustee or such Holders may terminate
the rights and obligations of the Servicer under Section 8.1. The Indenture
Trustee or, with the consent of the Indenture Trustee, the Trustee may
terminate the Servicer's appointment as custodian, with cause, at any time
upon written notification to the Servicer, and without cause upon 30 days'
prior written notification to the Servicer. As soon as practicable after
any termination of such appointment, the Servicer shall deliver the
Receivable Files to the Indenture Trustee or the Indenture Trustee's agent
at such place(s) as the Indenture Trustee may reasonably designate.
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1. Duties of Servicer. The Servicer, for the benefit of
the Issuer, and (to the extent provided herein) the Indenture Trustee shall
manage, service, administer and make collections on the Receivables with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable equipment receivables that it
services for itself or others. The Servicer's duties shall include
collection and posting of all payments, responding to inquiries of Obligors
on such Receivables, investigating delinquencies, sending payment coupons
to Obligors, reporting tax information to Obligors, accounting for
collections and furnishing monthly and annual statements to the Trustee and
the Indenture Trustee with respect to distributions. Subject to Section
4.2, the Servicer shall follow its customary standards, policies and
procedures in performing its duties as Servicer. Without limiting the
generality of the foregoing, the Servicer is authorized and empowered to
execute and deliver, on behalf of itself, the Issuer, the Trustee, the
Indenture Trustee, the Certificateholders, the Noteholders or any of them,
any and all instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to
such Receivables or the Financed Equipment securing such Receivables. If
the Servicer shall commence a legal proceeding to enforce a Receivable, the
Issuer shall thereupon be deemed to have automatically assigned, solely for
the purpose of collection, such Receivable to the Servicer. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may
not enforce a Receivable on the ground that it shall not be a real party in
interest or a holder entitled to enforce such Receivable, the Trustee
shall, at the Servicer's expense and direction, take steps to enforce such
Receivable, including bringing suit in its name or the name of the Trust,
the Indenture Trustee, the
10
<PAGE>
Certificateholders or the Noteholders. The Trustee or the Indenture Trustee
shall, upon the written request of the Servicer, furnish the Servicer with
any powers of attorney and other documents reasonably necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
SECTION 4.2. Collection and Allocation of Receivable Payments. The
Servicer shall make reasonable efforts to collect all payments called for
under the Receivables as and when the same shall become due and shall
follow such collection procedures as it follows with respect to all
comparable equipment receivables that it services for itself or others. The
Servicer shall allocate collections between principal and interest in
accordance with the customary servicing procedures it follows with respect
to all comparable equipment receivables that it services for itself or
others. The Servicer may grant extensions or adjustments on a Receivable;
provided, however, that if the Servicer extends the date for final payment
by the Obligor of any Receivable beyond the Final Scheduled Maturity Date,
it shall promptly purchase the Receivable from the Issuer in accordance
with Section 4.6. The Servicer may, in its discretion, waive any late
payment charge or any other fees (other than extension fees or any other
fees that represent interest charges on deferred Scheduled Payments) that
may be collected in the ordinary course of servicing a Receivable. The
Servicer shall not agree to any decrease of the interest rate on any
Receivable or reduce the aggregate amount of the Scheduled Payments due on
any Receivable.
SECTION 4.3. Realization upon Receivables. For the benefit of the
Issuer and the Indenture Trustee, the Servicer shall use reasonable
efforts, consistent with its customary servicing procedures, to repossess
or otherwise convert the ownership of the Financed Equipment securing any
Receivable as to which the Servicer shall have determined eventual payment
in full is unlikely. The Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable in its
servicing of equipment receivables, which may include reasonable efforts to
realize upon any recourse to Dealers and selling the Financed Equipment at
public or private sale. The foregoing shall be subject to the provision
that, in any case in which the Financed Equipment shall have suffered
damage, the Servicer shall not expend funds in connection with the repair
or the repossession of such Financed Equipment unless it shall determine in
its discretion that such repair and/or repossession will increase the
Liquidation Proceeds by an amount greater than the amount of such expenses.
SECTION 4.4. Maintenance of Security Interests in Financed
Equipment. The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed
Equipment. The Servicer is hereby authorized to take such steps as are
necessary to re-perfect such security interest
11
<PAGE>
for the benefit of the Issuer and the Indenture Trustee in the event of the
relocation of a Financed Equipment or for any other reason.
SECTION 4.5. Covenants of Servicer. The Servicer shall not release
the Financed Equipment securing any Receivable from the security interest
granted by such Receivable in whole or in part except in the event of
payment in full by the Obligor thereunder or repossession, nor shall the
Servicer impair the rights of the Issuer, the Indenture Trustee, the
Certificateholders or the Noteholders or in such Receivables. The Servicer
shall, in accordance with its customary servicing procedures, require that
each Obligor shall have obtained physical damage insurance covering the
Financed Equipment as of the execution of the Receivable.
SECTION 4.6. Purchase of Receivables upon Breach. The Servicer or
the Trustee shall inform the other party, the Indenture Trustee, the Seller
and Credit promptly, in writing, upon the discovery of any breach pursuant
to Section 4.2, 4.4 or 4.5. Unless the breach shall have been cured by the
last day of the Collection Period in which such breach is discovered, the
Servicer shall purchase any Receivable materially and adversely affected by
such breach as of such last day. If the Servicer takes any action during
any Collection Period pursuant to Section 4.2 that impairs the rights of
the Issuer, the Indenture Trustee, the Certificateholders or the
Noteholders in any Receivable or as otherwise provided in Section 4.2, the
Servicer shall purchase such Receivable as of the last day of such
Collection Period. As consideration for the purchase of any such Receivable
pursuant to either of the two preceding sentences, the Servicer shall remit
the Purchase Amount in the manner specified in Section 5.4. Subject to
Section 7.2, the sole remedy of the Issuer, the Trustee, the Indenture
Trustee, the Certificateholders or the Noteholders with respect to a breach
pursuant to Section 4.2, 4.4 or 4.5 shall be to require the Servicer to
purchase Receivables pursuant to this Section. The Trustee shall have no
duty to conduct any affirmative investigation as to the occurrence of any
condition requiring the purchase of any Receivable pursuant to this
Section.
SECTION 4.7. Servicing Fee. The Servicing Fee for each Collection
Period shall be equal to 1/12th of 1.00% of the Pool Balance as of the first
day of such Collection Period.
SECTION 4.8. Servicer's Certificate. On each Determination Date
the Servicer shall deliver to the Trustee, the Indenture Trustee and the
Seller, with a copy to the Rating Agencies, a Servicer's Certificate
containing all information necessary to make the distributions pursuant to
Sections 5.5 and 5.6 and the deposits to the Collection Account pursuant to
Section 5.2 for the Collection Period preceding the date of such Servicer's
Certificate. Receivables to be repurchased by the Seller or purchased by
the Servicer shall be identified by the
12
<PAGE>
Servicer by account number with respect to such Receivable (as specified in
the schedule of Receivables delivered on the Closing Date or attached to
the applicable Second-Tier Subsequent Transfer Assignment).
SECTION 4.9. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Trustee and the Indenture Trustee, on
or before April 30th of each year, an Officers' Certificate, dated as of
December 31 of the preceding year, stating that: (i) a review of the
activities of the Servicer during the preceding 12-month period (or, in the
case of the first such certificate, from the Initial Cutoff Date to
_______________ ___, 199__) and of its performance under this Agreement has
been made under such officers' supervision and (ii) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such year or, if there has
been a default in the fulfillment of any such obligation, specifying each
such default known to such officers and the nature and status thereof. The
Indenture Trustee shall send a copy of such Certificate and the report
referred to in Section 4.10 to the Rating Agencies. A copy of such
Certificate and report may be obtained by any Certificateholder or
Noteholder by a request in writing to the Trustee addressed to the
Corporate Trust Office. Upon the written request of the Trustee, the
Indenture Trustee will promptly furnish the Trustee a list of Noteholders
as of the date specified by the Trustee.
(b) The Servicer shall deliver to the Trustee, the Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five Business Days thereafter, written
notice in an Officers' Certificate of any event that, with the giving of
notice or lapse of time, or both, would become a Servicer Default under
Section 8.1(a) or (b).
SECTION 4.10. Annual Independent Certified Public Accountants'
Report. The Servicer shall cause a firm of independent certified public
accountants, which may also render other services to the Servicer or the
Seller, to deliver to the Trustee and the Indenture Trustee on or before
April 30 of each year a report, addressed to the Board of Directors of the
Servicer, the Trustee and the Indenture Trustee, summarizing the results of
certain procedures with respect to certain documents and records relating
to the servicing of the Receivables during the preceding calendar year (or,
in the case of the first such report, during the period from the Initial
Cutoff Date to ____________ __, 199__). The procedures to be performed and
reported upon by the independent public accountants shall be those agreed
to by the Servicer and the Indenture Trustee.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
13
<PAGE>
SECTION 4.11. Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Trustee and the
Indenture Trustee access to the Receivable Files in such cases where the
Trustee or the Indenture Trustee shall be required by applicable statutes
or regulations to review such documentation. Access shall be afforded
without charge, but only upon reasonable request and during the normal
business hours at the respective offices of the Servicer. Nothing in this
Section shall affect the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of the Servicer to provide access to information
as a result of such obligation shall not constitute a breach of this
Section.
SECTION 4.12. Servicer Expenses. The Servicer shall be required to
pay all expenses incurred by it in connection with its activities
hereunder, including fees and disbursements of independent accountants,
taxes imposed on the Servicer and expenses incurred in connection with
distributions and reports to Certificateholders and the Noteholders.
SECTION 4.13. Appointment of Subservicer. The Servicer may at any
time appoint a subservicer to perform all or any portion of its obligations
as Servicer hereunder; provided, however, that the Rating Agency Condition
shall have been satisfied in connection therewith; and provided further,
that the Servicer shall remain obligated and be liable to the Issuer, the
Trustee, the Indenture Trustee the Certificateholders and the Noteholders
for the servicing and administering of the Receivables in accordance with
the provisions hereof without diminution of such obligation and liability
by virtue of the appointment of such subservicer and to the same extent and
under the same terms and conditions as if the Servicer alone were servicing
and administering the Receivables. The fees and expenses of the subservicer
shall be as agreed between the Servicer and its subservicer from time to
time and none of the Issuer, the Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders shall have any responsibility
therefor.
ARTICLE V
Distributions: Spread Account;
Statements to Certificateholders and Noteholders
SECTION 5.1. Establishment of Trust Accounts. (a)(i) The Servicer, for
the benefit of the Noteholders and the Certificateholders, shall establish and
maintain in the name of the Indenture Trustee an Eligible Deposit Account (the
"Collection Account"), bearing a designation clearly indicating that the funds
14
<PAGE>
deposited therein are held for the benefit of the Noteholders and the
Certificateholders.
(ii) The Servicer, for the benefit of the Noteholders,
shall establish and maintain in the name of the Indenture Trustee
an Eligible Deposit Account (the "Note Distribution Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders.
(iii) The Servicer, for the benefit of the Noteholders,
shall establish and maintain in the name of the Indenture Trustee
an Eligible Deposit Account (the "Spread Account"), bearing a
designation clearly indicating that the funds deposited therein
are held for the benefit of the Noteholders.
(iv) The Servicer, for the benefit of the Noteholders and
the Certificateholders, shall establish and maintain in the name
of the Indenture Trustee an Eligible Deposit Account (the
"Pre-Funding Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Noteholders and the Certificateholders.
(v) The Servicer, for the benefit of the Noteholders and
the Certificateholders, shall establish and maintain in the name
of the Indenture Trustee an Eligible Deposit Account (the
"Negative Carry Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
(b) Funds on deposit in the Collection Account, the Note
Distribution Account, the Spread Account, the Pre-Funding Account and the
Negative Carry Account (collectively, the "Trust Accounts") shall be
invested or reinvested by the Indenture Trustee in Eligible Investments
selected by and as directed in writing by the Servicer (which written
direction may be in the form of standing instructions); provided, however,
it is understood and agreed that the Indenture Trustee shall not be liable
for the selection of, or any loss arising from such investment in, Eligible
Investments. All such Eligible Investments shall be held by the Indenture
Trustee for the benefit of the Noteholders and the Certificateholders or
the Noteholders, as applicable (and for the purposes of Article 8 of the
UCC, each Eligible Investment is intended to constitute a Financial Asset,
and each of the Trust Accounts is intended to constitute a Securities
Account); provided, that on each Transfer Date, all Investment Earnings on
funds on deposit therein shall be deposited into the Collection Account and
shall be deemed to constitute a portion of the Total Distribution
15
<PAGE>
Amount. Other than as permitted by the Rating Agencies, funds on deposit in
the Trust Accounts shall be invested in Eligible Investments that will
mature so that such funds will be available at the close of business on the
Transfer Date preceding the following Payment Date; provided, however, that
funds on deposit in Trust Accounts may be invested in Eligible Investments
of the entity serving as Indenture Trustee that may mature so that such
funds will be available on the Payment Date. Funds deposited in a Trust
Account on the Transfer Date that precedes a Payment Date upon the maturity
of any Eligible Investments are not required to be invested overnight.
(c)(i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts
and in all proceeds thereof (including all income thereon) and all such
funds, investments, proceeds and income shall be part of the Trust Estate.
The Trust Accounts shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Noteholders and the
Certificateholders or the Noteholders, as the case may be. If, at any time,
any of the Trust Accounts ceases to be an Eligible Deposit Account, the
Indenture Trustee (or the Servicer on its behalf) shall within 10 Business
Days (or such longer period, not to exceed 30 calendar days, as to which
each Rating Agency may consent) establish a new Trust Account as an
Eligible Deposit Account and shall transfer any cash and/or any investments
held in the no-longer Eligible Deposit Account to such new Trust Account.
(ii) With respect to the Trust Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in
deposit accounts shall be held solely in Eligible Deposit
Accounts, subject to the last sentence of Section
5.1(c)(i); and each such Eligible Deposit Account shall
be subject to the exclusive custody and control of the
Indenture Trustee, and the Indenture Trustee shall have
sole signature authority with respect thereto;
(B) any Trust Account Property that constitutes
a Certificated Security shall be delivered to the
Indenture Trustee in accordance with paragraph (i) of the
definition of "Delivery" and shall be held, pending
maturity or disposition, solely by the Indenture Trustee;
(C) any such Trust Account Property that
constitutes an Uncertificated Security (including any
investments in money market mutual funds, but excluding
any Federal Book Entry Security) shall be delivered to
the Indenture Trustee in accordance with paragraph (ii)
of the definition of "Delivery" and shall be maintained,
pending
16
<PAGE>
maturity or disposition, through continued registration of the
Indenture Trustee's (or its nominee's) ownership of such
security; and
(D) with respect to any Trust Account Property
that constitutes a Federal Book Entry Security, the
Indenture Trustee shall maintain and obtain Control over
such property.
(iii) The Servicer shall have the power, revocable by the
Indenture Trustee or by the Trustee, with the consent of the
Indenture Trustee, to instruct the Indenture Trustee to make
withdrawals and payments from the Trust Accounts for the purpose
of permitting the Servicer or the Trustee to carry out its
respective duties hereunder or permitting the Indenture Trustee to
carry out its duties under the Indenture.
(d) All Trust Accounts will initially be established at the
Indenture Trustee.
SECTION 5.2. Collections. The Servicer shall remit within two
Business Days of receipt thereof to the Collection Account all payments by
or on behalf of the Obligors with respect to the Receivables, and all
Liquidation Proceeds, both as collected during the Collection Period.
Notwithstanding the foregoing, for so long as: (i) Credit remains the
Servicer, (ii) no Servicer Default shall have occurred and be continuing
and (iii) prior to ceasing daily remittances, the Rating Agency Condition
shall have been satisfied (and any conditions or limitations imposed by the
Rating Agencies in connection therewith are complied with), the Servicer
shall remit such collections with respect to the related Collection Period
to the Collection Account on the Transfer Date immediately following the
end of such Collection Period. For purposes of this Article V, the phrase
"payments by or on behalf of the Obligors" shall mean payments made with
respect to the Receivables by Persons other than the Servicer or the
Seller.
SECTION 5.3. Application of Collections. (a) With respect to each
Receivable, all collections for the Collection Period shall be applied to the
related Scheduled Payment.
(b) All Liquidation Proceeds shall be applied to the related
Receivable.
SECTION 5.4. Additional Deposits. The Servicer and the Seller
shall deposit or cause to be deposited in the Collection Account the
aggregate Purchase Amount with respect to Purchased Receivables on the
Transfer Date related to the Collection Period on the last day of which the
purchase occurs, and the Servicer shall deposit therein all amounts to be
paid under Section 9.1 on the Transfer Date falling in the Collection
Period referred to in Section 9.1. The Servicer will deposit the aggregate
Purchase Amount with respect to Purchased Receivables
17
<PAGE>
when such obligations are due, unless the Servicer shall not be required to
make daily deposits pursuant to Section 5.2, in which case such deposits
shall be made on the Transfer Date following the related Collection Period.
SECTION 5.5. Distributions. (a) On each Determination Date, the
Servicer shall calculate all amounts required to determine the amounts to be
deposited in the Note Distribution Account, the Certificate Distribution Account
and the Spread Account.
(b) On each Payment Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
4.8) to make the following deposits and distributions for receipt by the
Servicer or deposit in the applicable Trust Account or Certificate
Distribution Account, as applicable, by 10:00 a.m. (New York time), to the
extent of the Total Distribution Amount, in the following order of
priority:
(i) to the Administrator, the Administration Fee and all
unpaid Administration Fees from prior Collection Periods;
(ii) to the Note Distribution Account, the Class A
Noteholders' Interest Distributable Amount;
(iii) to the Note Distribution Account, the Class B
Noteholders' Interest Distributable Amount;
(iv) to the Note Distribution Account, the Class Principal
Distributable Amount for each Class of Notes;
(v) to the Spread Account to the extent necessary so that
the balance on deposit therein will equal the Specified Spread
Account Balance;
(vi) to the Certificate Distribution Account, the
Certificateholders' Interest Distributable Amount;
(vii) to the Certificate Distribution Account, the
Certificateholders' Principal Distributable Amount;
(viii) to the Servicer, the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods; provided that if
Credit or an Affiliate of Credit is not the Servicer, the amounts
described in this clause (xii) will be paid prior to any other
application of funds on deposit in the Collection Account; and
18
<PAGE>
(ix) to the Seller, the remaining Total Distribution Amount.
SECTION 5.6. Spread Account. (a) On the Closing Date and on each
Subsequent Transfer Date, the Seller shall deposit the applicable Spread Account
Initial Deposit into the Spread Account.
(b) 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) is greater than the Specified Spread Account Balance for such
Payment Date, the Servicer shall instruct the Indenture Trustee to
distribute the amount of the excess to the Seller (and its transferees and
assignees in accordance with their respective interests); provided, that
if, after giving effect to all payments made on the Notes on such Payment
Date, the sum of the Pool Balance and 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 Note Balance and the Certificate Balance, such
excess shall not be distributed to the Seller (or such transferees or
assignees) and shall be retained in the Spread Account for application in
accordance with this Agreement. Amounts properly distributed pursuant to
this Section 5.6(b)(i) shall be deemed released from the Trust and the
security interest therein granted to the Indenture Trustee, and the Seller
(and such transferees and assignees) shall in no event thereafter be
required to refund any such distributed amounts.
(c) Following: (i) the payment in full of the aggregate
Outstanding Amount of the Notes and of all other amounts owing or to be
distributed hereunder or under the Indenture to the Noteholders, the
Trustee and the Indenture Trustee and (ii) the termination of the Trust,
any amount remaining on deposit in the Spread Account shall be distributed
to the Seller or any transferee or assignee pursuant to clause (g). The
Seller (and such transferees and assignees) shall in no event be required
to refund any amounts properly distributed pursuant to this Section 5.6(c).
(d) In the event that the Noteholders' Distributable Amount for a
Payment Date exceeds the amount deposited into the Note Distribution
Account pursuant to Sections 5.5(b)(iii), (iv), (v), (vi), (vii) and (viii)
on such Payment Date, the Servicer shall instruct the Indenture Trustee on
such Payment Date to withdraw from the Spread Account on such Payment Date
an amount equal to such excess, to the extent of funds available therein,
and deposit such amount into the Note Distribution Account.
(e) [Reserved]
(f) [Reserved]
19
<PAGE>
(g) The Seller may at any time, without consent of the
Noteholders, sell, transfer, convey or assign in any manner its rights to
and interests in distributions from the Spread Account, including interest
and other investment earnings thereon; provided, that: the Rating Agency
Condition is satisfied.
SECTION 5.7. Pre-Funding Account. (a) On the Closing Date, the
Trustee will deposit, on behalf of the Seller, in the Pre-Funding Account
$____________ from the net proceeds of the sale of the Notes and the
Certificates. On each Subsequent Transfer Date, the Servicer shall instruct
the Indenture Trustee to withdraw from the Pre-Funding Account an amount
equal to: (i) the aggregate Contract Value of the Subsequent Receivables
transferred to the Issuer on such Subsequent Transfer Date less the Spread
Account Initial Deposit for such Subsequent Transfer Date, and distribute
such amount to or upon the order of the Seller upon satisfaction of the
conditions set forth in Section 2.2(b) with respect to such transfer, and
(ii) the Spread Account Initial Deposit for such Subsequent Transfer Date
and, on behalf of the Seller, deposit such amount in the Spread Account.
(b) If: (i) the Pre-Funded Amount has not been reduced to zero on
the Payment Date on which the Funding Period ends (or, if the Funding
Period does not end on a Payment Date, on the first Payment Date following
the end of the Funding Period) or (ii) the Pre-Funded Amount has been
reduced to $100,000 or less on any Determination Date, in either case after
giving effect to any reductions in the Pre-Funded Amount on such date
pursuant to paragraph (a), the Servicer shall instruct the Indenture
Trustee to withdraw from the Pre-Funding Account, in the case of clause
(i), on such Payment Date or, in the case of clause (ii), on the Payment
Date immediately succeeding such Determination Date, the amount remaining
at the time in the Pre-Funding Account (such remaining amount being the
"Remaining Pre-Funded Amount") and deposit such amounts in the Note
Distribution Account, so that such amounts are payable: (A) first, to
redeem the A-1 Notes, in whole or in part, (B) second, to redeem the A-2
Notes, in whole or in part, (C) third, to redeem the A-3 Notes, in whole or
in part, and (D) fourth to the redeem the A-4 Notes, in whole or in part.
SECTION 5.8. Negative Carry Account. On the Closing Date, the
Seller shall deposit the Negative Carry Account Initial Deposit into the
Negative Carry Account. 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. If the amount on deposit in the Negative
Carry Account on any Payment Date (after giving effect to the withdrawal
therefrom 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.
20
<PAGE>
SECTION 5.9. [Intentionally Omitted].
SECTION 5.10. Statements to Certificateholders and Noteholders.
(a) On each Determination Date the Servicer shall provide to the Indenture
Trustee (with a copy to the Rating Agencies), for the Indenture Trustee to
forward to each Noteholder of record, and to the Trustee, for the Trustee
to forward to each Certificateholder of record, a statement substantially
in the form of Exhibits A and B, respectively, setting forth at least the
following information as to each Class of the Notes and the Certificates to
the extent applicable:
(i) the amount of such distribution allocable to principal of
each Class of Notes;
(ii) the amount of the distribution allocable to interest
of each Class of Notes;
(iii) the amount of the distribution allocable to
principal of the Certificates;
(iv) the amount of the distribution allocable to interest
of the Certificates;
(v) the Pool Balance as of the close of business on the
last day of the preceding Collection Period;
(vi) the aggregate Outstanding Amount and the Note Pool
Factor for each Class of Notes, and the Certificate Balance and
the Certificate Pool Factor as of such Payment Date, after giving
effect to payments allocated to principal reported under clauses
(i) and (iii) above;
(vii) the amount of the Servicing Fee paid to the
Servicer with respect to the preceding Collection Period;
(viii) the amount of the Administration Fee paid to the
Administrator in respect of the preceding Collection Period;
(ix) the amount of the aggregate Realized Losses, if any,
for such Collection Period;
(x) the aggregate Purchase Amounts for Receivables, if
any, that were repurchased or purchased in such Collection Period;
(xi) the balance of the Spread Account on such Payment
Date, after giving effect to changes therein on such Payment Date;
21
<PAGE>
(xii) for Payment Dates during the Funding Period, the
remaining Pre-Funded Amount;
(xiii) for the final Payment Date with respect to the
Funding Period, the amount of any remaining Pre-Funded Amount that
has not been used to fund the purchase of Subsequent Receivables;
(xiv) [intentionally omitted]; and
(xv) the balance of the Negative Carry Account on such
Payment Date, after giving effect to changes therein on such
Payment Date.
Each amount set forth pursuant to clauses (i), (ii), (iii), (iv), (vii) and
(viii) shall be expressed as a dollar amount per $1,000 of original
principal balance of a Certificate or Note, as applicable.
SECTION 5.11. Net Deposits. As an administrative convenience,
unless the Servicer is required to remit collections daily, the Servicer
will be permitted to make the deposit of collections net of distributions,
if any, to be made to the Servicer with respect to the Collection Period.
The Servicer, however, will account to the Trustee, the Indenture Trustee,
the Noteholders and the Certificateholders as if all deposits,
distributions and transfers were made individually.
ARTICLE VI
The Seller
SECTION 6.1. Representations of Seller. The Seller makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution
and delivery of this Agreement and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Organization and Good Standing. The Seller is duly
organized and validly existing as a corporation in good standing
under the laws of the State of Delaware, with the corporate power
and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, the corporate
power, authority and legal right to acquire, own and sell the
Receivables.
22
<PAGE>
(b) Due Qualification. The Seller is duly qualified to do
business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the
conduct of its business shall require such qualifications.
(c) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and to carry out
its terms; the Seller has full power and authority to sell and
assign the property to be sold and assigned to and deposited with
the Issuer and has duly authorized such sale and assignment to the
Issuer by all necessary corporate action; and the execution,
delivery and performance of this Agreement have been, and the
execution, delivery and performance of each Second-Tier Subsequent
Transfer Assignment have been or will be on or before the related
Subsequent Transfer Date, duly authorized by the Seller by all
necessary corporate action.
(d) Binding Obligation. This Agreement constitutes, and
each Second-Tier Subsequent Transfer Assignment when executed and
delivered by the Seller will constitute, a legal, valid and
binding obligation of the Seller enforceable in accordance with
their terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
hereof do not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the certificate of incorporation
or by-laws of the Seller, or any indenture, agreement or other
instrument to which the Seller is a party or by which it shall be
bound; or result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than the Basic Documents); or
violate any law or, to the best of the Seller's knowledge, any
order, rule or regulation applicable to the Seller of any court or
of any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the
Seller or its properties.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the Seller's best knowledge,
threatened, before any court, regulatory body, administrative
agency or other governmental instrumentality having jurisdiction
over the Seller or its properties: (i) asserting the invalidity of
this Agreement, the Indenture or any of the other Basic Documents,
the Notes or the Certificates, (ii) seeking to prevent the
issuance of the Notes or the Certificates or the consummation of
any of the transactions contemplated by this Agreement, the
Indenture or any of the other Basic Documents, (iii) seeking any
determination or
23
<PAGE>
ruling that could reasonably be expected to materially and
adversely affect the performance by the Seller of its obligations
under, or the validity or enforceability of, this Agreement, the
Indenture, any of the other Basic Documents, the Notes or the
Certificates or (iv) that might adversely affect the Federal or
state income tax attributes of the Notes or the Certificates.
SECTION 6.2. Corporate Existence. (a) During the term of this
Agreement, the Seller will keep in full force and effect its existence,
rights and franchises as a corporation under the laws of the jurisdiction
of its incorporation and will obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Basic Documents and each other instrument or agreement necessary or
appropriate to the proper administration of this Agreement and the
transactions contemplated hereby.
(b) During the term of this Agreement, the Seller shall observe
the applicable legal requirements for the recognition of the Seller as a
legal entity separate and apart from its Affiliates, including as follows:
(i) the Seller shall maintain corporate records and books
of account separate from those of its Affiliates;
(ii) except as otherwise provided in this Agreement and
similar arrangements relating to other securitizations, the Seller
shall not commingle its assets and funds with those of its
Affiliates;
(iii) the Seller shall hold such appropriate meetings or
obtain such appropriate consents of its Board of Directors as are
necessary to authorize all the Seller's corporate actions required
by law to be authorized by the Board of Directors, shall keep
minutes of such meetings and of meetings of its stockholder(s) and
observe all other customary corporate formalities (and any
successor Seller not a corporation shall observe similar
procedures in accordance with its governing documents and
applicable law);
(iv) the Seller shall at all times hold itself out to the
public under the Seller's own name as a legal entity separate and
distinct from its Affiliates; and
(v) all transactions and dealings between the Seller and
its Affiliates will be conducted on an arm's-length basis.
24
<PAGE>
SECTION 6.3. Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless
the Issuer, the Trustee and the Indenture Trustee (and their
officers, directors, employees and agents) from and against any
taxes that may at any time be asserted against any of them with
respect to the sale of the Receivables to the Issuer or the
issuance and original sale of the Certificates and the Notes,
including any sales, gross receipts, general corporation, tangible
personal property, privilege or license taxes (but, in the case of
the Issuer, not including any taxes asserted with respect to
ownership of the Receivables or Federal or other income taxes
arising out of the transactions contemplated by this Agreement)
and costs and expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless
the Issuer, the Trustee and the Indenture Trustee (and their
officers, directors, employees and agents) from and against any
loss, liability or expense incurred by reason of: (i) the Seller's
willful misfeasance, bad faith or negligence in the performance of
its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement and
(ii) the Seller's or the Issuer's violation of Federal or State
securities laws in connection with the offering and sale of the
Notes and the Certificates.
Indemnification under this Section shall survive the resignation
or removal of the Trustee or the Indenture Trustee or the termination of
this Agreement and the Indenture and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Seller shall have
made any indemnity payments pursuant to this Section and the Person to or
on behalf of whom such payments are made thereafter shall collect any of
such amounts from others, such Person shall promptly repay such amounts to
the Seller, without interest.
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person: (a) into which the Seller may be merged
or consolidated, (b) that may result from any merger or consolidation to
which the Seller shall be a party or (c) that may succeed to the properties
and assets of the Seller substantially as a whole, which Person (in any of
the foregoing cases) executes an agreement of assumption to perform every
obligation of the Seller under this Agreement (or is deemed by law to have
assumed such obligations), shall be the successor to the Seller hereunder
without the execution or filing of any document or any further act by any
of the parties to this Agreement; provided, however, that: (i) immediately
after giving effect to such transaction,
25
<PAGE>
no representation or warranty made pursuant to Section 3.1 shall have been
breached and no Servicer Default, and no event that, after notice or lapse
of time, or both, would become a Servicer Default shall have occurred and
be continuing, (ii) the Seller shall have delivered to the Trustee and the
Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if
any, provided for in this Agreement relating to such transaction have been
complied with, (iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction and (iv) the Seller shall have delivered
to the Trustee and the Indenture Trustee an Opinion of Counsel either: (A)
stating that, in the opinion of such counsel, all financing statements,
continuation statements and amendments thereto have been executed and filed
that are necessary fully to preserve and protect the interest of the
Trustee and Indenture Trustee, respectively, in the Receivables and
reciting the details of such filings, or (B) stating that, in the opinion
of such counsel, no such action shall be necessary to preserve and protect
such interests. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with
clauses (i), (ii), (iii) and (iv) shall be conditions to the consummation
of the transactions referred to in clauses (a), (b) or (c).
SECTION 6.5. Limitation on Liability of Seller and Others. The
Seller and any director, officer, employee or agent of the Seller may rely
in good faith on the advice of counsel or on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Seller shall not be under any obligation to appear
in, prosecute or defend any legal action that shall not be incidental to
its obligations under this Agreement, and that in its opinion may involve
it in any expense or liability.
SECTION 6.6. Seller May Own Certificates or Notes. The Seller and
any Affiliate thereof may in its individual or any other capacity become
the owner or pledgee of Certificates or the Notes with the same rights as
it would have if it were not the Seller or an Affiliate thereof, except as
expressly provided herein or in any other Basic Document.
Notwithstanding the foregoing, the Seller will not sell the
Certificates except (a) to an entity that is not an Affiliate of the Seller
or (b) to an Affiliate of the Seller that (i) is a subsidiary of Credit,
the Certificate of Incorporation of which contains restrictions
substantially similar to the restrictions contained in the Certificate of
Incorporation of the Seller and (ii) has provided an opinion of counsel
regarding substantive consolidation of such Affiliate with Credit in the
event of a bankruptcy filing by Credit which is substantially similar to
the opinion of counsel provided by Seller on the Closing Date, and which
may be subject to the same assumptions and qualifications as that opinion.
26
<PAGE>
ARTICLE VII
The Servicer
SECTION 7.1. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution
and delivery of the Agreement and as of the Closing Date, in the case of
the Initial Receivables, and as of the applicable Subsequent Transfer Date,
in the case of the Subsequent Receivables, and shall survive the sale of
the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is duly
organized and validly existing as a corporation in good standing
under the laws of the state of its incorporation, with the
corporate power and authority to own its properties and to conduct
its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times,
and has, the power, authority and legal right to acquire, own,
sell and service the Receivables and to hold the Receivable Files
as custodian.
(b) Due Qualification. The Servicer is duly qualified to
do business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the
conduct of its business (including the servicing of the
Receivables as required by this Agreement) shall require such
qualifications.
(c) Power and Authority. The Servicer has the corporate
power and authority to execute and deliver this Agreement and to
carry out its terms; and the execution, delivery and performance
of this Agreement have been duly authorized by the Servicer by all
necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a
legal, valid and binding obligation of the Servicer enforceable
against the Servicer in accordance with its terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
hereof shall not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the articles of incorporation or
by-laws of the Servicer, or
27
<PAGE>
any indenture, agreement or other instrument to which the Servicer
is a party or by which it shall be bound; or result in the
creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other
instrument (other than this Agreement); or violate any law or, to
the best of the Servicer's knowledge, any order, rule or
regulation applicable to the Servicer of any court or of any
Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer
or its properties.
(f) No Proceedings. There are no proceedings or
investigations pending, or, to the Servicer's best knowledge,
threatened, before any court, regulatory body, administrative
agency or other governmental instrumentality having jurisdiction
over the Servicer or its properties: (i) asserting the invalidity
of this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent
the issuance of the Notes or the Certificates or the consummation
of any of the transactions contemplated by this Agreement, the
Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that could reasonably be expected to
materially and adversely affect the performance by the Servicer of
its obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Basic Documents, the
Notes or the Certificates or (iv) relating to the Servicer and
that might adversely affect the Federal or state income tax
attributes of the Notes or the Certificates.
(g) No Insolvent Obligors. As of the Initial Cutoff Date
or, in the case of the Subsequent Receivables, as of the related
Subsequent Cutoff Date, no Obligor is shown on the Receivable
Files as the subject of a bankruptcy proceeding.
SECTION 7.2. Indemnities of Servicer. The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement.
(a) The Servicer shall defend, indemnify and hold
harmless the Issuer, the Trustee, the Indenture Trustee, the
Noteholders, the Certificateholders and the Seller (and any of
their officers, directors, employees and agents) from and against
any and all costs, expenses, losses, damages, claims and
liabilities, arising out of or resulting from:
(i) the use, ownership or operation by the Servicer
or any Affiliate thereof of any of the Financed Equipment;
28
<PAGE>
(ii) any taxes that may at any time be asserted
against any such Person with respect to the transactions
contemplated herein, including any sales, gross receipts,
general corporation, tangible personal property,
privilege or license taxes (but, in the case of the
Issuer, not including any taxes asserted with respect to,
and as of the date of, the sale of the Receivables to the
Issuer or the issuance and original sale of the
Certificates, the Notes, or asserted with respect to
ownership of the Receivables, or Federal or other income
taxes arising out of distributions on the Certificates or
the Notes) and costs and expenses in defending against
the same; and
(iii) the negligence, willful misfeasance or bad
faith of the Servicer in the performance of its duties
under this Agreement or by reason of reckless disregard
of its obligations and duties under this Agreement.
(b) The Servicer shall indemnify, defend and hold
harmless the Trustee and the Indenture Trustee (and their
respective officers, directors, employees and agents) from and
against all costs, expenses, losses, claims, damages and
liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties herein and, in
the case of the Trustee, in the Trust Agreement contained, and, in
the case of the Indenture Trustee, in the Indenture contained,
except to the extent that such cost, expense, loss, claim, damage
or liability:
(i) shall be due to the willful misfeasance, bad
faith or negligence (except for errors in judgment) of
the Trustee or the Indenture Trustee as applicable; or
(ii) shall arise from the breach by the Trustee
of any of its representations or warranties set forth in
Section 7.3 of the Trust Agreement.
(c) The Servicer shall pay any and all taxes levied or
assessed upon all or any part of the Trust Estate.
(d) The Servicer shall pay the Indenture Trustee and the
Trustee from time to time reasonable compensation for all services
rendered by the Indenture Trustee under the Indenture or by the
Trustee under the Trust Agreement (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust).
29
<PAGE>
(e) The Servicer shall, except as otherwise expressly
provided in the Indenture or the Trust Agreement, reimburse either
the Indenture Trustee or the Trustee, respectively, upon its
request for all reasonable expenses, disbursements and advances
incurred or made in accordance with the Indenture or the Trust
Agreement, respectively, (including the reasonable compensation,
expenses and disbursements of its agents and either in-house
counsel or outside counsel, but not both), except any such
expense, disbursement or advance as may be attributable to the
Indenture Trustee's or the Trustee's, respectively negligence, bad
faith or willful misfeasance.
For purposes of this Section, in the event of the termination of
the rights and obligations of the Servicer pursuant to Section 8.1, or a
resignation by the Servicer pursuant to this Agreement, the Servicer shall
be deemed to be the Servicer pending appointment of a successor Servicer
pursuant to Section 8.2.
Indemnification under this Section shall survive the resignation
or removal of the Trustee or the Indenture Trustee or the termination of
this Agreement, the Trust Agreement and the Indenture and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section
and the Person to or on behalf of whom such payments are made thereafter
collects any of such amounts from others, such Person shall promptly repay
such amounts to the Servicer, without interest.
SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person: (a) into which the Servicer may be
merged or consolidated, (b) that may result from any merger or
consolidation to which the Servicer shall be a party, or (c) that may
succeed to the properties and assets of the Servicer substantially as a
whole, which Person (in any of the foregoing circumstances) executes an
agreement of assumption to perform every obligation of the Servicer
hereunder (or is deemed by law to have assumed such obligations), shall be
the successor to the Servicer under this Agreement without further act on
the part of any of the parties to this Agreement; provided, however, that:
(i) immediately after giving effect to such transaction, no Servicer
Default, and no event that, after notice or lapse of time, or both, would
become a Servicer Default shall have occurred and be continuing, (ii) the
Servicer shall have delivered to the Trustee and Indenture Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for
in this Agreement relating to such transaction have been complied with,
(iii) the Rating Agencies shall have received at least ten days' prior
written notice of such transaction and (iv) the Servicer shall have
delivered to the Trustee and the Indenture Trustee an Opinion of Counsel
either:
30
<PAGE>
(A) stating that, in the opinion of such counsel, all financing statements,
continuation statements and amendments thereto have been executed and filed
that are necessary fully to preserve and protect the interest of the
Trustee and the Indenture Trustee, respectively, in the Receivables and
reciting the details of such filings, or (B) stating that, in the opinion
of such counsel, no such action shall be necessary to preserve and protect
such interests. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with
clauses (i), (ii), (iii) and (iv) shall be conditions to the consummation
of the transactions referred to in clauses (a), (b) or (c).
SECTION 7.4. Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Issuer, the
Noteholders or the Certificateholders, except as provided under this
Agreement, for any action taken or for refraining from the taking of any
action pursuant to this Agreement or for errors in judgment; provided,
however, that this provision shall not protect the Servicer or any such
Person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of its
duties or by reason of reckless disregard of obligations and duties under
this Agreement. The Servicer and any director, officer, employee or agent
of the Servicer may rely in good faith on the advice of counsel or on any
document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder.
Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action
that shall not be incidental to its duties to service the Receivables in
accordance with this Agreement, and that in its opinion may involve it in
any expense or liability; provided, however, that the Servicer may
undertake any reasonable action that it may deem necessary or desirable in
respect of this Agreement, the Basic Documents and the rights and duties of
the parties to this Agreement, the other Basic Documents and the interests
of the Certificateholders under this Agreement and the Noteholders under
the Indenture.
SECTION 7.5. Credit Not to Resign as Servicer. Subject to Section
7.3, Credit shall not resign from the obligations and duties imposed on it
as Servicer under this Agreement except upon determination that the
performance of its duties under this Agreement shall no longer be
permissible under applicable law. Notice of any such determination shall be
communicated to the Trustee and the Indenture Trustee at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Trustee and the Indenture Trustee concurrently with or
promptly after such notice. No such resignation shall become effective
until the Indenture
31
<PAGE>
Trustee or a successor Servicer shall have assumed the responsibilities and
obligations of Credit in accordance with Section 8.2.
SECTION 7.6. Servicer to Act as Administrator. In the event of the
resignation or removal of the Administrator and the failure of a successor
Administrator to have been appointed and to have accepted such appointment
as successor Administrator, the Servicer shall become the successor
Administrator and shall be bound by the terms of the Administration
Agreement.
ARTICLE VIII
Default
SECTION 8.1. Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deliver to the
Indenture Trustee for deposit in any of the Trust Accounts or the
Certificate Distribution Account any required payment or to direct
the Indenture Trustee or the Trustee to make any required
distributions therefrom, which failure continues unremedied for
three Business Days after written notice of such failure is
received by the Servicer from the Trustee or the Indenture Trustee
or after discovery of such failure by an officer of the Servicer;
(b) any failure by the Servicer or the Seller, as the
case may be, duly to observe or to perform in any material respect
any other covenants or agreements (other than as set forth in
clause (a)) of the Servicer or the Seller (as the case may be) set
forth in this Agreement or any other Basic Document, which failure
shall: (i) materially and adversely affect the rights of
Certificateholders or Noteholders and (ii) continue unremedied for
a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given:
(A) to the Servicer or the Seller (as the case may be) by the
Trustee or the Indenture Trustee or (B) to the Servicer or the
Seller (as the case may be) and to the Trustee and the Indenture
Trustee, by the Noteholders or Certificateholders, as applicable,
evidencing not less than 25% of the Outstanding Amount of the
Notes or 25% of the Certificate Balance; or
(c) an Insolvency Event occurs with respect to the Seller
or the Servicer;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Indenture Trustee, or the Holders of Notes
evidencing
32
<PAGE>
not less than 25% of the Outstanding Amount of the Notes, by notice then
given in writing to the Servicer (and to the Indenture Trustee and the
Trustee if given by the Noteholders), may terminate all the rights and
obligations (other than the obligations set forth in Section 7.2) of the
Servicer under this Agreement. On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Notes, the Certificates, the
Receivables or otherwise, shall, without further action, pass to and be
vested in the Indenture Trustee or such successor Servicer as may be
appointed under Section 8.2; and, without limitation, the Indenture Trustee
and the Trustee are hereby authorized and empowered to execute and deliver,
for the benefit of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer
and endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer, the
Indenture Trustee and the Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this
Agreement, including the transfer to the successor Servicer for
administration by it of: (i) all cash amounts that shall at the time be
held by the predecessor Servicer for deposit, or shall thereafter be
received by it with respect to a Receivable and (ii) all Receivable Files.
All reasonable costs and expenses (including attorneys' fees) incurred in
connection with transferring the Receivable Files to the successor Servicer
and amending this Agreement to reflect its succession as Servicer shall be
paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses. Upon receipt of notice of the
occurrence of a Servicer Default, the Trustee shall give notice thereof to
the Rating Agencies.
SECTION 8.2. Appointment of Successor Servicer. (a) Upon the
Servicer's receipt of notice of termination, pursuant to Section 8.1, or
the Servicer's resignation in accordance with this Agreement, the
predecessor Servicer shall continue to perform its functions as Servicer
under this Agreement, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the later of: (x) the date 45 days from the delivery to
the Trustee and the Indenture Trustee of written notice of such resignation
(or written confirmation of such notice) in accordance with this Agreement
and (y) the date upon which the predecessor Servicer shall become unable to
act as Servicer, as specified in the notice of resignation and accompanying
Opinion of Counsel. In the event of the Servicer's termination hereunder,
the Issuer shall appoint a successor Servicer acceptable to the Indenture
Trustee, and the successor Servicer shall accept its appointment by a
written assumption in form acceptable to the Indenture Trustee. In the
event that a successor Servicer has not been appointed at the time when the
predecessor
33
<PAGE>
Servicer has ceased to act as Servicer in accordance with this Section, the
Indenture Trustee without further action shall automatically be appointed
the successor Servicer and shall be entitled to the Servicing Fee.
Notwithstanding the above, the Indenture Trustee shall, if it shall be
unable so to act, appoint or petition a court of competent jurisdiction to
appoint any established institution, having a net worth of not less than
$50,000,000 and whose regular business shall include the servicing of
receivables, as the successor to the Servicer under this Agreement.
(b) Upon appointment, the successor Servicer (including the
Indenture Trustee acting as successor Servicer) shall be the successor in
all respects to the predecessor Servicer (except with respect to
responsibilities and obligations of the predecessor Servicer set forth in
Section 7.2) and shall be subject to all the responsibilities, duties and
liabilities arising thereafter relating thereto placed on the predecessor
Servicer and shall be entitled to the Servicing Fee and all the rights
granted to the predecessor Servicer by this Agreement. Any successor
Servicer shall from time to time provide to Credit such information as
Credit shall request with respect to the Receivables and collections
thereon.
(c) Subject to the last sentence of clause (a), the Servicer may
not resign unless it is prohibited from serving as such by law as evidenced
by an Opinion of Counsel to such effect delivered to the Indenture Trustee
and the Trustee.
SECTION 8.3. Notification to Noteholders and Certificateholders.
Upon any termination of, or appointment of a successor to, the Servicer
pursuant to this Article VIII, the Trustee shall give prompt written notice
thereof to the Certificateholders and the Indenture Trustee shall give
prompt written notice thereof to the Noteholders and the Rating Agencies.
SECTION 8.4. Waiver of Past Defaults. The Noteholders of Notes
evidencing not less than a majority of the Note Balance (or the Holders of
Certificates evidencing not less than a majority of the Certificate
Balance, in the case of any default that does not adversely affect the
Indenture Trustee or the Noteholders) may, on behalf of all the Noteholders
and Certificateholders, waive in writing any default by the Servicer in the
performance of its obligations hereunder and its consequences, except a
default in making any required deposits to or payments from any of the
Trust Accounts in accordance with this Agreement. Upon any such waiver of a
past default, such default shall cease to exist, and any Servicer Default
arising therefrom shall be deemed to have been remedied for every purpose
of this Agreement. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereto.
34
<PAGE>
ARTICLE IX
Termination
SECTION 9.1. Optional Purchase of All Receivables. (a) As of the
first day of any Collection Period immediately preceding a Payment Date as
of which the Pool Balance is 10% or less of the Initial Pool Balance, the
Servicer shall have the option to purchase all of the Trust Estate, other
than the Trust Accounts. To exercise such option, the Servicer shall
deposit, pursuant to Section 5.4, in the Collection Account an amount equal
to the aggregate Purchase Amount for the Receivables plus the appraised
value of any such other property held by the Trust, such value to be
determined by an appraiser mutually agreed upon by the Servicer, the
Trustee and the Indenture Trustee, and shall succeed to all interests in,
to and under the Trust Estate, other than the Trust Accounts.
(b) Upon any sale of the assets of the Trust pursuant to Section
9.2 of the Trust Agreement, the Servicer shall instruct the Indenture
Trustee to deposit the proceeds from such sale after all payments and
reserves therefrom have been made (the "Insolvency Proceeds") in the
Collection Account. On the Payment Date on, or, if such proceeds are not so
deposited on a Payment Date, on the first Payment Date following the date
on which the Insolvency Proceeds are deposited in the Collection Account,
the Servicer shall instruct the Indenture Trustee to make the following
deposits (after the application on such Payment Date of the Total
Distribution Amount and funds on deposit in the Spread Account pursuant to
Sections 5.5 and 5.6) from the Insolvency Proceeds and any funds remaining
on deposit in the Spread Account (including the proceeds of any sale of
investments therein as described in the following sentence):
(i) first, to the Note Distribution Account, any portion
of the Class A Noteholders' Interest Distributable Amount and the
Outstanding Amount of the Class A Notes (after giving effect to
the reduction resulting from the deposits made in the Note
Distribution Account on such Payment Date and on prior Payment
Dates) not otherwise deposited into the Note
Distribution Account on such Payment Date;
(ii) second, to the Note Distribution Account, any
portion of the Class B Noteholders' Interest Distributable Amount
and the Outstanding Amount of the Class B Notes (after giving
effect to the reduction resulting from the deposits made in the
Note Distribution Account on such Payment Date and on prior
Payment Dates) not otherwise deposited into the Note
Distribution Account on such Payment Date;
(iii) third, to the Certificate Distribution Account, any
portion of the Certificateholders' Interest Distributable Amount
not otherwise
35
<PAGE>
deposited into the Certificate Distribution Account on such Payment
Date; and
(iv) fourth, to the Certificate Distribution Account, the
Certificate Balance (after giving effect to the reduction
resulting from the deposits made in the Certificate Distribution
Account on such Payment Date).
Any investments on deposit in the Spread Account that will not mature on or
before such Payment Date shall be sold by the Indenture Trustee at such
time as will result in the Indenture Trustee receiving the proceeds from
such sale not later than the Transfer Date preceding such Payment Date. Any
Insolvency Proceeds remaining after the deposits described above shall be
paid to the Seller.
(c) As described in Article IX of the Trust Agreement, notice of
any termination of the Trust shall be given by the Servicer to the Trustee
and the Indenture Trustee as soon as practicable after the Servicer has
received notice thereof.
(d) Following the satisfaction and discharge of the Indenture and
the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder
and the Trustee will succeed to the rights of, and assume the obligations
of, the Indenture Trustee pursuant to this Agreement.
ARTICLE X
Miscellaneous Provisions
SECTION 10.1. Amendment. The Agreement may be amended from time to
time by a written amendment duly executed and delivered by the Seller, the
Servicer and the Issuer, with the written consent of the Indenture Trustee,
but without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this
Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Trustee and the
Indenture Trustee, adversely affect in any material respect the interests
of any Noteholder or Certificateholder.
The Specified Spread Account Balance may be reduced or the
definition thereof otherwise modified without the consent of any of the
Noteholders or the Certificateholders if the Rating Agency Condition is
satisfied.
36
<PAGE>
This Agreement may also be amended from time to time by the
Seller, the Servicer and the Issuer, with the written consent of the
Indenture Trustee, but without the consent of any of the Noteholders or the
Certificateholders, to: (x) replace the Spread Account with another form of
credit enhancement as long as such substitution will not result in a
reduction or withdrawal of the rating of any Class of the Notes or the
Certificates or (y) add credit enhancement for the benefit of any Class of
the Notes or the Certificates.
This Agreement may also be amended from time to time by the
Seller, the Servicer and the Issuer, with the written consent of (a) the
Indenture Trustee, (b) Noteholders holding Notes evidencing not less than a
majority of the Note Balance, and (c) the Holders of Certificates
evidencing not less than 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 this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, that no such amendment shall: (a) increase or reduce in any manner
the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that shall be required to be made
for the benefit of the Noteholders or the Certificateholders or (b) reduce
the aforesaid percentage of the Notes and the Certificates that are
required to consent to any such amendment, without the consent of the
holders of all the outstanding Notes and Certificates.
Promptly after the execution of any such amendment or consent (or,
in the case of the Rating Agencies, 10 days prior thereto), the Trustee
shall furnish written notification of the substance of such amendment or
consent to each Certificateholder, the Indenture Trustee and each of the
Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
the Noteholders pursuant to this Section to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the
Trustee and the Indenture Trustee shall be entitled to receive and rely
upon: (i) an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all
conditions precedent to such execution and delivery by the Trustee and the
Indenture Trustee have been satisfied and (ii) the Opinion of Counsel
referred to in Section 10.2(i)(1). The Trustee and the Indenture Trustee
may, but shall not be obligated to, enter into any such amendment that
affects the Trustee's or the Indenture Trustee's, as applicable, own
rights, duties or immunities under this Agreement or otherwise.
37
<PAGE>
SECTION 10.2. Protection of Title to Trust. (a) The Seller shall
execute and file such financing statements, and cause to be executed and
filed such continuation statements, all in such manner and in such places
as may be required by applicable law fully to preserve, maintain and
protect the right, title and interest of the Issuer and the interests of
the Indenture Trustee in the Receivables, the other property sold hereunder
and in the proceeds thereof. The Seller shall deliver (or cause to be
delivered) to the Trustee and the Indenture Trustee file- stamped copies
of, or filing receipts for, any document filed as provided above as soon as
available following such filing. The Issuer and the Indenture Trustee shall
cooperate fully with the Seller in connection with the obligations set
forth above and will execute any and all documents reasonably required to
fulfill the intent of this paragraph.
(b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might
make any financing statement or continuation statement filed in accordance
with paragraph (a) seriously misleading within the applicable provisions of
the UCC, unless it shall have given the Trustee and the Indenture Trustee
at least five days' prior written notice thereof and shall have promptly
filed appropriate amendments to all previously filed financing statements
or continuation statements.
(c) Each of the Seller and the Servicer shall have an obligation
to give the Trustee and the Indenture Trustee at least 60 days' prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly
file any such amendment. The Servicer shall at all times maintain each
office from which it shall service Receivables, and its principal executive
office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit: (i) the reader
thereof to know at any time the status of such Receivable, including
payments and recoveries made and payments owing (and the nature of each)
and (ii) reconciliation between payments or recoveries on (or with respect
to) each Receivable and the amounts from time to time deposited in the
Collection Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables, the
Servicer's master computer records (including any backup archives) that
refer to a Receivable shall indicate clearly the interest of the Issuer and
the Indenture Trustee in such Receivable and that such Receivable is owned
by the Issuer and has been pledged to Harris, as Indenture Trustee.
Indication of the Issuer's and
38
<PAGE>
the Indenture Trustee's interest in a Receivable may be deleted from or
modified on the Servicer's computer systems when, and only when, the
related Receivable shall have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
equipment receivables to any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender
or other transferee computer tapes, records or printouts (including any
restored from backup archives) that, if they shall refer in any manner
whatsoever to any Receivable, shall indicate clearly that such Receivable
has been sold and is owned by the Issuer and has been pledged to the
Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its agents
at any time during normal business hours to inspect, audit and make copies
of and abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Trustee or to
the Indenture Trustee, within five Business Days, a list of all Receivables
(by contract number and name of Obligor) then held as part of the Trust,
together with a reconciliation of such list to the Schedule of Receivables
and to each of the Servicer's Certificates furnished before such request
indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Trustee and the Indenture
Trustee:
(1) promptly after the execution and delivery of this
Agreement and of each amendment hereto, an Opinion of Counsel
either: (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and
protect the interest of the Trustee and the Indenture Trustee in
the Receivables, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such counsel, no
such action shall be necessary to preserve and protect such
interest; and
(2) within 90 days after the beginning of each calendar
year beginning with the first calendar year beginning more than
three months after the Initial Cutoff Date, an Opinion of Counsel,
dated as of a date during such 90-day period, either: (A) stating
that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the
Trustee and the Indenture Trustee in the Receivables, and reciting
the details of such filings or referring to prior Opinions of
39
<PAGE>
Counsel in which such details are given, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to
preserve and protect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) shall
specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law,
cause the Certificates and the Notes to be registered with the Commission
pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the
time periods specified in such sections.
SECTION 10.3. Notices. All demands, notices, directions,
instructions and communications upon or to the Seller, the Servicer, the
Issuer, the Trustee, the Indenture Trustee or the Rating Agencies under
this Agreement shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, and shall be deemed to have been
duly given upon receipt: (a) in the case of the Seller, to Case Receivables
II Inc., 233 Lake Avenue, Racine, Wisconsin 53403, Attention of: Treasurer
(telephone (414) 636-6564 and facsimile (414) 636-6284), (b) in the case of
the Servicer, to Case Credit Corporation, 233 Lake Avenue, Racine,
Wisconsin 53403, Attention: Treasurer (telephone (414) 636-6011 and
facsimile (414) 636-6284), (c) in the case of the Issuer or the Trustee, at
its Corporate Trust Office, (d) in the case of the Indenture Trustee, at
its Corporate Trust Office, (e) in the case of Moody's, to Moody's
Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New
York, New York 10007, and (f) in the case of Standard & Poor's, to Standard
& Poor's Ratings Services, a division of McGraw-Hill Companies, Inc., 26
Broadway (15th Floor), New York, New York 10004, Attention of Asset Backed
Surveillance Department; or, as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
SECTION 10.4. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.4 and 7.3 and as
provided in the provisions of this Agreement concerning the resignation of
the Servicer, this Agreement may not be assigned by the Seller or the
Servicer.
SECTION 10.5. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Seller, the Servicer, the
Issuer, the Trustee, the Certificateholders, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied,
shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
40
<PAGE>
SECTION 10.6. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 10.7. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 10.8. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 10.9. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 10.10. Assignment to Indenture Trustee. The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of
a security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and
interest of the Issuer in, to and under the Receivables and/or the
assignment of any or all of the Issuer's rights and obligations hereunder
to the Indenture Trustee.
SECTION 10.11. Nonpetition Covenants. (a) Notwithstanding any
prior termination of this Agreement, the Servicer and the Seller shall not,
prior to the date that is one year and one day after the termination of
this Agreement, with respect to the Issuer, acquiesce, petition or
otherwise invoke or cause the Issuer to invoke the process of any court or
governmental authority for the purpose of commencing or sustaining a case
against the Issuer under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Issuer. The foregoing shall not limit the right of
the Servicer and the Seller to file any claim in or otherwise take any
action with respect to any such insolvency proceeding that was instituted
against the Issuer by any Person other than the Servicer or the Seller.
(b) Notwithstanding any prior termination of this Agreement, the
Servicer shall not, prior to the date that is one year and one day after
the termination of
41
<PAGE>
this Agreement, with respect to the Seller, acquiesce, petition or
otherwise invoke or cause the Seller to invoke the process of any court or
governmental authority for the purpose of commencing or sustaining a case
against the Seller under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Seller or any
substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Seller. The foregoing shall not limit the right of
the Servicer to file any claim in or otherwise take any action with respect
to any such insolvency proceeding that was instituted against the Seller by
any Person other than the Servicer.
SECTION 10.12. Limitation of Liability of Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by [Trustee], not in its individual
capacity but solely in its capacity as Trustee of the Issuer, and in no
event shall [Trustee], in its individual capacity or, except as expressly
provided in the Trust Agreement, any beneficial owner of the Issuer have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates,
notices or agreements delivered pursuant hereto, as to all of which
recourse shall be had solely to the assets of the Issuer.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by [Harris Trust and Savings Bank], not in
its individual capacity but solely as Indenture Trustee, and in no event
shall [Harris Trust and Savings Bank] have any liability for the
representations, warranties, covenants, agreements or other obligations of
the Issuer hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely
to the assets of the Issuer.
42
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers as of the day and year
first above written.
CASE EQUIPMENT LOAN TRUST 199_-_
By: [TRUSTEE],
not in its individual capacity but
solely as Trustee of the Trust
By:______________________________________
Name:
Title:
CASE RECEIVABLES II INC.,
as Seller
By:______________________________________
Name: Peter Hong
Title:
CASE CREDIT CORPORATION,
as Servicer
By:______________________________________
Name:
Title:
Acknowledged and Accepted:
[HARRIS TRUST AND SAVINGS BANK],
not in its individual capacity
but solely as Indenture Trustee
By:________________________________
Name:___________________________
Title:__________________________
43
<PAGE>
SCHEDULE A
to Sale and Servicing Agreement
LOCATION OF RECEIVABLES FILES
-----------------------------
Documents relating to the Receivables are located at one of the
following Case Corporation locations:
1. 233 Lake Avenue
Racine, Wisconsin 53403
2. 2205 Durand Avenue
Racine, Wisconsin 53406
3. 700 State Street
Racine, Wisconsin 53404
4. 6363 Poplar Avenue
Suite 330
Memphis, Tennessee 38119
5. 2626 E. 82nd Street
Suite 240
Bloomington, Minnesota 55425
6. 5000 Quorum
Suite 505
Dallas, Texas 75204
7. 3600 Sullivant Avenue
Columbus, Ohio 43228-0519
44
<PAGE>
EXHIBIT A
to Sale and Servicing Agreement
FORM OF NOTEHOLDER'S
STATEMENT PURSUANT TO SECTION 5.10(A)
Payment Date: ______________________
(i) Amount of principal being paid on Notes:
A-1 Notes: ______________ ($_____ per $1,000 original principal amount)
A-2 Notes: ______________ ($_____ per $1,000 original principal amount)
A-3 Notes: ______________ ($_____ per $1,000 original principal amount)
A-4 Notes: ______________ ($_____ per $1,000 original principal amount)
Class B Notes: ___________ ($_____ per $1,000 original principal amount)
(ii) Amount of interest being paid on Notes:
A-1 Notes: ______________ ($_____ per $1,000 original principal amount)
A-2 Notes: ______________ ($_____ per $1,000 original principal amount)
A-3 Notes: ______________ ($_____ per $1,000 original principal amount)
A-4 Notes: ______________ ($_____ per $1,000 original principal amount)
Class B Notes: ___________ ($_____ per $1,000 original principal amount)
(iii) Pool Balance at end of the preceding Collection Period: _____
(iv) After giving effect to distributions on this Payment Date:
(a) (1) Outstanding Amount of A-1 Notes: _______
(2) Outstanding Amount of A-2 Notes: _______
(3) Outstanding Amount of A-3 Notes: _______
(4) Outstanding Amount of A-4 Notes: _______
(5) Outstanding Amount of Class B Notes: _______
(6) A-1 Note Pool Factor: _____
(7) A-2 Note Pool Factor: _____
(8) A-3 Note Pool Factor: _____
(9) A-4 Note Pool Factor: _____
45
<PAGE>
(10) Class B Note Pool Factor: _____
(b) (1) Certificate Balance: __________
(2) Certificate Pool Factor: __________
(v) Amount of Servicing Fee: ____ ($_____ per $1,000 original principal
amount)
(vi) Amount of Administration Fee: ____ ($____ per $1,000 original principal
amount)
(vii) Aggregate Amount of Realized Losses for the Collection Period: __________
(viii) Aggregate Purchase Amounts for the Collection Period: __________
(ix) Balance of Spread Account: __________
(x) Pre-funded Amount: __________
(xi) Balance of Negative Carry Account: __________
46
<PAGE>
EXHIBIT B
to Sale and Servicing Agreement
FORM OF CERTIFICATEHOLDER'S
STATEMENT PURSUANT TO SECTION 5.10(A)
Payment Date: ______________________
(i) Amount of principal being paid or distributed:
(a) (1) A-1 Notes: __________
(2) A-2 Notes: __________
(3) A-3 Notes: __________
(4) A-4 Notes: __________
(5) Class B Notes: __________
(b) Certificates: _________ ($____ per $1,000 original principal amount)
(c) Total: __________
(ii) Amount of interest being paid or distributed:
(a) (1) A-1 Notes: __________
(2) A-2 Notes: __________
(3) A-3 Notes: __________
(4) A-4 Notes: __________
(5) Class B Notes: __________
(b) Certificates: _________ ($____ per $1,000 original principal amount)
(c) Total: __________
(iii) Pool Balance at end of the preceding Collection Period: _____
(iv) After giving effect to distributions on this Payment Date:
(a) (1) Outstanding Amount of A-1 Notes: _______
(2) Outstanding Amount of A-2 Notes: _______
(3) Outstanding Amount of A-3 Notes: _______
(4) Outstanding Amount of A-4 Notes: _______
(5) Outstanding Amount of Class B Notes: _______
(6) A-1 Note Pool Factor: _____
(7) A-2 Note Pool Factor: _____
(8) A-3 Note Pool Factor: _____
47
<PAGE>
(9) A-4 Note Pool Factor: _____
(10) Class B Note Pool Factor: _____
(b) (1) Certificate Balance: __________
(2) Certificate Pool Factor: __________
(v) Amount of Servicing Fee: ____ ($_____ per $1,000 original principal
amount)
(vi) Amount of Administration Fee: ____ ($____ per $1,000 original principal
amount)
(vii) Aggregate amount of Realized Losses for the Collection Period: __________
(viii) Aggregate Purchase Amounts for the Collection Period: __________
(ix) Balance of Spread Account: __________
(x) Pre-Funded Amount:__________
(xi) Balance of Negative Carry Account: __________
48
<PAGE>
EXHIBIT C
to Sale and Servicing Agreement
FORM OF SERVICER'S CERTIFICATE
------------------------------
[Trustee]
- -----------------------------
- -----------------------------
Attention:________________________
[Harris Trust and Savings Bank]
[311 West Monroe Street]
[12th Floor]
[Chicago, Illinois 60606]
Attention: [Indenture Trust Administration]
Case Receivables II Inc.
233 Lake Avenue
Racine, Wisconsin 53403
Attention: Secretary
Moody's Investors Service, Inc.
ABS Monitoring Department
99 Church Street
New York, New York 10007
Standard & Poor's Ratings Services,
a division of McGraw-Hill Companies, Inc.
26 Broadway (15th Floor)
New York, New York 10004
Attention: Asset Backed Surveillance Department
49
<PAGE>
$______________ Class A-1 Asset-Backed Notes
$_______________ Class A-2 Asset-Backed Notes
$____________ Class A-3 Asset-Backed Notes
$_____________ Class B Asset-Backed Notes
$______________ Certificates
Determination Date: __-___-__
DISTRIBUTIONS
-------------
(1) Total Distribution Amount $________
(2) Servicing Fee $________
(3) Administration Fee $________
(4) Class A Noteholder's Interest Distributable Amount: $________
o Interest on Class A Notes ($________)
o Class A Noteholder's Interest Carryover Shortfall,
if any ($___________)
(5) Class B Noteholders' Interest Distributable Amount $________
o Interest on Class B Notes ($_________)
o Class B Noteholders' Interest Carryover Shortfall ($_______)
(6) A-1 Noteholders' Principal Distributable Amount $________
o A-1 Noteholders' Monthly Principal Distributable
Amount ($________)
o A-1 Noteholders' Principal Carryover Shortfall ($________)
(7) A-2 Noteholders' Principal Distributable Amount $________
o A-2 Noteholders' Monthly Principal Distributable
Amount ($________)
o A-2 Noteholders' Principal Carryover Shortfall ($________)
(8) A-3 Noteholders' Principal Distributable Amount $________
o A-3 Noteholders' Monthly Principal Distributable
Amount ($________)
o A-3 Noteholders' Principal Carryover Shortfall ($________)
50
<PAGE>
(9) A-3 Noteholders' Principal Distributable Amount $________
o A-3 Noteholders' Monthly Principal Distributable
Amount ($________)
o A-3 Noteholders' Principal Carryover Shortfall ($________)
(10) Class B Noteholders' Principal Distributable Amount $________
o Class B Noteholders' Monthly Principal Distributable
Amount ($________)
o Class B Noteholders' Principal Carryover Shortfall ($_______)
(11) NOTEHOLDERS' DISTRIBUTABLE AMOUNT (4)+(5)+(6)+(7)+(8)
+(9)+(10) $________
(12) Certificateholders' Interest Distributable Amount $________
o Interest on Certificates ($________)
o Certificateholders' Interest Carryover Shortfall ($________)
(13) Certificateholders' Principal Distributable Amount $________
o Principal Distribution Amount remaining after
Class A Notes paid in full ($________)
o Certificateholders' Principal Carryover Shortfall ($________)
(14) CERTIFICATEHOLDERS' DISTRIBUTABLE AMOUNT (12)+(13) $________
(15) Deposit to Spread Account (1)-((2)+(3)+(11)+(14)) $________
SPREAD ACCOUNT
--------------
(16) Spread Account Balance (after deposit from (15)) $________
(17) Specified Spread Account Balance (after all distributions $________
and adjustments): the lesser of:
(a) 2.00% of the Initial Pool Balance; and
(b) the Note Balance.
(18) Spread Account Balance over the Specified Spread Account $________
Balance (16)-(17)
51
<PAGE>
(19) Excess in Spread Account distributed to Seller (as permitted $________
in Sections 5.6(b) and (c) of the Sale and Servicing Agreement)
(20) Amount to be withdrawn from the Spread Account and de $________
into the Note Distribution Account (as per Sections 5.6(d)
and (f) of the Sale and Servicing Agreement)
(21) Amount to be withdrawn from the Spread Account and deposited $________
into the Certificate Distribution Account (as per Sections
5.6(e) and (f) of the Sale and Servicing Agreement)
(22) Final Spread Account Balance (16)-((19)+(20)+(21)) $________
MISCELLANEOUS
-------------
(23) Pool Balance at the beginning of this Collection Period $________
(24) After giving effect to all distributions on the Payment Date
during this Collection Period:
(a) Outstanding Amount of A-1 Notes $________
A-1 Note Pool Factor (_._______)
(b) Outstanding Amount of A-2 Notes $_______
A-2 Note Pool Factor (_._______)
(c) Outstanding Amount of A-3 Notes $_______
A-3 Note Pool Factor (_._______)
(d) Outstanding Amount of A-4 Notes $_______
A-4 Note Pool Factor (_._______)
(e) Outstanding Amount of Class B Notes
Class B Note Pool Factor (_._______)
(f) Outstanding Amount of Certificates $________
Certificate Pool Factor (_._______)
(25) Aggregate Purchase Amounts for the preceding Collection Period $________
52
<PAGE>
EXHIBIT D
to Sale and Servicing Agreement
FORM OF SECOND-TIER ASSIGNMENT
------------------------------
For value received, in accordance with and subject to the Sale and
Servicing Agreement dated as of _____ __, 19__ (the "Sale and Servicing
Agreement"), among the undersigned, Case Credit Corporation and Case
Equipment Loan Trust 199_-_ (the "Issuer"), the undersigned does hereby
sell, assign, transfer set over and otherwise convey unto the Issuer,
without recourse, all of its right, title and interest in, to and under:
(a) the Initial Receivables, including all documents constituting chattel
paper included therewith, and all obligations of the Obligors thereunder,
including all moneys paid thereunder on or after the Initial Cutoff Date,
(b) the security interests in the Financed Equipment granted by Obligors
pursuant to the Initial Receivables and any other interest of the
undersigned in such Financed Equipment, (c) any proceeds with respect to
the Initial Receivables from claims on insurance policies covering Financed
Equipment or Obligors, (d) the Liquidity Receivables Purchase Agreement
(only with respect to Contracts included in the Initial Receivables) and
the Purchase Agreement, including the right of the undersigned to cause
Case Credit Corporation to repurchase Receivables from the undersigned
under the circumstances described therein, (e) any proceeds from recourse
to Dealers with respect to the Initial Receivables other than any interest
in the Dealers' reserve accounts maintained with Case Credit Corporation,
(f) any Financed Equipment that shall have secured an Initial Receivable
and that shall have been acquired by or on behalf of the Trust, (g) all
funds on deposit from time to time in the Trust Accounts, including the
Spread Account Initial Deposit, the Negative Carry Account Initial Deposit
and the Pre-Funded Amount, and in all investments and proceeds thereof
(including all income thereon), and (h) the proceeds of any and all of the
foregoing (other than Recoveries). The foregoing sale does not constitute
and is not intended to result in any assumption by the Issuer of any
obligation of the undersigned to the Obligors, insurers or any other person
in connection with the Initial Receivables, Receivables Files, any
insurance policies or any agreement or instrument relating to any of them.
This Second-Tier Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Sale and Servicing Agreement and is to be governed in all
respects by the Sale and Servicing Agreement. Capitalized terms used herein
and not otherwise defined shall have the meanings assigned to them in the
Sale and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Second-Tier
Assignment to be duly executed as of ___________, 199__.
CASE RECEIVABLES II INC.,
By:__________________________
Name: Peter Hong
Title: Treasurer
53
<PAGE>
EXHIBIT E
to Sale and Servicing Agreement
FORM OF SECOND-TIER SUBSEQUENT TRANSFER ASSIGNMENT
--------------------------------------------------
For value received, in accordance with and subject to the Sale and
Servicing Agreement dated as of _____ __, 19__ (the "Sale and Servicing
Agreement"), among Case Equipment Loan Trust 199_-_, a Delaware business
trust (the "Issuer"), Case Receivables II Inc., a Delaware corporation (the
"Seller"), and Case Credit Corporation, a Delaware corporation, the Seller
does hereby sell, transfer, assign, set over and otherwise convey to the
Issuer, without recourse, all of its right, title and interest in, to and
under: (a) the Subsequent Receivables, with an aggregate Contract Value
equal to $________, listed on Schedule A hereto, including all documents
constituting chattel paper included therewith, and all obligations of the
Obligors thereunder including all moneys paid thereunder on or after the
Subsequent Cutoff Date, (b) the security interests in the Financed
Equipment granted by Obligors pursuant to such Subsequent Receivables and
any other interest of the Seller in such Financed Equipment, (c) any
proceeds with respect to such Subsequent Receivables from claims on
insurance policies covering Financed Equipment or Obligors, (d) the
Purchase Agreement, including the right of the Seller to cause Case Credit
Corporation to repurchase Subsequent Receivables from the Seller under the
circumstances described therein, (e) any proceeds from recourse to Dealers
with respect to such Subsequent Receivables other than any interest in the
Dealers' reserve accounts maintained with Case Credit Corporation, (f) any
Financed Equipment that shall have secured any such Subsequent Receivables
and that shall have been acquired by or on behalf of the Trust, and (g) the
proceeds of any and all of the foregoing (other than Recoveries). The
foregoing sale does not constitute and is not intended to result in any
assumption by the Issuer of any obligation of the Seller to the Obligors,
insurers or any other person in connection with such Subsequent
Receivables, Receivable Files, any insurance policies or any agreement or
instrument relating to any of them.
This Second-Tier Subsequent Transfer Assignment is made pursuant
to and upon the representations, warranties and agreements on the part of
the Seller contained in the Sale and Servicing Agreement (including the
Officers' Certificate of the Seller accompanying this Agreement) and is to
be governed in all respects by the Sale and Servicing Agreement.
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to them in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Second-Tier
Subsequent Transfer Assignment to be duly executed as of _______________,
199_.
CASE RECEIVABLES II INC.,
By:________________________________
Name:_____________________________
Title:____________________________
54
<PAGE>
SCHEDULE A
to Second-Tier Subsequent Transfer Assignment
SCHEDULE OF SUBSEQUENT RECEIVABLES
----------------------------------
[Attached]
55
<PAGE>
ANNEX A
to Second-Tier Subsequent Transfer Assignment
OFFICERS' CERTIFICATE
---------------------
We, the undersigned officers of Case Receivables II Inc. (the
"Company"), do hereby certify, pursuant to Section 2.2(b)(xv) of the Sale
and Servicing Agreement dated as of _____ __, 19__, among the Company, Case
Equipment Loan Trust 199_-_ and Case Credit Corporation (the "Agreement"),
that all of the conditions precedent to the transfer to the Issuer of the
Subsequent Receivables listed on Schedule A to the Second-Tier Subsequent
Transfer Assignment delivered herewith, and the other property and rights
related to such Subsequent Receivables as described in Section 2.2(a) of
the Agreement, have been satisfied on or prior to the related Subsequent
Transfer Date.
Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Agreement.
IN WITNESS WHEREOF, the undersigned have caused this certificate
to be duly executed this _____ day of _______, 199_.
By:__________________________
Name:______________________
Title:_____________________
By:__________________________
Name:______________________
Title:_____________________
56
<PAGE>
Page 1
_________, 199_
EXHIBIT F
to Sale and Servicing Agreement
FORM OF ACCOUNTANTS' LETTER IN CONNECTION
WITH THE SECOND-TIER SUBSEQUENT TRANSFER ASSIGNMENT PURSUANT TO
SECTION 2.2(b)(xiv) OF THE SALE AND SERVICING AGREEMENT
-------------------------------------------------------
[Letterhead of Arthur Andersen]
___________, 199_
Case Receivables II Inc.
233 Lake Avenue
Racine, Wisconsin 53403
Case Equipment Loan Trust 199_-_
700 State Street
Racine, Wisconsin 53404
- --------------------
as Representative of the several Underwriters
- --------------------
- --------------------
- --------------------
- --------------------
[Harris Trust and Savings Bank]
[311 West Monroe Street]
[Chicago, Illinois 60606]
[Trustee]
- ----------------------
- ----------------------
Dear Ladies and Gentlemen:
This letter is issued at the request of Case Receivables II Inc. (the
"Seller") with respect to the sale of certain retail receivables (the
"Subsequent Receivables") to the Case Equipment Loan Trust 199_-_ (the
"Trust") pursuant to the Sale and Servicing Agreement dated as of _____ __,
19__ (the "Sale and Servicing Agreement") among the Trust, the Seller and
Case Credit
1
<PAGE>
Page 2
_________, 199_
Corporation (the "Servicer"). The sale of the Subsequent Receivables is
described in the prospectus dated ________________ __, 199__ and the
prospectus supplement dated _____________, 199__ (together, the
"Prospectus"), which relates to the offering by the Trust of Class A-1
_____% Asset Backed Notes, Class A-2 _____% Asset Backed Notes, Class A-3
_____% Asset-Backed Notes and Class B Asset Backed Notes (collectively, the
"Notes") and the _____% Asset Backed Certificates (the "Certificates").
Capitalized terms used herein and not otherwise defined have the meaning
described in the Prospectus or the Sale and Servicing Agreement, as
applicable. In connection therewith, we performed or have previously
performed certain agreed upon procedures as specified in the items below:
1. As previously communicated in our letter to the Seller, the Trust,
__________________, the Indenture Trustee and the Trustee dated
___________, 199__ relating to the sale of certain retail
receivables (the "Initial Receivables") and the offering of the
Notes and the Certificates, we performed several procedures based
on a computer data file (the "Initial File") received from the
Servicer, including the following:
a. We read certain fields on the Initial File to determine
whether the data pertaining to the Initial Receivables
complied with the selection criteria as noted in our
previous letter.
b. Proved the arithmetic accuracy of the Aggregate Contract
Value and the related percentage of Initial Receivables
coded as representing construction equipment and the
Total Aggregate Contract Value of the Initial Receivables
as shown on Schedule B.
c. Proved the arithmetic accuracy of the Weighted Average
Original Term of the Initial Receivables as shown in
Schedule B.
2. On ______________, 199__, we obtained a computer data file (the
"Subsequent File") produced by and represented by the Servicer to
contain the list of the Subsequent Receivables. The Subsequent
File was received directly by Arthur Andersen LLP from the
Servicer. By use of data retrieval software, we have performed the
following with respect to the information contained in the
Subsequent File:
a. We read certain fields on the Subsequent File to
determine whether the data relating to the Subsequent
Receivables complied with selection criteria 1, 2 and 4
as shown on Schedule A. For purposes of selection
criteria 3, as shown on Schedule A, we read certain
fields from the Initial File and Subsequent File to
aggregate the total Contract Value for each account
number for the purpose of determining the Contract Value
for each Obligor. The total Contract Value for
2
<PAGE>
Page 3
_________, 199_
each account number was then compared to the aggregate
Contract Value to determine if the selection criteria was
achieved.
b. Proved the arithmetic accuracy of the Aggregate Contract
Value and the related percentage of the Subsequent
Receivables coded as representing construction equipment
and the Total Aggregate Contract Value of the Subsequent
Receivables as shown on Schedule B.
c. Proved the arithmetic accuracy of the Weighted Average
Original Term of the Subsequent Receivables as shown in
Schedule B.
3. We proved the arithmetic accuracy of the columnar totals for
Aggregate Contract Value of construction equipment and the Total
Aggregate Contract Value as shown on Schedule B.
4. We proved the arithmetic accuracy of the percent of total column as
shown in 1 on Schedule B by dividing the amount in the Total Aggregate
Contract Value of construction equipment column by the amount in the
Total Aggregate Contract Value column. We also proved the arithmetic
accuracy of the Weighted Average Original Term as shown in 2 on
Schedule B by summing the products of Total Aggregate Contract Value
times Weighted Average Original Term for the Initial Receivables and
the Subsequent Receivables and dividing the resulting sum by the
columnar total of the Total Aggregate Contract Value
The foregoing procedures do not constitute an audit conducted in accordance
with generally accepted auditing standards, and, therefore, we are unable
to and do not express an opinion on any individual balances or summaries of
selected transactions specifically set forth in this letter. Also, these
procedures would not necessarily reveal matters of significance with
respect to the findings described herein. Accordingly, we make no
representations regarding the sufficiency of the foregoing procedures for
your purposes of for questions of legal interpretation. Had we performed
additional procedures, other matters might have come to our attention that
would have been reported to you. Further, we have addressed ourselves
solely to the foregoing data in the Sale and Servicing Agreement and the
Prospectus and make no representations regarding the adequacy of disclosure
regarding whether any material facts have been omitted.
3
<PAGE>
Page 4
_________, 199_
This letter is solely for the information of the addressees and is not to
be used, circulated, quoted or otherwise referred to for any other purpose
including, but not limited to, the purchase or sale of Notes or
Certificates, nor is it to be referred to in any document. Furthermore, we
undertake no responsibility to update this letter for events and
circumstances occurring after the date of this letter.
Very truly yours,
ARTHUR ANDERSEN LLP
4
<PAGE>
Page 5
_________, 199_
SCHEDULE A
to Accountant's Letter
Selection Criteria Results
------------------ -------
1. No Subsequent Receivables was more than 90 days
past due as of the applicable Subsequent Cutoff Date.
2. Each Subsequent Receivable has an APR that is equal
to or greater than ___%.
3. Each Subsequent Receivable has a Contract Value as of
the Subsequent 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 Receivables.
4. Each Subsequent Receivable has a remaining term to maturity
(i.e., the period from but excluding the applicable
Subsequent Cutoff Date to and including the Receivables'
maturity date) of not more than 72 months.
5
<PAGE>
Page 6
_________, 199_
SCHEDULE B
to Accountant's Letter
1. Percentage of principal balance of the Receivables that represents
construction equipment:
Aggregate
Contract Value Total
of Construction Aggregate Percent of
Equipment Contract Value Total
--------------- -------------- -----------
Initial Receivables $_________ $___________ _____%
Subsequent Receivables $_________ $___________ _____%
---------- ------------ ------
Total Receivables $_________ $___________ _____%
========== ============ ======
2. Weighted Average Original Term of the Receivables in the Trust.
Weighted
Total Aggregate Average Original
Contract Value Term
---------------- -----------------
Initial Receivables $_________ _____ months
Subsequent Receivables $_________ _____ months
---------- ------------
Total Receivables $_________ _____ months
========== ============
As noted above, the Weighted Average Original Term does not exceed 55.0
months as required by the Sale and Servicing Agreement.
6
===============================================================================
CASE EQUIPMENT LOAN TRUST 199_-_
ADMINISTRATION AGREEMENT
among
CASE EQUIPMENT LOAN TRUST 199_-_,
an Issuer,
and
CASE CREDIT CORPORATION,
as Administrator,
and
[HARRIS TRUST AND SAVINGS BANK],
as Indenture Trustee.
Dated as of _______ __, 199__
===============================================================================
<PAGE>
TABLE OF CONTENTS
Section Page
1. Duties of the Administrator...............................................2
(a) Duties with Respect to the Indenture and the Depository
Agreement......................................................2
(b) Duties with Respect to the Trust................................5
(c) Non-Ministerial Matters.........................................7
2. Records...................................................................7
3. Compensation..............................................................7
4. Additional Information To Be Furnished to the Issuer......................8
5. Independence of the Administrator.........................................8
6. No Joint Venture..........................................................8
7. Other Activities of the Administrator.....................................8
8. Term of Agreement; Resignation and Removal of the Administrator...........8
9. Action upon Termination, Resignation or Removal..........................10
10. Notices.................................................................11
11. Amendments..............................................................11
12. Successors and Assigns..................................................12
13. Governing Law...........................................................13
14. Headings................................................................13
15. Counterparts............................................................13
16. Severability............................................................13
17. Not Applicable to Case Credit Corporation in Other Capacities...........13
18. Limitation of Liability of the Trustee and the Indenture Trustee........13
19. Third-Party Beneficiary.................................................14
i
<PAGE>
TABLE OF CONTENTS
(continued)
Section Page
20. Indemnification........................................................14
ii
<PAGE>
ADMINISTRATION AGREEMENT dated as of _______ __, 199_, among CASE
EQUIPMENT LOAN TRUST 199_-_, a Delaware business trust (the "Issuer"), CASE
CREDIT CORPORATION, a Delaware corporation, as administrator (the
"Administrator"), and [HARRIS TRUST AND SAVINGS BANK], an [Illinois]
banking corporation, not in its individual capacity but solely as Indenture
Trustee (the "Indenture Trustee").
RECITALS
WHEREAS, the Issuer is issuing: (a) _____% Class A-1 Asset Backed
Notes, ______% Class A-2 Asset Backed Notes, ______% Class A-3 Asset Backed
Notes, ______% Class A-4 Asset Backed Notes (together, the "Class A Notes")
and ______% Class B Asset Backed Notes (the "Class B Notes," and, together
with the Class A Notes, the "Notes") pursuant to the Indenture, dated as of
the date hereof (as amended and supplemented from time to time in
accordance with the provisions thereof, the "Indenture"), between the
Issuer and the Indenture Trustee (capitalized terms used herein and not
otherwise defined herein are defined in Appendix A to the Indenture);
WHEREAS, the Issuer has entered into certain agreements in
connection with the issuance of the Notes and of certain beneficial
ownership interests of the Issuer, including: (i) a Sale and Servicing
Agreement, dated as of the date hereof (as amended and supplemented from
time to time, the "Sale and Servicing Agreement"), among the Issuer, Case
Credit Corporation, as servicer (the "Servicer"), and Case Receivables II
Inc., a Delaware corporation, as seller (the "Seller"), (ii) a Depository
Agreement, dated _______ __, 199__ (the "Depository Agreement"), among the
Issuer, the Indenture Trustee, the Administrator and The Depository Trust
Company, (iii) the Indenture and (iv) a Trust Agreement, dated as of the
date hereof (the "Trust Agreement"), between the Seller and the Trustee
(the Sale and Servicing Agreement, the Depository Agreement, the Indenture
and the Trust Agreement being hereinafter referred to collectively as the
"Related Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer and the
Trustee are required to perform certain duties in connection with: (a) the
Notes and the collateral therefor pledged pursuant to the Indenture (the
"Collateral") and (b) the beneficial ownership interests in the Issuer (the
registered holders of such interests being referred to herein as the
"Owners");
WHEREAS, the Issuer and the Trustee desire to have the
Administrator perform certain of the duties of the Issuer and the Trustee
referred to in the preceding clause, and to provide such additional
1
<PAGE>
services consistent with this Agreement and the Related Agreements as
the Issuer and the Trustee may from time to time request;
WHEREAS, the Administrator has the capacity to provide the
services required hereby and is willing to perform such services for the
Issuer and the Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual terms and covenants
contained herein, and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties agree as
follows:
1. Duties of the Administrator.
(a) Duties with Respect to the Indenture and the Depository
Agreement. The Administrator shall perform all of its duties as
Administrator and the duties of the Issuer and the Trustee under the
Depository Agreement. In addition, the Administrator shall consult with the
Trustee regarding the duties of the Issuer and the Trustee under such
documents. The Administrator shall monitor the performance of the Issuer
and shall advise the Trustee when action is necessary to comply with the
Issuer's or the Trustee's duties under such documents. The Administrator
shall prepare for execution by the Issuer or shall cause the preparation by
other appropriate persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the
Issuer or the Trustee to prepare, file or deliver pursuant to such
documents. In furtherance of the foregoing, the Administrator shall take
all appropriate action that is the duty of the Issuer or the Trustee to
take pursuant to such documents, including, without limitation, such of the
foregoing as are required with respect to the following matters (references
in this Section are to sections of the Indenture):
(i) the duty to cause the Note Register to be kept and to
give the Indenture Trustee notice of any appointment of a new Note
Registrar and the location, or change in location, of the Note
Register (Section 2.4);
(ii) the fixing or causing to be fixed of any specified
record date and the notification of the Indenture Trustee and
Noteholders with respect to special payment dates, if any (Section
2.7(c));
(iii) the preparation of or obtaining of the documents
and instruments required for authentication of the Notes and
delivery of the same to the Indenture Trustee (Section 2.2);
2
<PAGE>
(iv) the preparation, obtaining or filing of the
instruments, opinions, certificates and other documents required
for the release of the Collateral (Section 2.9);
(v) the maintenance of an office in the Borough of
Manhattan, City of New York, for registration of transfer or
exchange of Notes (Section 3.2);
(vi) the duty to cause newly appointed Paying Agents, if
any, to deliver to the Indenture Trustee the instrument specified
in the Indenture regarding funds held in trust (Section 3.3);
(vii) the direction to the Paying Agents to deposit
moneys with the Indenture Trustee (Section 3.3);
(viii) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, the Collateral and
each other instrument and agreement included in the Trust Estate
(Section 3.4);
(ix) the preparation of all supplements, amendments,
financing statements, continuation statements, instruments of
further assurance and other instruments, in accordance with
Section 3.5 of the Indenture, necessary to protect the Trust
Estate (Section 3.5);
(x) the delivery of the Opinion of Counsel on the Closing
Date and the annual delivery of Opinions of Counsel, in accordance
with Section 3.6 of the Indenture, as to the Trust Estate, and the
annual delivery of the Officers' Certificate and certain other
statements, in accordance with Section 3.9 of the Indenture, as to
compliance with the Indenture (Sections 3.6 and 3.9);
(xi) the identification to the Indenture Trustee in an
Officers' Certificate of a Person with whom the Issuer has
contracted to perform its duties under the Indenture (Section
3.7(b));
(xii) the notification of the Indenture Trustee and the
Rating Agencies of a Servicer Default pursuant to the Sale and
Servicing Agreement and, if such Servicer Default arises from the
failure of the Servicer to perform any of its duties under the
Sale and Servicing Agreement, the taking of all reasonable steps
available to remedy such failure (Section 3.7(d));
3
<PAGE>
(xiii) the preparation and obtaining of documents and
instruments required for the release of the Issuer from its
obligations under the Indenture (Section 3.10(b));
(xiv) the delivery of notice to the Indenture Trustee of
each Event of Default and each default by the Servicer or Seller
under the Sale and Servicing Agreement (Section 3.19);
(xv) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of
an Officers' Certificate and the obtaining of the Opinion of
Counsel and the Independent Certificate relating thereto (Section
4.1);
(xvi) the compliance with any written directive of the
Indenture Trustee with respect to the sale of the Trust Estate in
a commercially reasonable manner if an Event of Default shall have
occurred and be continuing (Section 5.4);
(xvii) the furnishing to the Indenture Trustee with the
names and addresses of Noteholders during any period when the
Indenture Trustee is not the Note Registrar (Section 7.1);
(xviii) the preparation, execution and filing with the
Commission and the Indenture Trustee of documents required to be
filed on a periodic basis with, and summaries thereof as may be
required by rules and regulations prescribed by, the Commission
and the transmission of such summaries, as necessary, to the
Noteholders (Section 7.3);
(xix) the opening of one or more accounts in the Trust's
name, the preparation of Issuer Orders, Officers' Certificates and
Opinions of Counsel and all other actions necessary with respect
to investment and reinvestment of funds in the Trust Accounts
(Sections 8.2 and 8.3);
(xx) the preparation of an Issuer Request and Officers'
Certificate and the obtaining of an Opinion of Counsel and
Independent Certificates, if necessary, for the release of the
Trust Estate as defined in the Indenture (Sections 8.4 and 8.5);
(xxi) the preparation of Issuer Orders and the obtaining
of Opinions of Counsel with respect to the execution of
supplemental indentures and the mailing to the Noteholders of
notices with respect to such supplemental indentures (Sections
9.1, 9.2 and 9.3);
4
<PAGE>
(xxii) the execution and delivery of new Notes conforming
to any supplemental indenture (Section 9.6);
(xxiii) the notification of Noteholders of redemption of
the Notes or the duty to cause the Indenture Trustee to provide
such notification (Section 10.2);
(xxiv) the preparation of all Officers' Certificates,
Opinions of Counsel and Independent Certificates with respect to
any requests by the Issuer to the Indenture Trustee to take any
action under the Indenture (Section 11.1(a));
(xxv) the preparation and delivery of Officers'
Certificates and the obtaining of Independent Certificates, if
necessary, for the release of property from the lien of the
Indenture (Section 11.1(b));
(xxvi) the preparation and delivery to Noteholders and
the Indenture Trustee of any agreements with respect to alternate
payment and notice provisions (Section 11.6); and
(xxvii) the recording of the Indenture, if applicable
(Section 11.15).
(b) Duties with Respect to the Trust. (i) In addition to the
duties of the Administrator set forth above, the Administrator shall
perform such calculations, and shall prepare for execution by the Issuer or
the Trustee or shall cause the preparation by other appropriate persons of
all such documents, reports, filings, instruments, certificates and
opinions, as it shall be the duty of the Issuer or the Trustee to perform,
prepare, file or deliver pursuant to the Related Agreements, and at the
request of the Trustee shall take all appropriate action that it is the
duty of the Issuer or the Trustee to take pursuant to the Related
Agreements. Subject to Section 5 of this Agreement, and in accordance with
the directions of the Trustee, the Administrator shall administer, perform
or supervise the performance of such other activities in connection with
the Collateral (including the Related Agreements) as are not covered by any
of the foregoing and as are expressly requested by the Trustee and are
reasonably within the capability of the Administrator.
(ii) Notwithstanding anything in this Agreement or the
Related Agreements to the contrary, the Administrator shall be
responsible for promptly notifying the Trustee in the event that
any withholding tax is imposed on the Trust's payments (or
allocations of income) to an Owner as contemplated in Section
5.2(c) of the Trust Agreement. Any such
5
<PAGE>
notice shall specify the amount of any withholding tax required to
be withheld by the Trustee pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the
Related Agreements to the contrary, the Administrator shall be
responsible for performance of the duties of the Trustee set forth
in Sections 5.5(a), (b), (c) and (d), the penultimate sentence of
Section 5.5 and Section 5.6(a) of the Trust Agreement with respect
to, among other things, accounting and reports to Owners;
provided, however, that the Trustee shall retain responsibility
for the distribution of the Schedule K-1s necessary to enable each
Owner to prepare its Federal and State income tax returns.
(iv) The Administrator shall satisfy its obligations with
respect to clauses (ii) and (iii) by retaining, at the expense of
the Trust payable by the Servicer, a firm of independent certified
public accountants (the "Accountants") acceptable to the Trustee,
which Accountants shall perform the obligations of the
Administrator thereunder. In connection with clause (ii), the
Accountants will provide prior to __________ __, 199__, a letter
in form and substance satisfactory to the Trustee as to whether
any tax withholding is then required and, if required, the
procedures to be followed with respect thereto to comply with the
requirements of the Code. The Accountants shall be required to
update the letter in each instance that any additional tax
withholding is subsequently required or any previously required
tax withholding shall no longer be required.
(v) The Administrator shall perform the duties of the
Administrator specified in Section 10.2 of the Trust Agreement
required to be performed in connection with the resignation or
removal of the Trustee, and any other duties expressly required to
be performed by the Administrator under the Trust Agreement.
(vi) In carrying out the foregoing duties or any of its
other obligations under this Agreement, the Administrator may
enter into transactions with or otherwise deal with any of its
affiliates; provided, however, that the terms of any such
transactions or dealings shall be in accordance with any
directions received from the Issuer and shall be, in the
Administrator's opinion, no less favorable to the Issuer than
would be available from unaffiliated parties.
(vii) The Administrator hereby agrees to execute on
behalf of the Issuer all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of
the Issuer to prepare, file or deliver pursuant to the Basic
Documents or otherwise by law.
6
<PAGE>
(c) Non-Ministerial Matters. (i) With respect to matters that in
the reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time
before the taking of such action the Administrator shall have notified the
Trustee of the proposed action and the Trustee shall not have withheld
consent or provided an alternative direction. For the purpose of the
preceding sentence, "non-ministerial matters" shall include, without
limitation:
(A) the amendment of or any supplement to the
Indenture;
(B) the initiation of any claim or lawsuit by
the Issuer and the compromise of any action, claim or
lawsuit brought by or against the Issuer (other than in
connection with the collection of the Receivables);
(C) the amendment, change or modification of the
Related Agreements;
(D) the appointment of successor Note
Registrars, successor Paying Agents and successor
Trustees pursuant to the Indenture or the appointment of
successor Administrators or successor Servicers, or the
consent to the assignment by the Note Registrar, Paying
Agent or Indenture Trustee of its obligations under the
Indenture; and
(E) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this
Agreement, the Administrator shall not be obligated to, and shall
not: (x) make any payments to the Noteholders under the Related
Agreements, (y) sell the Trust Estate pursuant to Section 5.4 of
the Indenture or (z) take any other action that the Issuer directs
the Administrator not to take on its behalf.
2. Records. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books
of account and records shall be accessible for inspection by the Issuer,
the Indenture Trustee and the Depositor at any time during normal business
hours.
3. Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for
its expenses related thereto, the Administrator shall be entitled to $500
per quarter payable in arrears on each Payment Date, which payment shall be
solely an obligation of the Issuer.
7
<PAGE>
4. Additional Information To Be Furnished to the Issuer. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably
request.
5. Independence of the Administrator. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall
not be subject to the supervision of the Issuer or the Trustee with respect
to the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Administrator
shall have no authority to act for or represent the Issuer or the Trustee
in any way (other than as permitted hereunder) and shall not otherwise be
deemed an agent of the Issuer or the Trustee.
6. No Joint Venture. Nothing contained in this Agreement: (i)
shall constitute the Administrator and either of the Issuer or the Trustee
as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed
to impose any liability as such on any of them or (iii) shall be deemed to
confer on any of them any express, implied or apparent authority to incur
any obligation or liability on behalf of the others.
7. Other Activities of the Administrator. Nothing herein shall
prevent the Administrator or its Affiliates from engaging in other
businesses or, in their sole discretion, from acting in a similar capacity
as an administrator for any other Person even though such Person may engage
in business activities similar to those of the Issuer, the Trustee or the
Indenture Trustee.
8. Term of Agreement; Resignation and Removal of the
Administrator. (a) This Agreement shall continue in force until the
dissolution of the Issuer, upon which event this Agreement shall
automatically terminate.
(b) Subject to Section 8(e), the Administrator may resign its
duties hereunder by providing the Issuer, the Indenture Trustee and the
Servicer with at least 60 days' prior written notice.
(c) Subject to Section 8(e), the Issuer may remove the
Administrator without cause by providing the Administrator, the Indenture
Trustee and the Servicer with at least 60 days' prior written notice.
8
<PAGE>
(d) Subject to Section 8(e), at the sole option of the Issuer, the
Administrator may be removed immediately upon written notice of termination
from the Issuer to the Administrator, the Indenture Trustee and the
Servicer if any of the following events shall occur:
(i) the Administrator shall default in the performance of
any of its duties under this Agreement and, after notice of such
default, shall not cure such default within ten days (or, if such
default cannot be cured in such time, shall not give within ten
days such assurance of cure as shall be reasonably satisfactory to
the Issuer);
(ii) a court having jurisdiction in the premises shall
enter a decree or order for relief, and such decree or order shall
not have been vacated within 60 days, in respect of the
Administrator in any involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect or appoint a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for the Administrator or
any substantial part of its property or order the winding-up or
liquidation of its affairs; or
(iii) the Administrator shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, shall consent to the entry of an order
for relief in an involuntary case under any such law, or shall
consent to the appointment of a receiver, liquidator, assignee,
trustee, custodian, sequestrator or similar official for the
Administrator or any substantial part of its property, shall
consent to the taking of possession by any such official of any
substantial part of its property, shall make any general
assignment for the benefit of creditors or shall fail generally to
pay its debts as they become due.
The Administrator agrees that if any of the events specified in
clauses (ii) or (iii) of this subsection shall occur, it shall give written
notice thereof to the Issuer, the Servicer and the Indenture Trustee within
seven days after the happening of such event.
(e) Upon the Administrator's receipt of notice of termination,
pursuant to Sections 8(c) or (d), or the Administrator's resignation in
accordance with this Agreement, the predecessor Administrator shall
continue to perform its functions as Administrator under this Agreement, in
the case of termination, only until the date specified in such termination
notice or, if no such date is specified in a notice of termination, until
receipt of such notice and, in the case of resignation, until the later of:
(x) the date 45 days from the delivery to the Issuer, the Indenture Trustee
and the Servicer of written notice of such resignation (or written
confirmation of such notice) in accordance with this Agreement and (y)
9
<PAGE>
the date upon which the predecessor Administrator shall become unable to
act as Administrator, as specified in the notice of resignation and
accompanying Opinion of Counsel. In the event of the Administrator's
termination hereunder, the Issuer shall appoint a successor Administrator
acceptable to the Indenture Trustee, and the successor Administrator shall
accept its appointment by a written assumption in form acceptable to the
Indenture Trustee. In the event that a successor Administrator has not been
appointed at the time when the predecessor Administrator has ceased to act
as Administrator in accordance with this Section, the Indenture Trustee
without further action shall automatically be appointed the successor
Administrator and the Indenture Trustee shall be entitled to the
compensation specified in Section 3. Notwithstanding the above, the
Indenture Trustee shall, if it shall be unable so to act, appoint or
petition a court of competent jurisdiction to appoint any established
institution having a net worth of not less than $50,000,000 and whose
regular business shall include the performance of functions similar to
those of the Administrator, as the successor to the Administrator under
this Agreement.
(f) Upon appointment, the successor Administrator (including the
Indenture Trustee acting as successor Administrator) shall be the successor
in all respects to the predecessor Administrator and shall be subject to
all the responsibilities, duties and liabilities arising thereafter
relating thereto placed on the predecessor Administrator and shall be
entitled to the compensation specified in Section 3 and all the rights
granted to the predecessor Administrator by the terms and provisions of
this Agreement.
(g) Except when and if the Indenture Trustee is appointed
successor Administrator, the Administrator may not resign unless it is
prohibited from serving as such by law as evidenced by an Opinion of
Counsel to such effect delivered to the Indenture Trustee. No resignation
or removal of the Administrator pursuant to this Section shall be effective
until: (i) a successor Administrator shall have been appointed by the
Issuer and (ii) such successor Administrator shall have agreed in writing
to be bound by the terms of this Agreement in the same manner as the
Administrator is bound hereunder.
(h) The appointment of any successor Administrator shall be
effective only after satisfaction of the Rating Agency Condition with
respect to the proposed appointment.
9. Action upon Termination, Resignation or Removal. Promptly upon
the effective date of termination of this Agreement pursuant to Section
8(a), or the resignation or removal of the Administrator pursuant to
Section 8(b) or (c), respectively, the Administrator shall be entitled to
be paid all fees and reimbursable expenses accruing to it to the date of
such termination, resignation or removal. The Administrator shall forthwith
upon such termination pursuant to
10
<PAGE>
Section 8(a) deliver to the Issuer all property and documents of or
relating to the Collateral then in the custody of the Administrator. In the
event of the resignation or removal of the Administrator pursuant to
Section 8(b) or (c), respectively, the Administrator shall cooperate with
the Issuer and the Indenture Trustee and take all reasonable steps
requested to assist the Issuer and the Indenture Trustee in making an
orderly transfer of the duties of the Administrator.
10. Notices. Any notice, report or other communication given
hereunder shall be in writing and addressed as follows:
(a) if to the Issuer or the Trustee, to:
Case Equipment Loan Trust 199_-_
c/o [Trustee]
-------------------
-------------------
Attn: __________________________
(b) if to the Administrator, to:
Case Credit Corporation
233 Lake Avenue
Racine, Wisconsin 53403
Attention: Treasurer
(c) if to the Indenture Trustee, to:
[Harris Trust and Savings Bank]
[311 West Monroe Street, 12th Floor]
[Chicago, Illinois 60606]
Attention: [Indenture Trust Department]
or to such other address as any party shall have provided to the other
parties in writing. Any notice required to be in writing hereunder shall be
deemed given if such notice is mailed by certified mail, postage prepaid,
or hand-delivered to the address of such party as provided above.
11. Amendments. This Agreement may be amended from time to time by
a written amendment duly executed and delivered by the Issuer, the
Administrator and the Indenture Trustee, with the written consent of the
Trustee, but without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement
provisions of this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of
18333300.2 42798 1945C 95202263
11
<PAGE>
the Noteholders or the Certificateholders; provided, however, that such
amendment shall not, as evidenced by an Opinion of Counsel satisfactory to
the Indenture Trustee, adversely affect in any material respect the
interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the
Issuer, the Administrator and the Indenture Trustee with the written
consent of (w) the Trustee, (x) Noteholders holding Notes evidencing not
less than a majority of the Note Balance and (y) the Holders of
Certificates evidencing not less than 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 this Agreement or of
modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall: (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that are
required to be made for the benefit of the Noteholders or the
Certificateholders or (ii) reduce the aforesaid percentage of the Holders
of Notes and Certificates that are required to consent to any such
amendment, without the consent of the holders of all the outstanding Notes
and Certificates. Notwithstanding the foregoing, the Administrator may not
amend this Agreement without the permission of the Depositor, which
permission shall not be unreasonably withheld.
Promptly after the execution of any such amendment or consent (or,
in the case of the Rating Agencies, 10 days prior thereto), the
Administrator shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Trustee and each of the
Rating Agencies.
It shall not be necessary for the consent of the
Certificateholders or the Noteholders pursuant to this Section to approve
the particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof.
12. Successors and Assigns. This Agreement may not be assigned by
the Administrator unless such assignment is previously consented to in
writing by the Issuer and the Trustee and subject to the satisfaction of
the Rating Agency Condition in respect thereof. An assignment with such
consent and satisfaction, if accepted by the assignee, shall bind the
assignee hereunder in the same manner as the Administrator is bound
hereunder. Notwithstanding the foregoing, this Agreement may be assigned by
the Administrator without the consent of the Issuer or the Trustee to a
corporation or other organization that is a successor (by merger,
consolidation or purchase of assets) to the Administrator, provided that
such successor organization executes and delivers to the Issuer, the
Trustee and the Indenture Trustee an agreement in which such corporation or
other organization agrees to be bound hereunder by the terms of said
assignment in the
12
<PAGE>
same manner as the Administrator is bound hereunder. Subject to the
foregoing, this Agreement shall bind any successors or assigns of the
parties hereto.
13. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New York, without reference to its conflict
of law provisions, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
14. Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
15. Counterparts. This Agreement may be executed in counterparts, all
of which when so executed shall together constitute but one and the same
agreement.
16. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
17. Not Applicable to Case Credit Corporation in Other Capacities.
Nothing in this Agreement shall affect any obligation Case Credit
Corporation may have in any other capacity.
18. Limitation of Liability of the Trustee and the Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary,
this instrument has been countersigned by [Trustee], not in its individual
capacity but solely in its capacity as Trustee of the Issuer, and in no
event shall [Trustee], in its individual capacity, or any beneficial owner
of the Issuer have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder, as to
all of which recourse shall be had solely to the assets of the Issuer. For
all purposes of this Agreement, in the performance of any duties or
obligations of the Issuer thereunder, the Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII
and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by [Harris Trust and Savings Bank],
not in its individual capacity but solely as Indenture Trustee, and in no
event shall [Harris Trust and Savings Bank] have any liability for the
representations, warranties, covenants, agreements or other obligations of
the Issuer hereunder or in any of
13
<PAGE>
the certificates, notices or agreements delivered pursuant hereto, as to
all of which recourse shall be had solely to the assets of the Issuer.
19. Third-Party Beneficiary. The Trustee is a third-party
beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party
hereto.
20. Indemnification. The Administrator shall indemnify the Trustee
and the Indenture Trustee (and their officers, directors, employees and
agents) for, and hold them harmless against, any losses, liability or
expense, including attorneys' fees reasonably incurred by them, incurred
without negligence or bad faith on their part, arising out of or in
connection with: (i) actions taken by either of them pursuant to
instructions given by the Administrator pursuant to this Agreement or (ii)
the failure of the Administrator to perform its obligations hereunder. The
indemnities contained in this Section shall survive the termination of this
Agreement and the resignation or removal of the Administrator, the Trustee
or the Indenture Trustee.
14
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
CASE EQUIPMENT LOAN TRUST 199_-_
By: [TRUSTEE], not in its individual
capacity but solely as Trustee on
behalf of the Issuer
By: ------------------------------
Name:
Title:
[TRUSTEE],
not in its individual capacity but solely
as Trustee under the Trust Agreement
By:--------------------------------
Name:
Title:
[HARRIS TRUST AND SAVINGS BANK],
not in its individual capacity but solely
as Indenture Trustee
By:--------------------------------
Name:
Title:
CASE CREDIT CORPORATION,
as Administrator
By:--------------------------------
Name:
Title:
15
<PAGE>
- --------------------------------------------------------------------------------
CASE EQUIPMENT LOAN TRUST 199_-_
PURCHASE AGREEMENT
between
CASE CREDIT CORPORATION,
as Originator,
and
CASE RECEIVABLES II INC.,
as Purchaser.
Dated as of _____________ __, 199__
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Certain Definitions
SECTION 1.1. Definitions............................................2
SECTION 1.2. Other Definitional Provisions.
ARTICLE II
Conveyance of Receivables
SECTION 2.1. Conveyance of Purchased Contracts......................3
SECTION 2.2. Conveyance of Subsequent Receivables...................3
SECTION 2.3. Intention of the Parties...............................4
SECTION 2.4. The Closing............................................4
SECTION 2.5. Payment of the Purchase Price..........................4
ARTICLE III
Representations and Warranties
SECTION 3.1. Representations and Warranties of the Purchaser........5
SECTION 3.2. Representations and Warranties of the Originator.......6
ARTICLE IV
Conditions
SECTION 4.1. Conditions to Obligation of the Purchaser.............13
SECTION 4.2. Conditions to Obligation of the Originator............15
ARTICLE V
Covenants of the Originator
SECTION 5.1. Protection of Right, Title and Interest. .............16
SECTION 5.2. Other Liens or Interests..............................17
SECTION 5.3. Chief Executive Office................................17
SECTION 5.4. Costs and Expenses....................................17
SECTION 5.5. Indemnification.......................................17
SECTION 5.6. Transfer of Subsequent Receivables....................17
ARTICLE VI
Miscellaneous Provisions
SECTION 6.1. Obligations of Originator.............................18
i
<PAGE>
TABLE OF CONTENTS
(continued)
Page
SECTION 6.2. Repurchase Events.....................................18
SECTION 6.3. Purchaser Assignment of Repurchased Receivables.......18
SECTION 6.4. Trust.................................................18
SECTION 6.5. Amendment.............................................18
SECTION 6.6. Accountants' Letters..................................19
SECTION 6.7. Waivers...............................................19
SECTION 6.8. Notices...............................................20
SECTION 6.9. Costs and Expenses....................................20
SECTION 6.10. Representations of the Originator and the Purchaser...20
SECTION 6.11. Confidential Information..............................20
SECTION 6.12. Headings and Cross-References........................20
SECTION 6.13. Governing Law........................................20
SECTION 6.14. Counterparts.........................................21
SECTION 6.15. Severability.........................................21
SCHEDULES AND EXHIBITS
SCHEDULE A Location of Receivables Files
EXHIBIT A Form of First-Tier Assignment
EXHIBIT B Form of First-Tier Subsequent Transfer Assignment
||
ii
<PAGE>
PURCHASE AGREEMENT (as amended or supplemented from time to time,
this "Agreement"), dated as of _____________ __, 199__, between CASE CREDIT
CORPORATION, a Delaware corporation (the "Originator"), and CASE
RECEIVABLES II INC., a Delaware corporation (the "Purchaser").
RECITALS
WHEREAS, in the regular course of its business, the Originator
purchases from equipment dealers and brokers, and directly originates,
Contracts; and
WHEREAS, in the regular course of its business, the Originator
purchases from Case Corporation certain Contracts originated by Case
Corporation in the ordinary course of business; and
WHEREAS, the Originator and the Purchaser wish to set forth the
terms pursuant to which: (1) Contracts having an aggregate Contract Value
of approximately $_______________ (the "Purchased Contracts") as of
__________ __, 199_ (the "Initial Cutoff Date") are to be sold by the
Originator to the Purchaser on the date hereof and (2) certain Subsequent
Receivables are to be sold by the Originator to the Purchaser from time to
time on each Subsequent Transfer Date; and
WHEREAS, as of the Initial Cutoff Date, the Purchaser owned
Contracts previously purchased from the Originator pursuant to a
Receivables Purchase Agreement dated as of August 1, 1994 (as amended from
time to time, the "Liquidity Receivables Purchase Agreement"), between the
Originator and the Purchaser, having an aggregate Contract Value of
approximately $_____________ (the "Owned Contracts", and together with the
Purchased Contracts, the "Initial Receivables"); and
WHEREAS, the Receivables will be transferred by the Purchaser,
pursuant to the Sale and Servicing Agreement, to Case Equipment Loan Trust
199_-_ (the "Trust"), which Trust will issue _____% Asset Backed
Certificates representing fractional undivided interests in, and _____%
Class A-1 Asset Backed Notes, _____% Class A-2 Asset Backed Notes, _____%
Class A-3 Asset Backed Notes, _____% Class A-4 Asset Backed Notes and
_____% Class B Asset Backed Notes collateralized by, the Receivables and
the other property of the Trust; and
WHEREAS, the Originator and the Purchaser wish to set forth herein
certain representations, warranties, covenants and indemnities of the
Originator
1
<PAGE>
with respect to the Receivables for the benefit of the Purchaser, the Trust,
the Noteholders and the Certificateholders.
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration and the mutual terms and covenants contained herein
the parties hereto agree as follows:
ARTICLE I
Certain Definitions
SECTION 1.1. Definitions. Capitalized terms used herein and not
otherwise defined herein are defined in Appendix A to the Indenture, dated
as of the date hereof, between Case Equipment Loan Trust 199_-_ and [Harris
Trust and Savings Bank].
SECTION 1.2. Other Definitional Provisions. (a) All terms defined in
this Agreement shall have the defined meanings when used in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.
(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles as in effect
on the date hereof. To the extent that the definitions of accounting terms
in this Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this Agreement or in
any such certificate or other document shall control.
(c) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section, Schedule
and Exhibit references contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term "including" shall mean "including, without
limitation,".
(d) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
2
<PAGE>
ARTICLE II
Conveyance of Receivables
SECTION 2.1. Conveyance of Purchased Contracts. In consideration
of the Purchaser's payment of $_______________ (the "Initial Purchase
Price") in the manner set out in Section 2.5(a), the Originator does hereby
sell, transfer, assign, set over and otherwise convey to the Purchaser,
without recourse (subject to the obligations herein), all of its right,
title and interest in, to and under:
(i) the Purchased Contracts, including all documents
constituting chattel paper included therewith, and all obligations
of the Obligors thereunder, including all moneys paid thereunder
on or after the Initial Cutoff Date;
(ii) the security interests in the Financed Equipment
granted by Obligors pursuant to the Purchased Contracts and any
other interest of the Originator in such Financed Equipment;
(iii) any proceeds with respect to the Purchased
Contracts from claims on insurance policies covering Financed
Equipment or Obligors;
(iv) any proceeds from recourse to Dealers with respect
to the Purchased Contracts other than any interest in the Dealers'
reserve accounts maintained with the Originator;
(v) any Financed Equipment that shall have secured the
Purchased Contracts and that shall have been acquired by or on
behalf of the Purchaser; and
(vi) the proceeds of any and all of the foregoing (other
than Recoveries).
SECTION 2.2. Conveyance of Subsequent Receivables. Subject to the
conditions set forth in Section 4.1(b), in consideration of the Purchaser's
delivery on the related Subsequent Transfer Date to or upon the order of
the Originator of the related Subsequent Purchase Price pursuant to Section
2.5, the Originator does hereby sell, transfer, assign, set over and
otherwise convey to the Purchaser, without recourse (subject to the
obligations herein), all of its right, title and interest in, to and under:
(i) the Subsequent Receivables listed on Schedule A to
the related First-Tier Subsequent Transfer Assignment, including
all documents
3
<PAGE>
constituting chattel paper included therewith, and all obligations
of the Obligors thereunder, including all moneys paid thereunder
on or after the related Subsequent Cutoff Date;
(ii) the security interests in the Financed Equipment
granted by Obligors pursuant to such Subsequent Receivables and
any other interest of the Originator in such Financed Equipment;
(iii) any proceeds with respect to such Subsequent
Receivables from claims on insurance policies covering Financed
Equipment or Obligors;
(iv) any proceeds with respect to such Subsequent
Receivables from recourse to Dealers other than any interest in
the Dealers' reserve accounts maintained with the Originator;
(v) any Financed Equipment that shall have secured any
such Subsequent Receivable and that shall have been acquired by or
on behalf of the Purchaser; and
(vi) the proceeds of any and all of the foregoing (other
than Recoveries).
SECTION 2.3. Intention of the Parties. The parties to this
Agreement intend that the transactions contemplated hereby shall be, and
shall be treated as, a purchase by the Purchaser and a sale by the
Originator of the Purchased Contracts and the Subsequent Receivables and
not as a lending transaction. The foregoing sale, assignment, transfer and
conveyance does not constitute, and is not intended to result in a creation
or assumption by the Purchaser of, any obligation or liability with respect
to any Purchased Contract or any Subsequent Receivables, nor shall the
Purchaser be obligated to perform or otherwise be responsible for any
obligation of the Originator or any other Person in connection with the
Purchased Contracts or the Subsequent Receivables or under any agreement or
instrument relating thereto, including any contract or any other obligation
to any Obligor.
SECTION 2.4. The Closing. The sale and purchase of the Purchased
Contracts shall take place at a closing at the offices of Mayer, Brown &
Platt, 190 South LaSalle Street, Chicago, Illinois 60603 on the Closing
Date, simultaneously with the closings under: (a) the Sale and Servicing
Agreement, (b) the Trust Agreement, (c) the Administration Agreement and
(d) the Indenture.
SECTION 2.5. Payment of the Purchase Price.
4
<PAGE>
(a) Initial Receivables. The Initial Purchase Price is payable as
follows: (i) $_____________ in cash on the Closing Date and (ii)
$_________________ in cash, as provided in the subordinated note dated
__________ __, 199_, payable by the Purchaser to the Originator.
(b) Subsequent Receivables. As consideration for the conveyance of
Subsequent Receivables pursuant to Section 2.2, the Purchaser shall pay or
cause to be paid to the Originator on each Subsequent Transfer Date an
amount (a "Subsequent Purchase Price") equal to the aggregate Contract
Value of the Subsequent Receivables as of the related Subsequent Cutoff
Date, plus any premium or minus any discount agreed upon the Originator and
the Purchaser. Any Subsequent Purchase Price shall be payable as follows:
(i) cash in the amount released to the Purchaser from the Pre-Funding
Account pursuant to Section 5.7(a) of the Sale and Servicing Agreement
shall be paid to the Originator on the related Subsequent Transfer Date and
the balance paid in cash as and when amounts are released to, or otherwise
realized by, the Purchaser from the Spread Account and the Negative Carry
Account in accordance with the Sale and Servicing Agreement; or (ii) as
otherwise agreed by the Originator and the Purchaser.
ARTICLE III
Representations and Warranties
SECTION 3.1. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants to the Originator as of the date
hereof and as of the Closing Date:
(a) Organization and Good Standing. The Purchaser has
been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with the
power and authority to own its properties and to conduct its
business as such properties are currently owned and such business
is presently conducted, and had at all relevant times, and has,
the power and authority to acquire, own and sell the Receivables.
(b) Due Qualification. The Purchaser is duly qualified to
do business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the
conduct of its business shall require such qualifications.
5
<PAGE>
(c) Power and Authority. The Purchaser has the power and
authority to execute and deliver this Agreement and to carry out
its terms; and the execution, delivery and performance of this
Agreement have been duly authorized by the Purchaser by all
necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a
legal, valid and binding obligation of the Purchaser enforceable
against the Purchaser in accordance with its terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
hereof do not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the certificate of incorporation
or by-laws of the Purchaser, or any indenture, agreement or other
instrument to which the Purchaser is a party or by which it is
bound; or result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than the Sale and Servicing
Agreement and the Indenture); or violate any law or, to the best
of the Purchaser's knowledge, any order, rule or regulation
applicable to the Purchaser of any court or of any Federal or
State regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Purchaser or its
properties.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the Purchaser's best knowledge,
threatened, before any court, regulatory body, administrative
agency or other governmental instrumentality having jurisdiction
over the Purchaser or its properties: (i) asserting the invalidity
of this Agreement, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or (iii)
seeking any determination or ruling that could reasonably be
expected to materially and adversely affect the performance by the
Purchaser of its obligations under, or the validity or
enforceability of, this Agreement.
SECTION 3.2. Representations and Warranties of the Originator. (a) The
Originator hereby represents and warrants to the Purchaser as of the date hereof
and as of the Closing Date:
(i) Organization and Good Standing. The Originator has
been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with the
power and authority to own its properties and to conduct its
business as such properties are currently owned and such business
is presently conducted, and had at all relevant
6
<PAGE>
times, and has, the power and authority to acquire, own and sell the
Receivables.
(ii) Due Qualification. The Originator is duly qualified
to do business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the
conduct of its business shall require such qualifications.
(iii) Power and Authority. The Originator has the power
and authority to execute and deliver this Agreement and to carry
out its terms; the Originator has full power and authority to sell
and assign the property to be sold and assigned to the Purchaser
hereby and has duly authorized such sale and assignment to the
Purchaser by all necessary corporate action; and the execution,
delivery and performance of this Agreement have been, and the
execution, delivery and performance of each First-Tier Subsequent
Transfer Assignment have been or will be on or before the related
Subsequent Transfer Date, duly authorized by the Originator by all
necessary corporate action.
(iv) Binding Obligation. This Agreement constitutes, and
each First-Tier Subsequent Transfer Assignment when executed and
delivered by the Originator will constitute, a legal, valid and
binding obligation of the Originator enforceable against the
Originator in accordance with their terms.
(v) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
hereof do not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the certificate of incorporation
or by-laws of the Originator, or any indenture, agreement or other
instrument to which the Originator is a party or by which it is
bound; or result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than this Agreement); or
violate any law or, to the best of the Originator's knowledge, any
order, rule or regulation applicable to the Originator of any
court or of any Federal or State regulatory body, administrative
agency or other governmental instrumentality having jurisdiction
over the Originator or its properties.
(vi) No Proceedings. There are no proceedings or
investigations pending, or to the Originator's best knowledge,
threatened, before any court, regulatory body, administrative
agency or other governmental
7
<PAGE>
instrumentality having jurisdiction over the Originator or its
properties: (A) asserting the invalidity of this Agreement, (B)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, or (C) seeking any determination
or ruling that could reasonably be expected to materially and
adversely affect the performance by the Originator of its
obligations under, or the validity or enforceability of, this
Agreement.
(b) The Originator makes the following representations and
warranties as to the Receivables on which the Purchaser relies in accepting
the Purchased Contracts and the Subsequent Receivables and in transferring
the Receivables to the Trust. Such representations and warranties speak as
of the execution and delivery of this Agreement and as of the Closing Date,
in the case of the Purchased Contracts, and as of the applicable Subsequent
Transfer Date, in the case of the Subsequent Receivables, but shall survive
the sale, transfer and assignment of the Receivables to the Purchaser and
the subsequent assignment and transfer of such Receivables to the Trust
pursuant to the Sale and Servicing Agreement and pursuant to the Indenture:
(i) Characteristics of Receivables. Each Receivable: (A) (1)
was originated in the United States of America by a Dealer in
connection with the retail sale of Financed Equipment in the ordinary
course of such Dealer's business, was purchased by the Originator from
a Dealer and was validly assigned by such Dealer to the Originator in
accordance with its terms, or (2) was originated by Case Credit in the
ordinary course of Case Credit's business and, in either case, was
fully and properly executed by the parties thereto, (B) has created a
valid, subsisting and enforceable first priority security interest in
favor of the Originator in the Financed Equipment, which is assignable
by the Originator to the Purchaser, by the Purchaser to the Issuer and
by the Issuer to the Indenture Trustee, (C) contains customary and
enforceable provisions such that the rights and remedies of the holder
thereof are adequate for realization against the collateral of the
benefits of the security, and (D) provides for fixed payments on a
periodic basis that fully amortize the Amount Financed by maturity and
yield interest at the Annual Percentage Rate. [ADD CARVE OUTS IF
UNSECURED DEALER LOANS OR TRUE LEASES ARE INCLUDED.]
(ii) Schedule of Receivables. The information set forth
on Schedule A to the First-Tier Assignment delivered on the
Closing Date is true and correct in all material respects as of
the opening of business on the Initial Cutoff Date and the
information set forth on Schedule A to the related First-Tier
Subsequent Transfer Assignment will be true and correct on each
Subsequent Transfer Date and no selection procedures believed
8
<PAGE>
by the Originator to be adverse to the interests of the Trust, the
Noteholders or the Certificateholders were or will be utilized in
selecting the Receivables. The computer tape regarding the
Receivables made available to the Purchaser and its assigns is
true and correct in all respects.
(iii) Compliance with Law. Each Receivable and the sale
or lease of the related Financed Equipment complied in all
material respects at the time it was originated or made and at the
execution of this Agreement and each First-Tier Subsequent
Transfer Assignment complies in all material respects with all
requirements of applicable Federal, State and local laws and
regulations thereunder, including usury law, the Federal Truth-in-
Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal
Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal
Reserve Board's Regulations B and S, the Wisconsin Consumer Act
and State adaptations of the National Consumer Act and of the
Uniform Consumer Credit Code, and other consumer credit laws and
equal credit opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable represents the
genuine, legal, valid and binding payment obligation in writing of
the Obligor, enforceable by the holder thereof in accordance with
its terms.
(v) No Government Obligor. None of the Receivables is due
from the United States of America or any State or from any agency,
department or instrumentality of the United States of America or
any State.
(vi) Security Interest in Financed Equipment. Immediately
prior to the sale, assignment and transfer thereof, each
Receivable shall be secured by a validly perfected first priority
security interest in the Financed Equipment in favor of the
Originator as secured party or all necessary and appropriate
actions have been commenced that would result in the valid
perfection of a first priority security interest in the Financed
Equipment in favor of the Originator as secured party. [ADD CARVE
OUTS IF UNSECURED DEALER LOANS OR TRUE LEASES ARE INCLUDED.]
(vii) Receivables in Force. No Receivable has been
satisfied, subordinated or rescinded, nor has any Financed
Equipment been released from the Lien granted by the related
Receivable in whole or in part.
(viii) No Amendment or Waiver. No provision of a
Receivable has been waived, altered or modified in any respect,
except pursuant to
9
<PAGE>
a document, instrument or writing included in the Receivable Files
and no such amendment, waiver, alteration or modification causes
such Receivable not to conform to the other warranties contained
in this Section.
(ix) No Defenses. No right of rescission, setoff,
counterclaim or defense has been asserted or threatened or exists
with respect to any Receivable.
(x) No Liens. To the best of the Originator's knowledge,
no Liens or claims, including claims for work, labor or materials,
relating to any of the Financed Equipment have been filed that are
Liens prior to, or equal or coordinate with, the security interest
in the Financed Equipment granted by any Receivable.
(xi) No Default. No Receivable has a payment that is more
than 90 days overdue as of the Initial Cutoff Date or Subsequent
Cutoff Date, as applicable, and, except for a payment default
continuing for a period of not more than 90 days, no default,
breach, violation or event permitting acceleration under the terms
of any Receivable has occurred and is continuing; and no
continuing condition that with notice or the lapse of time would
constitute such a default, breach, violation or event permitting
acceleration under the terms of any Receivable has arisen; and the
Originator has not waived and shall not waive any of the
foregoing.
(xii) Title. It is the intention of the Originator that
the transfers and assignments contemplated herein and in the
Liquidity Receivables Purchase Agreement constitute a sale of the
Receivables from the Originator to the Purchaser and that the
beneficial interest in and title to the Receivables not be part of
the debtor's estate in the event of the filing of a bankruptcy
petition by or against the Originator under any bankruptcy or
similar law. No Receivable has been sold, transferred, assigned or
pledged by the Originator to any Person other than the Purchaser.
Immediately prior to the transfers and assignments contemplated
herein and in the Liquidity Receivables Purchase Agreement, the
Originator had good title to each Receivable, free and clear of
all Liens and, immediately upon the transfer thereof, the
Purchaser shall have good title to each Receivable, free and clear
of all Liens; and the transfer and assignment of the Receivables
to the Purchaser has been perfected under the UCC.
(xiii) Lawful Assignment. No Receivable has been
originated in, or is subject to the laws of, any jurisdiction
under which the sale, transfer and assignment of such Receivable
or any Receivable under this
10
<PAGE>
Agreement, the Liquidity Receivables Purchase Agreement, the Sale
and Servicing Agreement or the Indenture is unlawful, void or
voidable.
(xiv) All Filings Made. All filings (including UCC
filings) necessary in any jurisdiction to give the Purchaser a
first priority perfected ownership interest in the Receivables
have been made.
(xv) One Original. There is only one original executed
copy of each Receivable.
(xvi) Maturity of Receivables. Each Receivable has a
remaining term to maturity of not more than [72] months, in the
case of the Initial Receivables, and [72] months, in the case of
the Subsequent Receivables; the weighted average remaining term of
the Initial Receivables is approximately _____ months as of the
Initial Cutoff Date; the weighted average original term of the
Receivables, including as of each Subsequent Transfer Date all
Subsequent Receivables previously transferred to the Purchaser,
will not be greater than _____ months.
(xvii) Scheduled Payments and APR. No Receivable has a
final scheduled payment date later than six months preceding the
Final Scheduled Maturity Date; each Receivable provides for
payments that fully amortize the Amount Financed over the original
term of the Receivable and is a Precomputed Receivable; each
Receivable has an APR of at least ____%; and as of each Subsequent
Cutoff Date, the weighted average of the Initial Cutoff Date APR
and each Subsequent Cutoff Date APR (weighted on the basis of the
respective aggregate Contract Values of the Receivables for which
each such APR is used to calculate the Contract Value) will not be
less than the weighted average interest rate on the Outstanding
Notes plus 1.00% per annum.
(xviii) Location of Receivable Files. The Receivable
Files are kept at one or more of the locations listed in Schedule
A hereto.
(xix) Insurance. The Obligor on each Receivable is
required to maintain physical damage insurance covering the
Financed Equipment and, in the case of any Lease, public liability
insurance relating to the use of such Financed Equipment, in each
case in accordance with the Originator's normal requirements.
(xx) Concentrations. No Receivable has a Contract Value
(when combined with the Contract Value of any other Receivable
with the same or an Affiliated Obligor) that exceeds 1% of the
Initial Pool Balance.
11
<PAGE>
(xxi) Financing. Approximately _____% of the aggregate
Contract Value of the Initial Receivables, constituting _____% of
the number of Initial Receivables as of the Initial Cutoff Date,
were secured by equipment that was new at the time the related
Initial Receivable was originated; the remainder of the Initial
Receivables represent financing of used equipment; approximately
_____% of the aggregate Contract Value of the Initial Receivables,
constituting _____% of the number of Initial Receivables as of the
Initial Cutoff Date, represent the financing of agricultural
equipment; the remainder of the Initial Receivables represent the
financing of construction equipment. The aggregate Contract Value
of the Receivables for the purposes of the above calculations as
of the Initial Cutoff Date is $___________________ (and is
calculated using the individual APR applicable to each Initial
Receivable). Additionally, not more than ___% of the aggregate
Contract Value of the Receivables, including, as of each
Subsequent Transfer Date, all Subsequent Receivables previously
transferred to the Purchaser, will represent Contracts for the
financing of construction equipment.
(xxii) No Bankruptcies. No Obligor on any Receivable as
of the Initial Cutoff Date or the Subsequent Cutoff Date, as
applicable, was noted in the related Receivable File as being the
subject of a bankruptcy proceeding.
(xxiii) No Repossessions. None of the Financed Equipment
securing any Receivable is in repossession status.
(xxiv) Chattel Paper. Each Receivable constitutes
"chattel paper" as defined in the UCC of the State the law of
which governs the perfection of the interest granted in it.
(xxv) U.S. Obligors. None of the Receivables is
denominated and payable in any currency other than United States
Dollars or is due from any Person that does not have a mailing
address in the United States of America.
(xxvi) Payment Frequency. As of the Initial Cutoff Date
and as shown on the books of the Originator: (A) Initial
Receivables having an aggregate Contract Value equal to _____% of
the Initial Pool Balance had annual scheduled payments, (B)
Initial Receivables having an aggregate Contract Value equal to
_____% of the Initial Pool Balance had semi-annual scheduled
payments, (C) Initial Receivables having an aggregate Contract
Value equal to _____% of the Initial Pool Balance had quarterly
scheduled payments, and (D) Initial Receivables having an
aggregate
12
<PAGE>
Contract Value equal to _____% of the Initial Pool Balance had
monthly scheduled payments.
(xxvii) First Payment. As of the Initial Cutoff Date,
Obligors had not yet made the first payment in respect of Initial
Receivables representing less than _____% of the Initial Pool
Balance.
(xxviii) Interest Accruing. Each Receivable, other than
those Receivables consisting of Contracts that contain interest
waivers for a specified period of time, is, as of the Closing Date
or Subsequent Transfer Date, as applicable, accruing interest; no
Receivable contains an interest waiver extending more than 12
months after the Initial Cutoff Date.
(xxix) Originator's Representations. The representations and
warranties of the Originator contained in Section 3.2(a) are true and
correct.
ARTICLE IV
Conditions
SECTION 4.1. Conditions to Obligation of the Purchaser.
(a) Initial Receivables. The obligation of the Purchaser to purchase
the Purchased Contracts is subject to the satisfaction of the following
conditions:
(i) Representations and Warranties True. The
representations and warranties of the Originator hereunder shall
be true and correct on the Closing Date and the Originator shall
have performed all obligations to be performed by it hereunder on
or prior to the Closing Date.
(ii) Computer Files Marked. The Originator shall, at its
own expense, on or prior to the Closing Date, indicate in its
computer files that Receivables created in connection with the
Purchased Contracts have been sold to the Purchaser pursuant to
this Agreement and deliver to the Purchaser the Schedule of
Receivables certified by the Chairman, the President, a Vice
President or the Treasurer of the Originator to be true, correct
and complete.
(iii) Documents To Be Delivered by the Originator on the
Closing Date.
13
<PAGE>
(A) The First-Tier Assignment. On the Closing
Date (but only if the Contract Value of the Purchased
Contracts is greater than zero), the Originator will
execute and deliver the First-Tier Assignment, which
shall be substantially in the form of Exhibit A.
(B) Evidence of UCC Filing. On or prior to the
Closing Date (but only if the Contract Value of the
Purchased Contracts is greater than zero), the Originator
shall execute and file, at its own expense, a UCC
financing statement in each jurisdiction in which such
action is required by applicable law fully to perfect the
Purchaser's right, title and interest in the Purchased
Contracts and the other property sold hereunder, executed
by the Originator, as seller or debtor, and naming the
Purchaser, as purchaser or secured party, describing the
Purchased Contracts and the other property sold
hereunder, meeting the requirements of the laws of each
such jurisdiction and in such manner as is necessary to
perfect the sale, transfer, assignment and conveyance of
such Purchased Contracts and such other property to the
Purchaser. The Originator shall deliver (or cause to be
delivered) a file-stamped copy, or other evidence
satisfactory to the Purchaser of such filing, to the
Purchaser on or prior to the Closing Date.
(C) Other Documents. The Originator will deliver
such other documents as the Purchaser may reasonably
request.
(iv) Other Transactions. The transactions contemplated by
the Sale and Servicing Agreement to be consummated on the Closing
Date shall be consummated on such date.
(b) Subsequent Receivables. The obligation of the Purchaser to
purchase any Subsequent Receivables is subject to the satisfaction of the
following conditions on or prior to the related Subsequent Transfer Date:
(i) the Originator shall have delivered to the Purchaser
a duly executed written assignment in substantially the form of
Exhibit B (the "First-Tier Subsequent Transfer Assignment"), which
shall include supplements to the Schedule of Receivables listing
the Subsequent Receivables;
(ii) the Originator shall, to the extent required by
Section 5.2 of the Sale and Servicing Agreement, have delivered to
the Purchaser for deposit in the Collection Account all
collections in respect of the Subsequent Receivables;
14
<PAGE>
(iii) as of such Subsequent Transfer Date: (A) the
Originator was not insolvent and will not become insolvent as a
result of the transfer of Subsequent Receivables on such
Subsequent Transfer Date, (B) the Originator did not intend to
incur or believe that it would incur debts that would be beyond
the Originator's ability to pay as such debts matured, (C) such
transfer was not made with actual intent to hinder, delay or
defraud any Person and (D) the assets of the Originator did not
constitute unreasonably small capital to carry out its business as
conducted;
(iv) the applicable Spread Account Initial Deposit for
such Subsequent Transfer Date shall have been made;
(v) the Funding Period shall not have terminated;
(vi) each of the representations and warranties made by
the Originator pursuant to Section 3.2(b) with respect to the
Subsequent Receivables shall be true and correct as of such
Subsequent Transfer Date, and the Originator shall have performed
all obligations to be performed by it hereunder on or prior to
such Subsequent Transfer Date;
(vii) the Originator shall, at its own expense, on or
prior to such Subsequent Transfer Date, indicate in its computer
files that the Subsequent Receivables identified in the related
First-Tier Subsequent Transfer Assignment have been sold to the
Purchaser pursuant to this Agreement and the First-Tier Subsequent
Transfer Assignment;
(viii) the Originator shall have taken any action
required to give the Purchaser a first perfected ownership
interest in the Subsequent Receivables;
(ix) no selection procedures believed by the Originator
to be adverse to the interests of the Purchaser, the Trust, the
Noteholders or the Certificateholders shall have been utilized in
selecting the Subsequent Receivables;
(x) the addition of the Subsequent Receivables will not
result in a material adverse tax consequence to the Purchaser, the
Trust, the Noteholders or the Certificateholders;
(xi) the Originator shall have provided the Purchaser a
statement listing the aggregate Contract Value of such Subsequent
Receivables and any other information reasonably requested by the
Purchaser with respect to such Subsequent Receivables;
15
<PAGE>
(xiii) all the conditions to the transfer of the
Subsequent Receivables to the Issuer specified in the Sale and
Servicing Agreement shall have been satisfied; and
(xiii) the Originator shall have delivered to the
Purchaser an Officers' Certificate confirming the satisfaction of
each condition precedent specified in this clause (b)
(substantially in the form attached hereto as Annex A to the
First-Tier Subsequent Transfer Assignment).
SECTION 4.2. Conditions to Obligation of the Originator. The
obligation of the Originator to sell the Purchased Contracts and the
Subsequent Receivables to the Purchaser is subject to the satisfaction of
the following conditions:
(a) Representations and Warranties True. The
representations and warranties of the Purchaser hereunder shall be
true and correct on the Closing Date or the applicable Subsequent
Transfer Date with the same effect as if then made, and the
Originator shall have performed all obligations to be performed by
it hereunder on or prior to the Closing Date or such Subsequent
Transfer Date.
(b) Receivables Purchase Price. On the Closing Date or
the applicable Subsequent Transfer Date, the Purchaser shall have
delivered to the Originator the portion of the Initial Purchase
Price or the Subsequent Purchase Price, as the case may be,
payable on the Closing Date or such Subsequent Transfer Date
pursuant to Section 2.5.
ARTICLE V
Covenants of the Originator
The Originator agrees with the Purchaser as follows; provided,
however, that to the extent that any provision of this Article conflicts
with any provision of the Sale and Servicing Agreement, the Sale and
Servicing Agreement shall govern:
SECTION 5.1. Protection of Right, Title and Interest. (a) Filings.
The Originator shall cause all financing statements and continuation
statements and any other necessary documents covering the right, title and
interest of the Purchaser in and to the Receivables and the other property
included in the Trust Estate to be promptly filed, and at all times to be
kept recorded, registered and filed, all in such manner and in such places
as may be required by law fully to preserve and protect the right, title
and interest of the Purchaser hereunder to the Receivables and the other
property sold hereunder. The Originator shall deliver
16
<PAGE>
(or cause to be delivered) to the Purchaser file-stamped copies of, or
filing receipts for, any document recorded, registered or filed as provided
above as soon as available following such recordation, registration or
filing. The Purchaser shall cooperate fully with the Originator in
connection with the obligations set forth above and will execute any and
all documents reasonably required to fulfill the intent of this paragraph.
(b) Name Change. Within 15 days after the Originator makes any
change in its name, identity or corporate structure that would, could or
might make any financing statement or continuation statement filed in
accordance with paragraph (a) seriously misleading within the applicable
provisions of the UCC or any title statute, the Originator shall give the
Purchaser notice of any such change, and no later than five days after the
effective date thereof, shall file such financing statements or amendments
as may be necessary to continue the perfection of the Purchaser's interest
in the property included in the Trust Estate.
SECTION 5.2. Other Liens or Interests. Except for the conveyances
hereunder and pursuant to the Liquidity Receivables Purchase Agreement, the
Sale and Servicing Agreement, the Indenture and the other Basic Documents
(as defined in the Indenture), the Originator: (a) will not sell, pledge,
assign or transfer to any Person, or grant, create, incur, assume or suffer
to exist any Lien on, any interest in, to and under the Receivables, and
(b) shall defend the right, title and interest of the Purchaser in, to and
under the Receivables against all claims of third parties claiming through
or under the Originator; provided, however, that the Originator's
obligations under this Section shall terminate upon the termination of the
Trust pursuant to the Trust Agreement.
SECTION 5.3. Chief Executive Office. During the term of the
Receivables, the Originator will maintain its chief executive office in one of
the States.
SECTION 5.4. Costs and Expenses. The Originator agrees to pay all
reasonable costs and disbursements in connection with the perfection, as
against all third parties, of the Purchaser's right, title and interest in,
to and under the Receivables.
SECTION 5.5. Indemnification. The Originator shall indemnify,
defend and hold harmless the Purchaser for any liability as a result of the
failure of a Receivable to be originated in compliance with all
requirements of law and for any breach of any of its representations and
warranties contained herein. These indemnity obligations shall be in
addition to any obligation that the Originator may otherwise have.
17
<PAGE>
SECTION 5.6. Transfer of Subsequent Receivables. The Originator
covenants to transfer to the Purchaser, pursuant to Section 2.2, Subsequent
Receivables with an aggregate Contract Value equal to $_____________,
subject only to the availability of such Subsequent Receivables.
ARTICLE VI
Miscellaneous Provisions
SECTION 6.1. Obligations of Originator. The obligations of the
Originator under this Agreement shall not be affected by reason of any
invalidity, illegality or irregularity of any Receivable.
SECTION 6.2. Repurchase Events. The Originator hereby covenants
and agrees with the Purchaser for the benefit of the Purchaser, the
Indenture Trustee, the Noteholders, the Trustee and the Certificateholders
that the occurrence of a breach of any of the Originator's representations
and warranties contained in Section 3.2(b) shall constitute events
obligating the Originator to repurchase any Receivable materially and
adversely affected by any such breach ("Repurchase Events") at the Purchase
Amount from the Purchaser or from the Trust. Except as set forth in Section
5.5, the repurchase obligation of the Originator shall constitute the sole
remedy of the Purchaser, the Indenture Trustee, the Noteholders, the Trust,
the Trustee or the Certificateholders against the Originator with respect
to any Repurchase Event.
SECTION 6.3. Purchaser Assignment of Repurchased Receivables. With
respect to all Receivables repurchased by the Originator pursuant to this
Agreement, the Purchaser shall sell, transfer, assign, set over and
otherwise convey to the Originator, without recourse, representation or
warranty, all of the Purchaser's right, title and interest in, to and under
such Receivables, and all security and documents relating thereto.
SECTION 6.4. Trust. The Originator acknowledges and agrees that:
(a) the Purchaser will, pursuant to the Sale and Servicing Agreement, sell
the Receivables to the Trust and assign its rights under this Agreement to
the Trust, (b) the Trust will, pursuant to the Indenture, assign such
Receivables and such rights to the Indenture Trustee and (c) the
representations and warranties contained in this Agreement and the rights
of the Purchaser under this Agreement, including under Section 6.2, are
intended to benefit the Trust, the Certificateholders and the Noteholders.
The Originator hereby consents to all such sales and assignments.
SECTION 6.5. Amendment. This Agreement may be amended from time
to time, with prior written notice to the Rating Agencies, by a written
amendment duly executed and delivered by the Originator and the Purchaser,
18
<PAGE>
without the consent of the Noteholders or the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions in this Agreement or for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, that such amendment will not in the Opinion of Counsel, materially
and adversely affect the interest of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the
Originator and the Purchaser, with prior written notice to the Rating
Agencies, with the written consent of (x) Noteholders holding Notes
evidencing at least a majority of the Note Balance and (y) the Holders (as
defined in the Trust Agreement) of Certificates 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 this Agreement or of modifying in any manner the rights of
the Noteholders or the 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 Receivables
or distributions that are required to be made for the benefit of the
Noteholders or the Certificateholders or (ii) reduce the aforesaid
percentage of the Notes and Certificates that are required to consent to
any such amendment, without the consent of the holders of all the
outstanding Notes and Certificates.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.
SECTION 6.6. Accountants' Letters. (a) A firm of independent
certified public accountants will review the characteristics of the
Receivables described in the Schedule of Receivables and will compare those
characteristics to the information with respect to the Receivables
contained in the Prospectus, (b) the Originator will cooperate with the
Purchaser and such accounting firm in making available all information and
taking all steps reasonably necessary to permit such accounting firm to
complete the review set forth in clause (a) and to deliver the letters
required of them under the Underwriting Agreement, (c) such accounting firm
will deliver to the Purchaser a letter, dated the date of the Prospectus,
in the form previously agreed to by the Originator and the Purchaser, with
respect to the financial and statistical information contained in the
Prospectus and with respect to such other information as may be agreed in
the form of the letter.
SECTION 6.7. Waivers. No failure or delay on the part of the Purchaser
in exercising any power, right or remedy under this Agreement or any First-Tier
19
<PAGE>
Assignment shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or
remedy.
SECTION 6.8. Notices. All demands, notices and communications
under this Agreement shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, and shall be deemed to have been
duly given upon receipt: (a) in the case of the Originator, to Case Credit
Corporation, 233 Lake Avenue, Racine, Wisconsin 53403, Attention: Treasurer
(telephone (414) 636- 6011); (b) in the case of the Purchaser, to Case
Receivables II Inc., 233 Lake Avenue, Racine, Wisconsin 53403, Attention:
Treasurer (telephone (414) 636- 6564); (c) in the case of the Rating
Agencies, at their respective addresses set forth in Section 10.3 of the
Sale and Servicing Agreement; or, as to each of the foregoing, at such
other address as shall be designated by written notice to the other
parties.
SECTION 6.9. Costs and Expenses. The Originator will pay all
expenses incident to the performance of its obligations under this
Agreement and the Originator agrees to pay all reasonable out-of-pocket
costs and expenses of the Purchaser, excluding fees and expenses of
counsel, in connection with the perfection as against third parties of the
Purchaser's right, title and interest in, to and under the Receivables and
the enforcement of any obligation of the Originator hereunder.
SECTION 6.10. Representations of the Originator and the Purchaser.
The respective agreements, representations, warranties and other statements
by the Originator and the Purchaser set forth in or made pursuant to this
Agreement shall remain in full force and effect and will survive the
closing under Section 2.4.
SECTION 6.11. Confidential Information. The Purchaser agrees that
it will neither use nor disclose to any Person the names and addresses of
the Obligors, except in connection with the enforcement of the Purchaser's
rights hereunder, under the Receivables, under the Sale and Servicing
Agreement or the Indenture or any other Basic Document or as required by
any of the foregoing or by law.
SECTION 6.12. Headings and Cross-References. The various headings
in this Agreement are included for convenience only and shall not affect
the meaning or interpretation of any provision of this Agreement.
References in this Agreement to Section names or numbers are to such
Sections of this Agreement unless otherwise expressly indicated.
20
<PAGE>
SECTION 6.13. Governing Law. This Agreement and the First-Tier
Assignment shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder or thereunder
shall be determined in accordance with such laws.
SECTION 6.14. Counterparts. This Agreement may be executed in two
or more counterparts and by different parties on separate counterparts,
each of which shall be an original, but all of which together shall
constitute but one and the same instrument.
SECTION 6.15. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
21
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers duly authorized as of the date
and year first above written.
CASE RECEIVABLES II INC.
By:____________________________
Name: Peter Hong
Title: Treasurer
CASE CREDIT CORPORATION
By:_____________________________
Name: Peter Hong
Title: Treasurer
22
<PAGE>
SCHEDULE A
to Purchase Agreement
LOCATION OF RECEIVABLES FILES
Documents relating to the Receivables are located at one of the
following Case Corporation locations:
1. 233 Lake Avenue
Racine, Wisconsin 53403
2. 2205 Durand Avenue
Racine, Wisconsin 53403
3. 700 State Street
Racine, Wisconsin 53404
4. 6363 Poplar Avenue
Suite 330
Memphis, Tennessee 38119
5. 2626 E. 82nd Street
Suite 240
Bloomington, Minnesota 55425
6. 5000 Quorum
Suite 505
Dallas, Texas 75204
7. 3600 Sullivant Avenue
Columbus, Ohio 43228-0519
23
<PAGE>
EXHIBIT A
to Purchase Agreement
FORM OF
FIRST-TIER ASSIGNMENT
For value received, in accordance with and subject to the Purchase
Agreement dated as of _____________ __, 199__ (the "Purchase Agreement"),
between the undersigned and Case Receivables II Inc. (the "Purchaser"), the
undersigned does hereby sell, assign, transfer, set over and otherwise
convey unto the Purchaser, without recourse, all of its right, title and
interest in, to and under: (a) the Purchased Contracts, including all
documents constituting chattel paper included therewith, and all
obligations of the Obligors thereunder, including all moneys paid
thereunder on or after the Initial Cutoff Date, (b) the security interests
in the Financed Equipment granted by Obligors pursuant to the Purchased
Contracts and any other interest of the undersigned in such Financed
Equipment, (c) any proceeds with respect to the Purchased Contracts from
claims on insurance policies covering Financed Equipment or Obligors, (d)
any proceeds from recourse to Dealers with respect to the Purchased
Contracts other than any interest in the Dealers' reserve accounts
maintained with Case Credit Corporation, (e) any Financed Equipment that
shall have secured the Purchased Contracts and that shall have been
acquired by or on behalf of the Purchaser, and (f) the proceeds of any and
all of the foregoing (other than Recoveries). The foregoing sale does not
constitute and is not intended to result in any assumption by the Purchaser
of any obligation of the undersigned to the Obligors, insurers or any other
person in connection with the Purchased Contracts, Receivables Files, any
insurance policies or any agreement or instrument relating to any of them.
This First-Tier Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Purchase Agreement and is to be governed in all respects
by the Purchase Agreement.
Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has caused this First-Tier
Assignment to be duly executed as of _____________, 199_.
CASE CREDIT CORPORATION
By:____________________________
Name: Peter Hong
Title: Treasurer
24
<PAGE>
EXHIBIT B
to Purchase Agreement
FORM OF
FIRST-TIER SUBSEQUENT TRANSFER ASSIGNMENT
For value received, in accordance with and subject to the Purchase
Agreement dated as of _____________ __, 199__ (the "Purchase Agreement"),
between Case Credit Corporation, a Delaware corporation (the "Originator"),
and Case Receivables II Inc., a Delaware corporation (the "Purchaser"), the
Originator does hereby sell, transfer, assign, set over and otherwise
convey to the Purchaser, without recourse, all of its right, title and
interest in, to and under: (a) the Subsequent Receivables, with an
aggregate Contract Value equal to $_______________, listed on Schedule A
hereto, including all documents constituting chattel paper included
therewith, and all obligations of the Obligors thereunder, including all
moneys paid thereunder on or after the Subsequent Cutoff Date, (b) the
security interests in the Financed Equipment granted by Obligors pursuant
to such Subsequent Receivables and any other interest of the Originator in
such Financed Equipment, (c) any proceeds with respect to such Subsequent
Receivables from claims on insurance policies covering Financed Equipment
or Obligors, (d) any proceeds from recourse to Dealers with respect to such
Subsequent Receivables other than any interest in the Dealers' reserve
accounts maintained with the Originator, (e) any Financed Equipment that
shall have secured any such Subsequent Receivables and that shall have been
acquired by or on behalf of the Purchaser, and (f) the proceeds of any and
all of the foregoing (other than Recoveries). The foregoing sale does not
constitute and is not intended to result in any assumption by the Purchaser
of any obligation of the Originator to the Obligors, insurers or any other
person in connection with such Subsequent Receivables, Receivable Files,
any insurance policies or any agreement or instrument relating to any of
them.
This First-Tier Subsequent Transfer Assignment is made pursuant to
and upon the representations, warranties and agreements on the part of the
Originator contained in the Purchase Agreement (including the Officers'
Certificate of the Originator accompanying this Agreement) and is to be
governed in all respects by the Purchase Agreement.
Capitalized terms used but not otherwise defined herein shall have
the meanings assigned to them in the Purchase Agreement.
25
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this First-Tier
Subsequent Transfer Assignment to be duly executed as of
_____________________, 199_.
CASE CREDIT CORPORATION
By:___________________________
Name:_______________________
Title:______________________
26
<PAGE>
SCHEDULE A
to First-Tier Subsequent Transfer Assignment
SCHEDULE OF SUBSEQUENT RECEIVABLES
[See attached list]
27
<PAGE>
ANNEX A
to First-Tier Subsequent Transfer Assignment
OFFICERS' CERTIFICATE
We, the undersigned officers of Case Credit Corporation (the
"Company"), do hereby certify, pursuant to Section 4.1(b)(xiii) of the
Purchase Agreement dated as of _____________ __, 199__, among the Company,
and Case Receivables II Inc. (the "Purchase Agreement"), that all of the
conditions precedent to the transfer to the Purchaser of the Subsequent
Receivables listed on Schedule A to the First-Tier Subsequent Transfer
Assignment delivered herewith, and the other property and rights related to
such Subsequent Receivables as described in Section 2.2 of the Purchase
Agreement, have been satisfied on or prior to the related Subsequent
Transfer Date.
Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned have caused this certificate
to be duly executed this _____ day of _______, 199_.
By:__________________________
Name:____________________
Title:___________________
By:__________________________
Name:____________________
Title:___________________
28
