<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MARCH 10, 1999
Case Equipment Receivables Trust 1999-A
CASE RECEIVABLES II INC.
Seller
CASE CREDIT CORPORATION
Servicer
The trust will issue the following classes of notes--
<TABLE>
<CAPTION>
Class A Notes
<S> <C> <C> <C> <C> <C> <C>
A-1 Notes A-2 Notes A-3 Notes A-4 Notes Class B Notes
Principal Amount $75,550,000 $294,000,000 $137,000,000 $221,950,000 $31,000,000
Interest Rate (per annum) 4.950% 5.285% 5.600% 5.770% 5.960%
Payment Dates Monthly Monthly Monthly Monthly Monthly
First Payment Date April 15, 1999 April 15, 1999 April 15, 1999 April 15, 1999 April 15, 1999
Final Scheduled Payment Date April 7, 2000 September 2002 July 2003 August 2005 August 2005
Price to Public(1) 100.000% 100.000% 99.985% 99.971% 99.999%
Underwriting Discount(2) 0.095% 0.140% 0.230% 0.250% 0.350%
Proceeds to Seller(3) 99.905% 99.860% 99.755% 99.721% 99.649%
</TABLE>
(1)Plus accrued interest, if any, from March 22, 1999. Total
price to public (excluding such interest)=$759,414,774.50
(2)Total underwriting discount=$1,461,847.50
(3)Total proceeds to seller=$757,952,927.00
CREDIT ENHANCEMENT
- The trust will also issue $15,500,000 5.960% asset backed
certificates, which are subordinated to the notes.
Subordination of the certificates provides credit
enhancement for the notes.
- A spread account, with an initial balance of $7,996,999.25
(2% of the contract value of the initial receivables),
will serve as additional credit enhancement for the notes.
Each time that the trust purchases additional receivables
during its pre-funding period, an amount equal to 2% of
their aggregate contract value will be transferred from
the pre-funding account to the spread account.
- A yield supplement account may serve as additional
enhancement for the notes. Each time that the trust
purchases additional receivables, an amount will be
transferred from the pre-funding account to the yield
supplement account to the extent necessary to maintain the
initial credit ratings on the notes.
- 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.
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-7 IN THIS PROSPECTUS
SUPPLEMENT AND ON PAGE 4 IN THE PROSPECTUS.
The notes represent obligations of the trust only and do not 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 only if
accompanied by the prospectus.
This prospectus supplement and the accompanying prospectus relate only to
the offering of the notes. The certificates are not offered under these
documents.
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.
Delivery of the notes, in book-entry form only, will be made through The
Depository Trust Company, Cedel Bank, societe anonyme, and the Euroclear System
on or about March 22, 1999 against payment in immediately available funds.
Underwriters of the Class A Notes
CREDIT SUISSE FIRST BOSTON
CHASE SECURITIES INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
MERRILL LYNCH & CO.
NATIONSBANC MONTGOMERY
SECURITIES LLC
SALOMON SMITH BARNEY
Underwriters of the Class B Notes
CREDIT SUISSE FIRST BOSTON MERRILL LYNCH & CO.
PROSPECTUS SUPPLEMENT DATED MARCH 10, 1999
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
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 in any state
where the offer is not permitted.
Dealers will deliver a prospectus supplement and prospectus when acting as
underwriters of the Class A Notes or the Class B Notes and with respect to their
unsold allotments or subscriptions. In addition, all dealers selling the Class A
or the Class B Notes will deliver a prospectus supplement and prospectus until
June 8, 1999.
We tell you about the notes 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 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" beginning
on page S-39 in this prospectus supplement and under the caption "Index of
Terms" beginning on page 58 in the accompanying prospectus.
------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
SUMMARY OF TERMS............................... S-2
OFFERED SECURITIES........................... S-2
Subordination.............................. S-2
Closing Date............................... S-2
Indenture Trustee.......................... S-2
Trustee.................................... S-2
Payment Dates.............................. S-2
Interest Payments.......................... S-2
Principal Payments......................... S-2
Final Scheduled Maturity Dates............. S-3
Optional Redemption; Clean-Up Call......... S-3
Mandatory Redemption....................... S-3
TRUST PROPERTY............................... S-3
The Initial Receivables.................... S-4
Pre-Funding................................ S-4
Negative Carry Account..................... S-4
CREDIT ENHANCEMENT........................... S-4
Spread Account............................. S-4
Yield Supplement Account................... S-5
The Certificates........................... S-5
Subordination.............................. S-5
PRIORITY OF DISTRIBUTIONS.................... S-5
TAX STATUS................................... S-6
ERISA CONSIDERATIONS......................... S-6
LEGAL INVESTMENT............................. S-6
RATING OF THE NOTES.......................... S-6
RISK FACTORS................................... S-7
Limited Ability to Resell Notes.............. 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 onClass B
Noteholders................................ S-8
CASE CORPORATION AND CASE CREDIT CORPORATION... S-9
<CAPTION>
PAGE
---------
<S> <C>
THE TRUST.................................... S-11
General.................................... S-11
Capitalization of the Trust................ S-12
The Trustee................................ S-12
THE RECEIVABLES POOL......................... S-12
WEIGHTED AVERAGE LIFE OF THE NOTES........... S-20
DESCRIPTION OF THE NOTES..................... S-25
General.................................... S-25
Payments of Interest....................... S-25
Payments of Principal...................... S-25
Record Dates............................... S-27
Mandatory Redemption....................... S-27
Optional Redemption........................ S-28
Registration of Notes...................... S-28
The Indenture Trustee...................... S-28
DESCRIPTION OF THE CERTIFICATES.............. S-28
DESCRIPTION OF THE TRANSFER AND SERVICING
AGREEMENTS................................. S-28
Sale and Assignment of Initial Receivables
and Subsequent Receivables............... S-29
Accounts................................... S-30
Servicing Compensation and Payment of
Expenses................................. S-30
Distributions.............................. S-30
Negative Carry Account..................... S-32
Spread Account............................. S-33
Yield Supplement Account................... S-34
LEGAL INVESTMENT............................. S-35
ERISA CONSIDERATIONS......................... S-35
The Notes.................................. S-35
UNDERWRITING................................. S-36
Class A Notes.............................. S-36
Class B Notes.............................. S-37
LEGAL OPINIONS............................... S-38
INDEX OF TERMS............................... S-39
</TABLE>
<PAGE>
SUMMARY OF TERMS
- 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, READ CAREFULLY THIS ENTIRE DOCUMENT AND THE ACCOMPANYING
PROSPECTUS.
- 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
We are offering five classes of notes issued by Case Equipment Receivables Trust
1999-A:
<TABLE>
<CAPTION>
AGGREGATE
PRINCIPAL INTEREST
CLASS AMOUNT RATE
<S> <C> <C>
A-1 $ 75,550,000 4.950%
A-2 $294,000,000 5.285%
A-3 $137,000,000 5.600%
A-4 $221,950,000 5.770%
B $ 31,000,000 5.960%
</TABLE>
The notes will be book-entry securities clearing through DTC (in the United
States) or Cedel or Euroclear (in Europe) in minimum denominations of $1,000 and
in greater whole-dollar denominations. See "Certain Information Regarding the
Securities--Book-Entry Registration" in the prospectus.
SUBORDINATION
The A-1, A-2, A-3 and A-4 notes are all Class A notes. The Class B notes will be
subordinated to the Class A notes as follows:
- no interest will be paid on the Class B notes on any payment date until
all interest owed on the Class A notes through that payment date has been
paid in full; and
- no principal will be paid on the Class B notes on any payment date until
all principal owed on the Class A notes through that payment date has been
paid in full.
CLOSING DATE
March 22, 1999.
INDENTURE TRUSTEE
Harris Trust and Savings Bank.
TRUSTEE
The Bank of New York.
PAYMENT DATES
Payments on the notes will be made on the 15th day of each calendar month (or,
if not a business day, the next business day), beginning with April 15, 1999
except that interest and principal on the A-1 notes will also be paid on April
7, 2000 if any A-1 notes remain outstanding after the March 2000 payment date.
INTEREST PAYMENTS
The interest rate for each class of notes is as specified above. Interest on the
A-1 notes and A-2 notes will be calculated on the basis of the actual number of
days in the applicable interest period and a 360-day year. Interest on the other
notes will be calculated on the basis of a 360-day year of twelve 30-day months.
PRINCIPAL PAYMENTS
Principal will be paid on the notes on each payment date in an amount generally
equal to the decrease during the prior collection period in the sum of the
contract value of the receivables and the amount on deposit in the trust's
pre-funding account. The contract value of the receivables equals the discounted
present value of their scheduled cash flows, using a discount rate equal to the
average annual percentage rate of all receivables sold to the trust on a
particular day. A collection period is a period the length of a calendar month
that ends about nine days prior to a payment date.
Principal payments on each payment date will generally be allocated between the
Class A notes
S-2
<PAGE>
and the Class B notes so that the ratio of Class B note principal to the sum of
the contract values of the receivables and the amount on deposit in the
pre-funding account remains constant. However, the following exceptions to this
general rule will apply:
- Until the A-1 notes have been repaid in full, distributions of principal
to the Class B notes will be limited to the amount of prepayments on the
receivables during the related collection period. The balance will be
applied to the A-1 notes.
- Any shortfall in the amount of funds available for principal payments on
any payment date will reduce the principal payment on the Class B notes
(up to the amount of the full target payment on the Class B notes) before
the principal payment on the Class A notes is reduced.
Principal payments on the Class A notes will generally be made 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. For instance, no principal
will be paid on the A-2 notes until the A-1 notes have been paid in full.
See "Description of the Transfer and Servicing Agreements--Distributions" for
additional detail on some of the calculations described above and for special
priority rules that would apply in a default situation.
FINAL SCHEDULED MATURITY DATES
The outstanding principal amount, if any, of each class of notes will be payable
in full on the date specified or the payment date falling in the month specified
for each below:
<TABLE>
<CAPTION>
CLASS FINAL MATURITY DATE
- ------------------------------ ----------------------
<S> <C>
A-1........................... April 7, 2000
A-2........................... September 2002
A-3........................... July 2003
A-4........................... August 2005
B............................. August 2005
</TABLE>
OPTIONAL REDEMPTION; CLEAN-UP CALL
Any notes that remain outstanding on any payment date on which Case Credit, as
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 aggregate contract value of the receivables declines to 10% or
less of the aggregate initial contract value of the receivables, as measured for
each receivable at the time of its sale to the trust. 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.
MANDATORY REDEMPTION
As described below, 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 prepay the notes then outstanding
in whole or in part in the same sequence and proportions that would apply in a
normal principal distribution.
TRUST PROPERTY
The trust will possess only the following property:
- receivables and related collections;
- bank accounts established for the trust;
- security interests in the equipment financed or leased under the
receivables;
- any property obtained in a default situation under those security
interests;
- rights to proceeds from certain insurance policies covering equipment
financed or leased under the receivables or obligors on the receivables;
and
- our interest in any proceeds from recourse to dealers on receivables (but
excluding any amounts contained in the dealers' reserve accounts).
S-3
<PAGE>
THE INITIAL RECEIVABLES
On the closing date, the trust will acquire retail installment contracts with an
aggregate contract value of $348,117,132.56 and full payout leases with an
aggregate contract value of $51,732,830.16, in each case as of February 28,
1999.
PRE-FUNDING
In addition to the initial receivables, the trust will purchase additional
retail installment contracts and full payout leases during a pre-funding period
beginning on the closing date and ending not later than the close of business on
the September, 1999 payment date. See "Description of the Transfer and Servicing
Agreement--Sale and Assignment of Initial Receivables and Subsequent
Receivables."
The trust will purchase the subsequent receivables with funds on deposit in a
pre-funding account established for the trust, with an initial deposit of
$375,150,037.28. We expect to sell subsequent receivables to the trust with an
aggregate contract value approximately equal to the amount deposited in the
pre-funding account. Prior to being used to purchase receivables, funds on
deposit in the pre-funding account will be invested from time to time in highly
rated short-term securities. See "Description of the Transfer and Servicing
Agreements-- Accounts" in the prospectus.
The pre-funding period will end earlier than the September, 1999 payment date if
and when the balance in the pre-funding account is reduced to less than
$100,000. The pre-funding period will also terminate early if certain defaults
or other adverse events occur. Any balance remaining in the pre-funding account
at the end of the pre-funding period will be payable to the noteholders as
described in "Offered Securities-- Mandatory Redemption" above.
See "Risk Factors--Changes in Pool Characteristics as a Result of Pre-Funding"
and "The Receivables Pool" for additional information on the trust's pre-funding
feature.
NEGATIVE CARRY ACCOUNT
We anticipate that the average interest rate earned by the trust on investment
of funds in the pre-funding account may be less than the weighted average
interest rate on the notes. To provide a source of funds to cover any short fall
resulting from this difference, we will deposit $5,262,745.28 into a special
account of the trust to be known as the "Negative Carry Account." On each
payment date during the pre-funding period, a portion of the balance in that
account will be applied to make up for such shortfalls.
See "Description of the Transfer and Servicing Agreements--Negative Carry
Account."
CREDIT ENHANCEMENT
SPREAD ACCOUNT
As credit enhancement for the notes, Case Credit, as servicer, will establish
and maintain in the name of your indenture trustee a trust account to be known
as the "Spread Account." The Spread Account will be funded as follows:
- On the closing date, we will deposit $7,996,999.25 (2% of the contract
value of the initial receivables) into the Spread Account.
- On the date of each subsequent sale of receivables to the trust, the
indenture trustee will transfer cash or highly rated, short-term
securities having a value approximately equal to 2% of the aggregate
contract value of the receivables purchased from the pre-funding account
to the Spread Account.
- On each payment date after any draw has been made on the Spread Account,
available collections remaining after other more senior payments have been
made will be deposited into the Spread Account to the extent necessary to
maintain a specified minimum balance.
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 to the
extent described in
S-4
<PAGE>
"Description of the Transfer and Servicing Agreements--Spread Account."
YIELD SUPPLEMENT ACCOUNT
As further enhancement for the notes, the servicer will establish and maintain
in the name of the indenture trustee a trust account to be known as the "Yield
Supplement Account." However, no deposit is required to be made into the Yield
Supplement Account on or before the closing date. After the closing date,
deposits will only be required to be made into the Yield Supplement Account on
the date of each subsequent sale of receivables to the trust, and then only if
certain conditions are met.
On the date of each subsequent sale of receivables to the trust, the indenture
trustee will transfer additional cash or highly rated, short-term securities
from the pre-funding account to the Yield Supplement Account in the amount (if
any) required in order to maintain the initial credit ratings on the notes.
Prior to each payment date, for any receivable that has either prepaid or been
liquidated during the related collection period, the servicer will calculate the
excess (if any) of the contract value of that receivable over its outstanding
principal balance. Any funds available in the Yield Supplement Account up to the
amount of such excess will be added to the funds available for distribution to
noteholders to the extent that there would otherwise be a shortfall before any
withdrawal from the Spread Account.
See "Description of the Transfer and Servicing Agreements-Yield Supplement
Account."
THE CERTIFICATES
On the closing date, the trust will issue certificates to us in an aggregate
principal amount of $15,500,000. We will initially retain the entire principal
amount of the certificates. The certificates will bear interest at the rate of
5.960% per annum, except that during the pre-funding period no interest will
accrue on the portion of the certificate balance that is backed by the
pre-funding account. Distributions of interest on the certificates will be
subordinated in priority of payment to interest and principal due on the notes
to the extent described herein, and no principal will be paid on the
certificates until the notes have been repaid in full. The subordination of the
certificates will provide credit enhancement for the notes. See "Description of
the Certificates" in this prospectus supplement.
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.
PRIORITY OF DISTRIBUTIONS
On each payment date, available collections, plus funds transferred from various
trust accounts as described above, will be applied to the following (in the
priority indicated):
(i) administration fees;
(ii) interest on the Class A notes;
(iii) interest on the Class B notes;
(iv) to pay principal on the notes in the priority described above under
"Offered Securities-Principal Payments";
(v) to the Spread Account, to the extent necessary to maintain a specified
balance;
(vi) interest on the Certificates;
(vii) after the notes have been repaid in full, principal on the
certificates;
(viii) servicing fees, except that if neither Case Credit nor any of its
affiliates is the servicer, servicing fees will be paid prior to
any other application of funds; and
(ix) the remaining balance, if any, to us.
See "Description of the Transfer and Servicing Agreements--Distributions" for
additional details and for special priority rules that would apply in a default
situation.
S-5
<PAGE>
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. Mayer,
Brown & Platt, special Illinois tax counsel to the Seller ("Illinois Tax
Counsel"), is of the opinion that the same characterizations should apply for
Illinois 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
"U.S. Federal Income Tax Consequences" and "Illinois State Tax Consequences" in
the prospectus for additional information concerning the application of Federal
and Illinois 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.
LEGAL INVESTMENT
The A-1 notes will be eligible securities for purchase by money market funds
under paragraph (a)(10) of Rule 2a-7 under the Investment Company Act of 1940,
as amended.
RATING OF THE NOTES
It is a condition to the issuance of the notes that the A-1 notes be rated in
the highest short-term rating category, that the A-2 notes, A-3 notes and A-4
notes be rated in the highest long-term rating category and that the Class B
notes 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.
S-6
<PAGE>
RISK FACTORS
You should consider the following risk factors in deciding whether to
purchase the notes.
<TABLE>
<S> <C>
LIMITED ABILITY TO RESELL
NOTES The underwriters may assist in resales of the notes, but
they are not required to do so. A trading market for the
notes may not develop. If a trading market does develop, it
might not continue or it might not be sufficiently liquid to
allow you to resell any of your notes.
POSSIBLE PREPAYMENTS AS A
RESULT OF PRE-FUNDING If the principal amount of eligible receivables purchased or
directly originated by Case Credit during the trust's
pre-funding period is less than the amount deposited in the
trust's pre-funding account, we will not have sufficient
receivables to sell to the trust during the pre-funding
period. This would result in a prepayment of principal to
the noteholders.
To the extent that the aggregate contract value of
receivables we sell to the trust during the pre-funding
period is less than the amount deposited in the trust's
pre-funding account, the excess will be applied at the end
of the pre-funding period to prepay the notes in the same
sequence and proportions that would apply in a normal
principal distribution. Any such prepayment will shorten the
weighted average life of the affected notes. The amount of
the notes that will be prepaid is not known at this time,
but the greater the prepayment, the shorter the weighted
average life of the notes.
TRUST'S DEPENDENCE UPON CASE
CREDIT AND CASE FOR
SUBSEQUENT RECEIVABLES The trust will not be able to purchase receivables from us
during the pre-funding period unless Case Credit generates
receivables which we are able to purchase from Case Credit.
Case Credit's ability to generate receivables depends
primarily upon sales of agricultural, construction and other
equipment manufactured or distributed by Case. If, during
the pre-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 our ability to sell receivables to the trust. Case's
use of manufacturer's rebate and other incentive programs
may also affect retail sales, and neither we nor the trust
have any control over Case's future use of such incentives.
POSSIBLE EFFECTS OF ECONOMIC
AND OTHER FACTORS The ability of dealers financed by Case Credit to sell
agricultural, construction, and other equipment and generate
receivables through those sales is affected by the general
level of activity in the agricultural, construction and
other industries, including the rate of North American
agricultural production and demand, weather conditions,
commodity prices, consumer confidence, government subsidies
for the agricultural sector, interest rates, prevailing
levels of construction (especially housing starts) and
levels of total industry capacity and equipment inventory.
Case Credit and we are
</TABLE>
S-7
<PAGE>
<TABLE>
<S> <C>
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 receivables
transferred to the trust during the pre-funding period,
except that each such receivable must satisfy the
eligibility criteria specified in the Sale and Servicing
Agreement between us and the trust 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 annual percentage rate, 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 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. See "Weighted Average Life of the
Securities" in the prospectus. However, the trust will not
purchase any receivables that have a remaining term in
excess of 72 or any receivables that would cause the
weighted average original term of the receivables in the
trust to be greater than 55 months. These requirements are
intended to minimize the effect of the addition of
subsequent receivables on the weighted average life of the
notes.
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 53.07% of the aggregate contract value of the
initial receivables) are agricultural equipment sale
contracts or leases 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 may reflect 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."
EFFECTS OF SUBORDINATION ON
CLASS B NOTEHOLDERS If you buy Class B notes, your interest payments will be
subordinated to interest payments on the Class A notes, and
your principal payments will be subordinated to principal
payments on the Class A notes as follows. You will not
receive any interest payments on your Class B notes 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 with respect to a collection period until the
principal
</TABLE>
S-8
<PAGE>
<TABLE>
<S> <C>
payments on the Class A notes relating to such collection
period have been paid (or provided for) in full.
POSSIBLE SHORT FALLS
RESULTING FROM PREPAYMENTS
OF HIGHER INTEREST RATE
RECEIVABLES The receivables are subject to voluntary prepayment. (See
"Risk Factors--Maturity and Prepayment Considerations" in
the prospectus.) Upon any prepayment in full of a
receivable, the contract value of that receivable will be
reduced to zero, and the contract value of that receivable
will be added to the amount of principal to be paid on the
notes on the related payment date. However, in some cases
the contract value of a receivable is greater than its
outstanding principal balance. When a receivable of this
type is prepaid, the principal collected through the
prepayment will be less than the resulting increase in the
targeted principal distribution by an amount roughly equal
to the excess of the receivable's contract value over its
outstanding principal balance immediately prior to the
prepayment. See "Description of the Notes--Payments of
Principal."
To the extent necessary to maintain the initial credit
ratings on the notes, funds will be deposited in the trust's
Yield Supplement Account each time that the trust buys
additional receivables during the pre-funding period. Any
such funds are intended to make up for potential cash flow
short falls that could result from prepayments of this type.
Upon such a prepayment, an amount equal to the excess of the
contract value of the prepaid receivable over its
outstanding principal balance prior to the prepayment will
be withdrawn from the Yield Supplement Account and included
in the funds distributed on the related payment date to the
extent there would otherwise be a shortfall. However, no
funds may be required to be deposited into the Yield
Supplement Account, and in any event any required deposit is
expected to be less than the maximum aggregate cash flow
short flow that might result if all receivables of this type
prepaid. You might not receive ultimate payment in full of
all amounts due under your notes if the amount of the short
falls exceeds the amount of the deposits and other available
credit enhancement and excess collections available to make
up for the short falls.
</TABLE>
CASE CORPORATION AND CASE CREDIT CORPORATION
Case is a leading worldwide designer, manufacturer, marketer and distributor
of farm equipment and light- to medium-sized construction equipment, which is
sold worldwide predominantly through independent dealers. For the year ended
December 31, 1998, 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 $296
million (compared to $627 million for the year ended December 31, 1997), and net
income of $64 million (compared to $403 million for the year ended December 31,
1997) on net sales of approximately $5.7 billion (compared to $5.7 billion for
the year ended December 31, 1997). At December 31, 1998, Case's consolidated
equity was $2.1 billion.
Case Credit recorded net income of $85 million in 1998, as compared to net
income of $82 million in 1997. The $3 million increase in year-over-year income
is primarily due to higher earnings as a result
S-9
<PAGE>
of increased levels of on-balance-sheet receivables, and improved margins
resulting from the declining interest rate environment. Additionally, higher
lease income from operating leases and higher realized gains from the sale of
retail notes under asset-backed securitization transactions also improved
earnings. These amounts were partially offset by an increase in the Company's
credit loss provision as a result of a higher loss-to-liquidation ratio in 1998,
combined with the significant growth in Case Credit's serviced portfolio. In
addition, 1998 operating results reflect increased interest expense as a result
of higher average debt levels, as well as increased depreciation of equipment on
operating leases and a higher year-over-year tax rate.
YEAR 2000
As used in this "Year 2000" disclosure, the "Company" or "Case" refers to
Case Corporation and its consolidated subsidiaries, including Case Credit and
its subsidiaries. In addition, all references to "Case Industrial" refect the
consolidation of all majority-owned subsidiaries, excluding Case Credit.
In July 1996, the Emerging Issues Task Force ("EITF") of the Financial
Accounting Standards Board ("FASB") Issued EITF 96-14, "Accounting for the Costs
Associated with Modifying Computer Software for the Year 2000," which requires
that costs associated with modifying computer software for the Year 2000 be
expensed as incurred. Through Case's ongoing process of evaluating and
performing systems and software upgrades and enhancements, the Company has been
actively addressing Year 2000 issues since 1995.
Case Corporation understands that it is important to its customers and
shareholders that Case's products, services and internal systems are not
adversely affected by the Year 2000. Case has implemented procedures that it
deems necessary to safeguard the Company from computer-related issues associated
with adverse effects as a result of improperly recognizing the millennial date
change. These procedures include, where necessary, the inventoring/assessing,
planning, constructing/testing, and implementing/certifying of critical
internal-use hardware and software systems, as well as other embedded systems in
the Company's manufacturing plants, other buildings, equipment and other
infrastructure. The Company believes that these procedures will adequately
address both the information technology and non-information technology aspects
of our business. Based upon its review and efforts to date, the Company believes
that future external and internal costs to be incurred for the modification of
internal-use software to address Year 2000 Issues will not have a material
adverse effect on Case's financial position, cash flows or results of
operations.
The Company believes, based upon its review and efforts to date, that
external and internal remediation costs to be incurred for the modification of
internal-use software to address Year 2000 issues will, in the aggregate,
approximate $45 million to $50 million. As Case Industrial and Case Credit share
many technology resources and internal-use systems, all the remediation costs to
address Year 2000 issues will be borne by Case Industrial. As of December 31,
1998, Case Industrial has incurred approximately $22 million of costs for Year
2000 remediation, and the Company currently anticipates that remaining Year 2000
remediation costs will approximate $22 million in 1999 and $3 million in 2000.
These cost estimates include the costs of external contractors,
non-capitalizable purchases of software and hardware, and the direct cost of
internal employees working on Year 2000 projects. Case maintains a process that
tracks the cost and time of external contractors. However, the Company does not
separately track its own internal costs incurred for the Year 2000 project.
Internal costs are compiled principally from the related payroll records for
those personnel directly working on the Year 2000 effort. The Company's cost
estimate does not include the cost of implementing contingency plans, which are
in the process of being developed, and also does not include any potential
litigation or warranty costs relating to Year 2000 issues if the Company's
remediation efforts are not successful.
S-10
<PAGE>
Case has also undertaken a program to alert its suppliers and dealers of
Year 2000 issues. Based on its contracts with suppliers and dealers, the Company
believes that a majority of our most important suppliers are Year 2000
compliant, and the Company anticipates that most of its dealers will be Year
2000 compliant by mid-1999. Case will continue to work with its remaining
suppliers and its dealers throughout 1999 to secure Year 2000 compliance by
December 31, 1999. Based on third-party representations and internal testing,
and subject to the Company's ongoing compliance efforts, the costs and
uncertainties relating to timely resolution of Year 2000 issues applicable to
the Company's business and operations are not reasonably expected by the Company
to have a material adverse effect on Case's financial position, cash flows or
results of operations. For those suppliers and dealers that have not adequately
responded to our Year 2000 concerns, we are following up to ultimately achieve
an acceptable level of compliance within our supply chain. As there can be no
assurance that an acceptable level of Year 2000 compliance will be achieved,
Case is in the process of developing contingency plans to address potential
issues.
Case has completed all steps with regards to Year 2000 compliance that it
considers necessary regarding its agricultural and construction equipment and,
as a result, the Company has no information to suggest that its agricultural and
construction equipment is not Year 2000 compliant. The Company believes, based
on its review and testing, that products purchased from Case will accurately
determine chronological dates and accurately perform all calculations and data
manipulations based upon such dates.
Based upon Case's review and efforts to date, the Company currently
anticipates completion of critical Year 2000 compliance issues by mid-1999, and
the Company plans to continue integration testing throughout the balance of
1999. If Case's Year 2000 compliance efforts, as well as the efforts of the
Company's suppliers and dealers, individually and in the aggregate, are not
successful, it could have a material adverse effect on the Company's financial
position, cash flows and results of operations. Factors that could cause actual
results to differ include unanticipated supplier or dealer failures, disruption
of utilities, transportation or telecommunications breakdowns, foreign or
domestic governmental failures, as well as unanticipated failures on our part to
address Year 2000 related issues. The Company's most reasonably likely worst
case scenario in light of these risks would involve a potential loss in sales
resulting from order, production and shipping delays throughout the Company's
supply chain caused by Year 2000 related disruptions. The degree of sales loss
impact would depend on the severity of the disruption, the time required to
correct it, whether the sales loss was temporary or permanent, and the degree to
which our primary competition were also impacted by the disruption. The Company
is in the process of developing Year 2000 contingency plans that will be
designed to mitigate the impact on the Company in the event that its Year 2000
compliance efforts are not successful. The targeted completion date for the
Company's contingency planning is mid-1999. Case's contingency plans may include
the use of alternative systems and non-computerized approaches to our business
including manual procedures for machine operation, collecting and reporting of
information, as well as alternative sources of supply. At this time, the Company
has not determined whether it will be necessary to stockpile inventory or
supplies as part of its contingency planning.
The information included in this "Year 2000" section represents
forward-looking statements and involves risks and uncertainties that could cause
actual results to differ materially from those in the forward-looking
statements.
For additional information regarding the Seller, Case Credit or Case, see
"The Seller, Case Credit Corporation and Case Corporation" in the prospectus.
S-11
<PAGE>
THE TRUST
GENERAL
The trust is a business trust formed under the laws of the State of Delaware
pursuant to a 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 New York, New York, in care of The Bank
of New York, 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
Initial Cutoff Date, as if the issuance and sale of the Notes and the
Certificates had taken place on such date:
<TABLE>
<S> <C>
A-1 4.950% Asset Backed Notes.................................. $75,550,000
A-2 5.2850% Asset Backed Notes................................. $294,000,000
A-3 5.600% Asset Backed Notes.................................. $137,000,000
A-4 5.770% Asset Backed Notes.................................. $221,950,000
Class B 5.960% Asset Backed Notes.............................. $31,000,000
5.960% Asset Backed Certificates............................... $15,500,000
-----------
Total........................................................ $775,000,000
-----------
-----------
</TABLE>
THE TRUSTEE
The Bank of New York is the Trustee under the Trust Agreement. The Bank of
New York is a New York banking corporation and its principal offices are located
at 101 Barclay Street, Floor 12E, New York, New York 10286. 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 Bank of New York (Delaware) will act as
co-trustee for the purpose of complying with certain Delaware legal
requirements.
THE RECEIVABLES POOL
The pool of receivables held by the trust (the "Receivables Pool") will
include the receivables purchased on the closing date (the "Initial
Receivables") and any receivables ("Subsequent Receivables") purchased during
the trust's pre-funding period. The Subsequent Receivables together with the
Initial Receivables are referred to herein as the "Receivables."
A number of calculations described in this prospectus supplement, and
calculations required by the agreements governing the trust and the Notes, are
based upon the Contract Value of the Receivables. "Contract Value" is defined,
as of any calculation 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, 8.519%, which is the weighted average
annual percentage rate ("APR") of the Initial Receivables (the "Initial Cutoff
Date APR") as of February 28, 1999 (the "Initial Cutoff Date") plus any amount
of past due payments and (b) in the case of the Subsequent Receivables, the
weighted
S-12
<PAGE>
average APR (the "Subsequent Cutoff Date APR") of the Subsequent Receivables
sold as of the cutoff date designated for such sale (each, a "Subsequent Cutoff
Date") plus any amount of past due payments. Any defaulted Receivables
liquidated by the Servicer through the sale or other disposition of the related
Financed Equipment or Leased Equipment or that the Servicer has, after using all
reasonable efforts to realize upon the Financed Equipment or Leased Equipment,
determined to charge off without realizing upon the Financed Equipment
("Liquidated Receivables") are deemed to have a Contract Value of zero. The
Initial Cutoff Date and the Subsequent Cutoff Dates are each sometimes referred
to herein as a "Cutoff Date".
The Contract Value of the Receivables is generally equivalent to their
outstanding principal amount. However, the Contract Value of any particular
Receivable may be greater than or less than its outstanding principal amount,
depending primarily upon whether the APR of that Receivable is greater or less
than the Initial Cutoff Date APR (in the case of an Initial Receivable) or the
applicable Subsequent Cutoff Date APR. If a Receivable's APR is greater than the
Initial Cutoff Date APR or the applicable Subsequent Cutoff Date APR, its
Contract Value will be greater than its outstanding principal balance because
the discount rate used to determine its Contract Value is lower than the APR
that generated the finance charge component of the scheduled payments that are
discounted to determine the Contract Value. Conversely, if a Receivable's APR is
lower than the Initial Cutoff Date APR or the applicable Subsequent Cutoff Date
APR, its Contract Value will be less than its outstanding principal balance
because the discount rate used to determine its Contract Value is greater than
the APR that generated the finance charge component of the scheduled payments
that are discounted to determine the Contract Value.
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:
(i) each Receivable is Retail Installment Contract or a Full Payout
Lease;
(ii) each Receivable has an annual percentage rate that is equal to or
greater than 3.0%, and the Subsequent Cutoff Date APR with respect to the
Subsequent Receivables sold to the trust on any date will be equal to or
greater than 3.0%;
(iii) each Receivable 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;
(iv) each Receivable has a Contract Value as of the applicable Cutoff
Date that (when combined with the Contract Value of any other Receivables
with the same or an affiliated Obligor) does not exceed 1% of the aggregate
Contract Value of all the Receivables;
(v) after giving effect to each purchase of Subsequent Receivables, the
weighted average original term of the Receivables in the trust will not be
greater than 55 months; and
(vi) after giving effect to each purchase of Subsequent Receivables, not
more than 51.50% of the principal balances of the Receivables in the trust
will represent Contracts for the financing of construction equipment and not
more than 5% of the principal balances of the Receivables in the trust will
represent Contracts for the financing of all terrain vehicles, snowmobiles
or marine vessels collectively.
The Receivables as they are constituted on any Cutoff Date will not deviate
from the foregoing characteristics.
The Receivables may 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. The
Receivables may also include Contracts originated through special interest rate
S-13
<PAGE>
financing programs. The underwriting standards for Receivables originated in
such programs are the same as those for other Receivables.
Each Initial Receivable is a Precomputed Receivable, including some
Precomputed Simple Rebate Receivables. No Initial Receivable has, and no
Subsequent Receivable will have, a scheduled maturity later than the date that
is six months prior to the Final Scheduled Maturity Date. No Dealer Loans or Low
Payment Leases will be included in the trust.
The Initial Receivables will represent approximately 51.59% of the sum of
initial outstanding principal amount of the Notes (as reduced from time to time,
the "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 (instead of the Initial Cutoff Date APR) plus any amount of past due
payments 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. Totals may not add to 100% due to rounding.
COMPOSITION OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
INITIAL
CUTOFF DATE AGGREGATE NUMBER OF WEIGHTED AVERAGE WEIGHTED AVERAGE AVERAGE
APR CONTRACT VALUE RECEIVABLES REMAINING TERM ORIGINAL TERM CONTRACT VALUE
- ------------- ----------------- ----------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
8.519% $400,219,567.34 10,953 49.45 months 52.45 months $ 36,539.72
</TABLE>
DISTRIBUTION BY RECEIVABLE TYPE OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
AGGREGATE
NUMBER OF AGGREGATE CONTRACT
RECEIVABLE TYPE RECEIVABLES CONTRACT VALUE VALUE
- ---------------------------------------------------------------------- ----------- ----------------- -----------
<S> <C> <C> <C>
Retail Installment Contracts.......................................... 9,648 $ 349,810,852.52 87.40%
Full Payout Leases.................................................... 1,305 50,408,714.82 12.60%
----------- ----------------- -----------
Total................................................................. 10,953 $ 400,219,567.34 100.00%
----------- ----------------- -----------
----------- ----------------- -----------
</TABLE>
S-14
<PAGE>
DISTRIBUTION BY APR OF THE RECEIVABLES POOL AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
AGGREGATE
NUMBER OF AGGREGATE CONTRACT
APR RANGE RECEIVABLES CONTRACT VALUE VALUE
- ---------------------------------------------------------------------- ----------- ----------------- -----------
<S> <C> <C> <C>
3.000% to 3.999%...................................................... 280 $ 8,033,350.51 2.01%
4.000% to 4.999%...................................................... 472 15,612,925.16 3.90
5.000% to 5.999%...................................................... 571 25,601,704.17 6.40
6.000% to 6.999%...................................................... 1,032 25,902,106.41 6.47
7.000% to 7.999%...................................................... 1,605 51,095,433.60 12.77
8.000% to 8.999%...................................................... 1,639 109,001,593.61 27.25
9.000% to 9.999%...................................................... 2,569 102,754,639.67 25.67
10.000% to 10.999%.................................................... 1,916 36,984,556.07 9.24
11.000% to 11.999%.................................................... 373 9,418,519.09 2.35
12.000% to 12.999%.................................................... 186 5,685,404.00 1.42
13.000% to 13.999%.................................................... 98 2,871,825.66 0.72
14.000% to 14.999%.................................................... 56 1,813,947.23 0.45
15.000% to 15.999%.................................................... 43 1,373,031.54 0.34
16.000% to 16.999%.................................................... 28 1,017,172.29 0.25
17.000% to 17.999%.................................................... 80 2,924,427.12 0.73
18.000% to 18.999%.................................................... 4 121,301.29 0.03
20.000% to 20.999%.................................................... 1 7,629.92 0.00
----------- ----------------- -----------
Total............................................................... 10,953 $ 400,219,567.34 100.00%
----------- ----------------- -----------
----------- ----------------- -----------
</TABLE>
S-15
<PAGE>
DISTRIBUTION BY EQUIPMENT TYPE OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF AGGREGATE AGGREGATE
TYPE RECEIVABLES CONTRACT VALUE CONTRACT VALUE
- ------------------------------------------------------------------ ----------- ----------------- --------------
<S> <C> <C> <C>
Agricultural
New............................................................. 2,281 $ 84,493,684.28 21.11%
Used............................................................ 4,096 130,518,089.79 32.62
Construction
New............................................................. 2,359 96,970,026.43 24.23
Used............................................................ 1,978 68,013,998.69 16.99
Forestry
New 94 9,735,005.41 2.43
Used............................................................ 145 10,488,762.74 2.62
----------- ----------------- --------------
Total............................................................. 10,953 $400,219,567.34 100.00%
----------- ----------------- --------------
----------- ----------------- --------------
</TABLE>
DISTRIBUTION BY PAYMENT FREQUENCY OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF AGGREGATE AGGREGATE
FREQUENCY RECEIVABLES CONTRACT VALUE CONTRACT VALUE
- ------------------------------------------------------------ ----------- ----------------------- ---------------
<S> <C> <C> <C>
Annual(1)................................................... 4,573 $ 175,418,576.27 43.83%
Semiannual.................................................. 356 14,445,660.09 3.61
Quarterly................................................... 129 3,952,431.40 0.99
Monthly..................................................... 5,895 206,402,899.58 51.57
----------- ----------------------- ------
Total................................................... 10,953 $ 400,219,567.34 100.00%
----------- ----------------------- ------
----------- ----------------------- ------
</TABLE>
- ------------------------
(1) Approximately 36.07% 18.73%, 7.02%, 2.27%, 0.98%, 0.86%, 1.28%, 1.19%,
6.64%, 1.01%, 4.29% and 19.65%, of the annual Receivables have scheduled
payments within the collection periods relating to the payment dates in
January, February, March, April, May, June, July, August, September,
October, November and December, respectively.
S-16
<PAGE>
DISTRIBUTION BY CURRENT CONTRACT VALUE OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF AGGREGATE AGGREGATE
VALUE RANGE RECEIVABLES CONTRACT VALUE CONTRACT VALUE
- ------------------------------------------------------------------ ----------- ----------------- ---------------
<S> <C> <C> <C>
Up to $4,999.99................................................... 854 $ 2,884,224.25 0.72%
5,000.00 to 9,999.99.............................................. 1,638 12,056,071.66 3.01
10,000.00 to 14,999.99............................................ 1,452 17,911,511.73 4.48
15,000.00 to 19,999.99............................................ 1,077 18,633,556.88 4.66
20,000.00 to 24,999.99............................................ 837 18,663,269.56 4.66
25,000.00 to 29,999.99............................................ 626 17,124,602.50 4.28
30,000.00 to 34,999.99............................................ 556 18,046,197.71 4.51
35,000.00 to 39,999.99............................................ 511 19,112,226.70 4.78
40,000.00 to 44,999.99............................................ 431 18,290,703.17 4.57
45,000.00 to 49,999.99............................................ 403 19,123,749.36 4.78
50,000.00 to 54,999.99............................................ 348 18,238,261.91 4.56
55,000.00 to 59,999.99............................................ 292 16,759,342.14 4.19
60,000.00 to 64,999.99............................................ 244 15,176,042.58 3.79
65,000.00 to 69,999.99............................................ 206 13,904,513.15 3.47
70,000.00 to 74,999.99............................................ 154 11,177,817.94 2.79
75,000.00 to 99,999.99............................................ 609 52,525,066.88 13.12
100,000.00 to 199,999.99.......................................... 631 80,711,623.06 20.17
200,000.00 to 299,999.99.......................................... 48 11,660,814.36 2.91
300,000.00 and over............................................... 36 18,219,971.80 4.55
----------- ----------------- ------
Total 10,953 $400,219,567.34 100.00%
----------- ----------------- ------
----------- ----------------- ------
</TABLE>
S-17
<PAGE>
GEOGRAPHIC DISTRIBUTION OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
AGGREGATE
CONTRACT
STATE(1) VALUE
- ---------------------------------- ------------
<S> <C>
Alabama........................... 2.34%
Alaska............................ 0.07
Arizona........................... 2.06
Arkansas.......................... 4.48
California........................ 3.61
Colorado.......................... 3.00
Connecticut....................... 0.23
Delaware.......................... 0.32
Florida........................... 3.10
Georgia........................... 3.24
Hawaii............................ 0.06
Idaho............................. 0.90
Illinois.......................... 6.32
Indiana........................... 3.51
Iowa.............................. 6.03
Kansas............................ 2.64
Kentucky.......................... 1.42
Louisiana......................... 2.13
Maine............................. 0.34
Maryland.......................... 0.79
Massachusetts..................... 0.29
Michigan.......................... 2.64
Minnesota......................... 4.42
Mississippi....................... 2.38
Missouri.......................... 3.87
Montana........................... 1.00
<CAPTION>
PERCENT OF
AGGREGATE
CONTRACT
STATE(1) VALUE
- ---------------------------------- ------------
<S> <C>
Nebraska.......................... 3.54%
Nevada............................ 0.68
New Hampshire..................... 0.19
New Jersey........................ 0.75
New Mexico........................ 0.69
New York.......................... 1.50
North Carolina.................... 1.80
North Dakota...................... 1.17
Ohio.............................. 2.23
Oklahoma.......................... 2.04
Oregon............................ 1.29
Pennsylvania...................... 1.90
Rhode Island...................... 0.00
South Carolina.................... 1.35
South Dakota...................... 2.70
Tennessee......................... 2.17
Texas............................. 7.58
Utah.............................. 1.05
Vermont........................... 0.25
Virginia.......................... 1.23
Washington........................ 1.84
West Virginia..................... 0.13
Wisconsin......................... 2.47
Wyoming........................... 0.26
------------
Total......................... 100.00%
------------
------------
</TABLE>
- ------------------------
(1) Based upon billing addresses of the 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.
Since 1994, delinquencies, repossessions and net losses on construction
contracts have been generally stable, at levels that reflect a strong economy.
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. 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-18
<PAGE>
DELINQUENCY EXPERIENCE(1)
<TABLE>
<CAPTION>
AT DECEMBER 31,
-----------------------------------------------------------------------------------
1998 1997 1996 1995
---------------------- ---------------------- ---------------------- -----------
NUMBER NUMBER NUMBER NUMBER
OF OF OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS
----------- --------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Portfolio.............................. 153,959 $ 4,150.3 145,101 $ 3,623.3 135,211 $ 3,262.4 135,722
Period of Delinquency 31-60 days....... 3,100 104.1 2,649 74.2 2,031 45.9 1,927
60 Days or More...................... 3,251 133.0 2,502 65.3 1,778 36.3 1,509
----------- --------- ----------- --------- ----------- --------- -----------
Total Delinquencies.................... 6,351 $ 237.1 5,151 $ 139.5 3,809 $ 82.2 3,436
Total Delinquencies as a Percent of the
Portfolio............................ 4.1% 5.7% 3.6% 3.9% 2.8% 2.5% 2.5%
<CAPTION>
1994
----------------------
NUMBER
OF
AMOUNT CONTRACTS AMOUNT
--------- ----------- ---------
<S> <C> <C> <C>
Portfolio.............................. $ 3,093.1 128,891 $ 2,641.0
Period of Delinquency 31-60 days....... 33.5 1,457 18.4
60 Days or More...................... 18.5 855 9.4
--------- ----------- ---------
Total Delinquencies.................... $ 52.0 2,312 $ 27.8
Total Delinquencies as a Percent of the
Portfolio............................ 1.7% 1.8% 1.0%
</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. Case Credit treats a
receivable as delinquent when it is one day past due.
CREDIT LOSS/REPOSSESSION EXPERIENCE(1)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Average Gross Portfolio Outstanding During the Period...... $ 3,886.8 $ 3,442.9 $ 3,155.5 $ 2,857.7 $ 2,511.2
Repossessions as a Percent of Average Gross Portfolio
Outstanding.............................................. 1.22% 1.20% 1.07% 1.14% 1.33%
Net Losses as a Percent of Liquidations(2)(3)(4)........... 0.53% 0.34% 0.15% 0.22% 0.36%
Net Losses as a Percent of Average Gross Portfolio
Outstanding(2)(3)........................................ 0.29% 0.20% 0.08% 0.11% 0.19%
</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, construction and forestry 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 16%, 25%, 25%, 22% and 22% of
the aggregate amounts scheduled to be paid on the contracts acquired during
the years ended December 31, 1998, 1997, 1996, 1995 and 1994, respectively,
provide for recourse to Dealers (excluding some contracts which provide for
partial 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.
(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
S-19
<PAGE>
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.
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, the Specified Spread Account Balance and
the Yield Supplement Account Initial Deposit. 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.
As used above, losses are defined as those receivables that are over 120
days past due that Case Credit has determined to charge-off. It is the policy of
Case Credit to treat each receivable that is over 120 days past due as
nonperforming and to review each such receivable on a case-by-case basis to
determine the amount and need for charge-off. For purposes of the trust,
however, losses are recognized when a receivable is liquidated by the Servicer
through the sale of or other disposition of the Financed Equipment or Leased
Equipment, if any, or when the Servicer, has, after using all reasonable efforts
to realize upon the Financed Equipment or Leased Equipment, if any, determined
to charge-off the receivable without realizing upon the Financed Equipment or
Leased Equipment.
WEIGHTED AVERAGE LIFE OF THE NOTES
Information regarding certain maturity and prepayment considerations with
respect to the Notes is set forth under "Weighted Average Life of the
Securities" in the prospectus. As the rate of payment of principal of the Notes
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 Class Maturity Date.
Noteholders will bear the risk of being able to reinvest principal payments of
the Notes at yields at least equal to the yield on their respective Notes.
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-22, S-23 and S-24, 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 balance in the Yield
Supplement Account on any day is equal to the Required Yield Supplement Account
Balance, (f) the closing date occurs on March 22, 1999 and (g) the Servicer
exercises its option to purchase the Receivables on the earliest permitted
payment date. 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.
S-20
<PAGE>
The table also assumes that the Receivables have been aggregated into four
hypothetical pools with all of the Receivables within each such pool having the
following characteristics:
<TABLE>
<CAPTION>
AGGREGATE WEIGHTED
POOL CONTRACT VALUE AVERAGE APR
- -------------------------------------------------------------------------------- ----------------- -------------
<S> <C> <C>
1............................................................................... $ 399,849,962.72 8.519%
2............................................................................... 131,000,000.00 8.519
3............................................................................... 150,000,000.00 8.519
4............................................................................... 94,150,037.28 8.519
$ 775,000,000.00 8.519%
----------------- ------
----------------- ------
</TABLE>
Hypothetical pool 1 has the same Contract Value and cashflow characteristics
as the Initial Receivables. Hypothetical pools 2, 3 and 4 have a Contract Value
equal in the aggregate to the amount deposited in the trust's pre-funding
account. The cash flow characteristics of hypothetical pools 2, 3 and 4 are
proportionately identical to those of 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-22, S-23 and S-24. 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 amount deposited in the trust's pre-funding account.
Moreover, the diverse terms of Receivables within each of the four 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.
S-21
<PAGE>
PERCENT OF INITIAL PRINCIPAL AMOUNT OF THE NOTES AT VARIOUS CPR PERCENTAGES
<TABLE>
<CAPTION>
A-1 NOTES
--------------------------
PAYMENT DATE 0% 13% 15% 17%
- --------------------------------------------------------------------- --- --- --- ---
<S> <C> <C> <C> <C>
Closing Date......................................................... 100 100 100 100
April, 1999.......................................................... 89 84 83 82
May, 1999............................................................ 80 68 66 63
June, 1999........................................................... 69 48 44 41
July, 1999........................................................... 57 26 21 15
August, 1999......................................................... 46 5 0 0
September, 1999...................................................... 32 0 0 0
October, 1999........................................................ 20 0 0 0
November, 1999....................................................... 7 0 0 0
December, 1999....................................................... 0 0 0 0
January, 2000........................................................ 0 0 0 0
February, 2000....................................................... 0 0 0 0
March, 2000.......................................................... 0 0 0 0
April, 2000.......................................................... 0 0 0 0
May, 2000............................................................ 0 0 0 0
June, 2000........................................................... 0 0 0 0
July, 2000........................................................... 0 0 0 0
August, 2000......................................................... 0 0 0 0
September, 2000...................................................... 0 0 0 0
October, 2000........................................................ 0 0 0 0
November, 2000....................................................... 0 0 0 0
December, 2000....................................................... 0 0 0 0
January, 2001........................................................ 0 0 0 0
February, 2001....................................................... 0 0 0 0
March, 2001.......................................................... 0 0 0 0
April, 2001.......................................................... 0 0 0 0
May, 2001............................................................ 0 0 0 0
June, 2001........................................................... 0 0 0 0
July, 2001........................................................... 0 0 0 0
August, 2001......................................................... 0 0 0 0
September, 2001...................................................... 0 0 0 0
October, 2001........................................................ 0 0 0 0
November, 2001....................................................... 0 0 0 0
December, 2001....................................................... 0 0 0 0
January, 2002........................................................ 0 0 0 0
February, 2002....................................................... 0 0 0 0
March, 2002.......................................................... 0 0 0 0
April, 2002.......................................................... 0 0 0 0
May, 2002............................................................ 0 0 0 0
June, 2002........................................................... 0 0 0 0
July, 2002........................................................... 0 0 0 0
August, 2002......................................................... 0 0 0 0
September, 2002...................................................... 0 0 0 0
October, 2002........................................................ 0 0 0 0
November, 2002....................................................... 0 0 0 0
December, 2002....................................................... 0 0 0 0
January, 2003........................................................ 0 0 0 0
February, 2003....................................................... 0 0 0 0
March, 2003.......................................................... 0 0 0 0
April, 2003.......................................................... 0 0 0 0
May, 2003............................................................ 0 0 0 0
Weighted Average Life (years)(1)..................................... 0.40 0.26 0.24 0.23
<CAPTION>
A-2 NOTES
-------------------------------------
PAYMENT DATE 19% 0% 13% 15%
- --------------------------------------------------------------------- --- --- --- ---
<S> <C> <C>
Closing Date......................................................... 100 100 100 100
April, 1999.......................................................... 81 100 100 100
May, 1999............................................................ 61 100 100 100
June, 1999........................................................... 37 100 100 100
July, 1999........................................................... 10 100 100 100
August, 1999......................................................... 0 100 100 100
September, 1999...................................................... 0 100 96 93
October, 1999........................................................ 0 100 90 88
November, 1999....................................................... 0 100 85 82
December, 1999....................................................... 0 96 77 74
January, 2000........................................................ 0 87 66 63
February, 2000....................................................... 0 79 56 53
March, 2000.......................................................... 0 72 48 44
April, 2000.......................................................... 0 66 41 37
May, 2000............................................................ 0 63 36 32
June, 2000........................................................... 0 60 32 28
July, 2000........................................................... 0 57 28 23
August, 2000......................................................... 0 55 24 19
September, 2000...................................................... 0 51 19 14
October, 2000........................................................ 0 48 15 10
November, 2000....................................................... 0 45 11 6
December, 2000....................................................... 0 39 4 0
January, 2001........................................................ 0 29 0 0
February, 2001....................................................... 0 20 0 0
March, 2001.......................................................... 0 13 0 0
April, 2001.......................................................... 0 8 0 0
May, 2001............................................................ 0 4 0 0
June, 2001........................................................... 0 1 0 0
July, 2001........................................................... 0 0 0 0
August, 2001......................................................... 0 0 0 0
September, 2001...................................................... 0 0 0 0
October, 2001........................................................ 0 0 0 0
November, 2001....................................................... 0 0 0 0
December, 2001....................................................... 0 0 0 0
January, 2002........................................................ 0 0 0 0
February, 2002....................................................... 0 0 0 0
March, 2002.......................................................... 0 0 0 0
April, 2002.......................................................... 0 0 0 0
May, 2002............................................................ 0 0 0 0
June, 2002........................................................... 0 0 0 0
July, 2002........................................................... 0 0 0 0
August, 2002......................................................... 0 0 0 0
September, 2002...................................................... 0 0 0 0
October, 2002........................................................ 0 0 0 0
November, 2002....................................................... 0 0 0 0
December, 2002....................................................... 0 0 0 0
January, 2003........................................................ 0 0 0 0
February, 2003....................................................... 0 0 0 0
March, 2003.......................................................... 0 0 0 0
April, 2003.......................................................... 0 0 0 0
May, 2003............................................................ 0 0 0 0
Weighted Average Life (years)(1)..................................... 0.22 1.47 1.09 1.03
<CAPTION>
PAYMENT DATE 17% 19%
- --------------------------------------------------------------------- --- ---
Closing Date......................................................... 100 100
April, 1999.......................................................... 100 100
May, 1999............................................................ 100 100
June, 1999........................................................... 100 100
July, 1999........................................................... 100 100
August, 1999......................................................... 98 96
September, 1999...................................................... 91 89
October, 1999........................................................ 85 83
November, 1999....................................................... 79 76
December, 1999....................................................... 70 67
January, 2000........................................................ 59 56
February, 2000....................................................... 49 46
March, 2000.......................................................... 40 37
April, 2000.......................................................... 33 29
May, 2000............................................................ 28 24
June, 2000........................................................... 23 19
July, 2000........................................................... 19 14
August, 2000......................................................... 14 10
September, 2000...................................................... 10 5
October, 2000........................................................ 5 1
November, 2000....................................................... 1 0
December, 2000....................................................... 0 0
January, 2001........................................................ 0 0
February, 2001....................................................... 0 0
March, 2001.......................................................... 0 0
April, 2001.......................................................... 0 0
May, 2001............................................................ 0 0
June, 2001........................................................... 0 0
July, 2001........................................................... 0 0
August, 2001......................................................... 0 0
September, 2001...................................................... 0 0
October, 2001........................................................ 0 0
November, 2001....................................................... 0 0
December, 2001....................................................... 0 0
January, 2002........................................................ 0 0
February, 2002....................................................... 0 0
March, 2002.......................................................... 0 0
April, 2002.......................................................... 0 0
May, 2002............................................................ 0 0
June, 2002........................................................... 0 0
July, 2002........................................................... 0 0
August, 2002......................................................... 0 0
September, 2002...................................................... 0 0
October, 2002........................................................ 0 0
November, 2002....................................................... 0 0
December, 2002....................................................... 0 0
January, 2003........................................................ 0 0
February, 2003....................................................... 0 0
March, 2003.......................................................... 0 0
April, 2003.......................................................... 0 0
May, 2003............................................................ 0 0
Weighted Average Life (years)(1)..................................... 0.99 0.94
</TABLE>
- ------------------------------
(1) The weighted average life of an A-1 Note or A-2 Note is determined by: (a)
multiplying the amount of each principal payment on the applicable 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.
THIS TABLE HAS BEEN PREPARED BASED ON THE ASSUMPTIONS DESCRIBED ON PAGES
S-20 AND S-21 (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-22
<PAGE>
PERCENT OF INITIAL PRINCIPAL AMOUNT OF THE NOTES AT VARIOUS CPR PERCENTAGES
<TABLE>
<CAPTION>
A-3 NOTES
------------------------------------------
PAYMENT DATE 0% 13% 15% 17%
- --------------------------------------------------------------------------------- --- --- --- ---
<S> <C> <C> <C> <C>
Closing Date..................................................................... 100 100 100 100
April, 1999...................................................................... 100 100 100 100
May, 1999........................................................................ 100 100 100 100
June, 1999....................................................................... 100 100 100 100
July, 1999....................................................................... 100 100 100 100
August, 1999..................................................................... 100 100 100 100
September, 1999.................................................................. 100 100 100 100
October, 1999.................................................................... 100 100 100 100
November, 1999................................................................... 100 100 100 100
December, 1999................................................................... 100 100 100 100
January, 2000.................................................................... 100 100 100 100
February, 2000................................................................... 100 100 100 100
March, 2000...................................................................... 100 100 100 100
April, 2000...................................................................... 100 100 100 100
May, 2000........................................................................ 100 100 100 100
June, 2000....................................................................... 100 100 100 100
July, 2000....................................................................... 100 100 100 100
August, 2000..................................................................... 100 100 100 100
September, 2000.................................................................. 100 100 100 100
October, 2000.................................................................... 100 100 100 100
November, 2000................................................................... 100 100 100 100
December, 2000................................................................... 100 100 99 88
January, 2001.................................................................... 100 90 79 69
February, 2001................................................................... 100 72 62 52
March, 2001...................................................................... 100 57 47 37
April, 2001...................................................................... 100 46 36 26
May, 2001........................................................................ 100 38 28 18
June, 2001....................................................................... 100 31 21 11
July, 2001....................................................................... 97 24 14 5
August, 2001..................................................................... 91 18 8 0
September, 2001.................................................................. 84 11 1 0
October, 2001.................................................................... 78 4 0 0
November, 2001................................................................... 71 0 0 0
December, 2001................................................................... 58 0 0 0
January, 2002.................................................................... 37 0 0 0
February, 2002................................................................... 19 0 0 0
March, 2002...................................................................... 3 0 0 0
April, 2002...................................................................... 0 0 0 0
May, 2002........................................................................ 0 0 0 0
June, 2002....................................................................... 0 0 0 0
July, 2002....................................................................... 0 0 0 0
August, 2002..................................................................... 0 0 0 0
September, 2002.................................................................. 0 0 0 0
October, 2002.................................................................... 0 0 0 0
November, 2002................................................................... 0 0 0 0
December, 2002................................................................... 0 0 0 0
January, 2003.................................................................... 0 0 0 0
February, 2003................................................................... 0 0 0 0
March, 2003...................................................................... 0 0 0 0
April, 2003...................................................................... 0 0 0 0
May, 2003........................................................................ 0 0 0 0
June, 2003....................................................................... 0 0 0 0
July, 2003....................................................................... 0 0 0 0
August, 2003..................................................................... 0 0 0 0
September, 2003.................................................................. 0 0 0 0
October, 2003.................................................................... 0 0 0 0
Weighted Average Life (years)(1) 2.76 2.14 2.06 1.99
<CAPTION>
A-4 NOTES
-------------------------------
PAYMENT DATE 19% 0% 13% 15%
- --------------------------------------------------------------------------------- --- --- --- ---
<S> <C> <C>
Closing Date..................................................................... 100 100 100 100
April, 1999...................................................................... 100 100 100 100
May, 1999........................................................................ 100 100 100 100
June, 1999....................................................................... 100 100 100 100
July, 1999....................................................................... 100 100 100 100
August, 1999..................................................................... 100 100 100 100
September, 1999.................................................................. 100 100 100 100
October, 1999.................................................................... 100 100 100 100
November, 1999................................................................... 100 100 100 100
December, 1999................................................................... 100 100 100 100
January, 2000.................................................................... 100 100 100 100
February, 2000................................................................... 100 100 100 100
March, 2000...................................................................... 100 100 100 100
April, 2000...................................................................... 100 100 100 100
May, 2000........................................................................ 100 100 100 100
June, 2000....................................................................... 100 100 100 100
July, 2000....................................................................... 100 100 100 100
August, 2000..................................................................... 100 100 100 100
September, 2000.................................................................. 100 100 100 100
October, 2000.................................................................... 100 100 100 100
November, 2000................................................................... 91 100 100 100
December, 2000................................................................... 78 100 100 100
January, 2001.................................................................... 59 100 100 100
February, 2001................................................................... 42 100 100 100
March, 2001...................................................................... 28 100 100 100
April, 2001...................................................................... 17 100 100 100
May, 2001........................................................................ 8 100 100 100
June, 2001....................................................................... 2 100 100 100
July, 2001....................................................................... 0 100 100 100
August, 2001..................................................................... 0 100 100 100
September, 2001.................................................................. 0 100 100 100
October, 2001.................................................................... 0 100 100 96
November, 2001................................................................... 0 100 98 92
December, 2001................................................................... 0 100 92 86
January, 2002.................................................................... 0 100 82 76
February, 2002................................................................... 0 100 73 68
March, 2002...................................................................... 0 100 66 61
April, 2002...................................................................... 0 95 60 56
May, 2002........................................................................ 0 91 57 52
June, 2002....................................................................... 0 88 54 50
July, 2002....................................................................... 0 85 51 47
August, 2002..................................................................... 0 82 49 45
September, 2002.................................................................. 0 78 46 42
October, 2002.................................................................... 0 75 43 39
November, 2002................................................................... 0 71 41 37
December, 2002................................................................... 0 65 36 33
January, 2003.................................................................... 0 54 30 0
February, 2003................................................................... 0 46 0 0
March, 2003...................................................................... 0 39 0 0
April, 2003...................................................................... 0 34 0 0
May, 2003........................................................................ 0 32 0 0
June, 2003....................................................................... 0 30 0 0
July, 2003....................................................................... 0 29 0 0
August, 2003..................................................................... 0 28 0 0
September, 2003.................................................................. 0 0 0 0
October, 2003.................................................................... 0 0 0 0
Weighted Average Life (years)(1) 1.92 3.92 3.38 3.30
<CAPTION>
PAYMENT DATE 17% 19%
- --------------------------------------------------------------------------------- --- ---
Closing Date..................................................................... 100 100
April, 1999...................................................................... 100 100
May, 1999........................................................................ 100 100
June, 1999....................................................................... 100 100
July, 1999....................................................................... 100 100
August, 1999..................................................................... 100 100
September, 1999.................................................................. 100 100
October, 1999.................................................................... 100 100
November, 1999................................................................... 100 100
December, 1999................................................................... 100 100
January, 2000.................................................................... 100 100
February, 2000................................................................... 100 100
March, 2000...................................................................... 100 100
April, 2000...................................................................... 100 100
May, 2000........................................................................ 100 100
June, 2000....................................................................... 100 100
July, 2000....................................................................... 100 100
August, 2000..................................................................... 100 100
September, 2000.................................................................. 100 100
October, 2000.................................................................... 100 100
November, 2000................................................................... 100 100
December, 2000................................................................... 100 100
January, 2001.................................................................... 100 100
February, 2001................................................................... 100 100
March, 2001...................................................................... 100 100
April, 2001...................................................................... 100 100
May, 2001........................................................................ 100 100
June, 2001....................................................................... 100 100
July, 2001....................................................................... 100 97
August, 2001..................................................................... 99 93
September, 2001.................................................................. 94 89
October, 2001.................................................................... 90 85
November, 2001................................................................... 86 80
December, 2001................................................................... 80 74
January, 2002.................................................................... 71 66
February, 2002................................................................... 63 58
March, 2002...................................................................... 56 52
April, 2002...................................................................... 52 47
May, 2002........................................................................ 48 44
June, 2002....................................................................... 46 42
July, 2002....................................................................... 43 39
August, 2002..................................................................... 41 37
September, 2002.................................................................. 38 34
October, 2002.................................................................... 36 32
November, 2002................................................................... 33 30
December, 2002................................................................... 29 0
January, 2003.................................................................... 0 0
February, 2003................................................................... 0 0
March, 2003...................................................................... 0 0
April, 2003...................................................................... 0 0
May, 2003........................................................................ 0 0
June, 2003....................................................................... 0 0
July, 2003....................................................................... 0 0
August, 2003..................................................................... 0 0
September, 2003.................................................................. 0 0
October, 2003.................................................................... 0 0
Weighted Average Life (years)(1) 3.23 3.15
</TABLE>
- ----------------------------------
(1) The weighted average life of an A-3 Note or A-4 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 PAGES
S-20 AND S-21 (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-23
<PAGE>
<TABLE>
<CAPTION>
B NOTES
-------------------------------
PAYMENT DATE 0% 13% 15%
- --------------------------------------------------------------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Closing Date................................................................................. 100 100 100
April, 1999.................................................................................. 100 98 98
May, 1999.................................................................................... 100 97 97
June, 1999................................................................................... 100 95 94
July, 1999................................................................................... 100 92 92
August, 1999................................................................................. 100 90 90
September, 1999.............................................................................. 100 88 87
October, 1999................................................................................ 100 86 85
November, 1999............................................................................... 100 84 83
December, 1999............................................................................... 100 81 79
January, 2000................................................................................ 85 76 75
February, 2000............................................................................... 81 73 71
March, 2000.................................................................................. 79 69 68
April, 2000.................................................................................. 77 67 65
May, 2000.................................................................................... 75 65 63
June, 2000................................................................................... 74 63 61
July, 2000................................................................................... 73 61 60
August, 2000................................................................................. 72 60 58
September, 2000.............................................................................. 71 58 56
October, 2000................................................................................ 69 56 54
November, 2000............................................................................... 68 55 53
December, 2000............................................................................... 66 52 50
January, 2001................................................................................ 62 48 47
February, 2001............................................................................... 58 45 43
March, 2001.................................................................................. 55 42 41
April, 2001.................................................................................. 53 40 39
May, 2001.................................................................................... 52 39 37
June, 2001................................................................................... 51 38 36
July, 2001................................................................................... 50 36 35
August, 2001................................................................................. 49 35 33
September, 2001.............................................................................. 47 34 32
October, 2001................................................................................ 46 33 31
November, 2001............................................................................... 45 31 30
December, 2001............................................................................... 43 29 28
January, 2002................................................................................ 39 26 25
February, 2002............................................................................... 35 24 22
March, 2002.................................................................................. 33 22 20
April, 2002.................................................................................. 31 20 19
May, 2002.................................................................................... 29 19 18
June, 2002................................................................................... 28 18 17
July, 2002................................................................................... 27 17 16
August, 2002................................................................................. 26 17 15
September, 2002.............................................................................. 25 16 15
October, 2002................................................................................ 24 15 14
November, 2002............................................................................... 23 14 13
December, 2002............................................................................... 21 13 12
January, 2003................................................................................ 18 11 0
February, 2003............................................................................... 16 0 0
March, 2003.................................................................................. 14 0 0
April, 2003.................................................................................. 12 0 0
May, 2003.................................................................................... 12 0 0
June, 2003................................................................................... 11 0 0
July, 2003................................................................................... 11 0 0
August, 2003................................................................................. 10 0 0
September, 2003.............................................................................. 0 0 0
October, 2003................................................................................ 0 0 0
November, 2003............................................................................... 0 0 0
Weighted Average Life (years)(1)............................................................. 2.44 1.94 1.88
<CAPTION>
PAYMENT DATE 17% 19%
- --------------------------------------------------------------------------------------------- --------- ---------
<S> <C> <C>
Closing Date................................................................................. 100 100
April, 1999.................................................................................. 98 98
May, 1999.................................................................................... 96 96
June, 1999................................................................................... 94 94
July, 1999................................................................................... 91 91
August, 1999................................................................................. 89 88
September, 1999.............................................................................. 86 85
October, 1999................................................................................ 84 83
November, 1999............................................................................... 81 80
December, 1999............................................................................... 78 77
January, 2000................................................................................ 74 72
February, 2000............................................................................... 70 68
March, 2000.................................................................................. 66 65
April, 2000.................................................................................. 63 62
May, 2000.................................................................................... 61 60
June, 2000................................................................................... 60 58
July, 2000................................................................................... 58 56
August, 2000................................................................................. 56 54
September, 2000.............................................................................. 54 52
October, 2000................................................................................ 52 51
November, 2000............................................................................... 51 49
December, 2000............................................................................... 48 46
January, 2001................................................................................ 45 43
February, 2001............................................................................... 41 40
March, 2001.................................................................................. 39 37
April, 2001.................................................................................. 37 35
May, 2001.................................................................................... 35 33
June, 2001................................................................................... 34 32
July, 2001................................................................................... 33 31
August, 2001................................................................................. 32 30
September, 2001.............................................................................. 30 28
October, 2001................................................................................ 29 27
November, 2001............................................................................... 28 26
December, 2001............................................................................... 26 24
January, 2002................................................................................ 23 22
February, 2002............................................................................... 21 20
March, 2002.................................................................................. 19 18
April, 2002.................................................................................. 17 16
May, 2002.................................................................................... 16 15
June, 2002................................................................................... 16 15
July, 2002................................................................................... 15 14
August, 2002................................................................................. 14 13
September, 2002.............................................................................. 13 12
October, 2002................................................................................ 13 12
November, 2002............................................................................... 12 11
December, 2002............................................................................... 11 0
January, 2003................................................................................ 0 0
February, 2003............................................................................... 0 0
March, 2003.................................................................................. 0 0
April, 2003.................................................................................. 0 0
May, 2003.................................................................................... 0 0
June, 2003................................................................................... 0 0
July, 2003................................................................................... 0 0
August, 2003................................................................................. 0 0
September, 2003.............................................................................. 0 0
October, 2003................................................................................ 0 0
November, 2003............................................................................... 0 0
Weighted Average Life (years)(1)............................................................. 1.82 1.76
</TABLE>
- ------------------------------
(1) The weighted average life of a 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 PAGES
S-20 AND S-21 (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-24
<PAGE>
DESCRIPTION OF THE NOTES
GENERAL
The following summarizes the material terms of the notes offered hereby (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:
<TABLE>
<CAPTION>
INTEREST RATE
(PER ANNUM)
-------------
<S> <C>
Class A-1 Notes................................................................. 4.950%
Class A-2 Notes................................................................. 5.285%
Class A-3 Notes................................................................. 5.600%
Class A-4 Notes................................................................. 5.770%
Class B Notes................................................................... 5.960%
</TABLE>
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 April 15, 1999 except that interest on the A-1 Notes will also be
paid on April 7, 2000 (the "Special Payment Date") if any A-1 Notes remain
outstanding after the March 2000 payment date.
If the amount of interest on the Class A Notes payable on any payment date
exceeds the amounts available on such date, the holders of Class A Notes 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" "--Spread Account" and "--Yield Supplement 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 will be paid on the Notes on each payment date in an amount
generally equal to the Principal Distribution Amount. For any payment date, the
"Principal Distribution Amount" will be an 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, the principal
payments will be allocated among the various classes of Notes as described
below.
The principal of the Class A Notes will be payable on each payment date,
except that principal on the A-1 Notes will also be paid on the Special Payment
Date if any A-1 Notes remain outstanding after the March 2000 payment date.
Principal payments will be made to the extent of funds available therefor, in an
amount generally equal to the Class A Noteholders' Monthly Principal
Distributable Amount 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 A-2 Notes until the A-1
Notes have been paid in full). The principal of the Class B Notes will be
payable on each payment date, to the extent of funds
S-25
<PAGE>
available therefor, in an amount generally equal to the Class B Noteholders'
Monthly Principal Distributable Amount; PROVIDED, that no principal payments
will be made with respect to the Class B Notes on any payment date until all
amounts payable with respect to the Class A Notes on that payment date have been
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 until
the outstanding principal amount of the Class B Notes has been paid in full.
The final principal payment with respect to each class of notes is due not
later than the payment date in the month specified for each class below:
<TABLE>
<CAPTION>
CLASS FINAL MATURITY DATE
- ---------------------------------------------------------------------- ----------------------
<S> <C>
A-1................................................................... April 7, 2000
A-2................................................................... September 15, 2002
A-3................................................................... July 15, 2003
A-4................................................................... August 15, 2005
B..................................................................... August 15, 2005
</TABLE>
The payment date specified for each class of notes above is referred to as that
class's "Final Class Maturity Date," and the latest to occur of the Final Class
Maturity Dates is also referred to as the "Final Scheduled Maturity Date."
Upon any prepayment in full of a Receivable, the Contract Value of that
Receivable will be reduced to zero. This results in an increment to the
Principal Distribution Amount for the related payment date equal to the full
Contract Value of the prepaid Receivable. However, in circumstances where the
Contract Value of the prepaid Receivable exceeded its outstanding principal
balance, the principal collected through the prepayment will be less than the
resulting increment to the Principal Distribution Amount by an amount roughly
equal to the excess of the Receivable's Contract Value over its outstanding
principal balance immediately prior to the prepayment. This will generally
happen when the APR of the prepaid Receivable was greater than the Initial
Cutoff Date APR (in the case of an Initial Receivable) or the applicable
Subsequent Cutoff Date APR. See "The Receivables Pool."
To the extent necessary to maintain the initial credit ratings on the notes,
funds will be deposited in the trust's Yield Supplement Account each time the
trust buys any Subsequent Receivables during the Funding Period. Any such funds
are intended to cover shortfalls that could result from prepayments of this
type. Upon a prepayment of such a Receivable, an amount equal to the excess of
its Contract Value over its outstanding principal balance immediately prior to
the prepayment will be withdrawn from the Yield Supplement Account and included
in the funds distributed on that payment date to the extent that there are funds
available in the Yield Supplement Account and there would otherwise be a
shortfall. However, no funds may be required to be deposited into the Yield
Supplement Account, and in any event any required deposit is expected to be less
than the maximum aggregate shortfall that might result if all Receivables of
this type prepaid. Therefore, if a significant number of those Receivables
prepay, there may be insufficient funds available in the Yield Supplement
Account to cover the resulting shortfall.
As used herein, with respect to any payment date:
"Class A Noteholders' Monthly Principal Distributable Amount" means, with
respect to any payment date until the payment date on which the outstanding
amount of the Class A Notes has been reduced to zero, the Principal
Distributable Amount MINUS the Class B Noteholders' Monthly Principal
Distributable Amount.
"Class B Noteholders' Adjusted Principal Distributable Amount" means, with
respect to each payment date, an amount equal to the excess, if any, of: (a) the
outstanding amount of the Class B
S-26
<PAGE>
Notes on the related record date minus any Class B Noteholders' Principal
Carryover Shortfall over (b) the Initial Class B Percentage of the sum of the
outstanding Pool Balance and the amount on deposit in the trust's pre-funding
account (the "Pre-Funded Amount") as of the beginning of the current Collection
Period; PROVIDED, HOWEVER, that if on the related Record Date any principal of
the A-1 Notes remains outstanding, then the Class B Noteholders' Adjusted
Principal Distributable Amount for such payment date shall not exceed an amount
equal to the aggregate unscheduled principal payments on the Receivables
received during the related Collection Period. Notwithstanding the above, on and
after the payment date on which the Class A Notes are reduced to zero, the Class
B Noteholders' Adjusted Principal Distributable Amount shall be the Principal
Distributable Amount less the amount necessary to reduce the Class A Notes to
zero.
"Class B Noteholders' Monthly Principal Distributable Amount" means, with
respect to any payment date, the sum of (a) the Class B Noteholders' Adjusted
Principal Distributable Amount for such payment date and (b) without duplication
of any amounts included in (a), the Class B Noteholders' Principal Carryover
Shortfall for such payment date; PROVIDED, HOWEVER, that the sum of clauses (a)
and (b) shall not exceed the outstanding amount of the Class B Notes, and, on
the Final Class Maturity Date for the Class B Notes, the Class B Noteholders'
Monthly Principal Distributable Amount will include the amount, to the extent of
available funds, necessary to reduce the outstanding amount of the Class B Notes
to zero.
"Class B Noteholders' Principal Carryover Shortfall" means, with respect to
any payment date, the excess of the Class B Noteholders' Monthly Principal
Distributable Amount for the preceding payment date over the amount that was
actually deposited in the Note Distribution Account in respect of principal of
the Class B Notes on such preceding payment date.
"Initial Class B Percentage" means 4%.
"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.
RECORD DATES
Payments on the notes will be made on each payment date to holders of record
as of the fourteenth day of the calendar month in which the payment date occurs
(or in the case of the Special Payment Date, March 14, 2000) or, if Definitive
Notes are issued, the close of business on the last day of the prior calendar
month (the "Record Date").
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.
S-27
<PAGE>
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 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
Harris Trust and Savings Bank is the Indenture Trustee under the Indenture.
Harris Trust and Savings Bank is an Illinois banking corporation, and its
corporate trust offices are located at 311 West Monroe Street, Chicago,
Illinois. 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
On the Closing Date, the trust will issue $15,500,000 asset-backed
certificates (the "Certificates") 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 5.960% 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 and the
Yield Supplement Account will not be available to cover scheduled payments with
respect to the Certificates.
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS
The following summarizes the material terms of the Sale and Servicing
Agreement, the Purchase Agreement, the Administration Agreement and the Trust
Agreement 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
S-28
<PAGE>
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 to sell to the trust
Subsequent Receivables having an aggregate Contract Value of approximately
$375,150,037.28, such amount being equal to the amount deposited in the trust's
pre-funding account.
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. "Funding Period" means the period beginning
on the closing date and ending on the earliest of: (a) the Determination Date on
which the amount on deposit in the trust's pre-funding account (after giving
effect to any transfers therefrom in connection with the transfer of Subsequent
Receivables to the trust 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 September 1999
Payment Date.
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 2% of the aggregate Contract Value of the Subsequent Receivables will
be withdrawn from the Pre-Funding Account and deposited in the Spread Account,
(iii) an amount equal to the Required Yield Supplement Account Balance for such
Subsequent Transfer Date (minus any existing balance in the Yield Supplement
Account) will be withdrawn from the Pre-Funding Account and deposited in the
Yield Supplement Account and (iv) an amount equal to the excess of the aggregate
Contract Value of such Subsequent Receivables over the sum of the amounts
described in clauses (ii) and (iii) 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" herein and in the prospectus); (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) any
applicable required Yield Supplement Account deposit for such Subsequent
Transfer Date shall have been made; (vi) the Seller shall have executed and
delivered to the trust (with a copy
S-29
<PAGE>
to the Indenture Trustee) a written assignment conveying such Subsequent
Receivables to the trust (including a schedule identifying such Subsequent
Receivables); (vii) 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; (viii) 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 (ix) 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--Changes in Pool Characteristics as a
Result of Pre-Funding" 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, the Spread
Account and the Yield Supplement 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.
DISTRIBUTIONS
DEPOSITS TO COLLECTION ACCOUNT. 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. 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, the Negative Carry Amount to be
withdrawn from the Negative Carry Account and the any amount to be withdrawn
from the Yield Supplement 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, from the Initial Cutoff
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
S-30
<PAGE>
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 and any amounts transferred from the Yield Supplement Account for
such Collection Period. "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; and
(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 Interest Amount for each
Class of Class A Notes;
(iii) to the Note Distribution Account, the Class Interest Amount for the
Class B Notes;
(iv) to the Note Distribution Account, (A) first, the Class Principal
Distributable Amount for each class of Class A Notes and (B) second, the Class B
Noteholders' Monthly Principal Distributable Amount;
(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 pay accrued and unpaid interest on the Certificates;
(vii) after the Notes have been repaid in full, to pay principal on the
Certificates;
(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 (ix) 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 according to the
amounts due 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.
"Class Interest Amount" means, with respect to any payment date (the
"current payment date") and any Class of Notes, an amount equal to the sum of
(i) the aggregate amount of interest accrued on that Class of Notes at the
applicable Interest Rate 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 plus (ii) the Class Interest Shortfall
for that Class of Notes and the current payment date.
"Class Interest Shortfall" means, with respect to any payment date (the
"current payment date") and any Class of Notes, the excess of the Class Interest
Amount for the preceding payment date over the amount in respect of interest on
that Class of Notes that was actually deposited in the Note
S-31
<PAGE>
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 that Class of Notes from such preceding payment date to but
excluding the current payment date.
"Class Principal Distributable Amount" means, with respect to any Class of
Class A Notes on a payment date, the remainder, if any, of the Class A
Noteholders' Monthly Principal Distributable Amount for that payment date after
subtracting the Class Principal Distributable Amount for each Class of Class A
Notes having priority of payment over such Class of Class A Notes; PROVIDED that
(a) in no event shall the Class Principal Distributable Amount for any Class
exceed the outstanding principal amount of that Class, and (b) on the Final
Class Maturity Date for each class, the Class Principal Distributable Amount for
that class 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 that class to zero. For purposes of the
foregoing, the various Classes of Class A 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 A-4 Notes.
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 the Negative Carry Account as a
Trust Account in the name of the Indenture Trustee for the benefit of the
Noteholders. The Negative Carry Account will be created with an initial deposit
by the Seller of $5,262,745.28 (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) 2.5%, 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). 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 the 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 to the extent funds are available. 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.
S-32
<PAGE>
SPREAD ACCOUNT
The rights of the Certificateholders to receive distributions with respect
to the Certificates 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 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 an initial deposit by the Seller of $7,996,999.25, which is equal to 2% of
the Pool Balance as of the Initial Cutoff Date. On each Subsequent Transfer
Date, cash or Eligible Investments having a value approximately equal to 2% 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 of amounts to be distributed to Noteholders and
the payment of the Administration Fee and any third party 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.
"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 trust as of their respective Subsequent Cutoff Dates.
"Specified Spread Account Balance" means, with respect to any payment date,
the lesser of (a) 2% 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.
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 Maturity
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
S-33
<PAGE>
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. For
this purpose, the "Noteholders' Distributable Amount" for any payment date means
the sum of the Class Interest Amount for each Class of Notes, the Class
Principal Distributable Amount for each Class of Class A Notes and the Class B
Noteholders' Monthly Principal Distributable Amount for that payment date. 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.
YIELD SUPPLEMENT ACCOUNT
The Servicer will establish and maintain in the name of the Indenture
Trustee an account (the "Yield Supplement Account") for the benefit of the
Noteholders. However, no deposit is required to be made into the Yield
Supplement Account on or before the closing date. After the closing date,
deposits will only be required to be made into the Yield Supplement Account on
Subsequent Transfer Dates and then only if the Required Yield Supplement Account
Balance determined for the subject Subsequent Transfer Date is greater than
zero. On each Subsequent Transfer Date, cash or eligible investments having a
value equal to any positive Required Yield Supplement Account Balance for such
Subsequent Transfer Date (minus any amount then on deposit in the Yield
Supplement Account) will be withdrawn from the Pre-Funding Account and deposited
in the Yield Supplement Account.
Prior to each Payment Date, the Servicer will calculate an amount (the
"Available Yield Supplement Amount") equal to the Maximum Yield Supplement
Amount for all Receivables that were liquidated or prepaid during the related
collection period, as calculated for each such Receivable immediately prior to
such liquidation or prepayment. On each Payment Date, funds on deposit in the
Yield Supplement Account in an amount up to the Available Yield Supplement
Amount will be made available to cover any shortfalls in distributions to
Noteholders before any withdrawal is made from the Spread Account.
Funds on deposit in the Yield Supplement Account may be withdrawn and paid
to the Seller on any day if each of the rating agencies for the Notes has
confirmed that such action will not result in a withdrawal or downgrade of its
rating of any class of Notes.
"Required Yield Supplement Account Balance" means, for any Subsequent
Transfer Date, the excess, if any, of (a) the sum of the Maximum Yield
Supplement Amounts for each Receivable as of the end of the prior collection
period (or the applicable subsequent Transfer Cutoff Date for Subsequent
Receivables being transferred on that Subsequent Transfer Date), over (b) the
Expected Excess Spread.
"Maximum Yield Supplement Amount" for each Receivable is equal to the
difference (if positive) between (A) the present value on the scheduled and
unpaid payments of the Receivable discounted monthly at an annual rate equal to
the Initial Cutoff Date APR or the Subsequent Cutoff Date APR, as applicable,
minus (B) the present value of the scheduled and unpaid payments on the
Receivable discounted monthly at an annual rate equal to its individual APR.
S-34
<PAGE>
"Expected Excess Spread" means, for any Subsequent Transfer Date, an amount
determined by the Servicer to represent excess cash flows from the Receivables
that can reasonably be expected to be available to cover Maximum Yield
Supplement Amounts, provided that each of the rating agencies for the Notes has
confirmed that use of such amount determined by the Servicer in calculating the
Required Yield Supplement Account Balance for the Subsequent Transfer Date will
not result in a withdrawal or downgrade of its rating of any class of Notes.
LEGAL INVESTMENT
The A-1 Notes will be eligible for purchase by money market funds under
paragraph (a)(10) 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 should 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. By its
acquisition of a Note, each purchaser shall be deemed to represent and warrant
that its purchase and holding of the Note will not give rise to a nonexempt
prohibited transaction under ERISA or the Internal Revenue Code of 1986, as
amended.
For additional information regarding treatment of the Notes under ERISA, see
"ERISA Considerations" in the prospectus.
S-35
<PAGE>
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:
CLASS A-1 NOTES
<TABLE>
<CAPTION>
PRINCIPAL
CLASS A-1 NOTE UNDERWRITERS AMOUNT
- ------------------------------------------------------------------------------ --------------
<S> <C>
Credit Suisse First Boston Corporation........................................ $ 12,595,000
Chase Securities Inc.......................................................... 12,591,000
First Chicago Capital Markets, Inc............................................ 12,591,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................................ 12,591,000
NationsBanc Montgomery Securities LLC......................................... 12,591,000
Salomon Smith Barney Inc...................................................... 12,591,000
--------------
$ 75,550,000
--------------
--------------
</TABLE>
CLASS A-2 NOTES
<TABLE>
<CAPTION>
PRINCIPAL
CLASS A-2 NOTE UNDERWRITERS AMOUNT
- ------------------------------------------------------------------------------ --------------
<S> <C>
Credit Suisse First Boston Corporation........................................ $ 49,000,000
Chase Securities Inc.......................................................... 49,000,000
First Chicago Capital Markets, Inc............................................ 49,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................................ 49,000,000
NationsBanc Montgomery Securities LLC......................................... 49,000,000
Salomon Smith Barney Inc...................................................... 49,000,000
--------------
$ 294,000,000
--------------
--------------
</TABLE>
CLASS A-3 NOTES
<TABLE>
<CAPTION>
PRINCIPAL
CLASS A-3 NOTE UNDERWRITERS AMOUNT
- ------------------------------------------------------------------------------ --------------
<S> <C>
Credit Suisse First Boston Corporation........................................ $ 22,835,000
Chase Securities Inc.......................................................... 22,833,000
First Chicago Capital Markets, Inc............................................ 22,833,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................................ 22,833,000
NationsBanc Montgomery Securities LLC......................................... 22,833,000
Salomon Smith Barney Inc...................................................... 22,833,000
--------------
$ 137,000,000
--------------
--------------
</TABLE>
S-36
<PAGE>
CLASS A-4 NOTES
<TABLE>
<CAPTION>
PRINCIPAL
CLASS A-4 NOTE UNDERWRITERS AMOUNT
- ------------------------------------------------------------------------------ --------------
<S> <C>
Credit Suisse First Boston Corporation........................................ $ 36,995,000
Chase Securities Inc.......................................................... 36,991,000
First Chicago Capital Markets, Inc............................................ 36,991,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................................ 36,991,000
NationsBanc Montgomery Securities LLC......................................... 36,991,000
Salomon Smith Barney Inc...................................................... 36,991,000
--------------
$ 221,950,000
--------------
--------------
</TABLE>
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 0.057% per A-1 Note, 0.084% per A-2 Note, 0.138% per A-3 Note
and 0.150% per A-4 Note. The Class A Note Underwriters may allow and such
dealers may reallow a concession not in excess of 0.050% per A-1 Note, 0.075%
per A-2 Note, 0.100% per A-3 Note and 0.100% per A-4 Note to certain 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.
Credit Suisse First Boston, on behalf of the Class A Note Underwriters, may
engage in stabilizing transactions, syndicate covering transactions and penalty
bids in accordance with Rule 104 of Regulation M 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.
Penalty bids permit the Class A Note Underwriters to reclaim a selling
concession from a Class A Note Underwriter or a dealer when the Class A Notes
originally sold by such Class A Note Underwriter or dealer are purchased in a
syndicate covering transaction to cover syndicate short positions. Such
stabilizing transactions, syndicate covering transactions and penalty bids 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
Subject to the terms and conditions set forth in an underwriting agreement
(the "Class B Note Underwriting Agreement"), the Seller has agreed to cause the
trust to sell to each of the Underwriters named below (the "Class B Note
Underwriters"; and together with the Class A Note Underwriters, the
"Underwriters"), and each of the Class B Note Underwriters has severally agreed
to purchase, the principal amount of Class B Notes set forth opposite its name
below:
<TABLE>
<CAPTION>
PRINCIPAL
CLASS B NOTE UNDERWRITERS AMOUNT
- ------------------------------------------------------------------------------ --------------
<S> <C>
Credit Suisse First Boston Corporation........................................ $ 15,500,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................................ 15,500,000
--------------
$ 31,000,000
--------------
--------------
</TABLE>
S-37
<PAGE>
The Seller has been advised by the Class B Note Underwriters that they
propose initially to offer the Class B Notes to the public at the prices set
forth herein, and to certain dealers at such prices less the initial concession
not in excess of 0.210% per Class B Note. The Class B Note Underwriters may
allow and such dealers may reallow a concession not in excess of 0.125% per
Class B Note to certain other dealers. After the initial public offering of the
Class B Notes, the public offering prices and such concessions may be changed.
In the ordinary course of their respective businesses, the Class B 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.
Credit Suisse First Boston on behalf of the Class B Note Underwriters, may
engage in stabilizing transactions, syndicate covering transactions and penalty
bids in accordance with Rule 104 of Regulation M 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 in the open market after the
distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the Class B Note Underwriters to reclaim a selling
concession from a Class B Note Underwriter or a dealer when the Class B Notes
originally sold by such Class B Note Underwriter or dealer are purchased in a
syndicate covering transaction to cover syndicate short positions. Such
stabilizing transactions, syndicate covering transactions and penalty bids may
cause the price of the Class B 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.
We will receive proceeds of approximately $727,061,737 from the sale of the
Class A Notes (representing 99.803% of the principal amount of each Class A
Note) after paying the underwriting discount of $1,353,347.50 (representing
0.186% of the principal amount of each Class A Note). We will receive proceeds
of approximately $30,891,190 from the sale of the Class B Notes (representing
99.649% of the principal amount of each Class B Note) after paying the
underwriting discount of $108,500 (representing 0.350 % of the principal amount
of each Class B Note). Additional offering expenses are estimated to be
$600,000.
LEGAL OPINIONS
Certain legal matters relating to the Notes will be passed upon for the
trust, the Seller and the Servicer by Mayer, Brown & Platt. Certain legal
matters relating to the Notes will be passed upon for the Underwriters by
Kirkland & Ellis. Certain Federal income tax, Illinois state tax and other
matters will be passed upon for the trust by Mayer, Brown & Platt.
S-38
<PAGE>
INDEX OF TERMS
<TABLE>
<S> <C>
APR................................................................................... S-12
Available Yield Supplement Amount..................................................... S-34
Certificates.......................................................................... S-28
Class A Note Underwriters............................................................. S-36
Class A Note Underwriting Agreement................................................... S-36
Class A Noteholders' Monthly Principal Distributable Amount........................... S-26
Class B Note Underwriters............................................................. S-37
Class B Note Underwriting Agreement................................................... S-37
Class B Noteholders' Adjusted Principal Distributable Amount.......................... S-27
Class B Noteholders' Monthly Principal Distributable Amount........................... S-27
Class B Noteholders' Principal Carryover Shortfall.................................... S-27
Class Interest Amount................................................................. S-31
Class Interest Shortfall.............................................................. S-32
Class Principal Distributable Amount.................................................. S-32
Collection Account.................................................................... S-30
Collection Period..................................................................... S-30
Contract Value........................................................................ S-14
CPR................................................................................... S-20
Cutoff Date........................................................................... S-13
Determination Date.................................................................... S-30
EITF.................................................................................. S-10
ERISA................................................................................. S-35
Expected Excess Spread................................................................ S-35
FASB.................................................................................. S-10
Federal Tax Counsel................................................................... S-6
Final Class Maturity Date............................................................. S-26
Final Scheduled Maturity Date......................................................... S-26
Funding Period........................................................................ S-25
Illinois Tax Counsel.................................................................. S-7
Initial Class B Percentage............................................................ S-27
Initial Cutoff Date................................................................... S-12
Initial Cutoff Date APR............................................................... S-12
Initial Pool Balance.................................................................. S-33
Initial Receivables................................................................... S-10
Liquidated Receivables................................................................ S-13
Liquidation Proceeds.................................................................. S-31
Maximum Negative Carry Amount......................................................... S-28
Maximum Yield Supplement Amount....................................................... S-34
Negative Carry Account................................................................ S-4
Negative Carry Account Initial Deposit................................................ S-32
Negative Carry Amount................................................................. S-32
Note Balance.......................................................................... S-11
Note Percentage....................................................................... S-32
Noteholders' Distributable Amount..................................................... S-34
Notes................................................................................. S-25
Plan.................................................................................. S-35
</TABLE>
S-39
<PAGE>
<TABLE>
<S> <C>
Pool Balance.......................................................................... S-27
Pre-Funded Amount..................................................................... S-27
Pre-Funded Percentage................................................................. S-32
Principal Carryover Shortfall......................................................... S-27
Principal Distributable Amount........................................................ S-27
Principal Distribution Amount......................................................... S-25
PTCE.................................................................................. S-35
Purchase Agreement.................................................................... S-29
Rating Agencies....................................................................... S-6
Receivables Pool...................................................................... S-12
Record Date........................................................................... S-27
Required Negative Carry Account Balance............................................... S-32
Required Yield Supplement Account Balance............................................. S-34
Sale and Servicing Agreement.......................................................... S-29
Special Payment Date.................................................................. S-25
Specified Spread Account Balance...................................................... S-34
Spread Account........................................................................ S-4
Spread Account Initial Deposit........................................................ S-34
Subsequent Cutoff Date................................................................ S-13
Subsequent Cutoff Date APR............................................................ S-13
Subsequent Receivables................................................................ S-13
Subsequent Transfer Date.............................................................. S-29
Total Distribution Amount............................................................. S-30
Transfer and Servicing Agreements..................................................... S-28
Underwriters.......................................................................... S-34
Yield Supplement Account.............................................................. S-5
Specified Spread Account Balance...................................................... S-33
Spread Account........................................................................ S-5
Spread Account Initial Deposit........................................................ S-33
Subsequent Cutoff Date................................................................ S-30
Subsequent Cutoff Date APR............................................................ S-30
Subsequent Receivables................................................................ S-12
Subsequent Transfer Date.............................................................. S-31
Total Distribution Amount............................................................. S-30
Transfer and Servicing Agreements..................................................... S-31
Underwriters.......................................................................... S-37
Yield Supplement Account.............................................................. S-5
</TABLE>
S-40
<PAGE>
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 in any state
where the offer is not permitted.
Dealers will deliver a prospectus supplement and prospectus when acting as
underwriters of the Class A Notes or the Class B Notes and with respect to their
unsold allotments or subscriptions. In addition, all dealers selling the Class A
or the Class B Notes will deliver a prospectus supplement and prospectus until
June 8, 1999.
<PAGE>
PROSPECTUS
Case Equipment Receivables Trusts
Asset Backed Notes
Asset Backed Certificates
CASE RECEIVABLES II INC.
Seller
CASE CREDIT CORPORATION
Servicer
<TABLE>
<S> <C>
The Trusts--
Consider carefully
the risk factors
</TABLE>
- A new trust will be formed to issue each series
<TABLE>
<S> <C>
beginning on page
4of
each
trust
will
be
limited
to
those
described
below.
in this prospectus.
</TABLE>
- The primary assets of each trust will be a
pool of receivables ("Receivables" or
"Contracts") of one or more of the following
types (as specified in the related
prospectus supplement):
<TABLE>
<S> <C>
The Asset Backed
</TABLE>
- retail installment sale contracts or
<TABLE>
<S> <C>
Notes of a given
series
</TABLE>
Contracts") secured by new or used
<TABLE>
<S> <C>
represent
obligations of
</TABLE>
or other equipment;
<TABLE>
<S> <C>
the related trust
only.
</TABLE>
- leases ("Leases") of similar equipment;
<TABLE>
<S> <C>
The Asset Backed
</TABLE>
- term loans ("Dealer Loans") to equipment
<TABLE>
<S> <C>
Certificates of such
</TABLE>
rental equipment, rolling stock or
computer systems; and
<TABLE>
<S> <C>
series represent
</TABLE>
- unsecured term loans ("Unsecured Dealer
<TABLE>
<S> <C>
beneficial interests
in the
</TABLE>
dealers.
<TABLE>
<S> <C>
related trust only.
</TABLE>
- Each trust may also own monies on deposit in a
<TABLE>
<S> <C>
Neither the Asset
</TABLE>
which will be used to purchase additional
<TABLE>
<S> <C>
Backed Notes nor the
</TABLE>
during the period specified in the related
prospectus supplement.
<TABLE>
<S> <C>
Asset Backed
</TABLE>
- In addition, each trust will hold security or
<TABLE>
<S> <C>
Certificates
represent
</TABLE>
equipment financed or leased under the trust's
<TABLE>
<S> <C>
obligations of or
</TABLE>
equipment financed under the Unsecured Dealer
<TABLE>
<S> <C>
interests in, and
are not
</TABLE>
from claims on certain related insurance
<TABLE>
<S> <C>
guaranteed or
insured
</TABLE>
the trust accounts identified in the related
<TABLE>
<S> <C>
by, Case Receivables
II
</TABLE>
credit enhancements specified in the related
prospectus supplement.
<TABLE>
<S> <C>
Inc. or Case Credit
Corporation or any
of
</TABLE>
The Securities--
<TABLE>
<S> <C>
their respective
affiliates.
</TABLE>
- 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);
<TABLE>
<S> <C>
This prospectus may
be
</TABLE>
- will be paid only from the assets of the related
trust;
<TABLE>
<S> <C>
used to offer and
sell
</TABLE>
- if offered by this prospectus, will be rated in
<TABLE>
<S> <C>
any series of
securities
</TABLE>
term rating categories or the highest short-term
<TABLE>
<S> <C>
only if accompanied
by
</TABLE>
one nationally recognized rating agency;
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the prospectus
</TABLE>
- may benefit from one or more forms of credit
enhancement; and
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supplement for that
</TABLE>
- will be issued as part of a designated series,
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series.
</TABLE>
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.
March 10, 1999
<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:
- the timing of interest and principal payments;
- the priority of interest and principal payments;
- financial and other information about the Receivables;
- information about credit enhancement for each class;
- the ratings of each class; and
- 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 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 58
in this prospectus.
<PAGE>
TABLE OF CONTENTS
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RISK FACTORS...................... 4
Maturity and Prepayment
Considerations.................. 4
Possible Effects of a Case Credit
or Seller Bankruptcy............ 4
Possible Payment Delays or Losses
Resulting From a Dealer
Bankruptcy...................... 5
Possible Third Party Liabilities
of Trusts....................... 5
Possible Payment Delays or Losses
Resulting From Receivable
Defaults........................ 6
THE TRUSTS........................ 6
Trust Property.................. 6
The Trustee..................... 7
THE RECEIVABLES POOLS............. 8
General......................... 8
The Retail Equipment Financing
Business...................... 10
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......... 15
Case Corporation................ 15
DESCRIPTION OF THE NOTES.......... 16
General......................... 16
Principal and Interest on the
Notes......................... 16
The Indenture................... 17
The Indenture Trustee........... 20
DESCRIPTION OF THE CERTIFICATES... 21
General......................... 21
Distributions of Principal and
Interest...................... 21
CERTAIN INFORMATION REGARDING THE
SECURITIES...................... 22
Denominations................... 22
Fixed Rate Securities........... 22
Floating Rate Securities........ 22
Indexed Securities.............. 23
Book-Entry Registration......... 23
Definitive Securities........... 27
List of Securityholders......... 27
Reports to Securityholders...... 28
DESCRIPTION OF THE TRANSFER AND
SERVICING AGREEMENTS............ 30
Sale and Assignment of
Receivables................... 30
Commercial Paper Program........ 31
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PAGE
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Accounts........................ 33
Servicing Procedures............ 34
Collections..................... 35
Servicing Compensation and
Payment of Expenses........... 35
Credit and Cash Flow
Enhancement................... 36
Net Deposits.................... 37
Statements to Trustees and
Trust......................... 37
Evidence as to Compliance....... 37
Certain Matters Regarding the
Servicer...................... 37
Servicer Default................ 38
Rights Upon Servicer Default.... 38
Waiver of Past Defaults......... 39
Amendment....................... 39
Payment of Notes................ 39
Termination..................... 40
Administration Agreement........ 40
CERTAIN LEGAL ASPECTS OF THE
RECEIVABLES..................... 40
Bankruptcy Considerations
Relating to Case Credit....... 40
Bankruptcy Considerations
Relating to Dealers........... 41
Perfection and Priority With
Respect to Receivables........ 41
Security Interests in Financed
Equipment..................... 42
Security Interests in Leased
Equipment..................... 43
Bankruptcy Considerations
Relating to a Lessee.......... 44
Repossession.................... 44
Notice of Sale; Redemption
Rights........................ 45
Certain UCC Considerations...... 45
Vicarious Tort Liability........ 45
Deficiency Judgments and Excess
Proceeds; Other Limitations... 46
Consumer Protection Laws........ 46
U.S. FEDERAL INCOME TAX
CONSEQUENCES.................... 47
Tax Characterization of the
Trust......................... 47
Tax Consequences to Holders of
the Notes..................... 47
Tax Consequences to Holders of
the Certificates.............. 50
ILLINOIS STATE TAX CONSEQUENCES... 54
ERISA CONSIDERATIONS.............. 55
PLAN OF DISTRIBUTION.............. 56
LEGAL OPINIONS.................... 56
WHERE YOU CAN FIND MORE
INFORMATION..................... 57
INDEX OF TERMS.................... 58
</TABLE>
3
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RISK FACTORS
You should consider the following risk factors in deciding whether to
purchase the Securities.
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MATURITY AND PREPAYMENT The receivables included in each trust may be prepaid, in
CONSIDERATIONS 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 of the receivables or Case
Receivables II Inc. (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
a 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.
POSSIBLE EFFECTS OF A CASE Case Credit Corporation ("Case Credit") will sell
CREDIT OR SELLER BANKRUPTCY 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:
- 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;
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4
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- 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;
- 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
- 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.
POSSIBLE PAYMENT DELAYS A substantial portion of the receivables was originated by
OR LOSSES RESULTING FROM dealers or brokers ("Dealers") and purchased by Case Credit.
A DEALER BANKRUPTCY 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. Such an assertion could result in payment
delays or (if successful) 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 The sales of receivables from Case Credit to the Seller and
LIABILITIES OF TRUSTS 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
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5
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<TABLE>
<S> <C>
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 PAYMENT DELAYS OR You will rely primarily upon collections on the receivables
LOSSES RESULTING FROM in your trust for payments on your Securities. Your
RECEIVABLE DEFAULTS 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.
</TABLE>
THE TRUSTS
Each series of Securities will be issued by a separate trust (a "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. Each series of Securities will include one or more classes of asset
backed notes (the "Notes") and 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 Note and each Certificate will represent the right to receive payments of
principal and interest as described in the related prospectus supplement. In
this prospectus, holders of Notes are called "Noteholders," holders of
Certificates are called "Certificateholders," and Noteholders and
Certificateholders are collectively called "Securityholders".
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 Notes or two or more classes of Certificates,
each class may differ as to timing and priority of distributions, seniority,
allocations of losses, interest rates or amount of distributions in respect of
principal or interest.
The principal offices of each Trust and the related Trustee will be
specified in the applicable prospectus supplement.
TRUST PROPERTY
The assets of each Trust will be limited to those described below. 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
6
<PAGE>
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.
Each Trust will purchase Receivables ("Initial Receivables") from 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 as frequently as
daily during a pre-funding period (the "Funding Period") lasting not more than
six months. In a transaction that includes a Funding Period, a portion of the
proceeds from the sale of the related Securities (the "Pre-Funded Amount") will
be held in a trust account (the "Pre-Funding Account") and used to pay the
purchase price for Subsequent Receivables and related purposes. 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."
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.
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 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 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
7
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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;
(v) is not a non-performing Receivable and does not have a payment that
is more than 90 days overdue as of the end of the month prior to the day it
is sold to the Trust or other material default outstanding;
(vi) does not have an Obligor that is shown in the Servicer's records as
being the subject of a bankruptcy proceeding; and
(vii) 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 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
8
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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. The
"Rule of 78's" is a method of calculating the unearned portion of the
precomputed finance charge on Receivables repayable in substantially equal
successive installments of approximately equal intervals over 12 months. The
unearned portion of the precomputed finance charge to be refunded is equal to
that portion of the finance charge which the sum of the number of months the
obligations are outstanding after the date of prepayment (counting 1 month as 1,
2 months as 3 (1 + 2), etc., up to 78) bears to 78.
"Simple Interest Receivables" provide for the amortization of the amount
financed under each receivable over a series of fixed 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
360-day 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 Receivable allocable to "unearned" add-on interest,
calculated in accordance with a method equivalent to the Rule of 78's. If an
Actuarial Receivable is prepaid in full, with minor variations based upon state
law, the Actuarial Receivable requires that the rebate be calculated on the
basis of a constant interest rate. These amortization features and related
rebates for Rule of 78's Receivables and Actuarial Receivables should not result
in shortfalls of principal payments on related Securities because the portion of
the interest payments on these Receivables that give rise to rebate requirements
are essentially treated as principal paydowns for purposes of the Securities. 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
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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, without set-off or counterclaim,
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. The termination value payment under Low Payment
Leases is generally equal to the portion of the original equipment cost not
amortized through the principal component of the periodic rental payments. 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, 1998, 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,
irrigation equipment 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 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;
however, Receivables relating to all-terrain vehicles, snowmobiles and marine
vessels will collectively make up less than 10% of the assets of each Trust.
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 may be obtained in order
to evaluate the prospective customer's creditworthiness. The extent of the
additional information varies based primarily on the amount of financing
requested. In most cases, Case Credit obtains a credit bureau report on the
applicant from an independent credit bureau or checks credit references provided
by the applicant, typically banks or
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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 at least a five-year loan history 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 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 an agreement (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 in some cases a Dealer's
recourse obligation is contingent upon Case Credit obtaining the related
equipment from the Obligor and presenting it to the Dealer. 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.
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 physical damage
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
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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 life insurance that can be financed
under the Contract.
LOAN/LEASE-TO-VALUE RATIOS. 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, which may not exceed 105% unless a senior credit manager with
appropriate delegated authority specifically approves an exception to this
limit. Such exceptions are unusual and are made only when Case Credit has
determined that the obligor will be able to cover the excess on the basis of the
obligor's overall financial condition, as opposed to from the value of the
equipment. There is no stated limit on the ratio that may be approved by a
senior credit manager. The limit would be based upon the senior credit manager's
judgement about the obligor's overall financial condition. For new equipment,
the value of the related equipment 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.
Case Credit continues to operate under its traditional guidelines and
practices for loan/lease to asset value ratios. Consequently, Case Credit does
not believe that those ratios should reasonably be expected to cause any Trust
to have credit loss and repossession experience materially different from the
historical experience reflected in the related prospectus supplement. There can
be no assurance, however, that the credit loss and repossession experience of
any Trust will be comparable to the historical experience reflected in the
related prospectus supplement.
The maximum amount that Case Credit will finance under a Dealer Loan or
Unsecured Dealer Loan is generally based upon an analysis of the Dealer's
overall financial condition, rather than the value of any collateral.
Consequently, there are no requirements as to the relationship between the
amounts of these types of loans and the value of any collateral.
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, since they are not generally based upon 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 results in a prepayment of the entire Contract and the
issuance of a new Contract, normally with lower payments and a longer term than
the original Contract. 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.
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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). Neither
Case Credit nor any of its affiliates maintains historical prepayment data with
respect to its portfolio of Receivables. 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 balance (the "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
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Certificates. Each Note Pool Factor and each Certificate Pool Factor will
initially be 1.0000000 and thereafter will decline to reflect reductions in the
outstanding principal balance of the applicable class of Notes, or the reduction
of the Certificate Balance of the applicable class of Certificates, as the case
may be. A Noteholder's portion of the aggregate outstanding principal balance of
the related class of Notes is the product of (i) the original denomination of
such Noteholder's Note and (ii) the applicable Note Pool Factor. A
Certificateholder's portion of the aggregate outstanding Certificate Balance for
the related class of Certificates is the product of (a) the original
denomination of such Certificateholder's Certificate and (b) the applicable
Certificate Pool Factor.
Unless otherwise provided in the related prospectus supplement with respect
to each Trust, the Noteholders will receive reports on or about each payment
date concerning the Receivables, the Pool Balance (as such term is defined in
the related prospectus supplement, the "Pool Balance"), each Note Pool Factor
and various other items of information, and the Certificateholders will receive
reports on or about each payment date concerning the Receivables, the Pool
Balance, each Certificate Pool Factor and various other items of information. In
addition, Securityholders of record during any calendar year will be furnished
information for tax reporting purposes not later than the latest date permitted
by law. See "Certain Information Regarding the Securities -- Reports to
Securityholders."
USE OF PROCEEDS
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 475 Half Day Road, Suite 200, Lincolnshire,
Illinois, 60069 and its telephone number is (847) 955-0228.
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."
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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; however, the Trusts will include only
Receivables of obligors located in the United States. 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.
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
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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 the
Depository Trust Company ("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
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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 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 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
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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: (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,
subject to payment of any past due amounts and cure or waiver of all other
Events of Default, be rescinded by the holders of a
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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 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.
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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
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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.
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,
rate at which interest will accrue (the "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 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 (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
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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
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
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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 will hold omnibus
positions on behalf of the Cedel Participants and the Euroclear Participants,
respectively, through customers' securities accounts
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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
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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.
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
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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.
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
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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.
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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.
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
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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 the material 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 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").
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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, as to any Lease that is a "true lease" or as to any security
interest securing a Dealer's obligation to pay the termination value under any
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, Case Credit, as Servicer,
will continue to service the Receivables held by the related Trust and will
receive fees for such services. 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."
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
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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
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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 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
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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.
In the unlikely event of defaults on Eligible Investments, investors in the
Securities could experience losses or payment delays. Investment earnings on
funds deposited in the Trust Accounts, net of losses and investment expenses
(collectively, "Investment Earnings"), shall be deposited in the applicable
Collection Account on each payment date and shall be treated as collections of
interest on the related Receivables.
The Trust Accounts will be maintained as Eligible Deposit Accounts.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or any other segregated account the deposit of funds in
which has been approved by the 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
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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.
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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, 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. Any credit enhancement that
constitutes a guarantee of the applicable Securities will be separately
registered under the Securities Act unless exempt from such registration.
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 applicable 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
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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.
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
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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 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
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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
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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.
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.
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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). The Servicer
will provide notice of any termination of a Trust to the applicable Trustee and
the Indenture Trustee. Within five business days of the receipt of notice from
the Servicer, the Trustee will mail notice of such termination to the
Certificateholders. The Indenture Trustee will mail notice of any such
termination to the Noteholders.
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
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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
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.
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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 takes (or requires the applicable Dealer to take) appropriate
action 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 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
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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.
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 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
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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:
- cure any default (other than a default based on the Obligor's bankruptcy
or financial condition, and possibly other non-monetary defaults); or
- provide adequate assurance of a prompt cure; and,
- if there has been a prepetition default, provide adequate assurance of
future performance under the Lease.
If the Lease is rejected:
- the scheduled payments due thereafter under such Lease will be canceled;
- the Trust will generally be able to obtain possession of the Leased
Equipment; and
- 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
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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.
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 with respect to the Leased Equipment at the time the Lease is
originated. If a Dealer fails to verify physical damage 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.
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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.
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
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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."
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion, summarizing the material Federal income tax
consequences of the purchase, ownership and disposition of the Notes and
Certificates, is based upon the provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), proposed, temporary and final Treasury regulations
thereunder, and published rulings and court decisions in effect as of the date
hereof, all of which are subject to change, possibly retroactively. To the
extent that the following summary relates to matters of law or legal conclusions
with respect thereto, such summary represents the opinion of Mayer, Brown &
Platt, special federal tax counsel ("Federal Tax Counsel") for each Trust,
subject to the qualifications set forth herein. Mayer, Brown & Platt have
prepared or reviewed the statements in this prospectus under the heading "U.S.
Federal Income Tax Consequences," and are of the opinion that such statements
are correct in all material respects. This discussion does not address every
aspect of the Federal income tax laws that may be relevant to Securityholders in
light of their personal investment circumstances or their special treatment
under the Federal income tax laws (for example, banks and life insurance
companies).
Each Trust will be provided with an opinion of 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
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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 additional
interest when it becomes fixed and unconditionally payable. A purchaser who buys
a Note for more or less than its principal amount will generally be subject,
respectively, to the premium amortization or market discount rules of the Code.
A holder of a Note that has a fixed maturity date of not more than one year
from the issue date of such Note (a "Short-Term Note") may be subject to special
rules. Under the OID Regulations, all stated interest will be treated as OID. An
accrual basis holder of a Short-Term Note (and certain cash basis holders,
including regulated investment companies, as set forth in Section 1281 of the
Code) generally would be required to report interest income as OID accrues on a
straight-line basis over the term of each interest period. Other cash basis
holders of a Short-Term Note would, in general, be required to report interest
income as interest is paid (or, if earlier, upon the taxable disposition of the
Short-Term Note). However, a cash basis holder of a Short-Term Note reporting
interest income as it is paid may be required to defer a portion of any interest
expense otherwise deductible on indebtedness incurred to purchase or carry the
Short-Term Note until the taxable disposition of the Short-Term Note. A cash
basis taxpayer may elect under Section 1281 of the Code to accrue interest
income on all nongovernment debt obligations with a term of one year or less, in
which case the taxpayer would include OID on the Short-Term Note in income as it
accrues, but would not be 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 and at 20% if the Note
is held for more than 12 months.
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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 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.
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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
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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 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
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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.
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
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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 holders. Subsequent adoption of Treasury regulations or the
issuance of other administrative pronouncements may require the Trust to change
its withholding procedures. In
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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."
ILLINOIS STATE TAX CONSEQUENCES
The following discussion, summarizing the material Illinois income tax
consequences of the purchase, ownership and disposition of the Notes and
Certificates, is based upon present provisions of Illinois statutes and the
regulations promulgated thereunder, and applicable judicial or ruling authority,
all of which are subject to change, which change may be retroactive. To the
extent the following summary relates to matters of law or legal conclusions with
respect thereto, such summary represents the opinion of Mayer, Brown & Platt,
special Illinois tax counsel ("Illinois Tax Counsel") for each Trust subject to
the qualifications set forth herein. Mayer, Brown & Platt have prepared or
reviewed the statements in this prospectus under the heading "Illinois State Tax
Consequences" and are of the opinion that such statements are correct in all
material respects.
Each Trust will be provided with an opinion of Illinois Tax Counsel
regarding certain Illinois income tax matters discussed below. An opinion of
Illinois Tax Counsel, however, is not binding on the Illinois Department of
Revenue (the "IDOR") or the courts. Moreover, there are no cases or IDOR rulings
on similar transactions involving both debt and equity interests issued by a
trust with terms similar to these of the Notes and the Certificates. As a
result, the IDOR 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 IDOR.
The State of Illinois imposes a state income tax on individuals,
corporations, partners in partnerships and beneficiaries of trusts earning
income in, or as residents of, the State of Illinois. The State of Illinois also
imposes a franchise tax on corporations doing business in Illinois. If the
Certificates issued by the Trust were treated as equity interests in a
partnership, the partnership may be subject to the Illinois Replacement Tax.
TREATMENT OF THE NOTES
If the Notes are characterized as indebtedness for federal income tax
purposes, in the opinion of Illinois Tax counsel, although the matter is not
free from doubt, this treatment would also apply for Illinois tax purposes. If
the Notes are characterized as debt, Noteholders not otherwise subject to
taxation in Illinois will not, although the matter is not free from doubt,
become subject to such taxes solely because of their ownership of Notes.
Noteholders already subject to taxation in Illinois, however,
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could be required to pay tax on, or measured by, interest income (including
original issue discount, if any) generated by, and on gain from the disposition
of, Notes.
CLASSIFICATION OF TRUST AS A PARTNERSHIP
If a Trust were treated as a partnership (not taxable as a corporation) for
federal income tax purposes, in the opinion of Illinois Tax Counsel, although
the matter is not free from doubt, the same treatment would also apply for
Illinois tax purposes. In such case, the partnership may be treated as earning
income in the State of Illinois and therefore would be subject to the Illinois
Replacement Tax (which, if applicable, could result in reduced distributions to
Noteholders and Certificateholders).
TREATMENT OF NONRESIDENT CERTIFICATEHOLDERS
Under current law, Certificateholders that are nonresidents of the State of
Illinois and are not otherwise subject to Illinois income tax and Illinois
Replacement Tax should not be subject to Illinois income tax and Illinois
Replacement Tax on income from a Trust. In any event, classification of the
arrangement as a partnership would not cause a Certificateholder not otherwise
subject to taxation in Illinois to pay Illinois tax on income beyond that
derived from the Certificates. Certificateholders already subject to taxation in
Illinois, however, could be required to pay tax on, or measured by, interest
income (including original issue discount, if any) generated by, and on gain
from the disposition of, Notes and Certificates.
RISKS OF ALTERNATIVE CHARACTERIZATION
If the Trust were instead treated as an association taxable as a corporation
or a "publicly traded partnership" taxable as a corporation for federal income
tax purposes, then the Trust could be subject to the Illinois income tax, the
Illinois Replacement Tax, or the Illinois franchise tax (which, if applicable,
could result in reduced distributions to Certificateholders).
ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("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.
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<PAGE>
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 Mayer, Brown &
Platt, Chicago, Illinois and New York, New York. Richard S. Brennan, General
Counsel and Secretary of Case is also a partner at Mayer, Brown & Platt.
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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 May 10, 1996,
September 19, 1996, January 13, 1997, March 18, 1997, June 11, 1997, September
10, 1997, September 22, 1997, December 5, 1997, February 9, 1998, February 23,
1998, June 8, 1998, August 18, 1998, August 26, 1998, September 9, 1998,
September 15, 1998, October 15, 1998, November 6, 1998, November 16, 1998,
November 18, 1998, December 15, 1998, January 13, 1999, January 15, 1999,
February 15, 1999 and March 8, 1999 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., 475 Half Day Road, Lincolnshire, Illinois
60069, Attention: Vice President (Telephone 847-955-0228). You may access the
Servicer's Internet site at (http://www.casecorp.com).
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INDEX OF TERMS
Set forth below is a list of the defined terms used in this prospectus and
the pages on which the definitions of such terms may be found herein.
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Actuarial Receivables...................................................................................... 8
Administration Agreement................................................................................... 39
Administration Fee......................................................................................... 39
Administrator.............................................................................................. 39
Applicable Trustee......................................................................................... 27
APR........................................................................................................ 8
Article 2A................................................................................................. 44
Base Rate.................................................................................................. 22
Benefit Plan............................................................................................... 54
Calculation Agent.......................................................................................... 22
Case....................................................................................................... 15
Case Credit................................................................................................ 4
Case Dealers............................................................................................... 10
Cedel...................................................................................................... 25
Cedel Participants......................................................................................... 25
Certificate Balance........................................................................................ 13
Certificate Distribution Account........................................................................... 32
Certificate Pool Factor.................................................................................... 13
Certificateholders......................................................................................... 6
Certificates............................................................................................... 6
Clean-Up Call.............................................................................................. 30
Closing Date............................................................................................... 7
Code....................................................................................................... 46
Collection Account......................................................................................... 32
Collection Period.......................................................................................... 34
Commodity Indexed Securities............................................................................... 23
Contracts.................................................................................................. 1
Cooperative................................................................................................ 26
Currency Indexed Securities................................................................................ 23
Cutoff Date................................................................................................ 6
Dealer Agreement........................................................................................... 11
Dealer Loans............................................................................................... 1
Dealers.................................................................................................... 5
Definitive Certificates.................................................................................... 26
Definitive Notes........................................................................................... 26
Definitive Securities...................................................................................... 26
Depositaries............................................................................................... 23
DTC........................................................................................................ 16
DTC Participants........................................................................................... 24
Eligible Deposit Account................................................................................... 33
Eligible Institution....................................................................................... 33
Eligible Investments....................................................................................... 32
ERISA...................................................................................................... 54
Euroclear.................................................................................................. 26
Euroclear Operator......................................................................................... 26
Euroclear Participants..................................................................................... 26
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Events of Default.......................................................................................... 18
Exchange Act............................................................................................... 15
Face Amount................................................................................................ 23
Federal Tax Counsel........................................................................................ 46
Final Regulations.......................................................................................... 48
finance lease.............................................................................................. 42
Finance Lease Equipment.................................................................................... 7
Financed Equipment......................................................................................... 7
Fixed Rate Securities...................................................................................... 22
Floating Rate Securities................................................................................... 22
Full Payout Leases......................................................................................... 10
Funding Period............................................................................................. 7
Illinois Tax Counsel....................................................................................... 53
Indenture.................................................................................................. 16
Indenture Trustee.......................................................................................... 16
Index...................................................................................................... 23
Indexed Commodity.......................................................................................... 23
Indexed Currency........................................................................................... 23
Indexed Principal Amount................................................................................... 23
Indexed Securities......................................................................................... 23
Indirect Participants...................................................................................... 24
Initial Receivables........................................................................................ 7
Insolvency Event........................................................................................... 37
Insolvency Laws............................................................................................ 14
Interest Reset Period...................................................................................... 22
Investment Earnings........................................................................................ 33
IRS........................................................................................................ 46
Leased Equipment........................................................................................... 7
Leases..................................................................................................... 1
LIBOR...................................................................................................... 22
Liquidity Receivables Purchase Agreement................................................................... 30
Loan and Security Agreement................................................................................ 31
Low Payment Leases......................................................................................... 10
New Partnership............................................................................................ 51
Note Distribution Account.................................................................................. 32
Note Pool Factor........................................................................................... 13
Noteholders................................................................................................ 6
Notes...................................................................................................... 6
Obligors................................................................................................... 6
OID........................................................................................................ 46
OID Regulations............................................................................................ 46
Old Partnership............................................................................................ 51
Participants............................................................................................... 16
Pass-Through Rate.......................................................................................... 21
Plan Assets Regulation..................................................................................... 54
Pool Balance............................................................................................... 14
Pre-Funded Amount.......................................................................................... 7
Pre-Funding Account........................................................................................ 7
Precomputed Receivables.................................................................................... 8
Precomputed Simple Rebate Receivables...................................................................... 9
prepayments................................................................................................ 13
</TABLE>
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<TABLE>
<S> <C>
Purchase Agreement......................................................................................... 29
Purchase Amount............................................................................................ 30
Receivables................................................................................................ 1
Related Documents.......................................................................................... 20
Reorganization............................................................................................. 8
Retail Installment Contracts............................................................................... 1
Rule of 78's............................................................................................... 9
Rule of 78's Receivables................................................................................... 8
Sale and Servicing Agreement............................................................................... 29
Schedule of Receivables.................................................................................... 29
SEC........................................................................................................ 56
Securities................................................................................................. 1
Securities Act............................................................................................. 16
Securityholders............................................................................................ 6
Seller..................................................................................................... 4
Seller Collateral.......................................................................................... 31
Seller Loan................................................................................................ 31
Servicer................................................................................................... 15
Servicer Default........................................................................................... 37
Servicing Fee.............................................................................................. 34
Servicing Fee Rate......................................................................................... 34
Short-Term Note............................................................................................ 47
Simple Interest Receivables................................................................................ 9
Specified Party............................................................................................ 37
Spread..................................................................................................... 22
Spread Account............................................................................................. 35
Spread Multiplier.......................................................................................... 22
Standard Precomputed Receivables........................................................................... 9
Stock Index................................................................................................ 23
Stock Indexed Securities................................................................................... 23
Strip Certificates......................................................................................... 21
Strip Notes................................................................................................ 17
Subsequent Receivables..................................................................................... 7
Subsequent Transfer Date................................................................................... 29
Terms and Conditions....................................................................................... 26
Transfer and Servicing Agreements.......................................................................... 29
true lease................................................................................................. 42
Trust...................................................................................................... 6
Trust Accounts............................................................................................. 32
Trust Agreement............................................................................................ 6
Trustee.................................................................................................... 7
UCC........................................................................................................ 30
Underwriting Agreements.................................................................................... 55
Unsecured Dealer Loans..................................................................................... 1
</TABLE>
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