As filed with the Securities and Exchange Commission on August 9, 1999
Registration No. 333-82741
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
Amendment No. 1 to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
CASE RECEIVABLES II INC.
(Exact name of registrant as specified in its charter)
Delaware 6153 76-0439709
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
475 Half Day Road
Lincolnshire, Illinois 60069
(847) 955-0228
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Richard S. Brennan
General Counsel and Secretary
Case Corporation
700 State Street
Racine, Wisconsin 53404
(414) 636-6011
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Robert F. Hugi Jeffrey S. O'Connor
Mayer, Brown & Platt Kirkland & Ellis
190 South LaSalle Street 200 East Randolph Drive
Chicago, Illinois 60603-3441 Chicago, Illinois 60601
(312) 782-0600 (312) 861-2000
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective as
determined by market conditions.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, check the
following box.[ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering.[ ]_______
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]_________
If delivery of the prospectus is expected to be made pursuant to
Rule 434, check the following box. [ ]
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Aggregate Amount of
Securities to be Registered Registered(1) Per Unit(2) Offering Registration Fee(3)
Price(2)
<S> <C> <C> <C> <C>
Asset Backed Notes....................... $1,000,000 100% $1,000,000 $278
- ----------------------------------------------------------------------------------------------------------------------------
Asset Backed Certificates................ $0 100% $0 $0
- ----------------------------------------------------------------------------------------------------------------------------
Total Asset Backed Securities... $1,000,000 100% $1,000,000 $278
============================================================================================================================
</TABLE>
(1) $1,999,125,000 aggregate principal amount of Asset Backed Securities
registered by the Registrant under Registration Statement No.
333-52493 referred to below and not previously sold are
consolidated in this Registration Statement pursuant to Rule 429,
and $1,949,125,000 of such Asset Backed Securities is allocated to
Asset Backed Notes and $50,000,000 of such Asset Backed Securities
is allocated to Asset Backed Certificates. All registration fees
in connection with such unsold amount of Asset Backed Securities
have previously been paid under Registration Statement No.
333-52493. The total amount registered under this Registration
Statement as so consolidated as of the date of this filing is
$2,000,125,000 consisting of $1,950,125,000 of Asset Backed Notes and
$50,000,000 of Asset Backed Certificates.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Pursuant to Rule 457(o) under the Securities Act of 1933, the
registration fee has been calculated on the basis of the proposed
maximum offering price for the Total Asset Backed Securities. Such
registration fee has previously been paid.
Pursuant to Rule 429 under the Securities Act of 1933, the
Prospectus filed as part of this Registration Statement relates
to the securities registered hereby, including the remaining unsold
$1,999,125,000 principal amount of debt securities previously
registered by the Registrant under its Registration Statement on
Form S-3 (File No. 333-52493).
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933, or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL WE DELIVER A FINAL PROSPECTUS. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED __________
PROSPECTUS
Case Equipment Receivables Trusts
Asset Backed Notes
Asset Backed Certificates
Case Receivables II Inc.
Seller
Case Credit Corporation
Servicer
The Trusts--
Consider carefully the
risk factors beginning o We (Case Receivables II Inc.) will form a
on page 4 in this new trust to issue each series of.
prospectus and in your securities offered by this prospectus.
prospectus supplement o The assets of each trust:
o will be those described below and will
Notes in your series primarily be a pool of receivables of
represent obligations one or more of the following types:
only of the trust that
issues them. Certificates - retail installment sale contracts or
in your series will loans secured by new or used
represent beneficial agricultural and construction or
interests only in the trust other equipment,
that issues them. No one
else is liable for the - leases of similar equipment,
payments due on your
securities. - term loans to equipment dealers
secured by rental equipment, rolling
stock or computer systems, and
This prospectus may be
used to offer and sell any - unsecured term loans to equipment
series of securities only dealers
if accompanied by the
prospectus supplement o will also include interests in financed
for that series. or leased equipment, proceeds from
claims on related insurance policies,
and amounts on deposit in specified
bank accounts and may also include
other credit enhancements.
<PAGE>
The Securities--
o will be asset-backed securities
issued periodically in
designated series of one or
more classes.
o if offered by this prospectus,
will be rated in one of the
four highest long-term rating
categories or the highest
short-term rating category by
at least one nationally
recognized rating agency.
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.
------------- ----, -------
Important Notice about Information Presented in this
Prospectus and the Accompanying Prospectus Supplement
We tell you about the securities in two separate documents that
progressively provide more detail: (a) this prospectus, which provides
general information, some of which may not apply to a particular series of
securities, including your series; and (b) the accompanying prospectus
supplement, which will describe the specific terms of your series of
securities, including:
o the timing of interest and principal payments;
o the priority of interest and principal payments;
o financial and other information about the receivables;
o information about credit enhancement for each class;
o the ratings of each class; and
o the method for selling the securities.
If the terms of a particular series of securities vary between
this prospectus and the prospectus supplement, you should rely on the
information in the prospectus supplement.
You should rely only on the information provided in this
prospectus and the accompanying prospectus supplement, including the
information incorporated by reference. We have not authorized anyone to
provide you with different information. We are not offering the securities
in any state where the offer is not permitted.
We 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.
<PAGE>
TABLE OF CONTENTS
Page
Summary: Overview
of Transactions..............................................................3
Risk Factors.................................................................4
You will bear the reinvestment
risk and other interest rate risk if
receivables are prepaid,
repurchased or extended...................................................4
Our bankruptcy or the bankruptcy
of Case Credit Corporation may
cause payment delays or losses............................................5
Bankruptcy of an equipment
dealer or broker may cause
payment delays or losses..................................................6
Possible liability for third party
claims may cause payment delays
or losses................................................................ 6
Defaults on the receivables may
cause payment delays or losses............................................7
Characteristics of the Receivables...........................................7
Selection Criteria........................................................7
Interest and Amortization Types...........................................8
Payment Terms.........................................................10
Insurance................................................................10
Extension Procedures.....................................................10
Terms of Leases..........................................................10
Origination of Receivables..................................................11
Credit Approval Process..................................................12
Loan/Lease-to-Value Ratio................................................12
Dealer Agreements........................................................13
Delinquencies, Repossessions
and Net Losses...........................................................13
Use of Proceeds.............................................................14
Important Parties...........................................................14
Case Receivables II Inc..................................................14
Case Credit Corporation..................................................14
Case Corporation.........................................................15
The Trustee..............................................................15
The Indenture Trustee....................................................16
Description of the Notes....................................................16
Principal and Interest on
the Notes................................................................16
The Indenture............................................................16
<PAGE>
Description of the Certificates.............................................20
Administrative Information
About the Securities........................................................21
Denominations............................................................21
Fixed Rate Securities....................................................21
Floating Rate Securities.................................................21
Indexed Securities.......................................................22
Book-Entry Registration..................................................23
Definitive Securities....................................................26
List of Securityholders..................................................27
Reports to Securityholders...............................................28
Description of the Transaction
Agreements..................................................................29
Commercial Paper Program.................................................29
Additional Sales of
Receivables..............................................................31
Accounts.................................................................32
Servicing Procedures.....................................................34
Collections..............................................................34
Servicing Compensation...................................................35
Evidence as to Compliance................................................35
Resignation, Liability and
Successors of the Servicer...............................................35
Servicer Default.........................................................36
Rights Upon Servicer Default.............................................36
Waiver of Past Defaults..................................................36
Amendment................................................................37
Payment of Notes.........................................................37
Termination..............................................................37
Administration Agreement.................................................38
Credit and Cash Flow
Enhancement.................................................................38
Legal Aspects of the
Receivables.................................................................39
Bankruptcy Consideration
Relating to Case Credit..................................................39
Bankruptcy Consideration
Relating to Dealers......................................................40
Perfection and Priority With
Respect to Receivables...................................................41
Security Interests in Financed
Equipment................................................................41
Security Interests in Leased
Equipment................................................................42
Bankruptcy Considerations
Relating to a Lessee.....................................................43
Repossession.............................................................44
Notice of Sale; Redemption
i
<PAGE>
Rights...................................................................44
Uniform Commercial Code
Considerations...........................................................45
Vicarious Tort Liability.................................................45
Deficiency Judgments and Excess
Proceeds; Other Limitations..............................................45
U.S. Federal Income Tax
Consequences................................................................47
Tax Characterization of
the Trust................................................................47
Tax Consequences to Holders
of the Notes.............................................................48
Tax Consequences to Holders of
the Certificates.........................................................51
Illinois State Tax Consequences.............................................56
Treatment of the Notes...................................................56
Classification of Trust as a
Partnership..............................................................57
Treatment of Nonresident
Certificateholders.......................................................57
Risks of Alternative
Characterization.........................................................57
ERISA Considerations........................................................57
Plan of Distribution........................................................58
Legal Opinions..............................................................59
Where You Can Find More
Information.................................................................59
Index of Terms..............................................................60
ii
<PAGE>
Summary: Overview of Transactions
_____________ _____________
| | | Case | ( )
| Case Credit | Receivables |Receivables |Receivables ( Trust ) Securities
| Corporation |-------------> | II Inc. |----------->( ) ---------->
|_____________| |_____________|
Each series of securities will be issued by a separate trust and will
include:
o one or more classes of notes,
representing debt of the trust; and
o one or more classes of certificates,
representing ownership interests in
the trust.
Payments on the certificates issued by a trust will be junior in priority
to payments on the related notes. 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. We will disclose the details of these timing,
priority and other matters in a prospectus supplement.
The primary assets of each trust will be a pool of receivables. Each trust
will also include spread accounts or other credit enhancements for the
benefit of some or all of the trust's securities.
We will sell receivables to each trust on the issuance date for that
trust's securities. In addition, to the extent described in the related
prospectus supplement, each trust will have a pre-funding period. In that
case, a portion of the cash raised from the sale of the related securities
will be placed in a pre-funding account. The trust will use that cash to
buy additional receivables from us during a pre-funding period, which will
last not more than six months.
Each trust's receivables will be originated directly or indirectly by Case
Credit. We will buy those receivables from Case Credit either directly or
indirectly through another of its subsidiaries. Case Credit continues to
service receivables that are transferred to trusts under one of the
agreements entered into by each trust, subject to removal upon specified
servicer defaults. Case Credit also acts as administrator for each trust.
3
<PAGE>
Risk Factors
You should consider the following risk factors in deciding whether to
purchase the securities.
You will bear the The principal payment on any series of
reinvestment risk securities on any payment date will depend
and other interest mostly upon the amount of collections
rate risk if received on that trust's receivables during
receivables are a related collection period. As a result,
or extended. the rate at which payments on the
receivables are received will affect the
rate at which principal is paid on the
related securities. Each receivable has a
fixed payment schedule, but the actual
rate at which payments are received may
vary from that schedule for a number of
reasons.
o Receivables may be voluntarily prepaid,
in full or in part, or obligors may be
required to prepay receivables as a
result of defaults, casualties to the
related equipment, death of an obligor
or other reasons. Prepayments of
agricultural equipment retail
installment sale contracts or loans,
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. However, prepayment
rates may be influenced by a variety
of factors, and we cannot predict them
with any certainty.
o We or the servicer of the receivables
may be required to repurchase one or more
receivables from a trust. In that case
the repurchase price received by the
trust will be treated like a prepayment
of the receivable. This would happen
if we or Case Credit have made inaccurate
representations about a receivable or the
servicer violated specified servicing
obligations.
o The servicer may purchase all of a
trust's receivables after they have
paid down to 10% of their aggregate
balance as of the time they were
transferred to the trust. In this
case, the purchase price received by
the trust will be treated like a
prepayment of the remaining
receivables.
4
<PAGE>
Each prepayment, repurchase or purchase
will shorten the average life of the
related securities. On the other hand,
the payment schedule under a receivable
may be extended or revised by the
servicer, which may lengthen the
average life of the related securities.
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.
Our bankruptcy or the Case Credit Corporation will sell
bankruptcy of Case receivable to us, and we will in turn sell
Credit Corporation receivables to each trust. However, a
may cause payment court could conclude that we or Case Credit
delays or losses. Corporation effectively still own the of
receivables supporting any series of
securities. This could happen because the
court concludes either that the sales
referred to above were not "true sales"
or that the bankrupt party and the
owner of the receivables should be
treated as the same person for
bankruptcy purposes. If this were to
occur, then you could experience delays
or reductions in payments as a result
of:
o the automatic stay which prevents
secured creditors from exercising
remedies against a debtor in
bankruptcy without permission from
the court and provisions of the U.S.
Bankruptcy Code that permit
substitution of collateral;
o tax or government liens on Case
Credit Corporation's or our
property that arose prior to the
transfer of a receivable to the
trust having a right to be paid
from collections before the
collections are used to make
payments on the securities;
o rejection by Case Credit or its
bankruptcy trustee of any lease that
was deemed to be a "true lease,"
which would result in the termination
of scheduled payments under that
lease; or
5
<PAGE>
o the fact that the trust might not
have a perfected interest in (a)
some equipment subject to
certificate of title statutes or
(b) any cash collections on the
receivables held by Case Credit
Corporation at the time that a
bankruptcy proceeding begins.
Bankruptcy of an A substantial portion of the receivables was
equipment dealer or originated by equipment dealers or brokers
broker may cause and purchased by Case Credit Corporation. A
payment delays or portion of those receivables provide for
losses. recourse to the originating broker or dealer
for defaults by the obligors. In addition,
Case dealers have the right to repurchase at
any time the receivables they sell to
Case Credit Corporation.
In the event of a dealer or broker's
bankruptcy, a creditor or bankruptcy
trustee of the dealer or broker or the
dealer or broker itself might assert
that the sales of receivables to Case
Credit Corporation are loans to the
dealer or broker secured by the
receivables. Such an assertion could
result in payment delays and, if
successful, losses on the affected
receivables. In those circumstances, a
dealer or broker or its bankruptcy
trustee might also be able to reject
any leases originated by the dealer or
broker that were deemed to be "true
leases," resulting in the termination
of scheduled payments under those
leases.
Possible liability for The sales of receivables from Case Credit
third party claims may to us and from us to each trust are
cause payment delays intended to reduce the possibility that
or losses. cash flows from the receivables will be
subject to claims other than the rights of
investors in the securities issued by
the trust and of the parties to the
applicable transaction agreements.
However, to the extent that Case Credit
or a dealer or broker violates 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
transaction agreements, we must
repurchase any affected receivable from
the trust. However, if we fail for any
reason to perform our repurchase
obligation, you could experience delays
or reductions in payments on your
securities as a result of any
liabilities imposed upon your trust.
6
<PAGE>
Similarly, as to any trust that holds
any equipment subject to leases, state
laws differ as to whether anyone
suffering any injury to person or
property involving leased agricultural,
construction or other equipment may
bring an action upon which relief may
be granted against the owner of the
equipment by virtue of that ownership.
If applicable law permits an action,
and that action is successful, the
related trust and its assets may be
subject to liability to any 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 that
loss.
Defaults on the You will rely primarily upon collections
receivables may cause on the receivables in your trust for
payment delays or payments on your securities. Your
losses. 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.
Characteristics of the Receivables
We will provide information about each trust's pool of receivables
in the related prospectus supplement. The information will include, to the
extent appropriate, the types and composition of the receivables, the
distribution by interest rate or spread over a designated floating rate,
type of equipment, payment frequency and contract value of the receivables
and the geographic distribution of the receivables.
Selection Criteria
We will select receivables to sell to each trust using several
criteria. These criteria will include that each receivable transferred to a
trust must:
(1) be secured by new or used agricultural, construction
or other equipment, or be leases of such equipment, except that
receivables that are term loans to equipment dealers may be
secured by other collateral or not be secured;
(2) be originated in the United States;
(3) provide for payments that fully amortize the amount
financed over its original term to maturity-which payments may, in
the case of any lease, include a termination value similar to a
final balloon
7
<PAGE>
payment payable by either the lessee or the dealer that originated the
lease;
(4) not be a non-performing receivable and 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; and
(5) not have an obligor that is shown in Case Credit's
records as being the subject of a bankruptcy proceeding.
Additional criteria for any particular trust's receivables may be
listed in the related prospectus supplement. We will not use selection
procedures that we believe to be adverse to you in selecting the
receivables for your trust.
Each trust's receivables may include receivables with respect to
which the initial payment has not been made. They may also include interest
waiver receivables, under which interest does not begin to accrue for a
designated time period, as well as receivables originated through special
interest rate financing programs.
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. 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.
Interest and Amortization Types
A trust's receivables may include fixed rate receivables and
floating rate receivables, as well as receivables that provide for
different fixed or floating interest rates or different formulae to
calculate the floating interest rate at different times during the life of
the receivable. Receivables that are loans or retail installment contracts
have an explicit interest rate that is usually named in the contract that
evidences the receivable. Other receivables, including leases, may not
disclose an explicit interest rate, but they have an implicit interest rate
that Case Credit uses to calculate the periodic rental payments in a way
similar to the way that it calculates periodic installment payments under a
retail installment contract or retail installment loan.
All of the receivables in each trust will be either precomputed
receivables or simple interest receivables. The difference between these
two types of receivables is the way that each installment payment is
divided between principal and interest.
Under a precomputed receivable, each installment payment is
divided between interest and principal on a predetermined basis, without
regard to the period of time that has elapsed since the prior payment was
made. This allocation is made either on an actuarial basis or according to
a variation on the rule of 78's. (See box.) In contrast, under a simple
interest receivable, each installment payment is divided between interest
and principal based on the actual date on
8
<PAGE>
which a payment is received. The interest component equals the unpaid
principal amount financed, multiplied by the annual interest rate,
multiplied by the fraction of a calendar year that has elapsed since the
preceding payment of interest was made.
Under a simple interest receivable, 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. The final
installment on a simple interest receivable is increased or decreased as
necessary to adjust for variations in the amounts of prior installments
applied to principal, based upon the date on which they were made.
Under an actuarial receivable, the interest component of each installment
equals the unpaid principal amount financed, multiplied by the annual
interest rate, multiplied by an appropriate fraction. On a receivable that
requires payments every month, the appropriate fraction would be 1/12,
since that is the portion of a year that elapses between the required
payment dates. On a receivable that requires payments every three months,
the appropriate fraction would be 3/12, or 1/4. Under a rule of 78's
receivable, the interest component of each installment is determined using
a method equivalent to the rule of 78's. 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 at any time is equal to that portion of the
finance charge which the sum of the number of months the obligations are
outstanding after the calculation date (counting 1 month as 1, 2 months as
3 (1 + 2), etc., up to 78) bears to 78.
If a precomputed receivable is prepaid in full, the obligor is
entitled to a rebate equal to the portion of the total amount of payments
that is allocable to unearned add-on interest. 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 the
rebate on a precomputed receivables is determined based upon whether the
receivable is an actuarial receivable or a rule of 78's receivable and the
requirements of the law of the state where the obligor is located.
The amount of the rebate under a rule of 78's receivable generally
will be less than the amount of the rebate on an actuarial receivable for
the same amount 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. These amortization
features and related rebates for precomputed receivables should not result
in shortfalls of principal payments on your 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.
9
<PAGE>
Payment 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. Receivables secured
by construction equipment are normally financed with equal monthly
payments. However, obligors can select a "skip payment" schedule, under
which payments in up to three predetermined consecutive months are
"skipped" to coincide with slow work periods. 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 can only make this election at the time
the receivable is originated.
Insurance
Obligors are required to obtain and maintain physical damage
insurance with respect to the financed or leased equipment and, in the case
of a lease, liability insurance with respect to the leased equipment.
Dealers that sell receivables to Case Credit are responsible for verifying
physical damage insurance coverage on the equipment at the time the
receivable is originated. If a dealer fails to verify insurance coverage
and the obligor did not obtain insurance coverage at the time the
receivable was originated, the dealer will be responsible for any resulting
loss. At the time the receivable is originated, Case Credit offers
customers physical damage insurance and life insurance that can be financed
under the receivable.
Extension Procedures
Case Credit may agree to extend a receivable when payment
delinquencies result from temporary interruptions in an obligor's cash
flow. In an extension, Case Credit moves one or more payments to a future
date, which may be before or after the original final maturity of the
receivable. Case Credit charges obligors an extension fee, which is usually
payable at the time a receivable is extended. The extension fee is
generally equal to interest accrued on the unpaid balance of the receivable
during the period that payments are not required to be made as a result of
the extension. Any extension fees paid in connection with receivables sold
to a trust will be paid to that trust.
Terms of Leases
The leases transferred to the trusts will call for two kinds of
payments: rental payments that are due periodically during the term of the
lease; and a termination value payment. Under the leases, the lessee's
obligation to make rental payments is absolute and unconditional, without
set-off or counterclaim, and notwithstanding any damages to, or loss of,
the leased equipment or any other event. However, lessees are not required
to make termination value payments. Instead, the lessee has the option to
purchase the leased equipment at the end of the lease term for an amount
equal to the termination value payment.
The termination value payment is in an amount generally equal to
the portion of the original equipment cost that has not been amortized
through the principal component of the periodic rental payments. If a
lessee does not elect to purchase the leased equipment at the end of the
lease term, then, under the leases that are eligible to be transferred to
trusts, the dealer that originated the lease is required to pay the
termination value payment and entitled to obtain the
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equipment from the lessee. In no case will a trust or Case Credit, as
servicer for any trust, obtain possession of any leased equipment or be
entitled to the proceeds from the sale of such equipment, other than
termination value payments and proceeds of equipment that 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.
Origination of Receivables
Case Credit originates receivables that may be sold to the trusts
in several ways:
o It purchases retail installment contracts and leases from
dealers in agricultural, construction and other equipment
manufactured or otherwise distributed by Case Corporation
and other equipment not distributed by Case Corporation.
As of December 31, 1998, there were approximately 1,000
independently owned Case dealer outlets in the United
States.
o It finances retail installment contracts and leases
originated through one retail outlet directly owned by
Case which are immediately assigned to Case Credit.
o It purchases retail installment contracts, retail
installment loans and leases from other dealers and
through brokers in agricultural, construction and other
equipment.
o It makes, or may in the future make, retail installment
loans directly to purchasers of agricultural,
construction and other equipment.
o It makes term loans directly to equipment dealers. These
include loans secured by rental equipment, rolling stock
and computer systems and unsecured loans.
Case Credit finances the following categories of equipment:
Agricultural tractors, combines, cotton pickers, soil management
equipment: equipment, planting and seeding equipment, hay and forage
equipment, crop care equipment (such as sprayers and
irrigation equipment) and other related equipment
Construction excavators, backhoes, wheel loaders, skid steer loaders,
equipment: tractor loaders, trenchers, Horizontal directional
drilling equipment, telescopic handlers, forklifts,
compaction equipment, crawlers, cranes and other related
equipment
Other equipment: trucks, commercial vehicles, forestry equipment, mining
equipment, trailers, all-terrain vehicles, snowmobiles,
snow grooming equipment 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
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Credit Approval Process
Case Credit requires each prospective customer to complete a
credit application that lists the applicant's liabilities, income, credit
history and other demographic and personal information. This information is
obtained by a dealer or Case Credit, and in either case is sent to one of
four regional finance offices maintained by Case Credit. The regional
finance office then processes this information and obtains additional
information 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 finance companies
or suppliers that have furnished credit to the applicant. In some cases,
Case Credit obtains audited or certified financial statements of the
applicant.
As part of the credit review process for retail installment
contracts, retail installment loans and leases, Case Credit analyzes data
regarding the applicant and additional information using a credit scoring
model. Case Credit uses a credit scoring model that was developed for Case
Credit by Fair, Isaac and Company, Inc. Case Credit periodically evaluates
credit scoring and may utilize a different credit scoring model for trucks.
The models are 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
customers it reviews.
Case Credit evaluates creditworthiness based on criteria
established by its management. It uses the same credit criteria for retail
installment contracts, retail installment loans and leases and similar
credit criteria for dealer loans. It also uses the same credit criteria
regardless of which of its regional finance offices reviews the application
and whether the related receivable will be purchased by Case Credit from a
dealer, assigned by Case to Case Credit or take the form of a direct loan
by Case Credit to an equipment purchaser.
Loan/Lease-to-Value Ratio
The maximum amount that Case Credit will finance under a retail
installment contract, retail installment loan or lease varies based on the
obligor's credit history, the type of equipment financed, whether the
equipment is new or used, the payment schedule and the length of the
receivable. The amount financed is calculated as a percentage of the value
of the related equipment, which may not exceed 105% unless an authorized
senior credit manager specifically approves an exception to this limit. For
this purpose, the value of new equipment is based on the dealer's cost plus
freight charges. The value of used equipment is based on the equipment's
"as-is" value reported in the most recent edition of the North American
Equipment Dealers Association guidebook or other comparable guidebook.
Exceptions to the 105% limit are unusual. Case Credit makes
exceptions only when the senior credit manager 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 overall limit on the ratio that may be approved by a senior
credit manager. The limit in each case would be
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based upon the senior credit manager's judgement about the obligor's
overall financial condition.
Case Credit continues to operate under its traditional guidelines
and practices for loan/lease to asset value ratios. Consequently, we do 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.
The maximum amount that Case Credit will finance under a dealer
loan is generally based upon an analysis of the dealer's overall financial
condition, in addition to 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 a receivable or leased under a receivable
depreciates in value over time. However, Case Credit's practice is to
provide for repayment schedules under the receivables that will generally
result in the outstanding principal balance of a receivable at any time in
its life being less than the anticipated value of the equipment at the
time.
Dealer Agreements
Some of the receivables that Case Credit buys from dealers provide
for recourse to the dealer if the obligor defaults on the receivable. A
portion of the receivables that Case Credit purchases from Case dealers
provide for recourse to the dealer through a reserve account maintained by
the dealer with Case Credit in which the dealer is required to maintain
amounts on deposit. Case Credit will assign to us, and we will assign to
the trusts any rights to recourse against dealers, except for recourse to
the dealers' reserve accounts. 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.
Even when Case Credit purchases a receivable without recourse to
the dealer for obligor defaults, the selling dealer makes limited
representations and warranties about the receivables. Case Credit will
assign to us, and we will assign to the trusts, any rights against dealers
arising as a result of a breach of these representations and warranties.
We make no representation as to the financial condition of any of
the dealers or about their abilities to perform any repurchase obligations
that may arise.
Delinquencies, Repossessions and Net Losses
We provide you with historical information concerning
delinquencies, repossessions and net losses on the entire portfolio of
receivables serviced by Case Credit in the prospectus supplement for your
securities. This information may exclude any category of receivables not
included in your trust.
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Use of Proceeds
Each trust will apply the net proceeds from the sale of its
securities to buy receivables from us and to make deposits in various trust
accounts, including any pre-funding account for that trust. We will use
that portion of the net proceeds paid to us to repay outstanding
indebtedness under our asset-backed commercial paper facility or to
purchase related receivables from Case Credit.
Important Parties
Case Receivables II Inc.
We will sell receivables to each trust. We are a wholly-owned
subsidiary of Case Credit and were incorporated in the State of Delaware on
June 15, 1994. We were organized for the limited purpose of buying
receivables from Case Credit, transferring those receivables to third
parties and any related activities. Our principal executive offices are
located at 475 Half Day Road, Suite 200, Lincolnshire, Illinois 60069, and
our telephone number is (847) 955-1002. You can find information about our
legal separateness from Case Credit, the restrictions on our activities and
possible effects on you if we were to enter bankruptcy, reorganization or
other insolvency proceedings under "Legal Aspects of the Receivables -
Bankruptcy Considerations Relating to Case Credit."
Case Credit Corporation
Case Credit Corporation, a Delaware corporation (often referred to
as "Case Credit"), will service the receivables owned by each trust. Case
Credit is a wholly owned finance subsidiary of Case Capital Corporation
which is a wholly owned 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
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 equipment dealers, including Case and
non-Case dealers. In addition, Case Credit facilitates and finances the
sale of insurance products to retail customers, provides financing for
dealers and rental equipment yards, and also provides other retail
financing programs for end-use customers in the United States, Canada,
Australia and other parts of the world. 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.
As required by that act, Case Credit files reports and other information
with the SEC. You can find more information about Case Credit in the
reports and other information that are described under "Where You Can Find
More Information."
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Case Corporation
Case Corporation, a Delaware corporation (often referred to as
"Case"), is a leading worldwide designer, manufacturer, marketer and
distributor of farm equipment and light- and medium-sized construction
equipment. Case's market position is particularly significant in several
product categories, including loader/backhoes, skid steer loaders, large,
high-horsepower farm tractors and self-propelled combines. When we refer to
Case in this prospectus and any prospectus supplement, we are referring 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, through Case Credit, offers various types of
retail financing to qualified end-users in the United States, Canada,
Australia and other parts of the world. 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 sale 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.
On May 15, 1999, Case, Fiat S.p.A., a company organized under the
laws of Italy, New Holland N.V., a company organized under the laws of the
Netherlands, and Fiat Acquisition Corporation, a Delaware corporation and a
wholly owned subsidiary of Fiat S.p.A., entered into an Agreement and Plan
of Merger under which Fiat Acquisition Corporation will merge into Case,
with Case as the surviving corporation. At the effective time of the
merger, Case's common stock will be converted into the right to receive
cash and Case will become a wholly-owned subsidiary of Fiat S.p.A.
Consummation of the merger is subject to a number of conditions, including
(1) the adoption of the Agreement and Plan of Merger by the stockholders of
Case entitled to vote on this matter, (2) the expiration of all applicable
regulatory waiting periods and (3) other customary conditions.
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 Securities Exchange Act. As required by
that act, Case files reports and other information with the SEC. You can
find more information about Case in the reports and other information that
are described under "Where You Can Find More Information."
The Trustee
We will identify the trustee for your trust in your prospectus
supplement. A trustee's liability in connection with the issuance and sale
of the related securities is limited solely to its express obligations
under the related agreements. A trustee may resign at any time, in which
event Case Credit, as servicer, must appoint a successor trustee. The
administrator of a trust may also remove the
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trustee if the trustee ceases to be eligible to continue as trustee or if
the trustee becomes insolvent. In that case, the administrator must appoint
a successor trustee. No resignation or removal of a trustee or appointment
of a successor trustee will become effective until acceptance of the
appointment by the successor trustee.
The Indenture Trustee
We will identify the indenture trustee for your series of notes in
your prospectus supplement. An indenture trustee may resign at any time,
and may be removed by the trustee if the indenture trustee becomes
insolvent or ceases to be eligible to continue as indenture trustee. If an
indenture trustee resigns or is removed, the trust must appoint a successor
indenture trustee. No resignation or removal of an indenture trustee or
appointment of a successor indenture trustee will become effective until
the successor indenture trustee has accepted its appointment.
Description of the Notes
Each trust will issue one or more classes of notes pursuant to an
indenture between the trust and an indenture trustee. We have filed a form
of the indenture to be used as an exhibit to the registration statement of
which this prospectus is a part. In addition to the notes offered by this
prospectus, each trust may issue one or more additional classes of notes
that may be sold in transactions exempt from registration under the
Securities Act or retained by us or our affiliates. Those additional
classes of notes may be issued under the related indenture or under a
separate agreement. We summarize the material terms of the notes and
indentures below. This summary does not include all of the terms of the
notes and the indentures and is qualified by reference to the actual notes
and indentures.
Principal and Interest on the Notes
We will describe the timing and priority of payment, seniority,
redeemability, allocations of losses, interest rate and amount of or method
of determining payments of principal and interest on each class of notes of
a series in the related prospectus supplement. The right of holders of any
class of notes to receive payments of principal and interest may be senior
or subordinate to the rights of holders of any other class or classes of
notes of the same series. Each series may include one or more classes of
notes of a type known as "strip notes." Strip notes are entitled to (a)
principal payments with disproportionate, nominal or no interest payments
or (b) interest payments with disproportionate, nominal or no principal
payments. Each class of notes may have a different interest rate, which may
be a fixed or floating rate and may be zero for strip notes.
The Indenture
Modification of Indenture. The indenture for each trust may be
amended with the consent of the holders of at least a majority of the
outstanding principal amount of notes of the related series, the trust and
the indenture trustee. However, the following changes may not be made to
any indenture without the consent of each affected noteholder:
(1) any change to the due date of any installment of
principal of or interest on any note or any reduction of the principal
amount of any note, the interest rate for any note or the redemption
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price for any note, or any change to the place for or currency of any
payment on any note;
(2) any change that impairs the right of a noteholder to
take legal action to enforce payment under the provisions of the
indenture;
(3) any reduction in the percentage of noteholders, by
aggregate principal balance, that is required to consent to any
amendment or to any waiver of defaults or compliance with
provisions of the indenture;
(4) any modification of the provisions of the indenture
regarding the voting of notes held by us, the applicable trust,
any other obligor on the notes, or any of our respective
affiliates;
(5) any reduction in the percentage of noteholders, by
aggregate principal balance, that is required to direct the
indenture trustee to sell or liquidate the receivables if the
proceeds of sale would be insufficient to pay the notes in full,
with interest; or
(6) any change that adversely affects the status or
priority of the lien of the indenture on any collateral.
Also, unless otherwise provided in the applicable prospectus
supplement, a trust and the applicable indenture trustee may enter into
supplemental indentures without obtaining the consent of the noteholders of
the related series, for the purpose of:
(a) changing the related indenture or the rights of
noteholders, if the change will not materially and adversely affect
the interests of any noteholder; or
(b) substituting credit enhancement for any class of
notes, if the applicable rating agencies confirm in writing that
the substitution will not result in the reduction or withdrawal of
the rating of those notes or any other class of securities in the
same series.
Events of Default; Rights upon Event of Default. Any one of the
following events will be an event of default for the notes in your series,
unless otherwise specified in your prospectus supplement:
o the trust fails to pay any interest on any note within five
days after its due date;
o the trust fails to pay any installment of the principal of
any note on its due date;
o the trust breaches any of its other covenants in the
indenture for 30 days after notice of the breach is given
to the trust by the indenture trustee or to the trust and
the indenture trustee by the holders of at least 25% of
the outstanding principal amount of the notes in your
series;
o the trust fails to correct a breach of a representation or
warranty it made in the indenture, or in any certificate
delivered in connection
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with the indenture, that was incorrect in a material
respect at the time it was made, for 30 days after notice
of the breach is given to the trust by the indenture
trustee or to the trust and the indenture trustee by the
holders of at least 25% of the outstanding principal
amount of the notes in your series; or
o the trust becomes bankrupt or insolvent or is liquidated.
You should note, however, that until the final scheduled maturity
date for any class of notes, the amount of principal due to noteholders in
your series generally will be limited to amounts available for that
purpose. Also, if specified in the applicable prospectus supplement, the
amount of interest due to noteholders of any class may be limited to
amounts available for that purpose. Therefore, 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 that class of notes.
If an event of default with respect to the notes of any series
occurs and is not remedied as provided in the applicable indenture, then
the principal of the notes of that series may be declared to be immediately
due and payable by the indenture trustee, holders of a majority in
principal amount of those notes or, if so specified in the applicable
prospectus supplement, holders of a majority in principal amount of one or
more particular classes of those notes. Unless otherwise specified in your
prospectus supplement, that declaration may be rescinded by holders of a
majority of the outstanding principal amount of the notes of that series,
but only after payment of any past due amounts and cure or waiver of all
other events of default. Noteholders' voting rights may vary by class.
If the notes of any series have been declared due and payable
following an event of default, the indenture trustee for that series 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
those receivables and continue to apply collections on them as if there had
been no declaration of acceleration. Unless otherwise specified in the
related prospectus supplement, however, the each 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 in the payment of any interest on any note that continues for five
days or more, unless (i) the holders of all the outstanding notes of that
series consent to the sale, (ii) the proceeds of the sale are sufficient to
pay in full the principal of and the accrued interest on those notes at the
date of such sale or (iii) the indenture trustee for that series determines
that the proceeds of receivables would not be sufficient on an ongoing
basis to make all payments on those notes as those payments would have
become due if those obligations had not been declared due and payable, and
the indenture trustee obtains the consent of the holders of 66 2/3% of the
outstanding principal amount of those notes.
Each indenture will provide that, subject to the duty of the
indenture trustee to act with the required standard of care if an event of
default occurs, the indenture trustee is not required to exercise any of
its rights or powers under the indenture at the request or direction of any
of the noteholders, if the 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 that request. Subject to
the provision of adequate indemnification of the indenture trustee, the
holders of a majority of the outstanding principal amount of the notes
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of a series (or of one or more classes of those notes, if so specified in
the applicable prospectus supplement) will have the right to direct the
time, method and place for any remedy available to the indenture trustee.
Unless otherwise specified in the related prospectus supplement,
no noteholder will have the right to take legal action under the related
indenture, unless:
o the noteholder gives the indenture trustee written notice
of a continuing event of default;
o the holders of at least 25% of the outstanding principal
amount of notes of that series have requested in writing
that the indenture trustee take legal action and offered
reasonable indemnity to the indenture trustee;
o the indenture trustee has not received a direction not to
take legal action from the holders of a majority of the
outstanding principal amount of the notes in that series;
and
o the indenture trustee has failed to take legal action within
60 days.
In addition, each indenture trustee and the noteholders, by
accepting their notes, will covenant that they will not at any time
institute any bankruptcy or insolvency proceeding against their trust.
None of the trustee for any trust, the related indenture trustee
in its individual capacity, any holder of a certificate representing an
ownership interest in a trust or any of their respective owners,
beneficiaries, agents, officers, directors, employees, affiliates,
successors or assigns will be personally liable for the payment of the
principal of or interest on the related notes or for the agreements of such
trust contained in the applicable indenture.
Certain Covenants. In its indenture, each trust will agree not to
consolidate with or merge into any other entity, unless:
o the entity formed by or surviving the consolidation or merger
is organized under the laws of the United States or any state,
o that entity expressly assumes the trust's obligations
relating to the notes,
o immediately after the transaction, no event of default would
have occurred and not have been remedied,
o the trust has been advised that the ratings of the notes
or the certificates of the particular series then in
effect would not be reduced or withdrawn by the
applicable rating agencies as a result of the
transaction, and
o the trust has received an opinion of counsel to the
effect that the consolidation or merger would have no
material adverse tax consequence to the trust or to any
related noteholder or certificateholder.
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Each trust will also agree not to take the following actions:
o sell or otherwise dispose of any of its assets, except as
permitted by its transaction documents,
o claim any credit on or make any deduction from the
principal and interest payable in respect of its notes,
other than amounts withheld under the Internal Revenue
Code or applicable state law,
o assert any claim against any present or former holder of
those notes because of the payment of taxes levied or
assessed upon the trust,
o dissolve or liquidate in whole or in part, except as
contemplated by its transaction documents,
o permit the validity or effectiveness of its indenture to
be impaired or permit any person to be released from any
obligations with respect to the notes under its
indenture, except as may be expressly permitted by its
indenture,
o permit any lien, claim or other encumbrance to affect its
assets or any part of the trust, any interest in its assets
or the trust or any related proceeds, or
o incur, assume or guarantee any indebtedness other than
indebtedness incurred pursuant to its notes and its other
transaction documents.
Each trust may engage in only the activities described in the
related prospectus supplement.
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 its indenture.
Indenture Trustee's Annual Report. The indenture trustee for each
trust will be required to mail each year to all of the related noteholders
a brief report relating to its eligibility and qualification to continue as
indenture trustee, any amounts advanced by it under the indenture,
information about indebtedness owing by the trust to the indenture trustee
in its individual capacity, any property and funds physically held by the
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 may be
discharged with respect to the collateral securing the related notes upon
the delivery to the related indenture trustee for cancellation of all of
the related notes or upon deposit with the indenture trustee of funds
sufficient for the payment in full of the notes.
Description of the Certificates
Each trust will issue one or more classes of certificates pursuant
to a trust agreement between us and a trustee. We have filed a form of the
trust agreement to be used as an exhibit to the registration statement of
which this prospectus is a
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part. A trust's certificates may be offered by this prospectus or may be
sold in transactions exempt from registration under the Securities Act or
retained by us or our affiliates. We summarize the material terms of the
certificates below. This summary does not include all of the terms of the
certificates and is qualified by reference to the actual certificates.
We will describe the timing and priority of payment, seniority,
redeemability, allocations of losses, interest rate and amount of or method
of determining payments of principal and interest on each class of
certificates of a series in the related prospectus supplement.
Certificateholders' rights to receive payments on their certificates will
be junior to the payment rights of noteholders in the same series to the
extent described in the applicable prospectus supplement. In addition, the
right of holders of any class of certificates to receive payments of
principal and interest may be senior or subordinate to the rights of
holders of any other class or classes of certificates of the same series.
Each series may include one or more classes of certificates of a type known
as "strip certificates." Strip certificates are entitled to (a) principal
payments with disproportionate, nominal or no interest payments or (b)
interest payments with disproportionate, nominal or no principal payments.
Each class of certificates may have a different interest rate, which may be
a fixed or floating interest rate and may be zero for strip certificates.
Administrative Information About the Securities
Denominations
We will identify minimum denominations for purchase of securities
in the related prospectus supplement. If we do not specify any
denomination, 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 may bear interest at a fixed or floating
rate per annum. We will identify the applicable interest rate for each
class of fixed rate securities 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, unless we specify a
different computation basis in the applicable prospectus supplement.
Floating Rate Securities
Each class of floating rate securities will bear interest for
interest periods specified in the applicable prospectus supplement at a
rate per annum equal to:
o a specified base interest rate, which will be based upon
the London interbank offered rate (commonly known as
"LIBOR"), commercial paper rates, federal funds rates,
U.S. Government treasury securities rates, negotiable
certificates of deposit rates or another index rate we
specify in the applicable prospectus supplement;
o plus or minus a "spread" of a number of basis points (i.e.,
one-hundredths of a percentage point) we will specify in the
applicable prospectus supplement;
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o or multiplied by a "spread multiplier," which is a percentage
that we will specify in the applicable prospectus supplement.
In the prospectus supplement for any floating rate securities we
may also specify either or both of the following for any class:
o a maximum, or ceiling, on the rate at which interest may
accrue during any interest period and
o a minimum, or floor, on the rate at which interest may accrue
during any interest period.
In addition to any maximum interest rate specified in the applicable
prospectus supplement, 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.
Each trust that issues floating rate securities will appoint a
calculation agent to calculate interest rates on each class of its floating
rate securities. The applicable prospectus supplement will identify the
calculation agent for each class of floating rate securities in the offered
series. Determinations of interest by a calculation agent will be binding
on the holders of the related floating rate securities, in the absence of
manifest error. 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, unless we specify a different rounding
rule in the related prospectus supplement.
Indexed Securities
We may also specify in any prospectus supplement that any class of
securities of the related series will be "indexed securities." In that
case, the principal amount payable at the final scheduled payment date for
that class would be determined by reference to an index related to:
o the difference in the rate of exchange between United States
dollars and a currency or composite currency specified in the
prospectus supplement;
o the difference in the price of a specified commodity on
specified dates;
o the difference in the level of a specified stock index,
which may be based on U.S. or foreign stocks on specified
dates; or
o another objective price or economic measure described in the
prospectus supplement.
We will disclose the manner of determining the principal amount
payable on any indexed security and historical and other information
concerning the index used in that determination in the applicable
prospectus supplement, together with information concerning tax
consequences to the holders of the indexed securities. This may include
alternate means to calculate an index if a third party that initially
calculates or announces the index ceases to do so or changes the basis upon
which the index is calculated.
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Unless we specify otherwise in the applicable prospectus
supplement, interest on an indexed security will be payable based on the
amount designated in the prospectus supplement as the "face amount" of the
indexed security. We will also specify in the applicable prospectus
supplement whether the principal amount of any indexed security that would
be payable upon redemption or repayment prior to the applicable final
scheduled payment date would be its face amount, its principal amount based
on the applicable index at the time of redemption or repayment or some
other amount.
Book-Entry Registration
The Clearing Organizations. We will specify in the related
prospectus supplement whether or not investors may hold their securities in
book-entry form, directly or indirectly, through one of three major
securities clearing organizations:
o in the United States, The Depository Trust Company (commonly
known as "DTC"); or
o in Europe, either Cedel Bank, societe anonyme (commonly
known as "Cedel") or Euroclear (also known as the
"Euroclear System").
Each of these entities holds securities for its participating organizations
and facilitates the clearance and settlement of securities transactions
between its participants through electronic book-entry changes in the
participants' accounts. This eliminates the need for physical movement of
certificates representing the securities.
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 Section 17A of the
Securities Exchange Act. 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. The rules applicable to DTC and
its participants are on file with the SEC.
Cedel is incorporated under the laws of Luxembourg as a
professional depository. It settles transactions in a number of currencies,
including United States dollars. Cedel provides its participants, among
other things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and
borrowing. Cedel interfaces with domestic markets in several countries. As
a professional depository, Cedel is subject to regulation by the Luxembourg
Monetary Institute. Cedel's 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.
Euroclear was created in 1968. It settles transactions in a number of
currencies, including United States dollars. Euroclear includes various other
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services, including securities lending and borrowing. Euroclear interfaces
with domestic markets in many countries generally similar to the
arrangements for cross-market transfers with DTC described below. Euroclear
is operated by Morgan Guaranty Trust Company of New York, Brussels, Belgium
office, under contract with Euroclear Clearance System, Societe
Cooperative, a Belgian cooperative corporation. All operations are
conducted by Euroclear's operator, and all Euroclear securities clearance
accounts and Euroclear cash accounts are accounts with the Euroclear
operator, not the cooperative. The board of the cooperative 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 Euroclear 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.
These Terms and Conditions govern transfers of securities and cash within
Euroclear, withdrawal of securities and cash from Euroclear, and receipts
of payments with respect to securities in Euroclear. 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.
Book-Entry Clearance Mechanics. If book-entry arrangements are
made, then a nominee for DTC will hold global certificates representing the
securities. Cedel and Euroclear will hold omnibus positions on behalf of
their respective participants, through customers' securities accounts in
Cedel's and Euroclear's names on the books of their respective
depositaries, which in turn will hold positions in customers' securities
accounts in the depositaries' names on the books of DTC.
Transfers between DTC's participants will occur in accordance with
DTC rules. Transfers between Cedel's participants and Euroclear's
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
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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 Cedel's and
Euroclear's 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. Credits or other
transactions in securities settled during any processing will be reported
to the relevant Cedel participant or Euroclear participant on that 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, unless the book-entry system for
the securities is discontinued. Because of this, unless and until
definitive securities for such series are issued, securityholders will not
be recognized by the applicable indenture trustee or trustee as
"noteholders," "certificateholders" or "securityholders," as the case may
be. Hence, unless and until definitive securities are issued,
securityholders will only be able to exercise their rights as
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. The
deposit of securities with DTC and their registration in the name of its
nominee effects no change in beneficial ownership. DTC has no knowledge of
the actual securityholders of the securities. Its 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
are responsible for keeping account of their holdings on behalf of their
customers.
Notices and other communications conveyed by DTC to DTC
participants, by DTC participants to indirect participants, and by DTC
participants and indirect participants to securityholders are governed by
arrangements among them and any statutory or regulatory requirements that
are in effect from time to time.
Neither DTC nor its nominee 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 its
nominee's consenting
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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 securities cleared through DTC
will be made to DTC. DTC's practice is to credit participants' accounts on
the applicable payment 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 the payment 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 the DTC participant and not of DTC, the trustee or us,
subject to any statutory or regulatory requirements that are in effect from
time to time. Payment of principal and interest to DTC is the
responsibility of the trustee, disbursement of those payments to DTC
participants is the responsibility of DTC, and disbursement of the payments
to securityholders is the responsibility of DTC participants and indirect
participants.
Principal and interest payments on 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. Those payments will
be subject to tax reporting in accordance with relevant United States tax
laws and regulations, as described below in "Federal Income Tax
Consequences." Cedel or the Euroclear operator, as the case may be, will
take any other action permitted to be taken by a securityholder under a
related agreement on behalf of a Cedel participant or Euroclear participant
only in accordance with its relevant rules and procedures and subject to
its depositary's ability to effect such actions on its behalf through DTC.
Although DTC, Cedel and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of securities among
participants of DTC, Cedel and Euroclear, they are under no obligation to
perform or continue to perform such procedures and such procedures may be
discontinued at any time.
We obtained the information in this section concerning DTC, Cedel
and Euroclear and their respective book-entry systems from sources that we
believe to be reliable, but we take no responsibility for its accuracy.
Definitive Securities
Notes or certificates that are initially cleared through DTC will
be issued in definitive, fully registered, certificated form to investors
or their respective nominees, rather than to DTC or its nominee, only if:
o the administrator for any trust advises the related
indenture trustee or the related trustee, as applicable,
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,
o the administrator, at its option, elects to terminate the
book-entry system through DTC or
o after the occurrence of an event of default or a servicer
default with respect to a series of securities,
securityholders representing
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at least a majority of the outstanding principal amount
of the notes or the certificates, as the case may be, in
that 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 the
notes or certificates is no longer in the best interest
of their holders.
If any of these events occur, the applicable trustee will be
required to notify all holders of the securities in the affected series
through clearing organization 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 the securities to the
securityholders as definitive securities.
Principal and interest payments on all 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 the securities in the related
prospectus supplement. Those payments will be made by check mailed to the
address of each holder as it appears on the register maintained by the
applicable trustee. The final payment on any definitive security, however,
will be made only upon presentation and surrender of the 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 with a transfer or exchange.
List of Securityholders
Three or more holders of the notes of any series or one or more
holders of notes evidencing at least 25% of the aggregate outstanding
principal balance of the notes of a series may, by written request to the
related indenture trustee, obtain access to the list of all noteholders
maintained by the indenture trustee for the purpose of communicating with
other noteholders with respect to their rights under the related indenture
or the notes. The 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 their series.
Three or more holders of the certificates of any series or one or
more holders of certificates evidencing at least 25% of the aggregate
outstanding balance of the certificates of a series may, by written request
to the related trustee, obtain access to the list of all certificateholders
maintained by the trustee for the purpose of communicating with other
certificateholders with respect to their rights under the related trust
agreement or the certificates.
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Reports to Securityholders
On or prior to each payment date for the securities of a trust,
the servicer for the trust will prepare and provide to the trust's
indenture trustee a statement to be delivered to the related noteholders
and to the trustee a statement to be delivered to the related
certificateholders on the payment date. Each of these statements will
include, to the extent applicable to the particular series or class or
securities, the following information (and any other information specified
in the related prospectus supplement) with respect to the payment date or
the period since the previous payment date:
(1) the amount of any principal payment on each class of
securities;
(2) the amount of any interest payment on each class of
securities;
(3) the aggregate balance of receivables in the trust at
the end of the preceding collection period;
(4) the aggregate outstanding principal balance and the
note pool factor for each class of notes, and the aggregate
outstanding balance and the certificate pool factor for each class
of such certificates, each after giving effect to all payments
reported under clause (1) above;
(5) the amount of the servicing fee paid to the servicer
for the related collection period;
(6) the interest rate for the next period for any
floating rate securities;
(7) the amount of the administration fee paid to the
administrator for the related collection period;
(8) the amount of the net losses on receivables, if any,
for the related collection period;
(9) the aggregate purchase price paid for receivables, if
any, that were repurchased or purchased by us or the servicer in
the related collection period;
(10) the balance on deposit in any spread account or the
amount available under any other credit enhancement on the payment
date, after giving effect to any changes on that date;
(11) for each payment date during a pre-funding period,
the remaining balance in the pre-funding account; and
(12) for the first payment date that is on or immediately
following the end of a pre-funding period, the amount of any
remaining balance in the pre-funding account that has not been
used to fund the purchase of receivables and is being paid as
principal on the securities.
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Each amount described in subclauses (1), (2), (5) and (7) will be
expressed as a dollar amount per $1,000 of the initial principal balance of
the related notes or certificates.
The note pool factor for each class of notes will be a seven-digit
decimal 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 percentage of the initial outstanding
principal balance of such class of notes. Similarly, the certificate pool
factor for each class of certificates will be a seven-digit decimal
indicating the remaining 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 outstanding balance of such
class of certificates. Each note pool factor and each certificate pool
factor will initially be 1.0000000 and will decline over time to reflect
reductions in the outstanding balance of the applicable class of notes or
certificates.
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 the noteholder's note and (ii) the applicable note pool
factor. A certificateholder's portion of the aggregate outstanding balance
of 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.
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.
Description of the Transaction Agreements
We summarize below the material terms of the agreements under
which we will buy receivables, directly or indirectly, from Case Credit and
sell them to each trust, and under which Case Credit will agree to service
the trust's receivables and administer the trust. We will disclose any
additional material terms relating to a particular trust's agreements in
the related prospectus supplement. We have filed forms of these agreements
as exhibits to the registration statement of which this prospectus is a
part. The following summary does not include all of the terms of the
agreements and is qualified by reference to the actual agreements.
Commercial Paper Program
We buy a significant portion of the receivables that we will sell
to most trusts prior to the closing date for the particular trust. In
connection with an asset-backed commercial paper program that we
established in August 1994, we entered into a Receivables Purchase
Agreement dated as of August 1, 1994, and subsequently amended, with Case
Credit. Under that agreement, we generally buy from Case Credit on a
monthly basis all retail installment contracts meeting our eligibility
requirements that Case Credit originated in the preceding calendar month.
We expect to sell most of the contracts that we buy from Case Credit under
this arrangement to a trust that will issue securities offered under this
prospectus.
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If Case Credit elects to sell us any retail installment contracts
under this agreement in a month, Case Credit is obligated to sell to us all
of the eligible retail installment contracts originated by Case Credit in
the preceding month, unless the aggregate balance of the contract would
exceed the purchase limit under the agreement. In that case, Case Credit
must use procedures to select the contracts to be sold that are not adverse
to our interests.
Under the 1994 Receivables Purchase Agreement, we buy retail
installment contracts and related security interests without recourse to
Case Credit for defaults by the obligors. However, Case Credit represents
and warrants to us on each monthly purchase date as to the retail
installment contracts being sold on that date, among other things, that:
(1) each of the retail installment contracts meets our
eligibility requirements;
(2) the information Case Credit has provided to us about
the retail installment contracts is correct in all material
respects;
(3) the obligor on each of the retail installment
contracts is required to maintain physical damage insurance
covering the financed equipment in accordance with Case Credit's
normal requirements;
(4) as of the purchase date, the 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;
(5) as of the purchase date, each of the retail
installment contracts is or will be secured by a first priority
perfected security interest in the financed equipment in favor of
Case Credit; and
(6) each of the retail installment contracts complied at
the time it was originated and complies as of the purchase date
with applicable Federal and state laws in all material respects,
including consumer credit, truth in lending, equal credit
opportunity and disclosure laws.
If Case Credit breaches any of these representations or
warranties, Case Credit must repurchase from us any retail installment
contract materially and adversely affected by the breach at a price equal
to the contract's balance on the settlement date immediately succeeding the
month in which such repurchase obligation arises. The repurchase obligation
is the sole remedy available to us for any such breach.
While we hold the contracts that we buy from Case Credit under
this arrangement, we borrow against them under a Loan and Security
Agreement dated as of August 1, 1994, and subsequently amended, between us
and Case Equipment Loan Trust 1994-B. Under the Loan and Security
Agreement, Case Equipment Loan Trust 1994-B has agreed to make or increase
the principal amount of a loan to us on a monthly basis. In return, we have
granted the trust a security interest in the retail installment contracts
we have purchased as described above and that have not been previously
released, along with some other collateral. The trust obtains funds to make
these loans by issuing commercial paper notes or borrowing under a
Liquidity Agreement among the trust, a group of banks and The Chase
Manhattan Bank, as administrative agent.
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Under the Loan and Security Agreement, we have the right to obtain
the release of retail installment contracts and related rights from the
lien of the Loan and Security Agreement for the purpose of transferring
those contracts to a trust that will issue securities for offer under this
prospectus. Prior to any transfer, we must obtain written confirmation from
the applicable rating agencies that the transfer will not result in the
withdrawal or downgrade of the current ratings on the outstanding
securities issued by Case Equipment Loan Trust 1994-B. Also, after giving
effect to the transfer and related transactions, the outstanding principal
amount of loans outstanding under the Loan and Security Agreement must not
exceed an amount based on the aggregate balance of the retail installment
contracts pledged under the Loan and Security Agreement. In connection with
any release of retail installment contracts from the lien of the Loan and
Security Agreement, we are required to deposit into the related collection
account an amount equal to the aggregate balance of the retail installment
contracts being released, plus accrued interest at the applicable interest
rates to the release date.
Additional Sales of Receivables
In addition to retail installment contracts that we buy from Case
Credit on a monthly basis as described above, we may also buy receivables
from Case Credit to transfer to a trust on the closing date for that trust
under a separate purchase agreement. We buy those receivables on
substantially the same terms as under the 1994 Receivables Purchase
Agreement, as described above. Case Credit may also sell receivables to
another one of its subsidiaries, and we may buy the receivables from the
subsidiary on substantially the same terms as our purchases from Case
Credit.
We then sell receivables that we have bought from Case Credit (or
a Case Credit subsidiary) to a trustee, for the benefit of one of the
trusts, pursuant to a sale and servicing agreement. These sales are also
made without recourse. The related trustee will, concurrently with this
sale, execute and deliver the related notes and certificates. The trust
will apply the net proceeds received from the sale of its notes and
certificates to pay us for the related receivables, and, to the extent
specified in the related prospectus supplement, to make a deposit in a
pre-funding account and initial deposits in other trust accounts. If there
is a pre-funding account, then we will buy additional receivables from Case
Credit, and sell them to the trust from time to time during a pre-funding
period, as described further in the related prospectus supplement.
If we breach any of our representations or warranties made in a
sale and servicing agreement, and our breach is not cured by the last day
of the second (or, if we elect, the first) month following the discovery by
or notice to the trustee of the breach, we will repurchase any receivable
materially and adversely affected by our breach as of such last day at a
price equal to the contract value of the receivable, as specified in the
related prospectus supplement. Our obligation to repurchase any receivable
with respect to which any representation or warranty has been breached is
subject to Case Credit's repurchase of the receivable. This repurchase
obligation is the only remedy available to the noteholders, the indenture
trustee, the certificateholders or the trustee for any trust for any
uncured breach.
Under 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 its services. In order to assure uniform quality in
servicing the receivables and
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to reduce administrative costs, we and each trust will designate the
servicer as custodian to maintain possession, as the agent for each trust,
of the receivables and related documents. However, notes evidencing any
unsecured dealer loans that we sell to a trust will be delivered to the
related indenture trustee. The obligors on the receivables are not notified
that their receivables have been sold by Case Credit to us or by us to the
trust. However, Case Credit marks its accounting records to reflect these
sales, and Uniform Commercial Code financing statements reflecting the
sales are filed.
Under each sale and servicing agreement, the servicer has an
option to purchase all of the remaining receivables held by the trust after
their aggregate contract values fall below 10% of the sum of the contract
values of all of the trust's receivables, measured for each receivable at
the time of its sale to the trust.
Accounts
Case Credit, as servicer, will establish and maintain the
following bank accounts for each trust:
o a collection account, into which all payments made on or with
respect to the related receivables will be deposited;
o a note distribution account, into which amounts available
for payment to the noteholders will be deposited and from
which those payments will be made;
o a certificate distribution account, into which amounts
available for payment to the certificateholders will be
deposited and from which those payments will be made; and
o if so specified in the prospectus supplement, a pre-funding
account.
We will describe any other accounts to be established for a trust
in the related prospectus supplement.
Funds held in a trust's bank accounts will be invested in the
following types of investments:
(a) direct obligations of, or obligations fully
guaranteed as to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of
deposit of any domestic depository institution or trust company or
any domestic branch of a foreign bank that is subject to
supervision and examination by federal or state banking or
depository institution authorities, in each case where the issuer
has at the time of the investment or contractual commitment to
invest short-term credit ratings from each of the applicable
rating agencies in its highest investment category;
(c) commercial paper having, at the time of the
investment or contractual commitment to invest, a rating from each
of the applicable rating agencies in its highest investment
category;
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(d) investments in money market funds having a rating
from each of the applicable rating agencies in its highest
investment category, 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 of its agencies or
instrumentalities 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.
Investments described in clauses (d) and (g) 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. During any pre-funding period, no investments in money market funds
will be made with funds in any account other than the collection account.
Also, so long as they meet the criteria listed above, these investments may
include securities issued by us or our affiliates or trusts originated by
us or our affiliates. Except as described below with respect to spread
accounts, the investments made in each trust's bank accounts are limited to
obligations or securities that mature on or before the business day
preceding the next payment date
In the unlikely event of defaults on investments made in a trust's
bank accounts, investors in the securities could experience losses or
payment delays. Earnings from these investments, net of losses and
investment expenses, will be deposited in the applicable collection account
on each payment date and treated as collections on the related receivables.
Each trust's bank accounts will be maintained in one of the
following forms:
o as segregated accounts with (a) the corporate trust
department of the related indenture trustee or the related
trustee, or (b) a depository institution organized under the
laws of the United States of America, any state or the
District of Columbia (or any domestic branch of a foreign
bank) (1) which has either (A) a long-term unsecured debt
rating or certificate of deposit rating acceptable to the
applicable rating agencies or (B) a short-term unsecured debt
rating or certificate of deposit rating acceptable to the
applicable rating agencies and (2) whose deposits are insured
by the FDIC;
o as segregated trust account with the corporate trust
department of a depository institution organized under
the laws of the United States of America, any state 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
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rating from each applicable rating agency in one of its
generic rating categories which signifies investment grade;
or
o as any other segregated account the deposit of funds in which
has been approved by the applicable rating agencies.
Servicing Procedures
Case Credit, as servicer, will agree to make reasonable efforts to
collect all payments on the receivables held by each trust in a manner
consistent with the related sale and servicing agreement, and to use the
collection procedures it follows with respect to comparable agricultural,
construction and other equipment receivables 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. However, no such arrangement will be permitted to
extend the final payment date of any receivable beyond the final scheduled
maturity date specified for the related securities in the applicable
prospectus supplement unless the servicer purchases the receivable from the
trust for a purchase price equal to its contract value.
If the servicer forecloses on the collateral for a receivable, the
servicer may sell the collateral at public or private sale, or take any
other action permitted by applicable law. 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 servicer no longer needs it,
unless the related loan has been paid in full.
Collections
The servicer will deposit all payments received on a trust's
receivables during each collection period specified in the related
prospectus supplement into the related collection account within two
business days after receipt. However, at any time when (a) Case Credit is
the servicer, (b) there exists no servicer default and (c) 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
payments into the collection account until on or before the business day
preceding the applicable payment date. Pending deposit into the collection
account, the servicer may invest collections at its own risk and for its
own benefit, and the collections 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 described 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.
At any time when the servicer is permitted to remit collections
once a month, the servicer will be permitted to make that deposit net of
distributions to be made to the servicer with respect to the same
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.
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Servicing Compensation
With respect to each trust, the servicer will be entitled to
receive a servicing fee for each collection period in an amount equal to a
percentage per annum specified in the related prospectus supplement of the
aggregate contract value of the trust's receivables as of the first day of
the collection period. The servicing fee will be paid solely from the
sources, and at the priority, specified in the related prospectus
supplement.
Evidence as to Compliance
Each sale and servicing agreement will require that a firm of
independent public accountants 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 specified standards relating to the
servicing of the applicable receivables, the servicer's accounting records
and computer files and certain other matters.
Each sale and servicing agreement will also require that an
officer of the servicer deliver to the related trust and indenture trustee,
substantially simultaneously with the delivery of the accountants'
statement, a certificate 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.
Securityholders may obtain copies of such statements and
certificates by written request addressed to the applicable trustee.
Resignation, Liability and Successors of the Servicer
Case Credit will not be permitted to resign from its obligations
and duties as servicer for any trust, except upon determination that Case
Credit's performance of such duties is no longer permissible under
applicable law. No resignation will become effective until the related
indenture trustee or a successor servicer has assumed Case Credit's
servicing obligations and duties.
Neither the servicer nor any of its directors, officers, employees
and agents will be under any liability to any trust or the related
noteholders or certificateholders for taking any action or for refraining
from taking any action under the applicable sale and servicing agreement or
for errors in judgment. However, none of the listed parties 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, the servicer will not be
under any obligation to appear in, prosecute or defend any legal action
that is not incidental to the servicer's servicing responsibilities under
the related sale and servicing agreement and that, in its opinion, may
cause it to incur any expense or liability.
Upon compliance with procedural requirements specified in the
related sale and servicing agreement, any of the following entities will be
the successor of the servicer under that sale and servicing agreement:
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o 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,
o any entity succeeding to the business of the servicer, or
o any corporation 50% or more of the voting stock of which
is owned, directly or indirectly, by Case or Case Credit,
which assumes the obligations of the servicer.
Servicer Default
The following events will constitute "servicer defaults" under
each sale and servicing agreement:
o the servicer fails to make required deposits or to direct
the indenture trustee to make required distributions,
subject to a three business day cure period after
discovery or notice;
o we or the servicer breach our respective obligations
under the sale and servicing agreement, subject to
materiality limitations and a 60 day cure period after
notice; and
o bankruptcy or insolvency of the servicer or us.
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 at least 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 the sale and servicing
agreement. In that event, the indenture trustee or a successor servicer
appointed by the indenture trustee will succeed to all the
responsibilities, duties and liabilities of the servicer under the 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 that
appointment has occurred, the trustee or other official may have the power
to prevent the indenture trustee or noteholders from effecting a transfer
of servicing.
If the indenture trustee is unwilling or unable to act as
successor servicer, 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. The indenture trustee may make arrangements for
compensation to be paid to the successor servicer, but the compensation may
in no event be greater than the servicing fee provided for under the sale
and servicing agreement. Neither the trustee nor the certificateholders
have the right to remove the servicer if a servicer default occurs when 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
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principal amount of the then outstanding notes of the related series may,
on behalf of all 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.
Therefore, the noteholders have the ability to waive defaults by the
servicer which could materially adversely affect the certificateholders. In
addition, unless otherwise provided in the related prospectus supplement,
the holders of the related certificates evidencing at least a majority of
the outstanding certificate balance may, on behalf of all noteholders and
certificateholders, waive any servicer default that does not adversely
affect the related indenture trustee or noteholders. None of these waivers
will impair the noteholders' or certificateholders' rights with respect to
subsequent defaults.
Amendment
Unless otherwise provided in the related prospectus supplement,
each of a trust's transaction agreements may be amended by the parties to
the agreement, without the consent of the related noteholders or
certificateholders, so long as 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 of the trust's
noteholders or certificateholders. In addition, unless otherwise provided
in the related prospectus supplement, each of a trust's transaction
agreements may be amended by the parties to the agreement, without the
consent of the related noteholders or certificateholders, to substitute or
add credit enhancement for any class of securities, so long as the
applicable rating agencies confirm in writing that such substitution or
addition will not result in a reduction or withdrawal of the rating of any
class of securities in the related series.
Unless otherwise specified in the related prospectus supplement,
each of a trust's transaction agreements may be amended by the parties to
the agreement, 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.
However, no such amendment may (a) 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 (b) reduce the
required percentage of the notes or certificates of 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 will succeed to all the rights of the
noteholders, under the related sale and servicing agreement, except as
otherwise provided therein in the sale and servicing agreement.
Termination
With respect to each trust, our obligations and the obligations of
the servicer, the related trustee and the related indenture trustee
pursuant to the trust's transaction agreements will terminate upon (a) the
maturity or other liquidation of the last related receivables and the
disposition of any amounts received upon
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liquidation of any such remaining receivables and (b) the payment to
noteholders and certificateholders of the related series of all amounts
required to be paid to them pursuant to the transaction agreements. 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 administration agreement with each
trust and the related indenture trustee under which Case Credit will act as
administrator for the trust. The administrator will perform on behalf of
the trust administrative obligations required by the related indenture.
Unless otherwise specified in the prospectus supplement for any trust, as
compensation for the performance of the administrator's obligations under
the administration agreement and as reimbursement for its related expenses,
the administrator will be entitled to a quarterly administration fee in an
amount equal to $500.
Credit and Cash Flow Enhancement
We will describe the amounts and types of credit enhancement
arrangements and the provider of the credit enhancements, if applicable,
with respect to each class of securities of a given series 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 the
full amount of principal and interest due on their securities and to
decrease the likelihood that the 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, with interest. 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
one class or series will be subject to the risk that the credit enhancement
will be exhausted by the claims of securityholders of other classes or
series.
We may replace the credit enhancement for any class of securities
with another form of credit enhancement without the consent of
securityholders, if the applicable rating agencies confirm in writing that
the substitution will not result
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in the reduction or withdrawal of their rating of any class of securities of the
related series.
Spread Account. If so provided in the related prospectus
supplement, the servicer will establish for a series or class of securities
a spread account, which will be maintained in the name of the applicable
indenture trustee. We may initially fund any spread account by a deposit on
the applicable closing date in an amount set forth in the related
prospectus supplement. As further described in the related prospectus
supplement, the amount on deposit in the spread account may be increased on
each payment date up to a balance specified in the related prospectus
supplement by the deposit of collections on the related receivables
remaining after all higher priority payments on that payment date. We will
describe in the related prospectus supplement the circumstances and manner
under which distributions may be made out of the spread account to holders
of securities, to us or to any of our transferees or assignees.
To the extent permitted by the applicable rating agencies, funds
in a trust's spread account may be invested in securities that will not
mature prior to the next payment date. As a result, the amount of cash in a
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 related securities.
We may at any time, without consent of the securityholders, sell
or otherwise transfer our rights to any spread account, if (a) the
applicable rating agencies confirm in writing that doing so will not result
in a reduction or withdrawal of the rating of any class of securities, (b)
we provide to the trustee and the indenture trustee a written opinion from
independent counsel to the effect that the transfer 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 (c) the
transferee or assignee agrees in writing to take positions for tax purposes
consistent with the tax positions agreed to be taken by us.
Legal Aspects of the Receivables
Bankruptcy Considerations Relating to Case Credit
We and Case Credit will take steps in structuring the transactions
described in this prospectus that are intended to ensure that the voluntary
or involuntary application for relief by Case Credit under the United
States Bankruptcy Code or other insolvency laws will not result in
consolidation of our assets and liabilities with those of Case Credit.
These steps include our creation as a separate, limited-purpose subsidiary
pursuant to a certificate of incorporation containing restrictions on the
nature of our business and a restriction on our ability to commence a
voluntary case or proceeding under any insolvency law without the unanimous
affirmative vote of all our directors. However, there can be no assurance
that our activities would not result in a court concluding that our assets
and liabilities should be consolidated with those of Case Credit in a
proceeding under any insolvency law.
In addition, the indenture trustee, the trustee, all noteholders
and all certificateholders will covenant that they will not at any time
institute against us any bankruptcy, reorganization or other
proceeding under any federal or state bankruptcy or similar law.
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Case Credit will warrant that each sale of receivables by Case
Credit to us is a valid sale. If Case Credit were to become a debtor in a
bankruptcy case, and a creditor or trustee-in-bankruptcy or Case Credit
itself were to take the position that any sale of receivables to us should
instead be treated as a pledge of the receivables to secure a borrowing by
Case Credit, then delays in payments of collections of receivables to us
could occur. If the court ruled in favor of the creditor, trustee or Case
Credit, reductions in the amount of such payments could result. Also, under
these 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 remaining scheduled payments under the lease.
If any transfer of receivables to us by Case Credit 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 us may have
priority over our interest in the receivable. If those transfers are
treated as sales, the receivables would not be part of Case Credit's
bankruptcy estate and would not be available to Case Credit's creditors,
except under limited circumstances. In addition, while Case Credit is the
servicer, cash collections on the receivables may, under some
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 those 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 Uniform Commercial Code, would be included
in the bankruptcy estate of a transferor regardless of whether the transfer
is treated as a sale or a secured loan. Although the receivables are not
likely to be viewed as accounts, many of the accounts are "chattel paper."
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 by Case Credit to us and by us
to the trust were treated as a sale, the receivables would be part of Case
Credit's bankruptcy estate and would be subject to claims of some of its
creditors and delays and reductions in payments to us 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. A significant portion of those
receivables provide for recourse to the originating dealer for defaults by
the obligors. In addition, Case dealers retain the right to repurchase at
any time the receivables they sell to Case Credit. In the event of a Case
dealer's bankruptcy, a creditor or bankruptcy trustee of the Case dealer or
the Case dealer itself 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 us, Case Credit has warranted 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
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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 retail installment contracts, retail installment
loans or leases who gives new value and takes possession of the chattel
paper that evidences the retail installment contracts or leases in the
ordinary course of the purchaser's business may have priority over the
interest of the related trust in the retail installment contracts or
leases. Any sale of retail installment contracts or leases that had been
sold to a trust would be a violation of Case Credit's contractual
obligations.
Security Interests in Financed Equipment
In some states, retail installment sale contracts like the ones
that may be included in your trust evidence the credit sale of
agricultural, construction and other equipment. In those states, the
contracts also constitute personal property security agreements and include
grants of security interests in the equipment under the applicable Uniform
Commercial Code, as do retail installment loans made directly by Case
Credit. Perfection of security interests in the equipment is generally
governed by the Uniform Commercial Code. However, under the laws of some
other states, perfection of security interests in some agricultural,
construction or other equipment, including trucks, may be governed by
certificate of title registration laws of the state in which the equipment
is located.
Case Credit takes or requires the applicable dealer to take
appropriate action under the laws of each state in which financed equipment
is located to perfect Case Credit's security interest in the equipment. We
are required to repurchase from each trust any retail installment contract
or retail installment 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 those actions will materially adversely affect the interest of the
trust in the receivable and the 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 us. In addition, Case Credit, as the servicer, is required
to take appropriate steps to maintain perfection of security interests in
the financed 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, any security interests obtained in connection with those loans may
not have first priority status.
Due to administrative burden and expense, no action will be taken
to record the transfer of security interests from Case Credit to us or from
us to the trust. In most states, an assignment like the sales from Case
Credit to us and from us to each trust is effective to convey a security
interest, without any action to record the transfer of record. In those
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 the related 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 the trust in
financed equipment could be defeated through fraud or negligence.
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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 equipment. We will represent to each
trust that, as of the date the related receivable is sold to such trust,
each security interest in financed equipment is or will be prior to all
other present liens on and security interests in the 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 we nor the servicer must
repurchase a receivable if any of the occurrences described above, other
than any action by the servicer, result in the trust's losing the priority
of its security interest or its security interest in the financed equipment
after the date the security interest was assigned to the trust.
Under the laws of most states, a 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, or, if applicable, in which the
equipment is initially registered. With respect to any equipment that is
subject to a certificate of title under the laws of the state in which it
is located, a majority of states generally require a surrender of a
certificate of title to re-register the equipment. Accordingly, a secured
party must surrender possession if it holds the certificate of title to the
equipment, or, in the case of equipment registered in a state providing for
the notation of a lien on the certificate of title but not possession by
the secured party, the secured party would receive notice of surrender if
the security interest is noted on the certificate of title. Thus, the
secured party would have the opportunity to re-perfect its security
interest in the equipment in the state of relocation. In states that do not
require a certificate of title for registration of equipment,
re-registration could defeat perfection.
Security Interests in Leased Equipment
When we sell leases to a trust, we also assign to the trust any
security or ownership interest that we hold in the leased equipment. Each
lease is either a "true lease" or a lease intended for security (often
referred to as a "finance lease"). Whether we are 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, any lease transferred to a
trust that has a nominal termination value should be deemed to be finance
leases. While the term "nominal" is not clearly defined for this purpose,
it is clear that any lease with a $1 termination value should be treated as
a finance lease. The treatment of other 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
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any 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 to obtain a
precautionary first priority perfected security interest in the leased
equipment, in case the leases are deemed to be finance leases. In the case
of leases of trucks, Case Credit requires dealers to have the lessees named
as the owner on the certificates of title and to have Case Credit named as
holder of a security interest. 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 leased equipment and, in the case of
truck leases, causes the lessee to be named as owner and itself to be named
as holder of a security interest. As a result of these actions, for 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, and the same repurchase obligations apply if there
is no first priority perfected security interest.
Case Credit also obtains a security interest in leased equipment
against originating Case dealers in case the leased equipment is deemed to
be owned by the dealer, which would be the case for any lease that is
deemed to be a true lease, and the transfer of the 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 leases that might be true
leases will be included in the property of a 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 us, in case the transfer
of such leased equipment from Case Credit to us, or from us to the
applicable trust, respectively, is deemed not to be a true sale. Due to
administrative burden and expense, it is anticipated that those 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 us
could take priority over the interests of the applicable trust in that
leased equipment if the originating dealer, Case Credit or we were not
deemed to have made a true sale and any security interest in the leased
equipment granted to Case Credit, us 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 lessee 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 some of its rights under the leases and obtaining possession
of the leased equipment from the lessee. 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 lessee, which claim will generally have the benefit of
a perfected security interest in the leased equipment, subject to the
qualifications set out under " - Security Interests in Financed Equipment"
above. If a given lease is a true lease, the lessee's bankruptcy trustee or
the lessee will, for a period of time, have the
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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 lessee will have possession of the leased
equipment during such period.
If a lease is assumed, the bankruptcy trustee or the lessee must:
o cure any default, other than a default based on the lessee's
bankruptcy or financial condition, and possibly other
non-monetary defaults; or
o provide adequate assurance of a prompt cure; and,
o if there has been a prepetition default, provide adequate
assurance of future performance under the lease.
If a lease is rejected:
o the scheduled payments due thereafter under the lease will
be canceled;
o the trust will generally be able to obtain possession of the
leased equipment; and
o the trust will be entitled to assert an unsecured claim
for damages resulting from the rejection of the lease.
Repossession
Upon a default by an equipment purchaser, the holder of a retail
installment sale contract, loan or a lease that is treated as a personal
property security interest, has all the remedies of a secured party under
the Uniform Commercial Code, except where specifically limited by other
state laws. Under those remedies, the secured party may perform self-help
repossession unless it 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. Some
jurisdictions require that the obligor be notified of the default and be
given time to cure the default prior to repossession. Generally, the right
of reinstatement may be exercised on a limited number of occasions in any
one-year period. In cases where the obligor objects or raises a defense to
repossession, or if otherwise required by applicable state law, a court
order must be obtained from the appropriate state court, and the equipment
must then be repossessed in accordance with that order.
Notice of Sale; Redemption Rights
The Uniform Commercial Code and other state laws require a secured
party to provide an obligor with reasonable notice of the date, time and
place of any public sale and/or the date after which any private sale of
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.
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Uniform Commercial Code Considerations
Many states have adopted a version of Article 2A of the Uniform
Commercial Code 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, to the best of its knowledge, each lessee has accepted the equipment
leased to it and, after reasonable opportunity to inspect and test, has not
notified Case Credit of any defects. 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
the 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 the 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 on 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 is required to repurchase the lease. If insurance
has lapsed or has not been maintained in full force and effect, the dealers
will not be obligated to repurchase the lease.
Deficiency Judgments and Excess Proceeds; Other Limitations
The proceeds of resale of equipment generally will be applied
first to the expenses of resale and repossession and then to the
satisfaction of the indebtedness. Some states impose prohibitions or
limitations on deficiency judgments if the net proceeds from resale do not
cover the full amount of the indebtedness. In other states, a deficiency
judgment against the debtor can be sought for the shortfall. 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
Uniform
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Commercial Code requires the creditor to remit the surplus to any holder of
a lien on 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 Uniform Commercial Code 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 Uniform Commercial Code 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. Some of the receivables may be deemed to be consumer finance
contracts under applicable federal or state laws.
Case Credit warrants to us upon each sale of receivables that each
receivable sold complies with all requirements of law in all material
respects. We make similar warranties to each trustee. Accordingly, if an
obligor has a claim against the related trust for violation of any law and
such claim materially and adversely affects the trust's interest in a
receivable, the violation would be a breach of our warranties and would
create an obligation on our part to repurchase the receivable unless the
breach is cured. Our obligation to repurchase any receivables in these
circumstances is subject to Case Credit's repurchase of the receivables. If
the claim existed at the time Case Credit sold the receivable to us, the
violation would also be a breach of Case Credit's warranties, and Case
Credit would be required to repurchase the receivable unless the breach is
cured.
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U.S. Federal Income Tax Consequences
The following is a summary of the material Federal income tax
consequences of the purchase, ownership and disposition of the notes and
certificates. This summary is based upon current provisions of the Internal
Revenue Code of 1986, called the "Code", proposed, temporary and final
Treasury regulations thereunder, and published rulings and court decisions
currently in effect. The current tax laws and the current regulations,
rulings and court decisions may be changed, possibly retroactively. The
portions of this summary which relate to matters of law or legal
conclusions represent the opinion of Mayer, Brown & Platt, special Federal
tax counsel for each trust, as qualified in this summary. 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
they are correct in all material respects.
The following summary does not furnish information in the level of
detail or with the attention to an investor's specific tax circumstances
that would be provided by an investor's own tax advisor. For example, it
does not discuss the tax consequences of the purchase, ownership and
disposition of the notes and certificates by investors that are subject to
special treatment under the Federal income tax laws, including banks and
thrifts, insurance companies, regulated investment companies, dealers in
securities, holders that will hold the notes or certificates as a position
in a "straddle" for tax purposes or as a part of a "synthetic security" or
"conversion transaction" or other integrated investment comprised of the
notes or certificates and one or more other investments, trusts and estates
and pass-through entities, the equity holders of which are any of these
specified investors. In addition, the discussion regarding the notes and
certificates is limited to the Federal income tax consequences of the
initial investors and not a purchaser in the secondary market .
Each trust will be provided with an opinion of Mayer, Brown &
Platt regarding certain Federal income tax matters discussed below. An
opinion of Mayer, Brown & Platt, however, is not binding on the Internal
Revenue Service, called 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 refer, unless otherwise specified, to each trust and the notes,
certificates and related terms, parties and documents applicable to that
trust.
Tax Characterization of the Trust
Mayer, Brown & Platt is of the opinion that the trust will not be
an association (or publicly traded partnership) taxable as a corporation
for Federal income tax purposes. This opinion is based on 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
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reduced by its interest expense on the notes. Any corporate income tax
imposed on the trust could materially reduce cash available to make
payments on the notes and distributions on the certificates, and
certificateholders could be liable for any tax that is unpaid by the trust.
Tax Consequences to Holders of the Notes
Treatment of the Notes as Indebtedness. We will agree, and you
will agree by your purchase of notes, to treat the notes as debt for
Federal, state and local income and franchise tax purposes. Mayer, Brown &
Platt is of the opinion that the notes will be classified as debt for
Federal income tax purposes. The discussion below assumes the notes are
classified as debt for Federal income tax purposes.
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. Additionally, the
discussion assumes that the interest formula for the notes meets the
requirements for "qualified stated interest" under Treasury regulations,
called the "OID Regulations," relating to original issue discount, or
"OID." This discussion assumes that any OID on the notes is a de minimis
amount, within the meaning of the OID Regulations. Under the OID
Regulations, the notes will have OID to the extent the principal amount of
the notes exceeds their issue price. Further, if the notes have any OID, it
will be de minimis if it is less than 1/4% of the principal amount of the
notes multiplied by the number of full years included in their term. If
these conditions are not satisfied for any given series of notes and as a
result the notes are treated as issued with OID, additional tax
considerations for these notes will be disclosed in the applicable
prospectus supplement.
Interest Income on the Notes. Based on the above assumptions,
except as discussed below, the notes will not be considered issued with
OID. You will be required to report as ordinary interest income the stated
interest on the notes when received or accrued in accordance with your
method of tax accounting. Under the OID Regulations, if you hold a note
issued with a de minimis amount of OID, you must include this OID in
income, on a pro rata basis, as principal payments are made on the note. If
you purchase a note for more or less than its principal amount, you will
generally be subject, respectively, to the premium amortization or market
discount rules of the Code.
If you have purchased a note that has a fixed maturity date of not
more than one year from the issue date of the note, called a "Short-Term
Note", you may be subject to special rules. Under the OID Regulations, all
stated interest on a Short-Term Note will be treated as OID. If you are an
accrual basis holder of a Short-Term Note or a cash basis holder specified
in Section 1281 of the Code, including regulated investment companies, you
will generally be required to report interest income as OID accrues on a
straight-line basis over the term of each interest period. If you are a
cash basis holder of a Short-Term Note other than those specified in
Section 1281, you will, 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, if you are a cash basis holder of a Short-Term
Note reporting interest income as it is paid, you may be required to defer
a portion of any interest expense otherwise deductible on indebtedness
incurred to purchase or carry the Short-Term Note. This interest expense
would be deferred until the taxable disposition of the Short-Term Note. If
you are a cash basis taxpayer, you may elect under Section 1281 of the Code
to accrue interest income on all
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nongovernment debt obligations with a term of one year or less. If you have
so elected, you would include OID on the Short-Term Note in income as it
accrues, but you would not be subject to the interest expense deferral
rule. Special rules not discussed in this summary apply to a Short-Term
Note purchased for more or less than its principal amount.
Sale or Other Disposition. If you sell a note, you will recognize
gain or loss in an amount equal to the difference between the amount
realized on the sale and your adjusted tax basis in the note. The adjusted
tax basis of a note will equal your cost for the note, increased by any
market discount, OID and gain previously included in your income with
respect to the note and decreased by the amount of premium, if any,
previously amortized and by the amount of principal payments you have
previously received on the note. Any gain or loss will be capital gain or
loss provided that you held the note as a capital asset within the meaning
of Section 1221 of the Code, 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 a maximum rate of
20% if the note is held for more than 12 months.
Foreign Holders. If you are a nonresident alien, foreign
corporation or other non-United States person, called a "foreign person",
any interest paid or accrued to you will generally 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 you and you:
o are not actually or constructively a "10 percent
shareholder" of the trust or us, including a holder of
10% of the outstanding certificates, or a "controlled
foreign corporation" with respect to which we or the
trust are a "related person" within the meaning of the
Code; and
o satisfy the statement requirement set forth in section
871(h) and
section 881(c) of the Code and the regulations thereunder.
To satisfy this statement requirement, you, or a financial institution
holding the note on your behalf, must provide, in accordance with specified
procedures, a paying agent of the trust with a statement to the effect that
you are not a United States person. Currently these requirements will be
met if you provide your name and address, and certify, under penalties of
perjury, that you are not a United States person, which certification may
be made on an IRS Form W-8 or on new IRS Form W-8BEN, or if a financial
institution holding the note on your behalf certifies, under penalties of
perjury, that the required statement has been received by it and furnishes
a paying agent with a copy of the statement. Under recently finalized
Treasury regulations, called 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, 2000. We recommend that you consult your own tax advisors
regarding the Final Regulations.
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If you are a foreign person and interest paid or accrued to you is
not "portfolio interest," then it will be subject to a 30% withholding tax
unless you provide the trust or its paying agent, as the case may be, with
a properly executed:
o IRS Form 1001, or new IRS Form W-8BEN, claiming an
exemption from withholding tax or a reduction in withholding
tax under the benefit of a tax treaty, or
o IRS Form 4224, or new IRS Form W-8ECI, stating that
interest paid on the note is not subject to withholding
tax because it is effectively connected with your conduct
of a trade or business in the United States.
If you are a foreign person engaged in a trade or business in the
United States and interest on the note is effectively connected with the
conduct of that trade or business, although you will be exempt from the
withholding tax discussed above, you will be subject to United States
Federal income tax on your interest on a net income basis in the same
manner as if you were a United States person. In addition, if you are a
foreign corporation, you may be subject to a branch profits tax equal to
30%, or lower treaty rate, of your effectively connected earnings and
profits for the taxable year, subject to adjustments.
If you are a foreign person, any capital gain realized by you on
the sale, redemption, retirement or other taxable disposition of a note by
you will be exempt from United States Federal income and withholding tax;
provided that:
o the gain is not effectively connected with the conduct of
a trade or business in the United States by you, and
o if you are an individual foreign person, you have not
been present in the United States for 183 days or more in
the taxable year.
Backup Withholding. If you are not an exempt holder, including 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, you will be required to
provide, under penalties of perjury, a certificate containing your name,
address, correct federal taxpayer identification number and a statement
that you are not subject to backup withholding. If you are not an exempt
holder and you fail to provide the required certification, the trust will
be required to withhold 31% of the amount otherwise payable to you, and
remit the withheld amount to the IRS as a credit against your Federal
income tax liability. The Final Regulations make modifications to the
backup withholding rules. We recommend that you consult your own tax
advisors regarding the Final Regulations.
Possible Alternative Treatments of the Notes. If, contrary to the
opinion of Mayer, Brown & Platt, 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 this case,
the trust would be treated as a publicly traded partnership. This publicly
traded partnership would not, however, be taxable as a corporation because
it would meet certain qualifying income tests. Nonetheless, treatment of
the notes as equity interests in a publicly traded partnership could have
adverse tax consequences to you. For example, if you are a foreign person,
income to you might be subject to U.S. tax and U.S. tax return
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filing and withholding requirements, and if you are an individual holder,
you might be subject to certain limitations on your ability to deduct your
share of trust expenses.
Tax Consequences to Holders of the Certificates
The following discussion applies only if certificates are offered
in a related prospectus supplement. Until that time, because the
certificates will be held solely by us or one of our affiliates, under
current Treasury regulations, the trust will be disregarded as an entity
separate from us or one of our affiliates, for Federal income tax purposes.
Treatment of the trust as a Partnership. We and the servicer will
agree, and you will agree by your 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. The
assets of the partnership will be the assets held by the trust, the
partners of the partnership will be the certificateholders, including us in
our capacity as recipient of distributions from any account specified in
the related prospectus supplement in which we have an interest, and the
notes will be debt of the partnership. However, the proper characterization
of the arrangement involving the trust, the certificates, the notes, us and
the servicer is not clear because there is no authority on transactions
closely comparable to this arrangement.
A variety of alternative characterizations are possible. For
example, because the certificates have certain features characteristic of
debt, the certificates might be considered our debt or debt of the trust.
This characterization should not result in materially adverse tax
consequences to certificateholders 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 for those 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, you will be required to separately
take into account your accruals of guaranteed payments from the trust and
your 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 on 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,
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
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the present circumstances, are treated as deductible to the trust and as
ordinary income to you. The trust will have a calendar year tax year and
will deduct the guaranteed payments under the accrual method of accounting.
If you use a calendar year tax year, you will be required to include the
accruals of guaranteed payments in income in your taxable year that
corresponds to the year in which the trust deducts the payments. If you use
a taxable year other than a calendar year, you will be required to include
the payments in income in your 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
you will be allocated taxable income of the trust for each collection
period equal to the sum of:
o 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;
o prepayment premium, if any, payable to you for such month;
and
o any other amounts of income payable to you for the month.
This allocation will be reduced by any amortization by the trust of premium
on receivables corresponding 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 us.
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. However, no assurance
can be given that the IRS would not require a greater amount of income to
be allocated to you. Moreover, even under the method of allocation
described above, you may be subject to tax on income equal to the interest
rate on the certificates plus the other items described above even though
the trust might not have sufficient cash to make current cash distributions
of this amount. Thus, if you are a cash basis taxpayer, you will in effect
be required to report income from the certificates on the accrual basis and
you may become liable for taxes on trust income even if you have not
received cash from the trust to pay those 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, you may be required to report on
your tax returns taxable income that is greater or less than the amount
reported to you by the trust.
If you are a pension, profit-sharing or employee benefit plan or
other tax-exempt entity, including an individual retirement account, most
of the guaranteed payments and taxable income allocated to you will
constitute "unrelated debt-financed income" generally taxable to you under
the Code.
Your share of expenses of the trust, including fees to the
servicer but not interest expense, would be miscellaneous itemized
deductions. These deductions might be disallowed to you in whole or in part
and, as a result, you might be taxed on an amount of income that exceeds
the amount of cash actually distributed to
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you over the life of the trust. It is not clear if these rules would apply to a
certificateholder who accrues guaranteed payments.
The trust intends to make all tax calculations for income and
allocations to certificateholders on an aggregate basis. If the IRS were to
require that these 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 to you.
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, respectively. 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 discount in income currently
as it accrues over the life of the receivables or to offset any premium
against interest income on the receivables. As indicated above, a portion
of any market discount income or premium deduction may be allocated to you.
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 a
termination occurs, the trust will be considered to have contributed the
assets of the trust, constituting the old partnership, to a 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 if 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 your tax basis in the
certificates sold. Your tax basis in a certificate will generally equal
your cost for the certificate increased by your share of trust income and
accruals of guaranteed payments (includible in income) and decreased by any
distributions received by you with respect to the certificate. In addition,
both the tax basis in the certificates and the amount realized on a sale of
a certificate would include your share of the notes and other liabilities
of the trust. If you acquire certificates at different prices, you may be
required to maintain a single aggregate adjusted tax basis in the
certificates, and, upon sale or other disposition of some of the
certificates, allocate a pro rata portion of the 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 your share
of unrecognized accrued market discount on the receivables would generally
be treated as ordinary income to you and would give rise to special tax
reporting requirements. The trust does not expect to have any other assets
that would give rise to these special reporting requirements. Thus, to
avoid those special reporting
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requirements, the trust will elect to include market discount in income as it
accrues.
If you are 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 paid to you on the certificates, this 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 the month. As a result, you may be allocated tax items and accruals
of guaranteed payments, which will affect your tax liability and tax basis,
attributable to periods before you purchased your certificates.
The use of 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. We are authorized to revise the
trust's method of allocation between transferors and transferees to conform
to a method permitted by future Treasury regulations.
Section 754 Election. If a certificateholder sells its
certificates at a profit (loss), the purchasing certificateholder will have
a higher (lower) basis in the certificates than the selling
certificateholder had. The tax basis of the trust's assets will not be
adjusted to reflect that higher (or lower) basis unless the trust were to
file an election under Section 754 of the Code. In order to avoid the
administrative complexities that would be involved in keeping accurate
accounting records, as well as potentially onerous information reporting
requirements, the trust will not make this election. As a result, you might
be allocated a greater or lesser amount of trust income than would be
appropriate based upon your own purchase price for certificates.
Administrative Matters. The trustee is required to keep or have
kept complete and accurate books of the trust. These 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 on 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 certificateholders 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 these
nominees will be required to forward such information to the beneficial
owners of the certificates. Generally, you must file tax returns that are
consistent with the information return filed by the trust or be subject to
penalties unless you notify the IRS of all 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
54
<PAGE>
and the certificates so held. This information includes the name, address
and taxpayer identification number of the nominee, and, as to each
beneficial owner:
o the name, address and taxpayer identification number of that
person,
o whether that 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 a foreign government or international
organization, and
o certain information on certificates that were held,
bought or sold on behalf of that 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
regarding themselves and their ownership of certificates. A clearing agency
registered under Section 17A of the Securities Exchange Act is not required
to furnish this 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.
We will be designated as the tax matters partner in the trust
agreement and, therefore, will be responsible for representing you 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 your tax returns, and, under certain circumstances, you may
be precluded from separately litigating a proposed adjustment to the items
of the trust. An adjustment could also result in an audit of your tax
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 on non-U.S.
persons because there is no clear authority dealing with this issue under
facts substantially similar to ours. Although it is not expected that the
trust would be engaged in a trade or business in the United States for
these 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 pursuant to Section 1446 of the
Code, on the portion of its taxable income allocable to foreign
certificateholders as if this income were effectively connected to a U.S.
trade or business, at a rate of 35% for foreign certificateholders that are
taxable as corporations and 39.6% for all other foreign certificateholders.
Subsequent adoption of Treasury regulations or the issuance of other
administrative pronouncements may require the trust to change its
withholding procedures. In determining a certificateholder's nonforeign
status, the trust may rely on IRS Form W-8, new IRS Form W-8BEN, IRS Form
W-9 or the certificateholder's certification of nonforeign status signed
under penalties of perjury.
55
<PAGE>
Each foreign certificateholder 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 certificateholder must obtain a taxpayer
identification number from the IRS and submit that number to the trust on
Form W-8 or on new IRS Form W-8BEN in order to assure appropriate crediting
of the taxes withheld. A foreign certificateholder generally would be
entitled to file with the IRS a claim for refund for 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, you fail to comply with certain
identification procedures, unless you are an exempt recipient under
applicable provisions of the Code. The Final Regulations discussed above
contain modifications to the backup withholding and information reporting
rules. We recommend that you consult your own tax advisors regarding the
backup withholding rules and the Final Regulations. See "Tax Consequences
to Holders of the Notes - Backup Withholding."
Illinois State Tax Consequences
The following is a summary of the material Illinois income tax
consequences of the purchase, ownership and disposition of the notes and
certificates. This summary is based upon current provisions of Illinois
statutes and regulations, and applicable judicial or ruling authority. The
current Illinois statutes and regulations, and judicial and ruling
authority may be changed, possibly retroactively. The portions of the
following summary that relate to matters of law or legal conclusions
represent the opinion of Mayer, Brown & Platt, special Illinois tax counsel
for each trust subject to the qualifications set forth in this summary.
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 they are correct in all material respects.
Each trust will be provided with an opinion of Mayer, Brown &
Platt regarding Illinois income tax matters discussed below. An opinion of
Mayer, Brown & Platt, however, is not binding on the Illinois Department of
Revenue, called the "IDOR", or the courts. Additionally, there are no cases
or IDOR 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 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
imposes a Personal Property Replacement Income Tax, called the "Illinois
Replacement Tax", on individuals, corporations, partnerships and 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 were treated as
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<PAGE>
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 Mayer, Brown & Platt, 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 Illinois taxes solely because of their
ownership of notes. Noteholders 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.
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 Mayer,
Brown & Platt, although the matter is not free from doubt, the same
treatment would also apply for Illinois tax purposes. In this case, the
partnership may be treated as earning income in the State of Illinois and
therefore would be subject to the Illinois Replacement Tax. If this tax
were applicable, distributions to noteholders and certificateholders could
be reduced.
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 other than 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. If any of these taxes were applicable, distributions to
certificateholders could be reduced.
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
Internal Revenue Code with respect to the Benefit Plan. A violation of
these "prohibited transaction" rules may result in
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<PAGE>
an excise tax or other penalties and liabilities under ERISA and the Code
for these 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 relating to plan assets, the assets
of the trust would be treated as plan assets of a Benefit Plan for the
purposes of ERISA and the Code only if the Benefit Plan acquired an "equity
interest" in the trust and none of the exceptions contained in the plan
assets regulation was applicable. An equity interest is defined under the
plan assets regulation as an interest other than an instrument which is
treated as indebtedness under applicable local law and which has no
substantial equity features. The likely treatment in this context of notes
and certificates of a given series will be discussed in the related
prospectus supplement.
Employee benefit plans that are governmental plans (as defined in
Section 3(32) of ERISA) and certain church plans (as defined in Section
3(33) of ERISA) are not subject to ERISA requirements.
A plan fiduciary considering the purchase of securities of a given
series should consult its tax and/or legal advisors regarding whether the
assets of the related trust would be considered plan assets, the
possibility of exemptive relief from the prohibited transaction rules and
other issues and their potential consequences.
Plan of Distribution
We will enter into one or more underwriting agreements with
respect to the notes of each series and an underwriting agreement with
respect to the certificates of a given series, if offered under this
prospectus. In each underwriting agreement, we will agree to cause the
related trust to sell to the underwriters, and each of the 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
in the underwriting agreement 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 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 that offering, or specify
that the related notes and certificates 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 notes
and certificates the public offering prices and concessions may be changed.
Each underwriting agreement will provide that we 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.
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<PAGE>
Each trust may, from time to time, invest the funds in its trust
accounts in eligible investments acquired from underwriters.
Pursuant to each of the underwriting agreements with respect to a
given series of securities, the closing of the sale of each class of
securities subject to any of those agreements will be conditioned on the
closing of the sale of all other classes subject to any of those
agreements. 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, us 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.
Where You Can Find More Information
We filed a registration statement relating to the securities with
the Securities and Exchange Commission. This prospectus is part of the
registration statement, but the registration statement includes additional
information.
We will file with the SEC all required annual, monthly and special
SEC reports and other information about any trust we originate.
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
we file with it, which means that we 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 we
file 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. We incorporate 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.
Our 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
Securities Exchange Act and is incorporated into this prospectus by
reference and made a part hereof. Since that time, we have not been, nor
are we currently, required to file reports pursuant to Section 13(a) or
15(d) of the Securities Exchange Act, except for the filing of Current
Reports on Form 8-K in connection with the trusts it originates. Our
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, 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, March 8, 1999, March
15, 1999, April 15, 1999, May 15, 1999 and June 15, 1999 are incorporated
into this prospectus by reference and made a part hereof.
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<PAGE>
As a recipient of this prospectus, you may request a copy of any
document we incorporate 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 also access the servicer's Internet site at
(http://www.casecorp.com).
<PAGE>
Index of Terms
Set forth below is a list of the defined terms used in this
prospectus and the pages on which the definitions of such terms may be
found herein.
Benefit Plan ...........................................................59
Code ...........................................................47
ERISA ...........................................................59
Final Regulations ...........................................................51
foreign person ...........................................................50
IDOR ...........................................................58
Illinois Replacement Tax.....................................................58
IRS ...........................................................49
OID ...........................................................49
OID Regulations ...........................................................49
portfolio interest...........................................................49
Short-Term Note ...........................................................50
61
<PAGE>
Case Equipment Receivables Trust _____-___
Asset Backed Notes
[Asset Backed Certificates]
Case Receivables II Inc.
Seller
Case Credit Corporation
Servicer
$___________ A-1 Notes
$___________ A-2 Notes
$___________ A-3 Notes
$___________ A-4 Notes
$___________ [Class B Notes][Certificates]
__________________
PROSPECTUS SUPPLEMENT
___________________
Underwriters
[ ]
You should rely only on the information contained or incorporated
by reference in this prospectus supplement and the accompanying prospectus.
We have not authorized anyone to provide you with different information.
We are not offering the notes [or certificates] 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][Certificates] and with respect to their unsold allotments or
subscriptions. In addition, all dealers selling the Class A Notes or the
[Class B Notes][Certificates] will deliver a prospectus supplement and
prospectus until __________ __, _____ (90 days after the date of this
prospectus).
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses in connection with the offering of the
Securities being registered herein are as follows:
SEC filing fee........................................ $ 278.00
Legal fees and expenses............................... 175,000.00
Accounting fees and expenses.......................... 210,000.00
Rating agency fees.................................... 420,000.00
Trustee fees and expenses............................. 14,000.00
Indenture Trustee fees and expenses................... 7,000.00
Blue Sky expenses..................................... 28,000.00
Printing and engraving................................ 210,000.00
Miscellaneous......................................... 5,722.00
--------
Total............................... $ 1,070,000.00
============
Item 15. Indemnification of Directors and Officers.
The By-Laws of Case Corporation (the "Company") include the
following provisions:
Section 15.1. Right to Indemnification. The Company shall
indemnify and hold harmless, to the fullest extent permitted by applicable
law as it presently exists or may hereafter be amended, any person who was
or is made or is threatened to be made a party or is otherwise involved in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "proceeding"), by reason of the fact that he, or a person
for whom he is the legal representative, is or was a director or officer of
the Company or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust, enterprise or nonprofit entity,
including service with respect to employee benefit plans (an "indemnitee"),
against all liability and loss suffered and expenses (including attorneys'
fees) reasonably incurred by such indemnitee. Subject to Section 14.3
hereof, the Company shall be required to indemnify an indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee
only if the initiation of such proceeding (or part thereof) by the
indemnitee was authorized by the Board of Directors of the Company.
Section 15.2. Prepayment of Expenses. The Company shall pay the
expenses (including attorneys' fees) incurred by an indemnitee in defending
any proceeding in advance of its final disposition, provided, however, that
the payment of expenses incurred by a director or officer in advance of the
final disposition of the proceeding shall be made only upon receipt of an
undertaking by the director or officer to repay all amounts advanced if it
should be ultimately determined that the director or officer is not
entitled to be indemnified under this Section 15 or otherwise.
<PAGE>
Section 15.3. Claims. If a claim for indemnification or payment of
expenses under this Section 14 is not paid in full within ninety days after
a written claim therefor by the indemnitee has been received by the
Company, the indemnitee may file suit to recover the unpaid amount of such
claim and, if successful in whole or in part, shall be entitled to be paid
the expense of prosecuting such claim. In any such action the Company shall
have the burden of proving that the indemnitee was not entitled to the
requested indemnification or payment of expenses under applicable law.
Section 15.4. Nonexclusivity of Rights. The rights conferred on
any person by this Section 14 shall not be exclusive of any other rights
which such person may have or hereafter acquire under any statute,
provision of the certificate of incorporation, these By-Laws, agreement,
vote of stockholders or disinterested directors or otherwise.
Section 15.5. Other Indemnification. The Company's obligation, if
any, to indemnify or advance expenses to any person who was or is serving
at its request as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, enterprise or nonprofit
entity shall be reduced by any amount such person may collect as
indemnification from such other corporation, partnership, joint venture,
trust, enterprise or nonprofit entity.
Section 15.6. Amendment or Repeal. Any repeal or modification of
the foregoing provisions of Section 14 shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
The Company has purchased insurance that purports to insure it
against certain costs of indemnification that may be incurred by it
pursuant to the foregoing By-Law provisions, and to insure the officers and
directors of the Company, and of its subsidiary companies, against certain
liabilities incurred by them in the discharge of their function as such
officers and directors except for liabilities resulting from their own
malfeasance.
II-2
<PAGE>
Item 16. Exhibits.
1(a)* --Form of Underwriting Agreement for Notes
1(b)* --Form of Underwriting Agreement for Certificates
3(a)* --Certificate of Incorporation of Case Receivables II Inc.
3(b)* --By-Laws of Case Receivables II Inc.
3(c)** --Form of Certificate of Trust of Case Equipment Loan
Trusts (included as part of Exhibit 4(b))
4(a)** --Form of Indenture between the Trust and the Indenture
Trustee
4(b)** --Form of Trust Agreement between Case Receivables II Inc.
and the Trustee
4(c)** --Form of Class A-1 Note (included as part of Exhibit 4(a))
4(d)** --Form of Class A-2 Note (included as part of Exhibit 4(a))
4(e)** --Form of Class A-3 Note (included as part of Exhibit 4(a))
4(f)** --Form of Class B Note (included as part of Exhibit 4(a))
4(g)** --Form of Certificate (included as part of Exhibit 4(b))
5 --Opinion of Mayer, Brown & Platt with respect to legality
8*** --Opinion of Mayer, Brown & Platt with respect to Federal
income and Illinois tax
matters
10* --Receivables Purchase Agreement dated as of August 1, 1994,
between Case
Credit Corporation and Case Receivables II Inc.
23(a) --Consent of Mayer, Brown & Platt (included as part of
Exhibit 5)
23(b) --Consent of Mayer, Brown & Platt (to be included as part
of Exhibit 8)
24 --Power of Attorney (included on page II-4)
25* --Form T-1 Statement of Eligibility
99(a)** --Form of Sale and Servicing Agreement between Case
Receivables II Inc., the Trust and Case
Credit Corporation
99(b)** --Form of Administration Agreement between the Trust,
Case Credit
Corporation and the Indenture Trustee
99(c)** --Form of Purchase Agreement between Case Credit
Corporation and Case Receivables II Inc.
____________________
* Incorporated by reference to Registrants' Registration Statement
No. 33-84922.
** Incorporated by reference to Registrants' Registration Statement
No. 33-99298.
*** Filed herewith.
II-3
<PAGE>
Item 17. Undertakings
(a) As to Rule 415: The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective
amendment to this registration statement;
(i) to include any prospectus required by Section 10(a)
(3) of the Securities Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this registration
statement (or the most recent post-effective amendment
hereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar volume of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) to include any material information with respect
to the plan of distribution not previously disclosed in this
registration statement or any material change to such
information in this registration statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as
amended, that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) As to documents subsequently filed that are incorporated by
reference: The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, as amended,
each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934, as amended, that is
incorporated by reference in this registration statement shall be deemed to
be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-4
<PAGE>
(c) As to indemnification: Insofar as indemnification for
liabilities arising under the Securities Act of 1933, as amended, may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described in Item 15 herein, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
(d) As to qualification of Trust Indentures under Trust Indenture
Act of 1939 for delayed offerings:
The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section 305(b)
of the Act.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3, reasonably believes
that the security rating requirement for the asset-backed securities being
registered on this form will be met by the time of the sale and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lincolnshire,
Illinois, on the date of August 6, 1999.
CASE RECEIVABLES II INC.
By: *
-----------------------------------------------
Theodore R. French
Chairman of the Board
By: /s/ Robert A. Wegner
-------------------------------------------------
Robert A. Wegner
Senior Vice President and Chief Financial Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
* July 13, 1999
- ----------------------------
Andrew E. Graves Principal Executive
Officer
/s/ Robert A. Wegner Principal Financial
- ----------------------------- Officer August 6, 1999
Rober A. Wegner and Principal Accounting
Officer
* August 6, 1999
- ----------------------------- Director
Theodore R. French
* Director July 13, 1999
- -------------------------------
Kenneth K. Chalmers
* Director July 13, 1999
- -------------------------------
Michael Fredrich
* Director July 13, 1999
- -------------------------------
Jean-Pierre Rosso
/s/ Robert A. Wegner
- --------------------------------
Robert A. Wegner
Attorney-in-Fact
* Signature by Robert A. Wegner as
Attorney-in-Fact under Power of Attorney
II-6
MAYER, BROWN & PLATT
190 SOUTH LA SALLE STREET
CHICAGO, ILLINOIS 60603-3441
Exhibit 8
August 9, 1999
Case Receivables II Inc.
5729 Washington Avenue
Racine, Wisconsin 53406
Re: Case Receivables II Inc.
Registration Statement on
Form S-3 (Registration No. 333-82741)
-------------------------------------
Ladies and Gentlemen:
We have acted as special Federal tax counsel for Case Receivables II
Inc., a Delaware corporation (the "Company"), in connection with the
above-captioned Registration Statement (such registration statement,
together with the exhibits and any amendments thereto, the "Registration
Statement"), filed by the Company with the Securities and Exchange
Commission in connection with the registration by the Company of Asset
Backed Notes (the "Notes") and Asset Backed Certificates (the
"Certificates") with a proposed maximum aggregate offering price of
$1,000,000 (plus $1,999,125,000) in Asset Backed Securities previously
registered under Registration Statement 333-52493 that are being
consolidated into into the Registration Statement. As described in the
Registration Statement, the Notes and the Certificates will be issued from
time to time in series, with each series being issued by a Delaware
business trust (each, a "Trust") to be formed by the Company pursuant to a
Trust Agreement (each, a "Trust Agreement") between the Company and a
trustee. For each series, the Notes will be issued pursuant to an Indenture
(the "Indenture") between the related Trust and an indenture trustee and a
Sale and Servicing Agreement among the related Trust, the Company and Case
Credit Corporation, as servicer (each, a "Sale and Servicing Agreement"),
and the Certificates will be issued pursuant to a Trust Agreement and such
Sale and Servicing Agreement.
In that connection, we are generally familiar with the proceedings
required to be taken in connection with the proposed authorization,
issuance and sale of any series of Notes and Certificates and have examined
copies of such documents, corporate records and other instruments as we
have deemed necessary or appropriate for the purposes of this opinion,
including the Registration Statement and, in each case as filed as an
exhibit to the Registration Statement, the form of Sale and Servicing, the
form of Indenture (including the form of Notes included as exhibits
thereto), the form of Trust Agreement (including the form of Certificate
included as an exhibit thereto and including the form of Certificate of
Trust to be filed with the Delaware Secretary of State) and the form of
Purchase Agreement between the Company and Case Credit Corporation
(collectively, the "Operative Documents").
<PAGE>
Case Receivables II Inc.
August 9, 1999
Page 2
Based on the foregoing and assuming that the Operative Documents with
respect to each series are executed an delivered in substantially the form
we have examined and that the transactions contemplated to occur under the
Operative Documents in fact occur in accordance with the terms thereof, we
hereby confirm that, if we are acting as Federal Tax Counsel with respect
to an issuance of Notes and Certificates, the statements set forth in the
Prospectus forming part of the Registration Statement under the captions
"Summary of Terms--Tax Status" in the form of Prospectus Supplement (to the
extent they relate to federal income tax consequences) and "U.S. FEDERAL
INCOME TAX CONSEQUENCES" (as modified by the statements, if any, set forth
under those same headings in the related Prospectus Supplement) accurately
reflect our opinion.
We know that we are referred to under the captions referred to above
included in the Registration Statement, and we hereby consent to the use of
our name therein and to the use of this opinion for filing with the
Registration Statement as Exhibit 8(a) thereto.
Very truly yours,
/s/ MAYER, BROWN & PLATT
