1
EXHIBIT 10.5
SUBORDINATION AGREEMENT
BETWEEN
ORIX CREDIT ALLIANCE, INC.,
AS SERVICER
AND
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A,
AS ISSUER
DATED AS OF FEBRUARY ,2000
2
TABLE OF CONTENTS
Page
----
1. Subordination of Security Interests............................................1
2. Governing Law..................................................................2
3. Term of Agreement..............................................................2
4. Notices........................................................................2
5. Binding Effect.................................................................2
6. Limitation of Liability........................................................2
3
SUBORDINATION AGREEMENT
Subordination Agreement, dated as of February ,2000, between ORIX
CREDIT ALLIANCE, INC., a New York corporation ("OCAI" or the "Servicer") and
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A, a Delaware business trust (the
"Issuer").
WHEREAS, OCAI and the Issuer have entered into a Transfer and Servicing
Agreement, dated as of ,2000 (the "Agreement"), among OCAI, the Issuer,
Xxxxxx Trust and Savings Bank (the "Indenture Trustee") and ORIX Credit Alliance
Receivables Corporation III (the "Trust Depositor") (the capitalized terms
defined therein being used herein with the same meaning as set forth therein);
and
WHEREAS, pursuant to the Agreement, the Trust Depositor has assigned to
the Issuer certain Contracts secured by Financed Items and other collateral of
the Obligors (together, the "Collateral"); and
WHEREAS, OCAI in the ordinary course of its equipment finance business
may, subsequent to entering into such Contracts, enter into additional financing
agreements with Obligors and pursuant thereto take a security interest in the
additional financed equipment ("Subsequently Financed Items"); and
WHEREAS, the contracts resulting from such additional financing
agreements with Obligors may provide that in addition to the Subsequently
Financed Items, the Obligor grant OCAI a security interest in other equipment
owned by the Obligor, which could include the Collateral as well as the
Subsequently Financed Items; and
WHEREAS, certain of the Contracts assigned to the Issuer by the Trust
Depositor may include Obligors entering into such additional financing
agreements with OCAI which could be secured by Collateral and Subsequently
Financed Items; and
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
1. SUBORDINATION OF SECURITY INTERESTS. OCAI's security interests in
the Collateral (other than the Subsequently Financed Items) shall be and hereby
are made junior in priority to all security interests of the Issuer in such
Collateral; the Issuer's security interests in the Subsequently Financed Items
shall be and hereby are made junior in priority to the security interests of
OCAI in such Collateral; provided, however, that the security interests of OCAI
and the Issuer in the Collateral other than the Financed Items
4
or the Subsequently Financed Items shall be pari passu in right of payment and
equivalent in priority in proportion to the amounts owed by the Obligor if and
for so long as the value of the Financed Items securing a Contract shall be
determined, in accordance with OCAI's normal valuation procedures, to exceed at
least 120% of the Principal Balance of the Contract owned by the Issuer.
2. GOVERNING LAW. This Subordination Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
3. TERM OF AGREEMENT. This Agreement shall continue in force until
all amounts due and payable with respect to the Contracts have been paid in
full, upon which event this Agreement shall automatically terminate. The
priorities specified herein are applicable irrespective of the time or order of
attachment or perfection of security interests or the time or order of filing of
financing statements or the giving or failure to give notice of the acquisition
or expected acquisition of purchase money or other security interests. Except as
herein specifically provided, priority shall be determined in accordance with
applicable law.
4. NOTICES. All demands, notices and communications hereunder shall
be in writing, personally delivered or mailed by certified mail-return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of OCAI, at the following address: ORIX Credit Alliance, Inc., 000 Xxxxxxxx
Xxx, Xxxxxxxx, Xxx Xxxxxx 00000, Attn: Executive Vice President-Finance, (b) in
the case of the Issuer, at the following address: c/o Bank of New York
(Delaware), 000 Xxxxx Xxxx Xxxxxx, X.X. Xxx 0000, Xxxxxx, Xxxxxxxx 00000-0000,
Attn: Corporate Trust Administration, or at such other address as shall be
designated by such party in a written notice to the other party.
5. BINDING EFFECT. This Subordination Agreement shall be binding upon
and shall inure to the benefit of OCAI and the Issuer and their respective
successors and assigns.
6. LIMITATION OF LIABILITY. The Bank of New York (Delaware) acts on
behalf of the Issuer solely as Owner Trustee hereunder and not in its individual
capacity, and all Persons having any claim against the Trust by reason of the
transactions contemplated by this agreement or any other Transaction Document
shall look only to the Trust Estate under the Trust Agreement for payment or
satisfaction thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this agreement, any other Transaction Document or the
Notes, or of any Contract or related documents. The Owner Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Contract, or the perfection and priority of
any security interest created by any Contract in any Equipment or the
maintenance of any
-2-
5
such perfection and priority, or for or with respect to the sufficiency of the
Trust Estate under the Trust Agreement or its ability to generate the payments
to be distributed to the Certificateholder under the Trust Agreement or the
Noteholders under the Indenture, including, without limitation, the existence,
condition and ownership of any Equipment; the existence and enforceability of
any insurance thereon; the existence and contents of any Contract on any
computer or other record thereof; the validity of the assignment of any Contract
to the Trust or of any intervening assignment; the completeness of any Contract;
the performance or enforcement of any Contract; the compliance by the Issuer,
the Trust Depositor or the Servicer with any covenant, agreement or other
obligation or any warranty or representation made under any Transaction Document
or in any related document or the accuracy of any such warranty or
representation; or any action of the Administrator, the Indenture Trustee or the
Servicer or any subservicer taken in the name of the Owner Trustee or the
Issuer.
-3-
6
IN WITNESS WHEREOF, each of the parties hereto has caused this
Subordination Agreement to be executed in its name and on its behalf by a duly
authorized officer as of the day and year first above written.
ORIX CREDIT ALLIANCE, INC.,
By:
--------------------------------------
Name: Xxxxxx X. XxXxxxxx, Xx.
Title: Executive Vice President
ORIX CREDIT ALLIANCE RECEIVABLES
TRUST 2000-A
By THE BANK OF NEW YORK (DELAWARE), not in
its individual capacity but solely as Owner Trustee,
By:
--------------------------------------
Name: Xxxxxx Laser
Title: Assistant Vice President
