EXHIBIT 99.1
SUPPLEMENTAL INDENTURE NO. 1
dated as of May 29, 2003
among
CONSECO PRIVATE LABEL CREDIT CARD MASTER NOTE TRUST,
Trust
and
U.S. BANK NATIONAL ASSOCIATION,
Indenture Trustee
and
MILL CREEK BANK INC.
Servicer
to the
MASTER INDENTURE
Dated as of May 1, 2001
CONSECO PRIVATE LABEL CREDIT CARD MASTER NOTE TRUST
This Supplemental Indenture No. 1, dated as of May 29, 2003 (this
"Supplemental Indenture"), to the MASTER INDENTURE, dated as of May 1, 2001 (the
"Master Indenture"), is entered into by and among CONSECO PRIVATE LABEL CREDIT
CARD MASTER NOTE TRUST, a business trust organized under the laws of the State
of Delaware, as the Trust (the "Trust"), MILL CREEK BANK INC. (f/k/a Conseco
Bank, Inc.), a Utah industrial loan corporation, as Servicer (the "Servicer"),
and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as Indenture
Trustee (the "Indenture Trustee").
WHEREAS, Series 2001-A, which was issued pursuant to that certain Series
2001-A Indenture Supplement, dated as of May 1, 2001, by and among the Trust,
the Indenture Trustee and the Servicer (the "Series 2001-A Supplement"), is
currently the only outstanding series of Notes issued under the Trust;
WHEREAS, Series 2001-A is currently in its Early Amortization Period;
WHEREAS, following the May 2003 Payment Date, the remaining aggregate
principal balance of the Series 2001-A Class A Notes, Class B Notes, Class C
Notes and Class D Notes (collectively, the "Series 2001-A Notes" or the "Notes")
was approximately $201.9 million;
WHEREAS, following the May 2003 Payment Date, there was approximately
$174.4 million in undistributed cash in the Collection Account (including
approximately $120.3 million of Investor Charge-Offs), which amount has not been
distributed to Mill Creek Bank Inc., a Utah industrial loan corporation, or
Conseco Finance Credit Card Funding Corp., a Minnesota corporation, in their
capacities as Transferors (each, a "Transferor," and collectively, the
"Transferors");
WHEREAS, following the May 2003 Payment Date, there was approximately $35.8
million in the Cash Collateral Account and approximately $9.2 million in the
Spread Account;
WHEREAS, the Transferors, pursuant to that certain Supplement, dated the
date hereof (the "Supplement"), to the Transfer and Servicing Agreement, dated
as of May 1, 2001, by and among each of the Transferors and the Trust, conveyed
to the Trust all of their rights, if any, in the amounts remaining in the Series
2001-A Collection Account, Cash Collateral Account and Spread Account and,
pursuant to this Supplemental Indenture, hereby instruct the Trust and the
Indenture Trustee to apply such funds to defease Series 2001-A in accordance
with the terms set forth in the Master Indenture and this Supplemental
Indenture;
WHEREAS, the Transferors and the Servicer desire to apply all of the
amounts remaining in the Collection Account, the Cash Collateral Account and the
Spread Account, which represent an aggregate of approximately $219.4 million, as
Excess Finance Charge Collections to pay off the remaining aggregate principal
balance of $201.9 million on the Series 2001-A Notes in connection with the June
2003 Payment Date;
WHEREAS, Section 10.01(a)(i) of the Master Indenture permits amendment of
the Master Indenture (and any supplement thereto) with the consent the Trust,
the Servicer and the Indenture Trustee, upon the terms and conditions specified
therein;
WHEREAS, Section 10.01(a)(i) of the Master Indenture permits amendment of
the Master Indenture to correct or amplify the description of any property at
any time subject to the lien of the Master Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or required
to be subjected to the lien of the Master Indenture, or to subject to the lien
of the Master Indenture any additional property;
WHEREAS, as required by Section 10.01(a)(i) of the Master Indenture, (i)
each Transferor has delivered to the Indenture Trustee an Officer's Certificate,
dated the date of this Supplemental Indenture, stating that such Transferor
reasonably believes that the execution of this Supplemental Indenture will not
have an Adverse Effect, and (ii) a Tax Opinion with respect to this Supplemental
Indenture has been delivered to the Indenture Trustee;
WHEREAS, Section 11.03 of the Master Indenture permits the Trust to
irrevocably deposit or cause to be deposited with the Indenture Trustee a
combination of cash and Eligible Investments in an amount sufficient to pay and
discharge all remaining scheduled interest and principal payments on the
outstanding Notes;
WHEREAS, the Trust and the Servicer desire to ensure that sufficient funds
are deposited in trust to defease the remaining scheduled interest and principal
payments on the Series 2001-A Notes on or prior to May 30, 2003, for
distribution to the Series 2001-A Noteholders on the June 2003 Payment Date;
WHEREAS, this Supplemental Indenture has been authorized by an Issuer Order
executed in the name of the Trust by an Authorized Officer and delivered to the
Indenture Trustee; and
WHEREAS, the parties hereto desire to amend the Master Indenture under the
terms and conditions specified herein.
NOW, THEREFORE, the parties hereto hereby agree that the Master Indenture
is hereby amended effective as of the date hereof as follows:
1. Pledge of Series Accounts. Effective as of the date hereof, the
Transferors, pursuant to the Supplement, conveyed to the Trust, and the Trust,
pursuant to this Supplemental Indenture, hereby pledges and Grants to the
Indenture Trustee, for the benefit of the Series 2001-A Noteholders, all of the
Transferors' and the Trust's respective right, title and interest, whether now
owned or hereafter acquired, in, to and under any amounts remaining in the Cash
Collateral Account and the Spread Account, together with any amounts remaining
in the Collection Account, pursuant to the terms of the Master Indenture, the
Supplement and this Supplemental Indenture, to be applied to defease Series
2001-A as described in Section 2 below.
2. Defeasance. In connection with the defeasance of Series 2001-A
contemplated by this Supplemental Indenture, and in accordance with the
defeasance provisions set forth in Section 11.03 of the Master Indenture, the
Trust shall have (i) delivered a statement from a firm of nationally recognized
independent public accountants to the effect that the pledge to the Indenture
Trustee of the amounts remaining in the Collection Account, Cash Collateral
Account and Spread Account is sufficient to pay in full the remaining scheduled
interest and principal
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payments on the Series 2001-A Notes, (ii) delivered the Tax Opinion required by
Section 11.03(c)(iii) of the Master Indenture, (iii) delivered an Officer's
Certificate of each Transferor stating that such Transferor reasonably believes
that such deposit and termination of obligations will not have an Adverse
Effect; and (iv) satisfied the Rating Agency Condition with respect to the
defeasance of the Series 2001-A Notes. Upon the satisfaction of such conditions,
Series 2001-A shall be defeased, and the amounts deposited with the Indenture
Trustee shall be used to pay the outstanding aggregate principal balance of the
Series 2001-A Notes and any interest due thereunder on the June 2003 Payment
Date. Upon the deposit of cash and Eligible Investments in an amount sufficient
to pay and discharge the Series 2001-A Notes in full, and upon the satisfaction
of the conditions precedent set forth in Section 4.01 of the Master Indenture,
the lien of the Master Indenture on all of the Receivables in the Trust shall
terminate.
3. Final Distribution. In accordance with the terms of Section 11.02 of the
Master Indenture, the Servicer hereby notifies the Indenture Trustee that the
June 2003 Payment Date shall be the date for payment of the final distribution
on, and cancellation of, the Series 2001-A Notes. All funds on deposit in the
Collection Account, the Cash Collateral Account and the Spread Account shall
continue to be held in trust for the Noteholders, and the Indenture Trustee
shall pay such funds to such Noteholders upon surrender of their Notes. Any
funds remaining after the final distribution to the Noteholders described above
shall be distributed in accordance with the terms and conditions of the Master
Indenture and the Series 2001-A Supplement.
4. Additional Representations and Warranties of the Trust. The Trust hereby
makes the following representations and warranties. Such representations and
warranties shall survive until the termination of the Master Indenture. Such
representations and warranties speak as of the date that the funds in the
Collection Account, the Cash Collateral Account and the Spread Account
(collectively, the "Accounts") are transferred to the Indenture Trustee but
shall not be waived by any of the parties to this Supplemental Indenture unless
each Rating Agency shall have notified the Trust, the Servicer and the Indenture
Trustee in writing that such waiver will not result in a reduction or withdrawal
of the rating of any outstanding Series or Class to which it is a Rating Agency.
(a) The Master Indenture creates a valid and continuing security
interest (as defined in the applicable Uniform Commercial Code (the "UCC"))
(the "Master Indenture Security Interest") in favor of the Indenture
Trustee in (i) the Collection Account and all monies and investments
deposited therein or credited thereto pursuant to Section 8.03 of the
Master Indenture (the "Collection Account"), (ii) the Series 2001-A Cash
Collateral Account and all monies and investments deposited therein or
credited thereto pursuant to Section 4.12(a) of the Series 2001-A
Supplement (the "Cash Collateral Account") and (iii) the Series 2001-A
Spread Account and all monies and investments deposited therein or credited
thereto pursuant to Section 4.11(a) of the Series 2001-A Supplement (the
"Spread Account" and, together with the monies and investments deposited in
or credited to the Collection Account or the Cash Collateral Account, the
"Securities Accounts Collateral"). The Master Indenture and the
Supplemental Indenture create a valid and continuing security interest (as
defined in the applicable UCC) (the "Supplemental Indenture Security
Interest" and, together with the Master Indenture Security Interest, the
"Security Interests") in favor of the Indenture
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Trustee in the Accounts and all funds on deposit from time to time therein
or credited thereto and in all proceeds thereof, as described in the Master
Indenture, the Series 2001-A Supplement and this Supplemental Indenture and
as maintained for the benefit of the Series 2001-A Noteholders, which
Security Interests are prior to all other liens (other than permitted liens
under the Master Indenture, the Series 2001-A Supplement, the Supplement or
the Supplemental Indenture), and is enforceable as such as against
creditors of and purchasers from the Trust
(b) With respect to the Collection Account, the Cash Collateral
Account and the Spread Account and all funds on deposit from time to time
therein or Eligible Investments credited thereto and in all proceeds
thereof:
i. The Collection Account, the Cash Collateral Account and the
Spread Account constitute "securities accounts" within the
meaning of the applicable UCC, and the Indenture Trustee's
rights and property interest with respect to the monies and
investments deposited therein or credited thereto constitute
"security entitlements" within the meaning of the applicable
UCC.
ii. All of the Eligible Investments in the Collection Account,
the Cash Collateral Account and the Spread Account have been
and will have been credited to the Collection Account, the
Cash Collateral Account and Spread Account, respectively.
The Indenture Trustee, acting as securities intermediary,
has agreed to treat all assets credited to the Accounts as
"financial assets" within the meaning of the applicable UCC.
iii. At the time of each transfer and assignment of Securities
Accounts Collateral to the Indenture Trustee pursuant to the
Series 2001-A Supplement, the Master Indenture and the
Supplemental Indenture, the Trust owned and had good and
marketable title to such Securities Accounts Collateral free
and clear of any lien, claim or encumbrance of any Person,
except for permitted liens under the Master Indenture, the
Series 2001-A Supplement and the Supplemental Indenture.
iv. The Trust has received all consents and approvals required
by the terms of the Securities Accounts Collateral to the
transfer to the Indenture Trustee of its interest and rights
in the Securities Accounts Collateral under the Master
Indenture, the Series 2001-A Supplement and the Supplemental
Indenture.
v. The Trust has taken all steps necessary to cause the
Indenture Trustee, acting as securities intermediary, to
become the registered entitlement holder of any Securities
Accounts Collateral.
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vi. Other than the transfer and the security interest granted to the
Indenture Trustee pursuant to the Master Indenture, the Series
2001-A Supplement and this Supplemental Indenture, the Trust has
not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed the Securities Accounts Collateral. The Trust
has not authorized the filing of and is not aware of any
financing statements against the Trust that include a description
of collateral covering the Securities Accounts Collateral other
than any financing statements relating to the security interest
granted to the Indenture Trustee pursuant to the Master Indenture
or the Series 2001-A Supplement or that has been terminated. The
Trust is not aware of any judgment or tax lien filings against
the Trust.
vii. The Accounts are not in the name of any person other than the
Indenture Trustee. Each Account is maintained by the Indenture
Trustee. The Trust has not consented to the securities
intermediary of any Account complying with entitlement orders of
any person other than the Indenture Trustee.
5. Existing Definitions. Each term used but not defined herein shall have
the meaning assigned to such term in the Master Indenture or the Series 2001-A
Supplement, as applicable.
6. Waiver of Notice. The parties to this Supplemental Indenture hereby
waive any required notifications or notice periods with respect to this
Supplemental Indenture and waive any required notifications or notice periods
with respect to any payments or final distributions on the Series 2001-A Notes
that may be specified in the Master Indenture or the Indenture Supplement.
7. Counterparts. This Supplemental Indenture may be executed in several
counterparts, each of which shall be deemed an original hereof and all of which,
when taken together, shall constitute one and the same Supplemental Indenture to
the Master Indenture.
8. Ratification of Master Indenture and the Indenture Supplement. Except as
provided herein, all provisions, terms and conditions of the Master Indenture
and the Indenture Supplement shall remain in full force and effect. As amended
hereby, the Master Indenture and the Indenture Supplement are ratified and
confirmed in all respects.
9. Severability. Any provision contained in this Supplemental Indenture
that is held to be inoperative, unenforceable or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable or invalid without
affecting the operation, enforceability or validity of the remaining provisions
of this Supplemental Indenture in that jurisdiction or the operation,
enforceability or validity of such provision in any other jurisdiction.
10. Headings. The headings contained in this Supplemental Indenture are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Supplemental Indenture.
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11. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed by their respective officers as of the day and
year first above written.
CONSECO PRIVATE LABEL CREDIT CARD
MASTER NOTE TRUST, as Trust
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Financial Services Officer
MILL CREEK BANK INC., as Servicer
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ Xxxxxx Xxxxxxx-Xxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx-Xxxx
Title: Vice President