EXHIBIT 4.2
SRI RECEIVABLES PURCHASE CO., INC.
Transferor
SPECIALTY RETAILERS, INC.
Servicer
and
BANKERS TRUST (DELAWARE)
Trustee
on behalf of the Series 1997-1 Certificateholders
AMENDED AND RESTATED SERIES 1997-1 SUPPLEMENT
Dated as of October 16, 1998
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of August 11, 1995 and Amended
on May 30, 1996 and August 1, 1998
Class A-1
Variable Funding Certificates, Series 1997-1
Class B-1
Variable Funding Certificates, Series 1997-1
Class B-2
Variable Funding Certificates, Series 1997-1
Class C-1
Variable Funding Certificates, Series 1997-1
SRI RECEIVABLES MASTER TRUST
TABLE OF CONTENTS
PAGE
SECTION 1. Designation 1
SECTION 2. Definitions 1
SECTION 3. Reassignment Terms 28
SECTION 4. Delivery and Payment for the Series 1997-1 Variable Funding
Certificates 29
SECTION 5. Form of Delivery of Series 1997-1 Variable Funding
Certificates 29
SECTION 6. Article IV of Agreement 29
ARTICLE IV: RIGHTS OF CERTIFICATEHOLDERS ANDALLOCATION AND APPLICATION
OF COLLECTIONS 29
Section 4.2 Establishment of Accounts 29
Section 4.4 Rights of Certificateholders 31
Section 4.5 Collections and Allocation; Payments on
Exchangeable Transferor Certificate 31
Section 4.6 Application of Funds on Deposit in the
Collection Account for the Certificates 32
Section 4.7 Coverage of Required Amount and Spread Account
for the Series 1997-1 Variable Funding Certificates. 42
Section 4.8 Payment of Certificate Interest and Other Amounts 45
Section 4.9 Payment of Certificate Principal 48
Section 4.10 Investor Charge-Offs 51
Section 4.11 Shared Principal Collections 52
SECTION 7. Article V of the Agreement 52
ARTICLE V: DISTRIBUTIONS AND REPORTS TO INVESTOR CERTIFICATEHOLDERS 52
Section 5.1 Distributions 52
Section 5.2 Certificateholders' Statement 55
SECTION 8. Series 1997-1 Pay Out Events 57
SECTION 9. Article VI of the Agreement 59
Section 6.15 Additional Invested Amounts 59
Section 6.16 Extension 63
SECTION 10. Series 1997-1 Termination 65
SECTION 11. Limitation on Changes in Invested Amount. 65
SECTION 12. Legends; Transfer and Exchange; Restrictions on Transfer of
Series 1997-1 Variable Funding Certificates; Tax Treatment 65
SECTION 13. Successor Trustee 73
SECTION 14. Notice to Facility Agent 73
SECTION 15. Charge Account Agreements and Credit and Collection Policies 73
SECTION 16. Successor Servicer 74
SECTION 17. Series 1997-1 Investor Exchange; Certificate Defeasance 74
SECTION 18. Ratification of Agreement 75
SECTION 19. Counterparts 75
SECTION 20. GOVERNING LAW 75
SECTION 21. The Trustee 75
SECTION 22. Instructions in Writing 75
SECTION 23. Amendment 76
SECTION 24. Discount Option 76
SECTION 25. Rating Agency Condition 76
EXHIBITS
EXHIBIT A-1 Form of Class A VFC
EXHIBIT A-2 Form of Class B VFC
EXHIBIT A-3 Form of Class B-2 VFC
EXHIBIT A-4 Form of Class C VFC
EXHIBIT B Form of Monthly Certificateholders' Statement
EXHIBIT C Form of Extension Notice
EXHIBIT D Form of Investor Certificateholder Election Notice
EXHIBIT E Form of 144A Exchange Note and Certification
EXHIBIT F Representation Letter
THE AMENDED AND RESTATED SERIES 1997-1 SUPPLEMENT, dated as of
October 16, 1998 (the "SERIES SUPPLEMENT") by and among SRI RECEIVABLES PURCHASE
CO., INC., a corporation organized and existing under the laws of the State of
Delaware, as Transferor (the "TRANSFEROR"), SPECIALTY RETAILERS, INC., a
corporation organized and existing under the laws of Texas, as Servicer (the
"SERVICER"), and BANKERS TRUST (DELAWARE), a banking corporation organized and
existing under the laws of the State of Delaware as trustee (together with its
successors in trust thereunder as provided in the Agreement referred to below,
the "TRUSTEE") under the Amended and Restated Pooling and Servicing Agreement
dated as of August 11, 1995, and amended as of May 30, 1996 and as of August 1,
1998 (as it may be amended hereafter, the "AGREEMENT"), among the Transferor,
the Servicer and the Trustee.
The original Series 1997-1 Supplement among the parties hereto was
entered into on December 3, 1997 and was amended as of September 28, 1998. This
Series Supplement amends and restates in its entirety such original Series
1997-1 Supplement, as heretofore amended.
Section 6.9 of the Agreement provides, among other things, that the
Transferor and the Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the issuance by the
Trustee to the Transferor, for execution and redelivery to the Trustee for
authentication, one or more Series of Certificates.
Pursuant to this Series Supplement, the Transferor and the Trustee
shall create a new Series of Investor Certificates and shall specify the
Principal Terms thereof.
SECTION 1. DESIGNATION. There is hereby created a Series of Investor
Certificates to be issued pursuant to the Agreement and this Series Supplement
to be known generally as the "SERIES 1997-1 VARIABLE FUNDING CERTIFICATES." The
Series 1997-1 Variable Funding Certificates shall be issued in four Classes,
which shall be designated generally as the Class A-1 Variable Funding
Certificates, Series 1997-1 (the "CLASS A VFCS" or the "CLASS A CERTIFICATES"),
the Class B-1 Variable Funding Certificates, Series 1997-1 (the "CLASS B VFCS"
or the "CLASS B CERTIFICATES"), the Class B-2 Variable Funding Certificates,
Series 1997-1 (the "CLASS B-2 VFCS" or the "CLASS B-2 CERTIFICATES") and the
Class C-1 Variable Funding Certificates, Series 1997-1 (the "CLASS C VFCS" or
the "CLASS C CERTIFICATES").
SECTION 2. DEFINITIONS. In the event that any term or provision
contained herein shall conflict with or be inconsistent with any provision
contained in the Agreement, the terms and provisions of this Series Supplement
shall govern with respect to the Series 1997-1 Variable Funding Certificates.
All Article, Section or subsection references herein shall mean Article, Section
or subsections of the Agreement, as amended or supplemented by this Series
Supplement, except as otherwise provided
herein. All capitalized terms not otherwise defined herein are defined in the
Agreement. Each capitalized term defined herein shall relate only to the Series
1997-1 Variable Funding Certificates and no other Series of Certificates issued
by the Trust.
"ACCOUNT CAP" shall mean, with respect to any applicable period, the
sum of (i) the Account Cap Base Percentage, (ii) the Account Cap Payment Rate
Adjustment Percentage and (iii) the Account Cap Dilution Rate Adjustment
Percentage MINUS (iv) the Account Cap Holiday Adjustment Factor.
The "ACCOUNT CAP BASE PERCENTAGE" for a Determination Date shall
mean the percentage specified in column (C) of the Account Cap Base Table that
corresponds to the Account Cap Base Effective Level for such Determination Date.
The "ACCOUNT CAP BASE TABLE" is as follows:
-------------------------------------------------------
(A) (B) (C) (D)
Max ESP Min ESP ACBP Level
-------------------------------------------------------
n/a 3.00% 0.00% 7
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3.00% 2.50 0.50 6
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2.50 2.00 1.00 5
-------------------------------------------------------
2.00 1.50 1.50 4
-------------------------------------------------------
1.50 1.00 2.00 3
-------------------------------------------------------
1.00 0.50 2.50 2
-------------------------------------------------------
0.50 n/a 3.00 1
-------------------------------------------------------
The "ACCOUNT CAP BASE EFFECTIVE LEVEL" shall mean, on any
Determination Date, the Account Cap Base Last Month Level calculated on such
Determination Date; provided, however, that (i) if the Account Cap Base Last
Month Level calculated on such Determination Date is equal to or less than both
the Account Cap Base Three Month Level and the Account Cap Base Six Month Level,
as calculated on such Determination Date, then the Account Cap Base Effective
Level shall mean the lower of such Account Cap Base Three Month Level and such
Account Cap Base Six Month Level, or (ii) if the Account Cap Base Last Month
Level calculated on such Determination Date is greater than the Account Cap Base
Three Month Level calculated on such Determination Date, the Account Cap Base
Effective Level shall mean such Account Cap Base Three Month Level.
The "ACCOUNT CAP BASE LAST MONTH LEVEL" shall mean, on the Initial
Determination Date, the Account Cap Base Three Month Level, and on any
Determination Date following the Initial Determination Date, the Account Cap
Base Effective Level as of the preceding Determination Date.
The "ACCOUNT CAP BASE SIX MONTH LEVEL" for a Determination Date
shall be the level specified in column (D) of the Account Cap Base Table at
which the Six Month Excess Spread Percentage calculated on such Determination
Date is less than or equal to the percentage specified in column (A) of the
Account Cap Base Table but in excess of the percentage specified in column (B)
of the Account Cap Base Table.
The "ACCOUNT CAP BASE THREE MONTH LEVEL" for a Determination Date
shall be the level specified in column (D) of the Account Cap Base Table at
which the Three Month Excess Spread Percentage calculated on such Determination
Date is less than or equal to the percentage specified in column (A) of the
Account Cap Base Table but in excess of the percentage specified in column (B)
of the Account Cap Base Table.
The "ACCOUNT CAP DILUTION RATE ADJUSTMENT PERCENTAGE" for a
Determination Date shall mean the percentage specified in column (C) of the
Account Cap Dilution Rate Table that corresponds to the Account Cap Dilution
Rate Effective Level for such Determination Date.
The "ACCOUNT CAP DILUTION RATE TABLE" is as follows:
-------------------------------------------------------
(A) (B) (C) (D)
Max 12M DR Min 12M DR ACDRAP Level
-------------------------------------------------------
n/a 4.00% 6.00% 4
-------------------------------------------------------
4.00% 3.00% 4.00% 3
-------------------------------------------------------
3.00 2.50 2.00 2
-------------------------------------------------------
2.50 n/a 0.00 1
-------------------------------------------------------
The "ACCOUNT CAP DILUTION RATE CURRENT LEVEL" for a Determination
Date shall be the level specified in column (D) of the Account Cap Dilution Rate
Table at which the Twelve Month Dilution Rate calculated on such Determination
Date is less than or equal to the percentage specified in column (A) of the
Account Cap Dilution Table but in excess of the percentage specified in column
(B) of the Account Cap Dilution Table.
The "ACCOUNT CAP DILUTION RATE EFFECTIVE LEVEL" shall mean, on any
Determination Date, the highest Account Cap Dilution Rate Current Level
calculated on any of such Determination Date and the preceding five
Determination Dates (or such lesser number of Determination Dates as have
occurred since the Series 1997-1 Closing Date).
"ACCOUNT CAP HOLIDAY ADJUSTMENT FACTOR" shall mean, for a
Determination Date related to a December Monthly Period or a January Monthly
Period, (i) 0.50%, if the Account Cap Base Percentage would otherwise be 0.50%
and if the Default Ratio calculated on such Determination Date is equal to or
less than 13.0%, and (ii) zero, otherwise.
The "ACCOUNT CAP PAYMENT RATE ADJUSTMENT PERCENTAGE" for a
Determination Date shall mean the percentage specified in column (C) of the
Account Cap Payment Rate Table that corresponds to the Account Cap Payment Rate
Effective Level for such Determination Date.
The "ACCOUNT CAP PAYMENT RATE TABLE" is as follows:
-------------------------------------------------------
(A) (B) (C) (D)
Max PRP Min PRP ACPRAP Level
-------------------------------------------------------
n/a 10.00% 0.00% 3
-------------------------------------------------------
10.00% 8.00 1.00 2
-------------------------------------------------------
8.00 n/a 2.00 1
-------------------------------------------------------
The "ACCOUNT CAP PAYMENT RATE EFFECTIVE LEVEL" shall mean, on the
Initial Determination Date, in the Account Cap Payment Rate Three Month Level,
and on any Determination Date thereafter, the Account Cap Payment Rate Last
Month Level calculated on such Determination Date; provided, however, that (i)
if the Account Cap Payment Rate Last Month Level calculated on such
Determination Date is equal to or less than both the Account Cap Base Three
Month Level and the Account Cap Base Six Month Level, as calculated on such
Determination Date, then the Account Cap Payment Rate Effective Level shall mean
the lower of such Account Cap Payment Rate Three Month Level and such Account
Cap Base Six Month Level, or (ii) if the Account Cap Payment Rate Last Month
Level calculated on such Determination Date is greater than the Account Cap
Payment Rate Three Month Level calculated on such Determination Date, the
Account Cap Payment Rate Effective Level shall mean such Account Cap Payment
Rate Three Month Level.
The "ACCOUNT CAP PAYMENT RATE LAST MONTH LEVEL" shall mean, on any
Determination Date following the Initial Determination Date, the Account Cap
Payment Rate Effective Level as of the preceding Determination Date.
The "ACCOUNT CAP PAYMENT RATE SIX MONTH LEVEL" for a Determination
Date shall be the level specified in column (D) on the Account Cap Payment Rate
Table at which the Six Month Payment Rate Percentage calculated on such
Determination Date is less than or equal to the percentage specified in column
(A) of the Account Cap Payment Rate Table but in excess of the percentage
specified in column (B) of the Account Cap Payment Rate Table.
The "ACCOUNT CAP PAYMENT RATE THREE MONTH LEVEL" for a Determination
Date shall be the level specified in column (D) of the Account Cap Payment Rate
Table at which the Three Month Payment Rate calculated on such Determination
Date is less than or equal to the percentage specified in column (A) of the
Account Cap Payment Rate
Table but in excess of the percentage specified in column (B) of the Account Cap
Payment Rate Table.
The "ACCOUNT CAP STARTUP CALCULATION RULE" shall be used in
calculating the percentages specified in column (A) below using the
corresponding inputs specified in column (B) below on any Determination Date
(the "relevant Determination Date") on which the number of Determination Dates
actually preceding the relevant Determination Date is less than the number of
preceding Determination Dates (each, a "requisite Determination Date") specified
in the definition of such percentage. In computing such percentage on any such
relevant Determination Date, the Servicer shall employ the rate specified in
column (C) below for any requisite Determination Date which preceded the Initial
Determination Date:
-------------------------------------------------------------------------------
(A) (B) (C)
-------------------------------------------------------------------------------
Three Month Excess Spread Percentage Excess Spread Percentage 4.5%
-------------------------------------------------------------------------------
Six Month Excess Spread Percentage Excess Spread Percentage 4.5%
-------------------------------------------------------------------------------
Three Month Payment Rate Percentage Payment Rate 14.0%
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Six Month Payment Rate Percentage Payment Rate 14.0%
-------------------------------------------------------------------------------
Twelve Month Dilution Rate Dilution Rate 1.75%
-------------------------------------------------------------------------------
Thus, for example, on the seventh Determination Date, the Servicer shall compute
the Twelve Month Dilution Rate as the quotient of (x) the sum of (i) the actual
Dilution Rate for each of such Determination Date and the preceding six
Determination Dates and (ii) the product of five and 1.75% divided by (y)
twelve.
"ADDITIONAL CLASS A INVESTED AMOUNT" shall have the meaning
specified in Section 6.15 of the Agreement.
"ADDITIONAL CLASS B INVESTED AMOUNT" shall have the meaning
specified in Section 6.15 of the Agreement.
"ADDITIONAL CLASS B-2 INVESTED AMOUNT" shall have the meaning
specified in Section 6.15 of the Agreement.
"ADDITIONAL CLASS C INVESTED AMOUNT" shall have the meaning
specified in Section 6.15 of the Agreement.
"ADDITIONAL INVESTED AMOUNT" shall have the meaning specified in
Section 6.15 of the Agreement.
"ADJUSTED INVESTED AMOUNT" shall mean the sum of the Class A
Adjusted Invested Amount, the Class B Adjusted Invested Amount, the Class B-2
Adjustment Investment Amount and the Class C Adjusted Invested Amount.
"AMORTIZATION PERIOD COMMENCEMENT DATE" shall mean (a) prior to an
Extension, the earlier of (i) November 30, 2000 and (ii) the Pay Out
Commencement Date and (b) following an Extension, the earlier of (i) the date
specified as such in the Extension Notice and (ii) the Pay Out Commencement
Date.
"APPLICABLE MARGIN" shall mean the percentage per annum specified in
the relevant Fee Letter, with respect to each Bank Rate Tranche and/or Cost of
Funds Rate Tranche of the Class A Invested Amount and/or the Class B Invested
Amount, respectively.
"APPLICABLE RESERVE RATIO" shall mean for the November Monthly
Period, the December Monthly Period and the January Monthly Period, 2.0%, and
for each other Monthly Period, zero.
"AVAILABLE SERIES 1997-1 FINANCE CHARGE COLLECTIONS" shall have the
meaning specified in subsection 4.6(a).
"BANK RATE" shall mean a fluctuating rate per annum on any date
equal to 1.00% in excess of one-month LIBOR prevailing on the related Rate
Determination Date; PROVIDED, HOWEVER, that the Bank Rate shall be calculated on
the basis of the actual number of days elapsed in the applicable Interest
Accrual Period over a year of 360 days. Changes in the Bank Rate shall take
effect immediately upon their occurrence. The Facility Agent will endeavor
promptly to notify the Transferor of changes in the Bank Rate.
"BANK RATE TRANCHE" shall mean a portion of the Class A Principal
Balance and the Class B Principal Balance held by any Senior Certificateholder
which is a Committed Class A Purchaser or a Committed Class B Purchaser pursuant
to the applicable Certificate Purchase Agreement, which shall accrue interest
based on the Bank Rate.
"BUSINESS DAY" shall have the meaning set forth in the Agreement;
PROVIDED that as used in the definition of "LIBOR" and "Rate Determination
Date," "Business Day" shall mean a day that is both a "Business Day" under the
Agreement and a day for dealings by and between banks in Dollar deposits in the
London interbank eurodollar markets.
"CERTIFICATE PURCHASE AGREEMENT" shall mean, with respect to any
Class A Certificates, the Class A Certificate Purchase Agreement, with respect
to any Class B Certificates, the Class B Certificate Purchase Agreement and with
respect to any Class B-2 Certificates, the Class B-2
Certificate Purchase Agreement.
"CERTIFICATE RATE" shall mean the Class A Certificate Rate, the
Class B Certificate Rate, the Class B-2 Certificate Rate or the Class C
Certificate Rate, as applicable.
"CLASS A ADJUSTED INVESTED AMOUNT" shall mean, when used with
respect to any Business Day, the Class A Invested Amount MINUS the amount on
deposit in the Principal Account allocated to the Class A Certificates.
"CLASS A AGENT" shall have the meaning specified in the preamble of
the Class A Certificate Purchase Agreement.
"CLASS A CERTIFICATE PURCHASE AGREEMENT" shall mean the Class A
Certificate Purchase Agreement, dated as of December 3, 1997 by and among
Specialty Retailers, Inc. individually and as the Originator and the Servicer,
SRI Receivables Purchase Co., Inc. individually and as the Transferor, Credit
Suisse First Boston, New York Branch, as the Class A Agent and the Class A
Purchasers, relating to the Class A Certificates.
"CLASS A CERTIFICATE RATE" shall mean for any day the weighted
average of the Tranche Rates with respect to each portion of the Class A
Principal Balance outstanding at such time (taking into account whether such
rate is calculated on a 360 or 365/6 day basis).
"CLASS A CERTIFICATEHOLDER" shall mean the Person in whose name a
Class A VFC is registered in the Certificate Register.
"CLASS A CERTIFICATEHOLDERS' INTEREST" shall mean the portion of the
Series 1997-1 Certificateholders' Interest evidenced by the Class A VFCs.
"CLASS A DAILY PRINCIPAL AMOUNT" shall have the meaning specified in
subsection 4.6(c)(i).
"CLASS A FACILITY FEE" shall mean, for any Interest Accrual Period,
the amount of "Facility Fees" specified in the Class A Fee Letter as accruing
during such Interest Accrual Period.
"CLASS A FEE LETTER" means the letter agreement dated as of December
3, 1997 among the Class A Agent, the Transferor and the Servicer, as amended
from time to time pursuant to the Class A Certificate Purchase Agreement.
"CLASS A FIXED ALLOCATION PERCENTAGE" shall mean for any Business
Day the percentage equivalent of a fraction, the numerator of which is the Class
A Invested Amount at the end of the last day of the Revolving Period and the
denominator of which is the greater of (a) the aggregate amount of Principal
Receivables in the Trust and the amount on deposit in the Equalization Account
as of the end of the last day of the Revolving Period and (b) the sum of the
numerators used to calculate the allocation percentages with respect to
Principal Collections for all Series.
"CLASS A FLOATING ALLOCATION PERCENTAGE" shall mean, with respect to
any Business Day, the percentage equivalent of a fraction, the numerator of
which is the
Class A Adjusted Invested Amount as of the end of the preceding Business Day and
the denominator of which is the greater of (a) the sum of the amount of
Principal Receivables in the Trust and the amounts on deposit in the
Equalization Account at the end of the preceding Business Day and (b), with
respect to Principal Collections only, the sum of the numerators with respect to
all Classes of all Series then outstanding on such Business Day used with
respect to Principal Collections, to calculate the applicable allocation
percentage.
"CLASS A INITIAL INVESTED AMOUNT" shall mean the aggregate initial
principal amount of the Class A Certificates, which is $54,000,000.
"CLASS A INTEREST" shall have the meaning specified in subsection
4.8(a)(i).
"CLASS A INVESTED AMOUNT" shall mean, when used with respect to any
Business Day, an amount equal to (a) the Class A Initial Invested Amount, PLUS
(b) the aggregate principal amount of any Additional Class A Invested Amounts
purchased by the Class A Owners through the end of the preceding Business Day
pursuant to Section 6.15, MINUS (c) the aggregate amount of principal payments
made to Class A Certificateholders prior to such Business Day, MINUS (d) the
aggregate amount of Class A Investor Charge-Offs for all prior Business Days,
PLUS (e) the aggregate amount allocated with respect to Class A Investor
Charge-Offs and available on all prior Business Days pursuant to subsection
4.6(a)(v) for the purpose of reinstating amounts reduced pursuant to the
foregoing clause (d).
"CLASS A INVESTOR CHARGE-OFFS" shall have the meaning specified
in subsection 4.10(d).
"CLASS A INVESTOR PERCENTAGE" shall mean, for any Business Day, (a)
with respect to Finance Charge Collections and Receivables in Defaulted Accounts
at any time or Principal Collections during the Revolving Period, the Class A
Floating Allocation Percentage and (b) with respect to Principal Collections
during the Amortization Period, the Class A Fixed Allocation Percentage.
"CLASS A OWNER" shall mean a Certificateholder or, with respect to
any Class A Certificate held by the Class A Agent or any Person as nominee on
behalf of a beneficial owner of such Class A Certificate, the Person that is the
beneficial owner of the Class A Invested Amount represented by such Class A
Certificate as reflected on the books of such nominee.
"CLASS A PRINCIPAL BALANCE" shall mean, when used with respect to
any Business Day, an amount equal to (a) the Class A Initial Invested Amount,
PLUS (b) the aggregate principal amount of any Additional Class A Invested
Amounts purchased by the Class A Owners through the end of the preceding
Business Day pursuant to Section 6.15, MINUS (c) the aggregate amount of
principal payments made to Class A Certificateholders prior to such Business
Day.
"CLASS A PURCHASE LIMIT" shall mean (i) $75,000,000 through (but
excluding) September 28, 1998, (ii) $150,000,000 from and after September 28,
1998 through (but excluding) Xxxxx 0, 0000, (xxx) $131,250,000 from and after
April 1, 1999 through but excluding) October 1, 1999, and (iv) $75,000,000
thereafter.
"CLASS A PURCHASER" shall have the meaning specified in Section 1.1
of the Class A Certificate Purchase Agreement.
"CLASS A VFCS" or "CLASS A CERTIFICATES" shall mean any of the
certificates executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit A-1 hereto.
"CLASS B ADJUSTED INVESTED AMOUNT" shall mean, when used with
respect to any Business Day, the Class B Invested Amount MINUS the amount on
deposit in the Principal Account allocated to the Class B Certificates.
"CLASS B AGENT" shall have the meaning specified in the preamble of
the Class B Certificate Purchase Agreement.
"CLASS B CERTIFICATE PURCHASE AGREEMENT" shall mean the Class B
Certificate Purchase Agreement, dated as of December 3, 1997 by and among
Specialty Retailers, Inc. individually and as the Originator and the Servicer,
SRI Receivables Purchase Co., Inc. individually and as the Transferor, Credit
Suisse First Boston, New York Branch as the Class B Agent and the Class B
Purchasers, relating to the Class B Certificates.
"CLASS B CERTIFICATE RATE" shall mean for any day the weighted
average of the Tranche Rates with respect to each portion of the Class B
Principal Balance outstanding at such time (taking into account whether such
rate is calculated on a 360 or 365/6 day basis).
"CLASS B CERTIFICATEHOLDER" shall mean the Person in whose name a
Class B VFC is registered in the Certificate Register.
"CLASS B CERTIFICATEHOLDERS' INTEREST" shall mean the portion of the
Series 1997-1 Certificateholders' Interest evidenced by the Class B VFCs.
"CLASS B DAILY PRINCIPAL AMOUNT" shall have the meaning specified in
subsection 4.6(c)(ii).
"CLASS B FACILITY FEE" shall mean, for any Interest Accrual Period,
the amount of "Facility Fees" specified in the Class B Fee Letter as accruing
during such Interest Accrual Period.
"CLASS B FEE LETTER" means the letter agreement dated as of December
3, 1997 among the Class B Agent, the Transferor and the Servicer, as amended
from time to time pursuant to the Class B Certificate Purchase Agreement.
"CLASS B FIXED ALLOCATION PERCENTAGE" shall mean for any Business
Day the percentage equivalent of a fraction, the numerator of which is the Class
B Invested Amount at the end of the last day of the Revolving Period and the
denominator of which is the greater of (a) the aggregate amount of Principal
Receivables in the Trust and the amount on deposit in the Equalization Account
at the end of the last day of the Revolving Period and (b) the sum of the
numerators used to calculate allocation percentages with respect to Principal
Collections for all Series.
"CLASS B FLOATING ALLOCATION PERCENTAGE" shall mean, with respect to
any Business Day, the percentage equivalent of a fraction, the numerator of
which is the Class B Adjusted Invested Amount as of the end of the preceding
Business Day and the denominator of which is the greater of (a) the sum of the
amount of Principal Receivables in the Trust and the amounts on deposit in the
Equalization Account as of the end of the preceding Business Day and (b) with
respect to Principal Collections only, the sum of the numerators with respect to
all Classes of all Series then outstanding on such Business Day used with
respect to Principal Collections to calculate the applicable allocation
percentage.
"CLASS B INITIAL INVESTED AMOUNT" shall mean the aggregate initial
principal amount of the Class B Certificates, which is $1,000,000.
"CLASS B INTEREST" shall have the meaning specified in subsection
4.8(a)(ii).
"CLASS B INVESTED AMOUNT" shall mean, when used with respect to any
Business Day, an amount equal to (a) the Class B Initial Invested Amount, PLUS
(b) the aggregate principal amount of any Additional Class B Invested Amounts
purchased by the Class B Owners through the end of the preceding Business Day
pursuant to Section 6.15, MINUS (c) the aggregate amount of principal payments
made to Class B Certificateholders prior to such Business Day, MINUS (d) the
aggregate amount of Class B Investor Charge-Offs for all prior Business Days,
PLUS (e) the aggregate amount allocated with respect to Class B Investor
Charge-Offs and Reallocated Class B Principal Collections and available on all
prior Business Days pursuant to subsection 4.6(a)(vi) for the purpose of
reinstating amounts reduced pursuant to the foregoing clause (d) MINUS (f) the
amount of Reallocated Class B Principal Collections applied in accordance with
subsection 4.7(i).
"CLASS B INVESTOR CHARGE-OFFS" shall have the meaning specified
in subsection 4.10(c).
"CLASS B INVESTOR PERCENTAGE" shall mean, for any Distribution Date,
(a) with respect to Finance Charge Collections and Receivables in Defaulted
Accounts at any time or Principal Collections during the Revolving Period, the
Class B Floating
Allocation Percentage and (b) with respect to Principal Collections during the
Amortization Period, the Class B Fixed Allocation Percentage.
"CLASS B OWNER" shall mean a Certificateholder or, with respect to
any Class B Certificate held by the Class B Agent or any Person as nominee on
behalf of a beneficial owner of such Class B Certificate, the Person that is the
beneficial owner of the Class B Invested Amount represented by such Class B
Certificate as reflected on the books of such nominee.
"CLASS B PRINCIPAL BALANCE" shall mean, when used with respect to
any Business Day, an amount equal to (a) the Class B Initial Invested Amount,
PLUS (b) the aggregate principal amount of any Additional Class B Invested
Amounts purchased by the Class B Owners through the end of the preceding
Business Day pursuant to Section 6.15, MINUS (c) the aggregate amount of
principal payments made to Class B Certificateholders prior to such Business
Day.
"CLASS B PRINCIPAL PAYMENT COMMENCEMENT DATE" shall mean the earlier
of (a) the Distribution Date in an Amortization Period on which the Class A
Invested Amount is paid in full or, if there are no Principal Collections
allocable to the Series 1997-1 Variable Funding Certificates remaining after
payments have been made to the Class A VFCs on such Distribution Date, the
Distribution Date following the Distribution Date on which the Class A Invested
Amount is paid in full and (b) the Distribution Date following a sale or
repurchase of the Receivables as set forth in Sections 2.4(e), 9.2, 10.2(a),
12.1 or 12.2 of the Agreement and Section 3 of this Series Supplement.
"CLASS B PURCHASE LIMIT" shall mean (i) $7,500,000 through (but
excluding) September 28, 1998, (ii) $15,000,000 from and after September 28,
1998 through (but excluding) Xxxxx 0, 0000, (xxx) $13,125,000 from and after
April 1, 1999 through (but excluding) October 1, 1999, and (iv) $7,500,000
thereafter.
"CLASS B PURCHASER" shall have the meaning specified in Section 1.1
of the Class B Certificate Purchase Agreement.
"CLASS B VFCS" or "CLASS B CERTIFICATES" shall mean any of the
certificates executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit A-2 hereto.
"CLASS B-2 ADJUSTED INVESTED AMOUNT" shall mean, when used with
respect to any Business Day, the Class B-2 Invested Amount MINUS the amount on
deposit in the Principal Account allocated to the Class B-2 Certificates.
"CLASS B-2 AGENT" shall have the meaning specified in the preamble
of the Class B-2 Certificate Purchase Agreement.
"CLASS B-2 CERTIFICATE PURCHASE AGREEMENT" shall mean the Class B-2
Certificate Purchase Agreement, dated as of October 16, 1998 by and among
Specialty Retailers, Inc. individually and as the Originator and the Servicer,
SRI Receivables
Purchase Co., Inc. individually and as the Transferor, Credit Suisse First
Boston, New York Branch as the Class B-2 Agent and the Class B-2 Purchasers,
relating to the Class B-2 Certificates.
"CLASS B-2 CERTIFICATE RATE" shall have the meaning specified in
subsection 2.1(f) of the Class B-2 Certificate Purchase Agreement.
"CLASS B-2 CERTIFICATEHOLDER" shall mean the Person in whose name a
Class B-2 VFC is registered in the Certificate Register.
"CLASS B-2 CERTIFICATEHOLDERS' INTEREST" shall mean the portion of
the Series 1997-1 Certificateholders' Interest evidenced by the Class B-2 VFCs.
"CLASS B-2 DAILY PRINCIPAL AMOUNT" shall have the meaning specified
in subsection 4.6(c)(iii).
"CLASS B-2 FACILITY FEE" shall mean, for any Interest Accrual
Period, the amount of "Commitment Fees" specified in the Class B-2 Fee Letter as
accruing during such Interest Accrual Period.
"CLASS B-2 FEE LETTER" means the letter agreement dated as of
October 16, 1998 among the Class B-2 Agent, the Transferor and the Servicer, as
amended from time to time pursuant to the Class B-2 Certificate Purchase
Agreement.
"CLASS B-2 FIXED ALLOCATION PERCENTAGE" shall mean for any Business
Day the percentage equivalent of a fraction, the numerator of which is the Class
B-2 Invested Amount at the end of the last day of the Revolving Period and the
denominator of which is the greater of (a) the aggregate amount of Principal
Receivables in the Trust and the amount on deposit in the Equalization Account
at the end of the last day of the Revolving Period and (b) the sum of the
numerators used to calculate allocation percentages with respect to Principal
Collections for all Series.
"CLASS B-2 FLOATING ALLOCATION PERCENTAGE" shall mean, with respect
to any Business Day, the percentage equivalent of a fraction, the numerator of
which is the Class B-2 Adjusted Invested Amount as of the end of the preceding
Business Day and the denominator of which is the greater of (a) the sum of the
amount of Principal Receivables in the Trust and the amounts on deposit in the
Equalization Account as of the end of the preceding Business Day and (b) with
respect to Principal Collections only, the sum of the numerators with respect to
all Classes of all Series then outstanding on such Business Day used with
respect to Principal Collections to calculate the applicable allocation
percentage.
"CLASS B-2 INITIAL INVESTED AMOUNT" shall mean the aggregate initial
principal amount of the Class B-2 Certificates, which is zero.
"CLASS B-2 INTEREST" shall have the meaning specified in
subsection 4.8(a)(vii).
"CLASS B-2 INTEREST ACCRUAL" shall have the meaning specified in
subsection 4.6(a)(vii).
"CLASS B-2 INVESTED AMOUNT" shall mean, when used with respect to
any Business Day, an amount equal to (a) the Class B-2 Initial Invested Amount,
PLUS (b) the aggregate principal amount of any Additional Class B-2 Invested
Amounts purchased by the Class B-2 Owners through the end of the preceding
Business Day pursuant to Section 6.15, MINUS (c) the aggregate amount of
principal payments made to Class B-2 Certificateholders prior to such Business
Day, MINUS (d) the aggregate amount of Class B-2 Investor Charge-Offs for all
prior Business Days, PLUS (e) the aggregate amount allocated with respect to
Class B-2 Investor Charge-Offs and Reallocated Class B-2 Principal Collections
and available on all prior Business Days pursuant to subsection 4.6(a)(viii) for
the purpose of reinstating amounts reduced pursuant to the foregoing clause (d)
MINUS (f) the amount of Reallocated Class B-2 Principal Collections applied in
accordance with subsection 4.7(h).
"CLASS B-2 INVESTOR CHARGE-OFFS" shall have the meaning specified
in subsection 4.10(b).
"CLASS B-2 INVESTOR PERCENTAGE" shall mean, for any Distribution
Date, (a) with respect to Finance Charge Collections and Receivables in
Defaulted Accounts at any time or Principal Collections during the Revolving
Period, the Class B-2 Floating Allocation Percentage and (b) with respect to
Principal Collections during the Amortization Period, the Class B-2 Fixed
Allocation Percentage.
"CLASS B-2 OWNER" shall mean a Certificateholder or, with respect to
any Class B-2 Certificate held by the Class B-2 Agent or any Person as nominee
on behalf of a beneficial owner of such Class B-2 Certificate, the Person that
is the beneficial owner of the Class B-2 Invested Amount represented by such
Class B-2 Certificate as reflected on the books of such nominee.
"CLASS B-2 PRINCIPAL BALANCE" shall mean, when used with respect to
any Business Day, an amount equal to (a) the Class B-2 Initial Invested Amount,
PLUS (b) the aggregate principal amount of any Additional Class B-2 Invested
Amounts purchased by the Class B-2 Owners through the end of the preceding
Business Day pursuant to Section 6.15, MINUS (c) the aggregate amount of
principal payments made to Class B-2 Certificateholders prior to such Business
Day.
"CLASS B-2 PRINCIPAL PAYMENT COMMENCEMENT DATE" shall mean the
earlier of (a) the Distribution Date in an Amortization Period on which the
Class A Invested Amount and the Class B Invested Amount is each paid in full or,
if there are no Principal Collections allocable to the Series 1997-1 Variable
Funding Certificates remaining after payments have been made to the Class A VFCs
and the Class B VFCs on such Distribution Date, the Distribution Date following
the Distribution Date on which the Class A Invested Amount and the Class B
Invested Amount is paid in full and (b) the
Distribution Date following a sale or repurchase of the Receivables as set forth
in Sections 2.4(e), 9.2, 10.2(a), 12.1 or 12.2 of the Agreement and Section 3 of
this Series Supplement.
"CLASS B-2 PURCHASE LIMIT" shall mean (i) $10,000,000 through and
including December 24, 1998 and (ii) zero thereafter.
"CLASS B-2 PURCHASER" shall have the meaning specified in Section
1.1 of the Class B-2 Certificate Purchase Agreement.
"CLASS B-2 VFCS" or "CLASS B-2 CERTIFICATES" shall mean any of the
certificates executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit A-3 hereto.
"CLASS C ADJUSTED INVESTED AMOUNT" shall mean, when used with
respect to any Business Day, the Class C Invested Amount MINUS the amount on
deposit in the Principal Account allocated to the Class C Certificates.
"CLASS C CERTIFICATEHOLDER" shall mean the Person in whose name a
Class C VFC is registered in the Certificate Register.
"CLASS C CERTIFICATEHOLDERS' INTEREST" shall mean the portion of the
Series 1997-1 Certificateholders' Interest evidenced by the Class C VFCs.
"CLASS C CERTIFICATE RATE" shall mean 0%.
"CLASS C DAILY PRINCIPAL AMOUNT" shall have the meaning specified in
subsection 4.6(c)(iv).
"CLASS C FIXED ALLOCATION PERCENTAGE" shall mean for any Business
Day the percentage equivalent to a fraction, the numerator of which is the Class
C Invested Amount at the end of the last day of the Revolving Period and the
denominator of which is the greater of (a) the sum of the amount of Principal
Receivables in the Trust and the amounts on deposit in the Equalization Account
at the end of the last day of the Revolving Period and (b) the sum of the
numerators used to calculate allocation percentages with respect to Principal
Collections for all Series.
"CLASS C FLOATING ALLOCATION PERCENTAGE" shall mean with respect to
any Business Day the percentage equivalent to a fraction, the numerator of which
is the Class C Invested Amount as of the end of the preceding Business Day and
the denominator of which is the greater of (a) the sum of the amount of
Principal Receivables in the Trust and the amounts on deposit in the
Equalization Account at the end of the preceding Business Day and (b) with
respect to Principal Collections only, the sum of the numerators with respect to
all Classes of all Series then outstanding on such Business Day used with
respect to Principal Collections to calculate the applicable allocation
percentage.
"CLASS C INITIAL INVESTED AMOUNT" shall mean the aggregate initial
principal amount of the Class C Certificates, which is $17,000,000.
"CLASS C INTEREST" shall mean, with respect to any day of the
Interest Accrual Period, an amount equal to the aggregate amount of interest
that has accrued over such period at the Class C Certificate Rate on the Class C
Principal Balance, as of the close of business on the day immediately preceding
such day of the Interest Accrual Period.
"CLASS C INVESTED AMOUNT" shall mean, when used with respect to any
Business Day, an amount equal to (a) the Class C Initial Invested Amount, PLUS
(b) the aggregate principal amount of any Additional Class C Invested Amounts
purchased by the Class C Certificateholders through the end of the preceding
Business Day pursuant to Section 6.15, MINUS (c) the aggregate amount of
principal payments made to Class C Certificateholders prior to such Business
Day, MINUS (d) the aggregate amount of Class C Investor Charge-Offs for all
prior Business Days, PLUS (e) the aggregate amount allocated with respect to
Class C Investor Charge-Offs and Reallocated Class C Principal Collections and
available on all prior Business Days pursuant to subsection 4.6(a)(ix) for the
purpose of reinstating amounts reduced pursuant to the foregoing clause (d)
MINUS (f) the amount of Reallocated Class C Principal Collections applied in
accordance with subsection 4.7(g).
"CLASS C PRINCIPAL BALANCE" shall mean, when used with respect to
any Business Day, an amount equal to (a) the Class C Initial Invested Amount,
PLUS (b) the aggregate principal amount of any Additional Class C Invested
Amounts purchased by the Class C Certificateholders through the end of the
preceding Business Day pursuant to Section 6.15, MINUS (c) the aggregate amount
of principal payments made to Class C Certificateholders prior to such Business
Day.
"CLASS C INVESTOR CHARGE-OFFS" shall have the meaning specified
in subsection 4.10(a).
"CLASS C INVESTOR PERCENTAGE" shall mean, for any Business Day, (a)
with respect to Finance Charge Collections and Receivables in Defaulted Accounts
at any time or Principal Collections during the Revolving Period, the Class C
Floating Allocation Percentage and (b) with respect to Principal Collections
during the Amortization Period, the Class C Fixed Allocation Percentage.
"CLASS C PRINCIPAL PAYMENT COMMENCEMENT DATE" shall mean the earlier
of (a) the Distribution Date on which the Class A Invested Amount and the Class
B Invested Amount (and if any Class B-2 Certificates were theretofore
outstanding, the Class B-2 Invested Amount) is paid in full or, if there are no
Principal Collections allocable to the Series 1997-1 Investor Certificates
remaining after payments have been made to the Class A Certificates and the
Class B Certificates (and, if applicable, the Class B-2 Certificates) on such
Distribution Date, the Distribution Date following the
Distribution Date on which the Class A Invested Amount and the Class B Invested
Amount (and, if applicable, the Class B-2 Invested Amount) is paid in full and
(b) the Distribution Date following a sale or repurchase of the Receivables as
set forth in Sections 2.4(e), 9.2, 10.2(a), 12.1 and 12.2 of the Agreement and
Section 3 of this Series Supplement.
"CLASS C VFCS" or "CLASS C CERTIFICATES" shall mean any of the
certificates executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit A-4 hereto.
"COMMITTED CLASS A PURCHASER" shall have the meaning specified in
Section 1.1 of the Class A Certificate Purchase Agreement.
"COMMITTED CLASS B PURCHASER" shall have the meaning specified in
Section 1.1 of the Class B Certificate Purchase Agreement.
"COMMITMENT" shall have the meaning specified in subsection 1.1 of
the Class A Certificate Purchase Agreement, in subsection 1.1 of the Class B
Certificate Purchase Agreement or in subsection 1.1 of the Class B-2 Certificate
Purchase Agreement, as the case may be, which means, in general, with respect to
any Class A or Class B Committed Purchaser or Class B-2 Purchaser, a commitment
to purchase a portion of the Class A Invested Amount, the Class B Invested
Amount or the Class B-2 Invested Amount, as the case may be, pursuant to the
provisions of the Class A Certificate Purchase Agreement, the Class B
Certificate Purchase Agreement or the Class B-2 Certificate Purchase Agreement,
as the case may be, to which such committed purchaser is a party.
"COMMITMENT PERCENTAGE" shall have the meaning specified in Section
1.1 of the Class A Purchase Agreement, the Class B Purchase Agreement
or the Class B-2 Purchase Agreement, as applicable.
"COST OF FUNDS RATE" shall mean, for a Noncommitted Class A
Purchaser or a Noncommitted Class B Purchaser (a "NONCOMMITTED PURCHASER") and
an Interest Accrual Period the sum of (a) the daily average for each day during
such Interest Accrual Period of the weighted average of the following rates for
such Noncommitted Purchaser:
(i) to the extent that for such day such Noncommitted
Purchaser has allocated its CP Notes which are then
outstanding to its purchase or maintenance of the outstanding
Class A Principal Balance or Class B Principal Balance (as
applicable, the "INVESTOR PRINCIPAL BALANCE") or accrued and
unpaid interest thereon ("ALLOCATED CP Notes"), the rate of
interest per annum (or if more than one rate, the weighted
average of the per annum rates) borne on such day by all
Allocated CP Notes; PROVIDED that if any such rate (or rates)
is a discount rate (or rates), then such rate shall be the
rate (or if more than one rate, the weighted average of the
rates)
resulting from converting such discount rate (or rates) to an
interest-bearing equivalent rate per annum; PROVIDED FURTHER
that such rates shall in each case be adjusted, as necessary,
to give effect to commercial paper dealer or placement agent
commissions, discounts and similar fees and costs which are
allocated by such Noncommitted Purchaser to Allocated CP
Notes, and
(ii) to the extent that for such day such Noncommitted
Purchaser has not allocated its CP Notes which are then
outstanding to its purchase or maintenance of the outstanding
Investor Principal Balance or accrued and unpaid interest
thereon, the Bank Rate,
plus (b) if (i) such Noncommitted Purchaser has on any date during or prior to
such Interest Accrual Period received a payment of principal in respect of the
Investor Principal Balance or assigned all or any portion of its interest in the
Investor Principal Balance (the date of any such payment or assignment, a
"PRINCIPAL REDUCTION DATE"), in either case in an amount in excess of the
principal component of Allocated CP Notes maturing on such Principal Reduction
Date, and (ii) Allocated CP Notes (or a portion thereof) which were allocated by
such Noncommitted Purchaser to its purchase or maintenance of the repaid or
assigned portion of Investor Principal Balance remain outstanding during such
Interest Accrual Period, an amount equal to the excess, if any, of (A) such
Noncommitted Purchaser's aggregate interest cost (determined in accordance with
clause (a)(i) above) of such Allocated CP Notes (or such portion thereof) during
such Interest Accrual Period, over (B) the net earnings received by such
Noncommitted Purchaser during such Interest Accrual Period from investing the
proceeds of such reduction or assignment of such portion of the Investor
Principal Balance, such excess expressed as a per annum percentage of the daily
average Principal Balance owed to such Noncommitted Purchaser during such
Interest Accrual Period; PROVIDED that if on the last day of an Interest Accrual
Period no Investor Principal Balance is owed to such Noncommitted Purchaser, the
amount described in clause (A) above shall also include such Noncommitted
Purchaser's aggregate interest cost (determined in accordance with clause (a)(i)
above) of such Allocated CP Notes (or such portion thereof) after such Interest
Accrual Period and prior to latest maturity date of such Allocated CP Notes, and
the amount described in clause (B) above shall include the net earnings such
Noncommitted Purchaser estimates in good faith that it will receive after such
Interest Accrual Period and prior to latest maturity date of such Allocated CP
Notes from investing the proceeds of such reduction or assignment of such
portion of the Investor Principal Balance. The Cost of Funds Rate for a
Noncommitted Purchaser and an Interest Accrual Period shall be determined in
good faith by such Noncommitted Purchaser and notice thereof shall be given to
the Servicer by such Noncommitted Purchaser (or the Facility Agent on its
behalf) not later than the last day of such Interest Accrual Period.
"COST OF FUNDS RATE TRANCHE" shall mean a portion of the Class A
Principal Balance or the Class B Principal Balance held by an Class A Owner
which is a Noncommitted Class A Purchaser or a Noncommitted Class B Purchaser
pursuant to the
relevant Certificate Purchase Agreement, as the case may be, which shall accrue
interest based on the Cost of Funds Rate.
"CP NOTE" shall mean any commercial paper note issued by any
Noncommitted Purchaser.
"CSFB CORPORATE BASE RATE" shall mean, for any day, the higher of
(i) the base commercial lending rate per annum announced from time to time by
Credit Suisse First Boston, New York Branch, in New York in effect on such day,
or (ii) the interest rate per annum quoted by Credit Suisse First Boston, New
York Branch, at approximately 11:00 a.m., New York City time, on such day, to
dealers in the New York Federal funds market for the overnight offering of
Dollars by Credit Suisse First Boston, New York Branch plus one-half of one
percent (0.50%). (The CSFB Corporate Base Rate is not intended to represent the
lowest rate charged by Credit Suisse First Boston, New York Branch, for
extensions of credit.)
"DAILY REQUIRED AMOUNT" shall mean, for any Business Day, the
amount, if any, by which (x) for such Business Day, the sum of the amounts
described in subsections 4.6(a)(i) through (ii) and (iv) through (xi) PLUS the
Class A Floating Allocation Percentage of the amount described in subsection
4.6(a)(iii) PLUS the Class B Floating Allocation Percentage of the amount
described in subsection 4.6(a)(iii) PLUS the Class B-2 Floating Allocation
Percentage of the amount described in subsection 4.6(a)(iii) exceeds (y) the
Finance Charge Collections available for application thereto pursuant to
subsection 4.6(a) on any Business Day.
"DECEMBER MONTHLY PERIOD" means the Monthly Period in each Fiscal
Year ending on the Sunday closest to the last calendar day of December in such
Fiscal Year.
"DEFAULT RATIO" shall mean, for a Monthly Period, the percentage
obtained by (i) dividing (a) the aggregate Default Amounts in all Accounts of
the Trust during such Monthly Period, by (b) the aggregate amount of the
Principal Receivables of the Trust outstanding as of the beginning of such
Monthly Period and (ii) adjusting to a per annum equivalent.
"DEFEASANCE ACCOUNT" shall have the meaning specified in
subsection 17(b) hereof.
"DETERMINATION DATE" shall mean the second Business Day prior to
each Distribution Date.
"DILUTION" with respect to a Receivable shall mean any downward
adjustment of such Receivable because of a rebate, refund, unauthorized charge
or billing error to an Obligor, because such Receivable was created in respect
of merchandise which was refused or returned by an Obligor, or if the Servicer
otherwise adjusts downward the amount of any receivable without receiving
Collections therefor or without changing of such amount as uncollectible.
"DILUTION RATE" shall mean, with respect to a Determination Date, a
rate obtained by dividing (a) the aggregate amount of Dilution with respect to
Receivables during the related Monthly Period, by (b) the total amount of the
Receivables then outstanding as of the beginning of such Monthly Period.
"DISTRIBUTION DATE" shall mean (i) each Monthly Distribution Date,
and (ii) any date on which payments are received in the Defeasance Account. A
Distribution Date shall relate to the Monthly Period and the Interest Accrual
Period that ended prior to such Distribution Date and to the Determination Date
immediately preceding such Distribution Date.
"EARLY AMORTIZATION PERIOD" shall mean the period commencing on the
Pay Out Commencement Date and ending on the earlier to occur of (i) the date of
termination of the Trust pursuant to Section 12.1 of the Agreement or (ii) the
Series 1997-1 Termination Date.
"ELECTION NOTICE" shall have the meaning specified in subsection
6.16(a).
"ENHANCEMENT" shall mean, with respect to the Class A Certificates,
the subordination of the Class B Invested Amount, the Class B-2 Invested Amount
and the Class C Invested Amount to the Class A Invested Amount and the
reallocation of funds from the Spread Account to cover shortfalls in amounts
owing in respect of the Class A VFCs; and with respect to the Class B VFCs, the
subordination of the Class B-2 Invested Amount and the Class C Invested Amount
to the Class A Invested Amount and the Class B Invested Amount and the
reallocation of funds from the Spread Account to cover shortfalls in amounts
owing in respect of the Class B VFCs; and with respect to the Class B-2 VFCs,
the subordination of the Class C Invested Amount to the Class A Invested Amount,
the Class B Invested Amount and the Class B-2 Invested Amount and the
reallocation of funds from the Spread Account to cover shortfalls in amounts
owing in respect of the Class B-2 VFCs .
"EXCESS FINANCE CHARGE COLLECTIONS" shall mean, with respect to any
Business Day, as the context requires, either (x) the amount described in
subsections 4.6(a)(xii), 4.7(f) (clause FIRST thereof) and 4.8(a)(xiii)
initially allocated to the Series 1997-1 Variable Funding Certificates but
available for the purposes specified in such subsections, or (y) the aggregate
amount of Finance Charge Collections allocable to other Series in excess of the
amounts necessary to make required payments with respect to such Series, if any,
and available to cover shortfalls with respect to the Series 1997-1 Variable
Funding Certificates.
"EXCESS SPREAD BASE RATE" shall mean, with respect to a Monthly
Period, the higher of (x) the per annum percentage equal to the sum of (i) the
result of (a) the sum of Class A Interest, Class B Interest and Program Fees
which have accrued on the Class A VFCs and the Class B VFCs for the Interest
Accrual Period related to such Monthly Period divided by (b) the sum of (1) the
weighted average Class A Invested Amount, (2) the weighted average Class B
Invested Amount and (3) the product of 0.25 and the sum of (A) the weighted
average Class B-2 Invested Amount and (B) the weighted average Class C Invested
Amount, each during such Interest Accrual Period, and (ii) only if SRI or its
Affiliate is not the Servicer during such Monthly Period, the Series Servicing
Fee Percentage, and (y) the per annum percentage equal to the sum of (i) the
result of (a) the sum of Class A Interest, Class B Interest, the Class B-2
Interest, and Program Fees which have accrued on the Class A VFCs, the Class B
VFCs and the Class B-2 VFCs for the Interest Accrual Period related to such
Monthly Period divided by (b) the sum of (1) the weighted average Class A
Invested Amount, (2)
the weighted average Class B Invested Amount, (3) the weighted average Class B-2
Invested Amount and (4) the weighted average Class C Invested Amount, each
during such Interest Accrual Period, and (ii) only if SRI or its Affiliate is
not the Servicer during such Monthly Period, the Series Servicing Fee
Percentage.
"EXCESS SPREAD PERCENTAGE" shall mean, with respect to any Monthly
Period, a per annum percentage equal to the remainder of (a) the Trust Portfolio
Yield for such Monthly Period MINUS the Excess Spread Base Rate for such Monthly
Period.
"EXITING CLASS A PURCHASER" shall have the meaning specified in
subsection 4.6(e).
"EXITING CLASS B PURCHASER" shall have the meaning specified in
subsection 4.6(e).
"EXITING PURCHASER" shall have the meaning specified in
subsection 4.6(e).
"EXITING PURCHASERS' ALLOCATION PERCENTAGE" shall mean, with respect
to all Exiting Purchasers on any Business Day, a percentage designated by the
Transferor which shall (i) not be less than the percentage equivalent of a
fraction, the numerator of which is the aggregate Adjusted Invested Amount of
all such Exiting Purchasers on such Business Day, and the denominator of which
is the greater of (a) the sum of the amount of Principal Receivables in the
Trust and the amounts on deposit in the Equalization Account as of the end of
the preceding Business Day and (b) the aggregate Invested Amount of all Series
then outstanding on such Business Day (or, for any Series which is then in an
Amortization Period, its Invested Amount as of the end of its Revolving Period)
and (ii) not be greater than 100%.
"EXTENSION" shall mean the procedure by which the Investor
Certificateholders consent to the extension of the Revolving Period to the new
Amortization Period Commencement Date set forth in the Extension Notice,
pursuant to Section 6.16.
"EXTENSION DATE" shall mean November 30, 2000 or if an Extension has
already occurred, the date of the next Extension Date set forth in the Extension
Notice relating to the Extension then in effect (or, if any such date is not a
Business Day, the next preceding Business Day).
"EXTENSION NOTICE" shall have the meaning specified in subsection
6.16(a) of the Agreement.
"EXTENSION OPINION" shall have the meaning specified in
subsection 6.16(a) of the Agreement.
"EXTENSION TAX OPINION" shall have the meaning specified in
subsection 6.16(a) of the Agreement.
"FACILITIES COSTS" shall mean, for any Interest Accrual Period, an
amount, as notified in writing by the Facility Agent to the Transferor, the
Servicer and the Trustee on or prior to the related Determination Date, equal to
all amounts owing by the Transferor under the applicable Certificate Purchase
Agreement, including Program Fees but excluding those fees and other costs
covered by the calculation of the Cost of Funds Rate.
"FACILITY AGENT" shall mean the agent from time to time serving as
the Facility Agent under the Certificate Purchase Agreements.
"FEE LETTER" means, with respect to the Class A Certificateholders'
Interest, the Class A Fee Letter, with respect to the Class B
Certificateholders' Interest, the Class B Fee Letter, and with respect to the
Class B-2 Certificateholders' Interest, the Class B-2 Fee Letter.
"FIXED ALLOCATION PERCENTAGE" shall mean for any Business Day the
percentage equivalent of a fraction, the numerator of which is the Invested
Amount at the end of the last day of the Revolving Period and the denominator of
which is the greater of (a) the sum of the aggregate amount of Principal
Receivables in the Trust and the amount on deposit in the Equalization Account
as of the end of the last day of the Revolving Period and (b) the sum of the
numerators used to calculate the allocation percentages with respect to
Principal Collections for all Series in their Revolving Periods on such Business
Day or, with respect to any Series in its Amortization Period, for each Class to
which principal is being allocated for payment on such Business Day.
"FLOATING ALLOCATION PERCENTAGE" shall mean for any Business Day the
sum of the applicable Class A Floating Allocation Percentage, Class B Floating
Allocation Percentage, Class B-2 Floating Allocation Percentage and Class C
Floating Allocation Percentage for such Business Day.
"INITIAL DETERMINATION DATE" shall mean January 13, 1998.
"INITIAL INVESTED AMOUNT" shall mean the aggregate initial principal
amount of the Investor Certificates.
"INITIAL MONTHLY DISTRIBUTION DATE" shall mean January 15, 1998.
"INTEREST ACCRUAL" shall have the meaning specified in subsection
4.6(a)(i).
"INTEREST ACCRUAL PERIOD" shall mean, with respect to a related
Distribution Date, the period from and including the Determination Date related
to the immediately preceding Distribution Date to but excluding the
Determination Date preceding the related Distribution Date; PROVIDED, however,
that the initial Interest Accrual Period will run from and including the Series
1997-1 Closing Date to but excluding the Initial Determination Date; and
PROVIDED, FURTHER, that a final Interest Accrual Period will run from the
Determination Date preceding the final Distribution Date to but excluding the
final Distribution Date. An Interest Accrual Period shall relate to the Monthly
Period that has the same related Distribution Date.
"INTEREST ACCRUAL RATE" shall mean, with respect to an Interest
Accrual Period, a per annum rate equal to LIBOR with respect to such Interest
Accrual Period PLUS 0.50%.
"INTEREST/PROGRAM FEE SHORTFALL" shall mean, with respect to a
Determination Date, the amount, if any, by which (x) the sum of (i) the
aggregate amount of unpaid interest which will have accrued on the Class A VFCs
and the Class B VFCs as of such Determination Date and (ii) the aggregate unpaid
Program Fees with respect to Class A VFCs and Class B VFCs which will have
accrued as of such Determination Date and (iii) all unpaid interest which will
have accrued on unpaid amounts described in clause (i) or (ii) above as of such
Determination Date exceeds (y) the amount of funds that will have been set aside
in the Interest Funding Account as of the related Transfer Date pursuant to
subsections 4.6(a)(i) through (ii).
"INVESTED AMOUNT" shall mean, when used with respect to any Business
Day, an amount equal to the sum of (a) the Class A Invested Amount as of such
Business Day, (b) the Class B Invested Amount as of such Business Day, (c) the
Class B-2 Invested Amount as of such Business Day and (d) the Class C Invested
Amount as of such Business Day.
"INVESTED AMOUNT CHANGE" shall have the meaning specified in Section
11 below.
"INVESTOR CERTIFICATEHOLDERS" shall mean all of the Holders of
record of Investor Certificates of Series 1997-1.
"INVESTOR CERTIFICATES" shall mean the Class A VFCs, the Class B
VFCs, the Class B-2 VFCs and the Class C VFCs.
"INVESTOR CHARGE-OFFS" shall mean the sum of Class A Investor
Charge-Offs, Class B Investor Charge-Offs, Class B-2 Investment Charge-Offs
and Class C Investor Charge-Offs.
"INVESTOR DEFAULT AMOUNT" shall mean, with respect to each Business
Day, an amount equal to the product of the Default Amount for such Business Day
and the Floating Allocation Percentage applicable for such Business Day.
"INVESTOR PERCENTAGE" shall mean for any Business Day, (a) with
respect to Finance Charge Collections and Receivables in Defaulted Accounts at
any time or Principal Collections during the Revolving Period, the Floating
Allocation Percentage and (b) with respect to Principal Collections during the
Amortization Period, the Fixed Allocation Percentage.
"JANUARY MONTHLY PERIOD" means the Monthly Period in each Fiscal
Year ending on the Sunday closest to the last calendar day of January in such
Fiscal Year.
"LIBOR" shall mean, for an Interest Accrual Period, the rate
obtained by dividing (x) the offered rate for deposits in United States Dollars
having an one-month maturity period which appears on the Dow Xxxxx Telerate
System, page 3750, as of 11:00 a.m. London time on the related Rate
Determination Date by (y) a percentage equal to one minus the stated maximum
rate (stated as a decimal) of all reserves required to be maintained against
"Eurocurrency Liabilities" as specified in Regulation D (or against any other
category of liabilities which includes deposits by reference to which the
interest rate on LIBOR is determined or any category of extensions of credit or
other assets which includes loans by a non-United States office of any bank to
United States residents). In the event the rate specified in clause (x) shall
not be provided, "LIBOR" shall mean (a) the arithmetic average (rounded upwards
to the nearest 1/16th of l%) of the rates at which deposits in United States
dollars are offered to four reference banks selected by the Facility Agent in
the interbank eurodollar market at approximately 11:00 a.m. (London time) on the
Rate Determination Date divided by (b) the percentage specified in clause (y)
above.
"MAXIMUM SPREAD ACCOUNT AMOUNT" shall have the meaning specified in
subsection 4.2(g).
"MEASURING PERIOD" shall mean, with respect to any day, the period
from (i) the later of (a) the Series 1997-1 Closing Date and (b) the first day
of the eleventh Monthly Period preceding the Monthly Period in which such day
occurs through (ii) such day.
"MINIMUM TRANSFEROR PERCENTAGE" shall mean the Applicable Reserve
Ratio.
"MONTHLY ADJUSTED REQUIRED AMOUNT" shall mean, with respect to a
Determination Date, the sum of (i) the Monthly Required Amount (after giving
effect to allocations on such Determination Date pursuant to subsection 4.7(f))
and (ii) the amount by which the sum of the amounts described in subsections
4.6(a)(xiii) and (xiv) exceeds the amount of Finance Charge Collections
available for application thereto on such Determination Date (after making the
applications described in Section 4.7(b)).
"MONTHLY DISTRIBUTION DATE" shall mean the Initial Monthly
Distribution Date and fifteenth day of each calendar month thereafter, or if
such day is not a Business Day, the next succeeding Business Day.
"MONTHLY PERIOD" shall have the meaning specified in the Agreement,
except that the first Monthly Period with respect to the Series 1997-1 Variable
Funding Certificates shall begin on and include the Series 1997-1 Closing Date
and shall end on and include December 28, 1997.
"MONTHLY REQUIRED AMOUNT" shall mean, with respect to a
Determination Date, the amount, if any, by which (x) for such Determination
Date, the sum of the amounts described in subsections 4.6(a)(iv) through (xi),
PLUS the Class A Floating Allocation Percentage of the amount described in
subsection 4.6(a)(iii), PLUS the Class B Floating Allocation Percentage of the
amount described in subsection 4.6(a)(iii), PLUS the Class B-2 Floating
Allocation Percentage of the amount described in subsection 4.6(a)(iii), PLUS
any Interest/Program Fee Shortfall exceeds (y) the Finance Charge Collections
available for application thereto pursuant to subsection 4.6(a) on such
Determination Date (after making the applications described in Section 4.7(b)).
"NET BORROWED EXCESS SPREAD AMOUNT" shall mean, on any Business Day
during a Monthly Period, the excess, if any, of (x) the cumulative amounts of
Excess Finance Charge Collections from other Series which, pursuant to
subsection 4.7(b), have been allocated to the Series 1997-1 Variable Funding
Certificates on such Business Day and on each prior Business Day during such
Monthly Period over (y) the cumulative amounts of Available Series 1997-1
Finance Charge Collections which, pursuant to subsection 4.6(a)(xii), have been
allocated to other Series on such Business Day and on each prior Business Day
during such Monthly Period.
"NONCOMMITTED CLASS A PURCHASER" shall have the meaning specified in
Section 1.1 of the Class A Certificate Purchase Agreement.
"NONCOMMITTED CLASS B PURCHASER" shall have the meaning specified in
Section 1.1 of the Class B Certificate Purchase Agreement.
"NONEXTENDING CLASS A PURCHASER" shall have the meaning specified in
Section 1.1 of the Class A Certificate Purchase Agreement.
"NONEXTENDING CLASS B PURCHASER" shall have the meaning specified in
Section 1.1 of the Class B Certificate Purchase Agreement.
"PARTIAL AMORTIZATION AMOUNT" shall mean, as of any date, the
smallest amount that, if distributed to the Senior Certificateholders on such
date, would result in (x) (i) the sum of the Class A Principal Balance and the
Class B Principal Balance on such date not being greater than (ii) the sum of
the Class A Purchase Limit plus the Class B Purchase Limit on such date, and (y)
the Class B-2 Principal Balance on such date not being greater than the Class
B-2 Purchase Limit on such date.
"PAY OUT COMMENCEMENT DATE" shall mean the date on which a Trust Pay
Out Event is deemed to occur pursuant to Section 9.1 of the Agreement or a
Series 1997-1 Pay Out Event is deemed to occur pursuant to Section 8 of this
Series Supplement.
"PAYMENT RATE" shall mean for any Monthly Period the percentage
obtained by dividing the aggregate amount of Principal Collections during such
Monthly Period by the aggregate amount of Principal Receivables outstanding as
of the beginning of such Monthly Period.
"PORTFOLIO CORRECTION AMOUNT" shall mean the smallest amount which,
if distributed to certificateholders of the Trust in reduction of the aggregate
invested amount of all certificates upon the occurrence of a Portfolio Imbalance
Event, would result in compliance with the percentage limitation in the
definition of Portfolio Imbalance Event the violation of which gave rise to such
Portfolio Imbalance Event.
"PORTFOLIO CORRECTION DISTRIBUTION DATE" shall mean the first
Distribution Date following the occurrence of a Portfolio Imbalance Event.
"PORTFOLIO IMBALANCE EVENT" shall mean an event which will occur if,
on the last day of any Monthly Period occurring during the Revolving Period (the
"MEASUREMENT DAY"), (a) on each of such day and the last day of each of the
preceding eleven consecutive Monthly Periods, (i) the amount of all Cash
Equivalents and other amounts on deposit in the Equalization Account exceeded
25% of (ii) the sum of all Principal Receivables and Cash Equivalents and other
amounts on deposit in the Equalization Account on each such day, or (b) on each
of the measurement day and the last day of the preceding Monthly Period, (i) the
amount of all Cash Equivalents and other amounts on deposit in the Equalization
Account exceeded 45% of (ii) the sum of all Principal Receivables and Cash
Equivalents and other amounts on deposit in the Equalization Account on each
such day. All such amounts shall be calculated after giving effect to all
amounts to be distributed on the Distribution Date following the last day of the
applicable Monthly Period.
"PRINCIPAL DISTRIBUTION DATE" shall mean (i) each Business Day
during the Revolving Period on which the Transferor elects, upon not less than
one Business Day's notice to the Facility Agent, to repay principal on the
Investor Certificates, (ii) each Business Day on which the Transferor elects to
make payments to Exiting Purchasers pursuant to subsection 4.9(c), (iii) the
Business Day following each day during the Revolving Period on which the Partial
Amortization Amount in respect of the Class A VFCs or the Class B VFCs exceeds
zero and there are funds on deposit in the Principal Funding Account in an
amount equal to or greater than $1,000,000, in respect of the aggregate of Class
A VFCs and Class B VFCs, or, if such Partial Amortization Amount in respect of
the aggregate of Class A VFCs and Class B VFCs is then less than $1,000,000, in
an amount equal to or greater than such Partial Amortization Amount, and (iv)
the Business Day following each day during the Revolving Period on which the
Partial Amortization Amount in respect of the Class B-2 VFCs exceeds zero and
there are funds on deposit in the Principal Funding Account in an amount equal
to or greater than $500,000 or, if such Partial Amortization Amount is then less
than $500,000, in an amount equal to or greater than such Partial Amortization
Amount.
"PRINCIPAL SHORTFALLS" shall mean on any Business Day (x) for the
Series 1997-1 Variable Funding Certificates, the Adjusted Invested Amount of
each class of Senior Certificates then receiving principal payments after the
application of Principal Collections on such Business Day or (y) for any other
Series, the amounts specified as such in the Supplement for such other
Series.
"PROGRAM FEES" shall mean, for any Interest Accrual Period, the sum
of (a) the Class A Facility Fee for such Interest Accrual Period, (b) the Class
B Facility Fee for such Interest Accrual Period (c) the Class B-2 Facility Fee
for such Interest Accrual Period and (d) the Utilization Fee for such Interest
Accrual Period.
"PURCHASE DATE" shall mean any Business Day on which the purchase of
an Additional Invested Amount is to occur pursuant to Section 6.15 of the
Agreement.
"RATE DETERMINATION DATE" shall mean, with respect to any Interest
Accrual Period, the second Business Day before the first day of such Interest
Accrual Period.
"RATING AGENCY" shall mean each of Standard & Poor's Ratings
Services, a Division of the XxXxxx-Xxxx Companies, and Xxxxx'x Investors
Service, Inc.
"REALLOCATED CLASS B PRINCIPAL COLLECTIONS" shall have the meaning
specified in subsection 4.7(i).
"REALLOCATED CLASS B-2 PRINCIPAL COLLECTIONS" shall have the meaning
specified in subsection 4.7(h).
"REALLOCATED CLASS C PRINCIPAL COLLECTIONS" shall have the meaning
specified in subsection 4.7(g).
"RELEASED SPREAD ACCOUNT AMOUNT" shall have the meaning specified in
subsection 4.2(h).
"REPAYABLE SERVICING FEE AMOUNT" shall mean, for any Business Day of
a Monthly Period, only if SRI or its Affiliate is the Servicer, an amount equal
to the aggregate amounts distributed to the Servicer in respect of the Servicing
Fee pursuant to subsection 4.6(a)(xv) for any preceding Business Day during such
Monthly Period.
"REQUIRED CLASS A PURCHASERS" and "REQUIRED CLASS A OWNERS" shall
have the respective meanings specified in Section 1.1 of the Class A Certificate
Purchase Agreement.
"REQUIRED CLASS B PURCHASERS" and "REQUIRED CLASS B OWNERS" shall
have the respective meanings specified in Section 1.1 of the Class B Certificate
Purchase Agreement.
"REVOLVING PERIOD" shall mean the period from and including the
Series 1997-1 Closing Date to, but not including, the Amortization Period
Commencement Date.
"SCHEDULED SERIES 1997-1 TERMINATION DATE" shall mean the
December, 2003 Distribution Date.
"SENIOR CERTIFICATEHOLDER" shall mean the Person in whose name a
Class A VFC, a Class B VFC or a Class B-2 VFC is registered in the Certificate
Register.
"SENIOR CERTIFICATES" shall mean the Class A Certificates, the Class
B Certificates and the Class B-2 Certificates.
"SERIES 1997-1" shall mean the Series of the SRI Receivables Master
Trust represented by the Series 1997-1 Variable Funding Certificates.
"SERIES 1997-1 CERTIFICATEHOLDER" shall mean the holder of record of
any Series 1997-1 Variable Funding Certificate.
"SERIES 1997-1 CERTIFICATEHOLDERS' INTEREST" shall have the meaning
specified in Section 4.4.
"SERIES 1997-1 CLOSING DATE" shall mean December 3, 1997.
"SERIES 1997-1 PAY OUT EVENT" shall have the meaning specified in
Section 8.
"SERIES 1997-1 PRINCIPAL COLLECTIONS" shall have the meaning
specified in subsection 4.6(d).
"SERIES 1997-1 TERMINATION DATE" shall mean the earlier to occur of
(i) the day after the Distribution Date on which the Series 1997-1 Variable
Funding Certificates are paid in full, or (ii) the Scheduled Series 1997-1
Termination Date.
"SERIES SERVICING FEE PERCENTAGE" shall mean 2.0%.
"SERVICING FEE" shall mean, for any Monthly Period, an amount equal
to the product of (i) one-twelfth, (ii) the Series Servicing Fee Percentage and
(iii) the Adjusted Invested Amount as of the preceding Record Date, or, in the
case of the first Distribution Date, the Initial Invested Amount.
"SERVICING FEE ACCRUAL" shall mean, for any Business Day of a
Monthly Period, an amount equal to the product of (i) the number of days elapsed
from the Business Day immediately preceding such Business Day and (ii) the
quotient of (x) the Servicing Fee for such Monthly Period divided by (y) the
number of days in such Monthly Period.
"SHARED PRINCIPAL COLLECTIONS" shall mean, as the context requires,
either (a) the amount allocated to the Series 1997-1 Variable Funding
Certificates which, in accordance with subsection 4.6(d) or 4.9(g), may be
applied in accordance with subsection 4.3(e) of the Agreement or (b) the amounts
allocated to the investor certificates (other than Transferor Retained
Certificates) of other Series which the applicable Supplements for such Series
specify are to be treated as "Shared Principal Collections" and which may be
applied to cover Principal Shortfalls with respect to the Series 1997-1 Variable
Funding Certificates.
"SIX MONTH EXCESS SPREAD PERCENTAGE" shall mean, for any
Determination Date, the arithmetic average of the Excess Spread Percentages
calculated on such Determination Date and the five preceding Determination Dates
(calculated utilizing the Account Cap Start-up Calculation Rule).
"SIX MONTH PAYMENT RATE PERCENTAGE" shall mean, for any
Determination Date, the arithmetic average of the Payment Rates calculated on
such Determination Date and the five preceding Determination Dates (calculated
utilizing the Account Cap Start-up Calculation Rule).
"SPREAD ACCOUNT" shall have the meaning specified in subsection
4.2(f).
"STORED EXCESS FINANCE CHARGE COLLECTIONS" shall mean (i) with
respect to any Business Day, the Finance Charge Collections that are designated
as such pursuant to subsection 4.6(a)(xvi) and (ii) with respect to any Transfer
Date, the cumulative amount of Finance Charge Collections designated as such
during the related Monthly Period.
"TERMINATION PAYMENT DATE" shall mean the earlier of the first
Distribution Date following the liquidation or sale of the Receivables as a
result of an Insolvency Event and the occurrence of the Scheduled Series 1997-1
Termination Date.
"THREE MONTH EXCESS SPREAD PERCENTAGE" shall mean, for any
Determination Date, the arithmetic average of the Excess Spread Percentages
calculated on such Determination Date and the two preceding Determination Dates
(calculated utilizing the Account Cap Start-up Calculation Rule).
"THREE MONTH PAYMENT RATE PERCENTAGE" shall mean, for any
Determination Date, the arithmetic average of the Payment Rates calculated on
such Determination Date and the two preceding Determination Dates (calculated
utilizing the Account Cap Start-up Calculation Rule).
"TRANCHE" shall mean a Cost of Funds Rate Tranche or a Bank Rate
Tranche.
"TRANCHE RATE" shall mean the interest rate applicable to each
portion of the Class A Principal Balance and the Class B Principal Balance,
which shall be, with respect to any Cost of Funds Rate Tranche, the Cost of
Funds Rate applicable thereto and with respect to any Bank Rate Tranche, the
Bank Rate applicable thereto.
"TRANSFEROR FINANCE CHARGE COLLECTIONS" shall mean on any Business
Day the product of (a) the Finance Charge Collections for such Business Day, (b)
the Transferor Percentage and (c) the Floating Allocation Percentage.
"TRANSFEROR RETAINED CERTIFICATES" shall mean investor certificates
of any Series, including the Class C VFCs, which the Transferor is required to
retain, but only for so long as the Transferor is the Holder of such
Certificates.
"TRUST BASE RATE" shall mean, with respect to a Monthly Period, the
per annum percentage equal to the sum of (i) the Interest Accrual Rate for the
Interest Accrual Period related to such Monthly Period and (ii) the Series
Servicing Fee Percentage only if SRI or its Affiliate is not the Servicer during
such Monthly Period.
"TRUST PORTFOLIO YIELD" shall mean, with respect to any Monthly
Period, the annualized percentage equivalent of a fraction, (a) the numerator of
which is an amount equal to the result, for all days during such Monthly Period,
of (i) the aggregate Finance Charge Collections, MINUS (ii) the aggregate
Discount Option Receivables Collections, MINUS (iii) the aggregate Default
Amounts and (b) the denominator of which is the aggregate amount of Principal
Receivables outstanding as of the beginning of the Monthly Period.
The "TWELVE MONTH DILUTION RATE" shall mean, for any Determination
Date, the arithmetic average of the Dilution Rates calculated on such
Determination Date and the eleven preceding Determination Dates (calculated
utilizing the Account Cap Start-up Calculation Rule).
"UTILIZATION FEE" shall mean an amount, payable on each Distribution
Date in the amount calculated as provided in Section 2.3(a) of each Certificate
Purchase Agreement.
"VFC ADDITIONAL INVESTED AMOUNT" shall mean an Additional Invested
Amount (as defined in Section 6.15 of the Agreement).
SECTION 3. REASSIGNMENT TERMS. (a) The Senior Certificates shall be
subject to repurchase by the Transferor at its option, in accordance with the
terms specified in subsection 12.2(a) of the Agreement, on any Distribution Date
on or after the Distribution Date on which the sum of the Class A Invested
Amount, the Class B Invested Amount and the Class B-2 Invested Amount is reduced
to an amount less than or
equal to 10% of the sum of the highest combined Class A Invested Amount, Class B
Invested Amount and Class B-2 Invested Amount at any time during the Revolving
Period. The deposit required in connection with any such repurchase and final
distribution shall be equal to the sum of the Class A Principal Balance Invested
Amount, the Class B Invested Amount and the Class B-2 Invested Amount PLUS any
accrued and unpaid interest on such Certificates PLUS any accrued and unpaid
Facilities Costs PLUS any accrued and unpaid interest on unpaid interest on
Senior Certificates or unpaid Facilities Costs through the day prior to the
Distribution Date on which the final distribution occurs. The deposit required
to be made in connection with a sale or repurchase of the Receivables as set
forth in sections 2.4(e), 9.2, 10.2(a), 12.1 or 12.2 of the Agreement shall,
unless otherwise specified in the Agreement, be equal to the sum of the Class A
Invested Amount and the Class C Invested Amount plus any accrued and unpaid
interest on unpaid interest on Senior Certificates or unpaid Facilities Costs
PLUS any accrued and unpaid interest on unpaid interest on Senior Certificates
or unpaid Facilities Costs through the day prior to the Distribution Date on
which the final distribution occurs.
(b) Each Certificateholder, by accepting and holding such Certificate or
interest therein, will be deemed to have represented and warranted that it is
not (i) an employee benefit plan (as defined in Section 3(3) of ERISA) that is
subject to the provisions of Title I of ERISA, (ii) a plan described in Section
4975(c)(1) of the Internal Revenue Code, or (iii) any entity whose underlying
assets include plan assets by reason of a plan's investment in the entity.
SECTION 4. DELIVERY AND PAYMENT FOR THE SERIES 1997-1 VARIABLE
FUNDING CERTIFICATES. The Transferor shall execute and deliver the Series 1997-1
Variable Funding Certificates to the Trustee for authentication in accordance
with Section 6.1 of the Agreement. The Trustee shall deliver the Series 1997-1
Variable Funding Certificates to or upon the order of the Transferor when
authenticated in accordance with Section 6.2 of the Agreement.
SECTION 5. FORM OF DELIVERY OF SERIES 1997-1 VARIABLE FUNDING
CERTIFICATES. The Class A VFCs, the Class B VFCs, the Class B-2 VFCs and the
Class C VFCs shall be delivered as Registered Certificates as provided in
Section 6.1 of the Agreement.
SECTION 6. ARTICLE IV OF AGREEMENT. Sections 4.l, 4.2 (a) through
(e) and 4.3 of the Agreement shall read in their entirety as provided in the
Agreement. Article IV of the Agreement (except for Sections 4.1, 4.2(a) through
(e) and 4.3 thereof) shall read in its entirety as follows and shall be
applicable only to the Series 1997-1 Variable Funding Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.2 ESTABLISHMENT OF ACCOUNTS.
(F) THE SPREAD ACCOUNT. The Servicer, for the benefit of the Senior
Certificateholders, shall cause to be established and maintained in the name of
the Trustee, with an office or branch of a Qualified Institution (including
Bankers Trust Company), a segregated trust account for the Series 1997-1 (the
"SPREAD ACCOUNT") bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Senior
Certificateholders. The Servicer shall give written notice to the Trustee of the
location and account number of the Spread Account and shall notify the Trustee
in writing prior to any subsequent change thereof. The Trustee shall possess all
right, title and interest in all funds on deposit from time to time in the
Spread Account and in all proceeds thereof. The Spread Account shall be under
the sole dominion and control of the Trustee for the benefit of the Senior
Certificateholders. The Transferor does hereby transfer, assign, set-over, and
otherwise convey to the Trust for the benefit of the Senior Certificateholders,
without recourse, all of its right, title and interest in, to and under:
(i) the Spread Account, all funds, and all investment
property, certificates and instruments, if any, from time to time
representing or evidencing or held in the Spread Account;
(ii) all investments of amounts on deposit in the Spread
Account from time to time and all investment property, certificates and
instruments, if any, from time to time representing or evidencing such
investments;
(iii) all notes, certificates of deposit, investment property
and other instruments from time to time hereafter delivered to or
otherwise possessed by the Trustee for and on behalf of the Transferor in
substitution for or in addition to any of the then existing Spread Account
property;
(iv) all interest, dividends, cash, investment property,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any and all of the
existing Spread Account property; and
(v) all additional property designated as being Spread Account
property that may from time to time hereafter be assigned or pledged to
the Trustee for the benefit of the Series 1997-1 Certificateholders
hereunder by the Transferor or by any Person on the Transferor's behalf.
(G) MAXIMUM SPREAD ACCOUNT AMOUNT. On each Determination Date, the
Servicer shall compute the Account Cap and the Maximum Spread Account Amount.
The Account Cap determined pursuant to the previous sentence will, except as
specified in the proviso to the following sentence, be in effect from and
including the related Distribution Date to but excluding the next subsequent
Distribution Date. The maximum amount required to be held on deposit in the
Spread Account (the "MAXIMUM SPREAD ACCOUNT AMOUNT") shall be zero until the
Initial Determination Date and on any day thereafter shall equal the product of
(i) the Account Cap established on the most recent Determination Date and (ii)
the Invested Amount as of such day; PROVIDED, HOWEVER, that on or after the
occurrence of a Series 1997-1 Pay Out Event, the Maximum Spread Account Amount
for any day shall equal (i) the sum of the Class A Principal Balance, the Class
B Principal Balance and the Class B-2 Principal Balance on such day, MINUS (ii)
the amount of the available funds in the Principal Account as of such day after
giving effect to all deposits pursuant to subsection 4.6(a)(xiii).
(H) DEPOSITS INTO AND WITHDRAWALS FROM THE SPREAD ACCOUNT. On each
Business Day, the Servicer shall instruct the Trustee to withdraw funds from the
Collection Account in the amount specified in subsection 4.6(a)(xiii) and
deposit them into the Spread Account and to withdraw from the Spread Account
such amounts as are specified in subsection 4.7(d) to be withdrawn from the
Spread Account and to deposit or pay such amounts as provided in subsection
4.7(d). On any Business Day, the Transferor may (but shall have no obligation
to) deposit additional funds into the Spread Account. On any Purchase Date, the
Servicer may cause a portion of the proceeds of the sale of Additional Invested
Amount to be deposited into the Spread Account in satisfaction of the condition
precedent in Section 3.2(e) of each Certificate Purchase Agreement. On any
Business Day, the Servicer may instruct the Trustee to withdraw any excess, of
the funds available in the Spread Account over the Maximum Spread Account Amount
applicable to such Business Day from the Spread Account and pay such funds (the
"RELEASED SPREAD ACCOUNT AMOUNT") to the Transferor. Funds shall be withdrawn
from the Spread Account and applied as provided in Section 4.7(d). Such Related
Spread Account Amount shall be treated on the next succeeding Business Day as
Available Series 1997-1 Finance Charge Collections and the Transferor shall make
the Released Spread Account Amount available to the Trustee on such succeeding
Business Day (to the extent that other services of Available Series 1997-1
Finance Charge collections are insufficient for the uses described in subsection
4.6(a)). Funds in the Spread Account shall be invested at the direction of the
Servicer in Cash Equivalents that mature at or prior to the time required by the
Agreement or the Series 1997-1 Supplement. Any earnings on such invested funds
shall be deposited and held in the Spread Account and applied in the same manner
and priority as other amounts therein.
SECTION 4.4 RIGHTS OF CERTIFICATEHOLDERS. The Series 1997-1 Variable
Funding Certificates shall represent undivided interests in the Trust,
consisting of the right to receive, to the extent necessary to make the required
payments with respect to such Series 1997-1 Variable Funding Certificates at the
times and in the amounts specified in this Agreement, (a) the Floating
Allocation Percentage and Fixed Allocation Percentage (as applicable from time
to time) of Collections available in the Collection
Account, (b) funds allocable to the Series 1997-1 Variable Funding Certificates
on deposit in the Equalization Account and (c) funds on deposit in the Interest
Funding Account, the Principal Account, the Spread Account and the Distribution
Account (for such Series, the "SERIES 1997-1 CERTIFICATEHOLDERS' INTEREST"). The
Class B Invested Amount, the Class B-2 Invested Amount and the Class C Invested
Amount shall be subordinated to the Class A VFCs, the Class B-2 Invested Amount
and the Class C Invested Amount shall be subordinated to the Class A VFCs and
the Class B VFCs, and the Class C Invested Amount shall be subordinated to the
Class A VFCs, the Class B VFCs and the Class B-2 VFCs, in each case to the
extent provided in this Article IV.
SECTION 4.5 COLLECTIONS AND ALLOCATION; PAYMENTS ON EXCHANGEABLE
TRANSFEROR CERTIFICATE.
(A) COLLECTIONS. The Servicer will apply or will instruct the
Trustee to apply all funds on deposit in the Collection Account and the
Equalization Account allocable to the Series 1997-1 Variable Funding
Certificates, and all funds on deposit in the Interest Funding Account, the
Principal Account, the Spread Account and the Distribution Account maintained
for this Series, as described in this Article IV.
(B) PAYMENTS TO THE HOLDER OF THE EXCHANGEABLE TRANSFEROR
CERTIFICATE. On each Business Day, the Servicer shall determine whether a Series
1997-1 Pay Out Event is deemed to have occurred with respect to the Series
1997-1 Variable Funding Certificates, and the Servicer shall allocate and pay
Collections in accordance with the Daily Report with respect to such Business
Day to the Holder of the Exchangeable Transferor Certificate as follows:
(i) For each Business Day with respect to the Revolving Period, in
addition to amounts allocated and paid to the Holder of the Exchangeable
Transferor Certificate pursuant to subsection 4.3(b) of the Agreement, an
amount equal to the product of the Class C Floating Allocation Percentage
and the amount of Principal Collections on such Business Day (net of any
Reallocated Class C Principal Collections on such Business Day).
(ii) For each Business Day with respect to the Amortization Period
prior to the Business Day on which an amount equal to the Class B Invested
Amount has been deposited in the Principal Account in addition to amounts
allocated and paid to the Holder of the Exchangeable Transferor
Certificate pursuant to subsection 4.3(b) of the Agreement, an amount
equal to the product of the Class C Fixed Allocation Percentage and the
amount of Principal Collections on such Business Day.
(iii) For each Business Day on and after the day on which Principal
Collections are being deposited in the Principal Account pursuant to
subsections 4.6(c)(i), (ii) and (iii), the amount of payments made to the
Holder of the
Exchangeable Transferor Certificate shall be determined only as provided
in subsection 4.3(b) of the Agreement.
Notwithstanding the foregoing, amounts payable to the Holders of the
Exchangeable Transferor Certificate pursuant to subsection 4.5(b)(i) or (ii)
shall instead be deposited in the Equalization Account to the extent necessary
to prevent the Transferor Interest from being less than the Minimum Transferor
Interest.
The allocations to be made pursuant to this subsection 4.5(b) also
apply to deposits into the Collection Account that are treated as Principal
Collections, including Adjustment Payments, payment of the reassignment price
pursuant to subsection 2.4(e) of the Agreement and proceeds from the sale,
disposition or liquidation of the Receivables pursuant to Section 9.2, 10.2(a),
12.1 or 12.2 of the Agreement and Section 3 of this Series Supplement, such
deposits to be treated as Collections and will be allocated as Finance Charge
Receivables or Principal Receivables as provided in the Agreement.
SECTION 4.6 APPLICATION OF FUNDS ON DEPOSIT IN THE COLLECTION
ACCOUNT FOR THE CERTIFICATES.
(a) On each Business Day, the Servicer shall deliver to the Trustee
a Daily Report in which it shall instruct the Trustee to withdraw, and the
Trustee, acting in accordance with such instructions, shall withdraw, to the
extent of (x) the sum of (i) the Floating Allocation Percentage of Finance
Charge Collections available in the Collection Account, (ii) amounts released
from the Spread Account pursuant to subsection 4.2(h) and (iii) investment
earnings on amounts on deposit in the Principal Account (the "AVAILABLE SERIES
1997-1 FINANCE CHARGE COLLECTIONS"), the amounts required to be withdrawn from
the Collection Account, pursuant to subsections 4.6(a)(i) through 4.6(a)(xvi).
(i) INTEREST ACCRUAL. On each Business Day during an Interest
Accrual Period except for any Transfer Date, the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the
Collection Account to the extent of the Available Series 1997-1 Finance
Charge Collections for such Business Day, and deposit into the Interest
Funding Account, an amount equal to the amount accrued since the preceding
Business Day on the sum of the Class A Principal Balance and the Class B
Principal Balance at the Interest Accrual Rate in effect for such Interest
Accrual Period (the "INTEREST ACCRUAL") plus any Interest Accrual due with
respect to any prior Business Day but not previously deposited in the
Interest Funding Account. On each Transfer Date immediately following an
Interest Accrual Period, the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Collection Account
to the extent of the Available Series 1997-1 Finance Charge Collections
for such Transfer Date, and deposit into the Interest Funding Account, an
amount which, when aggregated with amounts on deposit therein on such
Transfer Date, shall equal to the amount of interest and Program Fees
which are payable to the Senior Certificateholders on such Transfer Date
pursuant to subsections 4.8(a)(i) through (iv).
(ii) ADDITIONAL INTEREST ON UNPAID CLASS A INTEREST, CLASS B
INTEREST AND PROGRAM FEES. On each Business Day during an Interest Accrual
Period, the Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Collection Account to the extent of any
Available Series 1997-1 Finance Charge Collections remaining after giving
effect to the withdrawals pursuant to subsections 4.6(a)(i), and deposit
into the Interest Funding Account for distribution on the next
Distribution Date as provided in Section 4.8(a), the sum of (1) additional
interest at the CSFB Corporate Base Rate for interest that has accrued on
interest that was payable pursuant to subsection 4.8(a)(i) but was not
previously paid to the Class A Certificateholders, (2) additional interest
at the CSFB Corporate Base Rate on Program Fees payable to Class A
Certificateholders pursuant to subsection 4.8(a)(iii) but that were not
previously paid to such Class A Certificateholders, (3) additional
interest at the CSFB Corporate Base Rate for interest that has accrued on
interest that was payable pursuant to subsection 4.8(a)(ii) but was not
previously paid to the Class B Certificateholders and (4) additional
interest at the CSFB Corporate Base Rate on Program Fees due and payable
to Class B Certificateholders pursuant to subsection 4.8(a)(iv) but that
were not previously paid to such Class B Certificateholders.
(iii) SERVICING FEE. On each Business Day on which SRI or an
Affiliate of SRI is not the Servicer, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw from the Collection
Account and distribute to the Servicer, to the extent of any Available
Series 1997-1 Finance Charge Collections remaining after giving effect to
the withdrawals pursuant to subsections 4.6(a)(i) and (ii), an amount
equal to the excess of (1) the Servicing Fee Accrual for such Business Day
plus any unpaid Servicing Fees from prior Interest Accrual Periods over
(2) any amounts with respect thereto previously distributed to the
Servicer during the relevant Interest Accrual Period.
(iv) INVESTOR DEFAULT AMOUNT. On each Business Day, the
Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account, to the extent of any Available
Series 1997-1 Finance Charge Collections remaining after giving effect to
the withdrawals pursuant to subsections 4.6(a)(i) through (iii), an amount
equal to the sum of (1) the aggregate Investor Default Amount for such
Business Day PLUS (2) the unpaid Investor Default Amount for any previous
Business Day during such Monthly Period, such amount to be (A) treated as
Shared Principal Collections during the Revolving Period, (B) during the
Amortization Period on and prior to the day on which an amount equal to
the Class A Invested Amount is deposited in the Principal Account,
deposited in the Principal Account for distribution to the Class A
Certificateholders on the next Distribution Date, (C) during the
Amortization Period, on and after the day on which such deposit to the
Principal Account with respect to the Class A Invested Amount has been
made and on and prior to the day on which an amount equal to the Class B
Invested Amount is deposited in the Principal Account, deposited in the
Principal Account for payment to the Class B
Certificateholders on the next Distribution Date, (D) during the
Amortization Period, on and after the day on which such deposit to the
Principal Account with respect to the Class A Invested Amount and Class B
Invested Amount has been made and on and prior to the day on which an
amount equal to the Class B-2 Invested Amount is deposited in the
Principal Account, deposited in the Principal Account for payment to the
Class B-2 Certificateholders on the next Distribution Date, and (E) on and
after such deposit to the Principal Account with respect to the Class B-2
Invested Amount has been made, paid to the Class C Certificateholders.
(v) REIMBURSEMENT OF CLASS A INVESTOR CHARGE-OFFS. On each
Business Day, the Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Collection Account to the extent of any
Available Series 1997-1 Finance Charge Collections remaining after giving
effect to the withdrawals pursuant to subsections 4.6(a)(i) through (iv),
an amount equal to the unreimbursed Class A Investor Charge-Offs, such
amount (A) during the Revolving Period to be treated as Shared Principal
Collections, and (B) during the Amortization Period on and prior to the
day on which an amount equal to the Class A Invested Amount is deposited
in the Principal Account to be deposited in the Principal Account for
distribution to the Class A Certificateholders on the next Distribution
Date.
(vi) REIMBURSEMENT OF CLASS B INVESTOR CHARGE-OFFS. On each
Business Day, the Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Collection Account to the extent of any
Available Series 1997-1 Finance Charge Collections remaining after giving
effect to the withdrawals pursuant to subsections 4.6(a)(i) through (v),
an amount equal to the sum of the unreimbursed Class B Investor
Charge-Offs and the unreimbursed Reallocated Class B Principal
Collections, such amount, (A) during the Revolving Period, to be treated
as Shared Principal Collections, (B) during the Amortization Period, on
and prior to the day on which an amount equal to the Class A Invested
Amount is deposited in the Principal Account, to be deposited in the
Principal Account for distribution to the Class A Certificateholders on
the next Distribution Date, and (C) during the Amortization Period, on and
after the day on which such deposit has been made, to be deposited in the
Principal Account for payment to the Class B Certificateholders on the
next Distribution Date.
(vii) CLASS B-2 INTEREST ACCRUAL AND CLASS B-2 FACILITY FEE
ACCRUAL. On each Business Day during an Interest Accrual Period, the
Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account and deposit into the Interest Funding
Account, to the extent of any Available Series 1997-1 Finance Charge
Collections for such Business Day remaining after giving effect to the
withdrawals and deposits pursuant to subsection 4.6(a)(i) through (vi), an
amount equal to the sum of (1) the amount accrued since the preceding
Business Day on the Class B-2 Principal Balance at the Class B-2
Certificate Rate in effect (the "CLASS B-2 INTEREST ACCRUAL"), plus (2)
any Class B-2 Interest Accrual due with respect to any prior Business Day
but not previously deposited in the Interest Funding Account, plus (3)
additional interest at the Class B-2 Certificate Rate plus 2.0% for
interest that has accrued on interest that was payable pursuant to
subsection 4.8(a)(vii) but was not previously paid to the Class B-2
Certificateholders, plus (4) additional interest at the Class B-2
Certificate Rate plus 2.0% on Program Fees due and payable to Class B-2
Certificateholders pursuant to subsection 4.8(a)(viii) but that were not
previously paid to such Class B-2 Certificateholders, plus (5) the amount
of Class B-2 Facility Fees accrued since the preceding Business Day (the
"CLASS B-2 FACILITY ACCRUAl"), plus (6) any Class B-2 Facility Accrual due
with respect to any prior Business Day but not previously deposited in the
Interest Funding Account.
(viii) REIMBURSEMENT OF CLASS B-2 INVESTOR CHARGE-OFFS. On
each Business Day, the Trustee, acting in accordance with instructions
from the Servicer, shall withdraw from the Collection Account, to the
extent of any Available Series 1997-1 Finance Charge Collections remaining
after giving effect to the withdrawals and deposits pursuant to subsection
4.6(a)(i) through (vii), an amount equal to the sum of the unreimbursed
Class B-2 Investor Charge-Offs and the unreimbursed Reallocated Class B-2
Principal Collections, such amount, (A) during the Revolving Period, to be
treated as Shared Principal Collections, (B) during the Amortization
Period, on and prior to the day on which an amount equal to the Class A
Invested Amount is deposited in the Principal Account, to be deposited in
the Principal Account for distribution to the Class A Certificateholders
on the next Distribution Date, (C) during the Amortization Period, on and
after the day on which such deposit to the Principal Account with respect
to the Class A Investor Amount has been made and on and prior to the day
on which an amount equal to the Class B Invested Amount is deposited in
the Principal Account to be deposited in the Principal Account for payment
to the Class B Certificateholders on the next Distribution Date, and (D)
on and after the day of such deposit to the Principal Account with respect
to Class B Invested Amount has been made, to be paid to the Class B-2
Certificateholders directly or through depositing to the Principal Account
in accordance with the instructions given by the Class B-2
Certificateholders.
(ix) REIMBURSEMENT OF CLASS C INVESTOR CHARGE-OFFS. On each
Business Day, the Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Collection Account, to the extent of any
Available Series 1997-1 Finance Charge Collections remaining after giving
effect to the withdrawals and deposits pursuant to subsections 4.6(a)(i)
through (viii), an amount equal to the sum of the unreimbursed Class C
Investor Charge-Offs and the unreimbursed Reallocated Class C Principal
Collections, such amount, (A) during the Revolving Period, to be treated
as Shared Principal Collections, (B) during the Amortization Period on and
prior to the day on which an amount equal to the Class A Invested Amount
is deposited in the Principal Account to be deposited in the Principal
Account for distribution to the Class A Certificateholders on the next
Distribution Date, (C) during the Amortization Period, on and after the
day on which such deposit to the Principal Account with respect to the
Class A Invested Amount has been made and on and prior to the day on which
an amount equal to the Class B Invested Amount is deposited in the
Principal Account, to be deposited in the Principal Account for Payment to
the Class B Certificateholders on the next Distribution Date, (D) during
the Amortization Period and on and after the day on which an amount equal
to the Class B Invested Amount is deposited in the Principal Account to be
deposited in the Principal Account for payment to the Class B-2
Certificateholders on the next Distribution Date, and (E) on and after the
day such deposit to the Principal Account with respect to Class B-2
Invested Amount has been made, paid to the Class C Certificateholders
directly or through depositing to the Principal Account in accordance with
the instructions given by the Class C Certificateholders.
(x) MEZZANINE FACILITIES COSTS. On each Business Day during an
Interest Accrual Period, the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Collection Account
and deposit into the Interest Funding Account, to the extent of any
Available Series 1997-1 Finance Charge Collections remaining after giving
effect to the withdrawals and deposits pursuant to subsections 4.6(a)(i)
through (ix), an amount equal to the excess of (1) the lesser of (A) the
product of (x) one-twelfth, (y) 0.50% and (z) the sum of the Class A
Purchase Limit, the Class B Purchase Limit and the Class B-2 Purchase
Limit as of the first day of such Interest Accrual Period and (B) the
aggregate amount of unreimbursed Facilities Costs (other than Program Fees
and additional interest thereon) of which the Transferor or the Servicer
has theretofore received notice pursuant to a Certificate Purchase
Agreement over (2) the amount previously deposited into the Interest
Funding Account pursuant to this subsection 4.6(a)(x) during such Interest
Accrual Period.
(xi) CLASS C INTEREST. On each Business Day, the Trustee,
acting in accordance with instructions from the Servicer, shall withdraw
from the Collection Account and pay to the Class C Certificateholders, to
the extent of any Available Series 1997-1 Finance Charge Collections
remaining after giving effect to the withdrawals and deposits pursuant to
subsections 4.6(a)(i) through (x), an amount equal to the sum of (1) the
amount of interest which has accrued with respect to the outstanding
aggregate principal amount of the Class C Certificates
at the Class C Certificate Rate but which has not been paid to the Class C
Certificateholders and (2) any additional interest at the Class C
Certificate Rate for interest that has accrued on interest that was due
during a prior Monthly Period pursuant to this subsection but not paid to
the Class C Certificateholders.
(xii) REIMBURSEMENT OF FUNDS ALLOCATED FROM EXCESS FINANCE
CHARGE COLLECTIONS OF OTHER SERIES. On each Business Day, the Trustee,
acting in accordance with instructions from the Servicer, shall withdraw
from the Collection Account and make any amounts remaining in the
Collection Account available to pay to Certificateholders of other Series
any shortfalls in amount payable to such Certificateholders from Finance
Charge Collections (but not from Excess Finance Charge Collections)
allocated to such other Series, to the extent of any Available Series
1997-1 Finance Charge Collections remaining after giving effect to the
withdrawals and deposits pursuant to subsections 4.6(a)(i) through (xi),
the lesser of (1) the aggregate amount of such shortfalls and (2) the Net
Borrowed Excess Spread Amount for such Business Day.
(xiii) MAXIMUM SPREAD ACCOUNT AMOUNT. On each Business Day,
the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account any Available Series 1997-1
Finance Charge Collections remaining after giving effect to the
withdrawals pursuant to subsections 4.6(a)(i) through (xii), and shall
deposit such funds into the Spread Account until the amount therein equals
the Maximum Spread Account Amount as of such Business Day.
(xiv) OTHER REMAINING FACILITIES COSTS. On each Business Day
during an Interest Accrual Period, the Trustee acting in accordance with
instructions from the Servicer, shall withdraw from the Collection Account
and deposit into the Interest Funding Account, to the extent of Available
Series 1997-1 Finance Charge Collections remaining after giving effect to
the withdrawals pursuant to subsections 4.6(a)(i) through (xiii), the
excess of (1) the unreimbursed Facilities Costs (other than Program Fees
and additional interest thereon) as to which the Transferor or the
Servicer has theretofore received notice pursuant to a Certificate
Purchase Agreement over (2) the aggregate amount previously deposited into
the Interest Funding Account pursuant to subsection 4.6(a)(x) and this
subsection 4.6(a)(xiv) during such Interest Accrual Period.
(xv) SERVICING FEE. On each Business Day, if SRI or an
Affiliate of SRI is the Servicer, the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Collection Account
and distribute to the Servicer, to the extent of Available Series 1997-1
Finance Charge Collections for such Business Day remaining after giving
effect to the withdrawals and deposits pursuant to subsections 4.6(a)(i)
through (xiv), an amount equal to the excess of (1) the Servicing Fee
Accrual for such Business Day plus any unpaid Servicing Fees from prior
Monthly Periods over (2) any amounts with respect thereto previously
distributed to the Servicer during the relevant Monthly Period.
(xvi) STORED EXCESS FINANCE CHARGE COLLECTIONS. Any amounts
remaining in the Collection Account to the extent of any Available Series
1997-1 Finance Charge Collections remaining after giving effect to the
withdrawals and deposits pursuant to subsection 4.6(a)(i) through (xv)
shall be treated as Stored Excess Finance Charge Collections, and the
Servicer shall direct the Trustee in writing on each Business Day to
withdraw such amounts from the Collection Account and pay them to the
Servicer.
(b) For each Business Day with respect to the Revolving Period, the
funds on deposit in the Collection Account to the extent of the product of (i)
the sum of the Class A Floating Allocation Percentage, the Class B Floating
Allocation Percentage and the Class B-2 Floating Allocation Percentage and (ii)
Principal Collections with respect to such Business Day will be treated as
Shared Principal Collections and applied, pursuant to the written direction of
the Servicer in the Daily Report for such Business Day, as provided in
subsection 4.3(e) of the Agreement.
(c) For each Business Day on and after the Amortization Period
Commencement Date, the amount of funds available in the Collection Account as
described below will be distributed, pursuant to the written direction of the
Servicer in the Daily Report for such Business Day, in the following priority:
(i) on and prior to the day on which an amount equal to the
Class A Invested Amount has been deposited in the Principal Account to be
applied to the payment of Class A Principal, an amount (not in excess of
the Class A Invested Amount) equal to the sum of (w) the product of the
Class A Fixed Allocation Percentage and Principal Collections in the
Collection Account at the end of the preceding Business Day, (x) any
amount on deposit in the Equalization Account allocated to the Class A
VFCs on such Business Day pursuant to subsection 4.6(f), (y) amounts to be
paid pursuant to subsections 4.6(a)(iv), (v), (vi), (viii) and (ix) on
such Business Day and (z) the amount of Shared Principal Collections
allocated to the Series 1997-1 Variable Funding Certificates in accordance
with Section 4.11 on such Business Day (such sum, the "CLASS A DAILY
PRINCIPAL AMOUNT"), will be deposited into the Principal Account to be
applied to the payment of the Class A Invested Amount;
(ii) on and after the day on which an amount equal to the
Class A Invested Amount has been deposited in the Principal Account to be
applied to the payment of Class A Principal, an amount (not in excess of
the Class B Invested Amount) equal to the sum of (w) an amount equal to
the product of the Class B Fixed Allocation Percentage and Principal
Collections in the Collection Account at the end of the preceding Business
Day, (x) any amount on deposit in the Equalization Account allocated to
the Class B VFCs on such Business Day pursuant to subsection 4.6(f), (y)
the amount, if any, allocated to be paid to the Class B VFCs pursuant to
subsections 4.6(a)(iv), (vi), (viii) and (ix) with respect to such
Business Day and (z) the amount of Shared Principal
Collections allocated to the Series 1997-1 Variable Funding Certificates
in accordance with Section 4.11 on such Business Day (such sum, the "CLASS
B DAILY PRINCIPAL AMOUNT") will be deposited into the Principal Account to
be applied to the payment of the Class B Invested Amount);
(iii) on and after the day on which an amount equal to the
Class B Invested Amount has been deposited in the Principal Account to be
applied to the payment of Class B Principal, an amount (not in excess of
the Class B-2 Invested Amount) equal to the sum of (w) an amount equal to
the product of the Class B-2 Fixed Allocation Percentage and Principal
Collections in the Collection Account at the end of the preceding Business
Day, (x) any amount on deposit in the Equalization Account allocated to
the Class B-2 VFCs on such Business Day pursuant to subsection 4.6(f), (y)
the amount, if any, allocated to be paid to the Class B-2 VFCs pursuant to
subsections 4.6(a)(iv), (viii) and (ix) with respect to such Business Day
and (z) the amount of Shared Principal Collections allocated to the Series
1997-1 Variable Funding Certificates in accordance with Section 4.11 on
such Business Day (such sum, the "CLASS B-2 DAILY PRINCIPAL AMOUNT") will
be deposited in the Principal Account to be applied to the payment of the
Class B-2 Invested Amount;
(iv) on and after the day on which an amount equal to the
Class B-2 Invested Amount has been deposited in the Principal Account to
be applied to the payment of Class B-2 Principal, an amount equal to the
sum of (w) an amount equal to the product of the Class C Fixed Allocation
Percentage and Principal Collections in the Collection Account at the end
of the preceding Business Day, (x) any amount on deposit in the
Equalization Account allocated to the Class C VFCs on such Business Day
pursuant to subsection 4.6(f), (y) the amount, if any, allocated to be
paid to the Class C VFCs pursuant to subsections 4.6(a)(iv) and (ix) with
respect to such Business Day and (z) the amount of Shared Principal
Collections allocated to the Series 1997-1 Variable Funding Certificates
in accordance with Section 4.11 on such Business Day (such sum, the "CLASS
C DAILY PRINCIPAL AMOUNT") will be distributed to the Class C
Certificateholders; and
(v) an amount equal to the excess, if any, of (A) the product
of (x) the sum of the Class A Fixed Allocation Percentage, the Class B
Fixed Allocation Percentage and the Class B-2 Fixed Allocation Percentage
and (y) Principal Collections in the Collection Account at the end of the
preceding Business Day over (B) the sum of the amounts deposited in the
Principal Account pursuant to clauses (i)(w), (ii)(w) and (iii)(w) above
will be treated as Shared Principal Collections and applied as provided in
subsection 4.3(e) of the Agreement.
(d) Prior to the Amortization Period Commencement Date, pursuant to
subsection 4.3(e) of the Agreement, the Transferor may at its option apply
Shared Principal Collections after the applications with respect thereto
specified in the provisions of
subsection 4.3(e) of the Agreement, to make payments of principal or deposits to
the Principal Account with respect to the Series 1997-1 Variable Funding
Certificates. Such Shared Principal Collections allocated to the Series 1997-1
Variable Funding Certificates (the "SERIES 1997-1 PRINCIPAL COLLECTIONS") may be
applied on each Business Day with respect to the Revolving Period, at the option
of the Transferor and in an amount to be determined by the Transferor, to make
deposits to the Principal Account, for payment as provided in Sections 4.9 and
5.1.
(e) Notwithstanding the foregoing provisions of this Section 4.6,
but subject to the provisions of subsection 4.6(i) below, if:
(x) if both (1) any Class A Purchaser does not elect to
approve an Extension hereunder (an "EXITING CLASS A PURCHASER"), as
provided in subsection 6.16(a) of this Agreement, and (2) the Class A VFC
held by such Exiting Class A Purchaser has not been acquired by another
Class A Purchaser who agreed to the Extension, or
(y) both (1) any Class B Purchaser does not elect to approve
an Extension hereunder (an "EXITING CLASS B PURCHASER"), as provided in
subsection 6.16(a) of this Agreement, and (2) (A) the Class B VFC held by
such Exiting Class B Purchaser has not been acquired by another Class B
Purchaser who agreed to the Extension and (B) the Class C Invested Amount
has not been increased on or prior to the original Extension Date before
the Extension so that the new Class B Invested Amount plus the Class B-2
Invested Amount plus the new Class C Invested Amount is no less than the
greater of (I) 25% of the new Invested Amount on the Business Day
preceding the original Extension Date or (II) 5% of the highest Invested
Amount at any point during the preceding 180 days,
then, commencing on the original Extension Date and on each Business Day
thereafter during the Revolving Period on which there remains a positive
Adjusted Invested Amount for any Exiting Class A Purchaser or Exiting Class B
Purchaser (either, an "EXITING PURCHASER"), the Servicer shall instruct the
Trustee in writing to deposit, and the Trustee, acting in accordance with such
instructions, shall deposit into the Principal Account for payment to the
Exiting Purchasers pursuant to subsection 5.1(e), the Exiting Purchasers'
Allocation Percentage of the Shared Principal Collections allocable to the
Series 1997-1 Investor Certificates pursuant to subsection 4.3(e) of the
Agreement (until such time as the amount on deposit therein equals the aggregate
Invested Amount of all Exiting Purchasers) PLUS, if any Exiting Purchaser is a
Class B Purchaser, that additional amount of Shared Principal Collections which
(upon concurrent application in reduction of the Class A Invested Amount and
taking into account any concurrent increase in the Class B-2 Invested Amount and
the Class C Invested Amount) will result in the sum of the Class B Invested
Amount, the Class B-2 Invested Amount and the Class C Invested Amount being at
least 25% of the Invested Amount. Upon making any such deposit into the
Principal Account, the Transferor may, at its option, apply amounts allocable to
the Transferor pursuant to subsection 4.5(b) or allocable to the Transferor with
respect to any
other Transferor Retained Class pursuant to any other Supplement to make a
payment to the Class C VFCs in an amount not to exceed the amount which would
(after giving effect to the payments of principal to be made to the Exiting
Purchasers) cause (1) the sum of the Class C Invested Amount, the Class B-2
Invested Amount and the Class B Invested Amount to be at least equal to 25% of
the Invested Amount, (2) the Class C Invested Amount to be at least equal to
17.5/25ths of the sum of the Class B Invested Amount and the Class C Invested
Amount, and (3) the Class C Invested Amount to be at least 5% of the highest
Invested Amount during the immediately preceding 180 days.
(f) On the first Business Day of the Amortization Period funds on
deposit in the Equalization Account will be deposited in the Principal Account
to the extent of the lesser of (x) the Adjusted Invested Amount and (y) the
product of (i) the product of (A) 100% minus the Transferor Percentage minus the
fixed allocation percentage represented by any Transferor Retained Certificates
and (B) the amount on deposit in the Equalization Account at the beginning of
the Amortization Period and (ii) the Senior Equalization Account Percentage with
respect to Series 1997-1. Any funds in the Equalization Account on any
subsequent day will be allocated to the Class A VFCs, the Class B VFCs and the
Class B-2 VFCs, to the extent that Default Amounts allocated to the Transferor
Interest or adjustments as described in Section 3.8 of the Agreement would cause
the Transferor Interest to be less than the Minimum Transferor Interest and,
with respect to any credit adjustment, the Transferor has not made an Adjustment
Payment to the Collection Account, in an amount equal to the least of (i) the
product of (A) the amount of such reduction below the Minimum Transferor
Interest and (B) the Senior Equalization Account Percentage with respect to
Series 1997-1, (ii) the product of (A) the amount of funds available in the
Equalization Account and (B) the Senior Equalization Account Percentage and
(iii) the sum of the Class A Adjusted Invested Amount, Class B Adjusted Invested
Amount and the Class B-2 Adjusted Invested Amount. On any Determination Date
that occurs during the Amortization Period and prior to the Class C Principal
Payment Commencement Date on which a Class C Investor Charge-Off is recorded,
funds in the Equalization Account shall be allocated to the Senior Certificates
in an amount equal to the least of (i) the amount of such Class C Investor
Charge-Off, (ii) the product of (A) the amount of funds available in the
Equalization Account and (B) the Senior Equalization Account Percentage with
respect to Series 1997-1 and (iii) the aggregate remaining Class A Adjusted
Invested Amount, Class B Adjusted Invested Amount and Class B-2 Adjusted
Invested Amount. The amounts allocated in the preceding two sentences will be
allocated, in accordance with written instructions from the Servicer, in the
following order of priority: (i) to the Class A VFCs in an amount not to exceed
the Class A Invested Amount after subtracting therefrom any amounts to be
deposited in the Principal Account with respect thereto pursuant to subsections
4.6(c)(i)(w) and (y), and (ii) to the Class B VFCs in an amount not to exceed
the Class B Invested Amount after subtracting therefrom any amounts to be
deposited in the Principal Account with respect thereto pursuant to subsections
4.6(c)(ii)(w) and (y), and (iii) to the Class B-2 VFCs in an amount not to
exceed the Class B-2 Invested Amount after subtracting therefrom any amounts to
be deposited in the Principal Account with respect thereto pursuant to
subsections 4.6(c)(iii)(w) and (y). On the day on which an amount equal to the
sum of the Class A Invested Amount, the Class B Invested Amount and the
Class B-2 Invested Amount has been deposited in the Principal Account to be
applied to the payment of Class A Principal, Class B Principal and Class B-2
Principal, as applicable, amounts remaining on deposit in the Equalization
Account will be allocated to the Series 1997-1 Variable Funding Certificates and
deposited in the Principal Account in an amount not to exceed the lesser of (i)
the Class C Invested Amount after subtracting therefrom any amounts to be
deposited in the Principal Account with respect thereto pursuant to subsections
4.6(c)(iv)(w) and (y) and (ii) the product of (A) such amounts remaining on
deposit and (B) a fraction, the numerator of which is the Class C Invested
Amount and the denominator of which is the sum of the invested amounts of all
Transferor Retained Classes of Series then in amortization periods on such day.
(g) Any application of funds pursuant to subsections 4.6(a)(xvi) or
4.6(f) shall not discharge the Transferor from its obligation to make any
Adjustment Payment pursuant to Section 3.8 of the Agreement.
(h) The Transferor shall maintain the Class C Adjusted Invested
Amount at an amount greater than zero at any time that any of the Class A
Invested Amount, the Class B Invested Amount or the Class B-2 Invested Amount
is greater than zero.
(i) Notwithstanding the provisions of subsections 4.6(a) through
4.6(e), if during the Revolving Period there is any Partial Amortization Amount
on any Business Day, the Servicer shall instruct the Trustee in writing to
deposit, and the Trustee, acting in accordance with such instructions, shall
deposit into the Principal Account for payment to the Senior Certificateholders
pursuant subsections 4.9(b) and 5.1(e), all Shared Principal Collections
allocable to the Series 1997-1 Investor Certificates pursuant to subsection
4.3(e) of the Agreement, until the amount on deposit therein equals the Partial
Amortization Amount. Upon making any such deposit into the Principal Account,
the Transferor may, at its option, apply amounts allocable to the Transferor
pursuant to subsection 4.5(b) or allocable to the Transferor with respect to any
other Transferor Retained Class pursuant to any other Supplement to make a
payment to the Class C VFCs in an amount not to exceed the amount which would
(after giving effect to the payments of principal to be made to the Senior
Certificateholder) cause (1) the sum of the Class C Invested Amount, the Class
B-2 Invested Amount and the Class B Invested Amount to be at least equal to 25%
of the Invested Amount, (2) the sum of the Class C Invested Amount and the Class
B-2 Invested Amount to be at least equal to 17.5/25ths of the sum of the Class B
Invested Amount, the Class B-2 Invested Amount and the Class C Invested Amount,
(3) the Class B-2 Invested Amount to be no greater than 10% of the Invested
Amount, (4) the Class C Invested Amount to be at least equal to 7.5/17.5ths of
the sum of the Class B-2 Invested Amount and the Class C Invested Amount, and
(5) the sum of the Class B-2 Invested Amount and the Class C Invested Amount to
be at least 5% of the highest Invested Amount during the immediately preceding
180 days. The allocations pursuant to this paragraph shall be made prior to any
deposits described in subsection 4.6(e).
SECTION 4.7 COVERAGE OF REQUIRED AMOUNT AND SPREAD ACCOUNT FOR
THE SERIES 1997-1 VARIABLE FUNDING CERTIFICATES.
(a) On each Business Day, the Servicer shall determine the Daily
Required Amount, if any. On each Determination Date, the Servicer shall
determine the Monthly Required Amount, if any.
(b) In the event that the Daily Required Amount for a Business Day
is greater than zero, the Servicer shall reflect such positive Daily Required
Amount on the Daily Report for such Business Day. To the extent of any Daily
Required Amount, the Servicer shall apply all or a portion of the Excess Finance
Charge Collections of other Series with respect to such Business Day allocable
to the Series 1997-1 Variable Funding Certificates in an amount equal to the
Daily Required Amount for such Business Day in the manner specified in
subsections 4.6(a)(i) through (xi).
(c) Excess Finance Charge Collections allocated to the Series 1997-1
Variable Funding Certificates for any Business Day shall mean an amount equal to
the product of (i) Excess Finance Charge Collections available from all other
Series for such Business Day and (ii) a fraction, the numerator of which is the
Daily Required Amount for such Business Day remaining after the application of
Transferor Finance Charge Collections and the denominator of which is the
aggregate amount of shortfalls in required amounts or other amounts to be paid
from Finance Charge Collections for all Series for such Business Day.
(d) In the event that a Monthly Adjusted Required Amount exists on
any Determination Date, on the related Transfer Date to the extent of the lesser
of (i) such Monthly Adjusted Required Amount and (ii) the Stored Excess Finance
Charge Collections for the relevant Monthly Period, the Servicer shall, from its
own funds, FIRST, deposit into the Interest Funding Account an amount equal to
any Interest/Program Fee Shortfall, and SECOND, pay the remaining amount in the
manner specified in subsections 4.6(a)(iii) through (xi), (xiii) and (xiv). If
such Monthly Adjusted Required Amount exceeds the amount so deposited and paid
by the Servicer pursuant to the immediately preceding sentence, on such Transfer
Date to the extent of the lesser of (i) such excess and (ii) the Repayable
Servicing Fee Amount for the relevant Monthly Period, the Servicer shall, from
its own funds, FIRST, deposit into the Interest Funding Account an amount equal
to any remaining Interest/Program Fee Shortfall, and SECOND, pay the remaining
amount in the manner specified in subsections 4.6(a)(iii) through (xi), (xiii)
and (xiv). Then, if there is any remaining excess of such Monthly Adjusted
Required Amount (excluding for purposes of this sentence any remaining amount
thereof arising due to shortfalls in the amounts payable pursuant to clauses
(xi) through (xiv) of subsection 4.6(a)), over the aggregate amounts so
deposited and paid by the Transferor and the Servicer pursuant to the
immediately preceding two sentences, the Servicer shall withdraw from the Spread
Account an amount equal to the lesser of (i) such net Monthly Adjusted Required
Amount and (ii) the available funds in the Spread Account, and shall apply such
funds on such Determination Date, FIRST, by depositing into the Interest
Funding Account an amount equal to any remaining Interest/Program Fee Shortfall,
and SECOND, to the extent of any funds remaining after the application described
in the preceding clause first, in the manner specified in subsections
4.6(a)(iii) through (x).
(e) On each Transfer Date, following the applications described in
subsection 4.7(d), the Servicer shall deposit from its own funds into the Spread
Account an amount equal to the lesser of (i) the excess of the Maximum Spread
Account Amount on such Transfer Date over the amount of funds then on deposit in
the Spread Account and (ii) the Stored Excess Finance Charge Collections for the
related Monthly Period remaining after the application described in subsection
4.7(d).
(f) Any Stored Excess Finance Charge Collections with respect to a
Monthly Period remaining on a Transfer Date after the prior applications
described in this Section 4.7 shall be treated as Excess Finance Charge
Collections and shall be, FIRST, made available on such Transfer Date by the
Servicer to pay to Certificateholders of other Series to the extent of
shortfalls, if any, in amounts payable to such Certificateholders from Finance
Charge Collections (but not Excess Finance Charge Collections) allocated to such
other Series, SECOND, applied by the Servicer to make any required payment by
the Transferor pursuant to Section 2.4(d) or any overdue required Adjustment
Payment pursuant to Section 3.8(a) of the Agreement with respect to any
preceding Monthly Period, and THIRD, transferred by the Servicer to the
Transferor. Any Repayable Servicing Fee Amount with respect to a Monthly Period
remaining on a Transfer Date after the applications described in this Section
4.7 shall be retained by the Servicer. No such remaining Stored Excess Finance
Charge Collections or Repayable Servicing Fee Amount shall be subject to further
applications hereunder.
(g) In the event that the Monthly Required Amount (excluding for
purposes of this subsection 4.7(g) any remaining amount thereof arising due to
shortfalls in the amounts payable pursuant to clause (ix) of subsection 4.6(a))
for a Transfer Date exceeds the amount of Stored Excess Finance Charge
Collections, Repayable Servicer Fee Amount and Spread Account funds allocated
thereto or to the Monthly Adjusted Required Amount on such Transfer Date, a
portion of the Series 1997-1 Principal Collections allocable to the Class C VFCs
in an amount equal to the lesser of such excess and the product of (i)(x) during
the Revolving Period, the Class C Floating Allocation Percentage or (y) during
the Amortization Period, the Class C Fixed Allocation Percentage and (ii) the
amount of Principal Collections in the Collection Account with respect to such
Transfer Date shall be allocated to the Senior Certificates and applied on such
Transfer Date in accordance with the provisions of subsections 4.6(a)(i) through
(viii); provided, however, that with respect to amounts applied pursuant to
subsections 4.6(a)(iii), such amounts shall be applied only to the extent of the
product of (x) the Class A Floating Allocation Percentage plus the Class B
Floating Allocation Percentage plus the Class B-2 Floating Allocation Percentage
and (y) the shortfall arising pursuant to such subsections (any such amount so
applied, "REALLOCATED CLASS C PRINCIPAL COLLECTIONS").
(h) In the event that the Monthly Required Amount (excluding for
purposes of this subsection 4.7(h) any remaining amount thereof arising due to
shortfalls in the amounts payable pursuant to clause (viii) of subsection
4.6(a)) for a Transfer Date exceeds the amount of Stored Excess Finance Charge
Collections, Repayable Servicer Fee Amount, Spread Account funds and Reallocated
Class C Principal Collections allocated thereto or to the Monthly Adjusted
Required Amount on such Transfer Date, a portion of the Series 1997-1 Principal
Collections allocable to the Class B-2 VFCs in an amount equal to the lesser of
such excess and the product of (i)(x) during the Revolving Period, the Class B-2
Floating Allocation Percentage or (y) during the Amortization Period, the Class
B-2 Fixed Allocation Percentage and (ii) the amount of Principal Collections in
the Collection Account with respect to such Transfer Date shall be allocated to
the Class A Certificates and Class B Certificates and applied on such Transfer
Date in accordance with the provisions of subsections 4.6(a)(i) through (vi);
provided, however, that with respect to amounts applied pursuant to subsection
4.6(a)(iii), such amounts shall be applied only to the extent of the product of
(x) the Class A Floating Allocation Percentage plus the Class B Floating
Allocation Percentage and (y) the shortfall arising pursuant to such subsections
(any such amount so applied, "REALLOCATED CLASS B-2 PRINCIPAL COLLECTIONS").
(i) In the event that the Monthly Required Amount (excluding for
purposes of this subsection 4.7(i) any remaining amount thereof arising due to
shortfalls in the amounts payable pursuant to clause (vi) of subsection 4.6(a))
for a Transfer Date exceeds the amount of Stored Excess Finance Charge
Collections, Repayable Servicer Fee Amount, Spread Account funds and Reallocated
Class C Principal Collections and Reallocated Class B-2 Principal Collections
allocated thereto or to the Monthly Adjusted Required Amount on such Transfer
Date, a portion of the Series 1997-1 Principal Collections allocable to the
Class B VFCs in an amount equal to the lesser of such excess and the product of
(i)(x) during the Revolving Period, the Class B Floating Allocation Percentage
or (y) during the Amortization Period, the Class B Fixed Allocation Percentage
and (ii) the amount of Principal Collections in the Collection Account with
respect to such Transfer Date shall be allocated to the Class A Certificates and
applied on such Transfer Date in accordance with the provisions of subsections
4.6(a)(i) through (v); provided, however, that with respect to amounts applied
pursuant to subsection 4.6(a)(iii), such amounts shall be applied only to the
extent of the product of (x) the Class A Floating Allocation Percentage and (y)
the shortfall arising pursuant to such subsections (any such amount so applied,
"REALLOCATED CLASS B PRINCIPAL COLLECTIONS").
SECTION 4.8 PAYMENT OF CERTIFICATE INTEREST AND OTHER AMOUNTS. (a)
On the Transfer Date immediately prior to each Distribution Date, the Trustee,
acting in accordance with instructions from the Servicer set forth in the Daily
Report for such Transfer Date, shall for the purpose of making payments for the
relevant Monthly Period and Interest Accrual Period, as the case may be,
allocable to the Series 1997-1 Variable Funding Certificates, take the following
actions:
(i) CLASS A INTEREST. First, withdraw from the Interest
Funding Account (and, if applicable, the Defeasance Account) to the extent
of the funds
available therein as of such Transfer Date, for payment to Class A
Certificateholders, an amount equal to the interest accrued on each
Tranche of the Class A Principal Balance at the applicable Tranche Rate
for the period of time such Tranche was outstanding during the Interest
Accrual Period with respect to the Distribution Date (the "CLASS A
INTEREST" for such Interest Accrual Period) PLUS any Class A Interest due
with respect to any prior Interest Accrual Period pursuant to this
subsection but not previously deposited in the Distribution Account plus
interest on such undeposited amounts as described in clause (1) of
subsection 4.6(a)(ii). Notwithstanding anything to the contrary herein,
Class A Interest shall be payable or distributable to Class A
Certificateholders only to the extent permitted by applicable law.
(ii) CLASS B INTEREST. Second, withdraw from the Interest
Funding Account (and, if applicable, the Defeasance Account) to the extent
of the funds available therein remaining after giving effect to the
withdrawal pursuant to subsection 4.8(a)(i), and deposit into the
Distribution Account for payment to Class B Certificateholders, an amount
equal to the interest accrued on each Tranche of the Class B Principal
Balance at the applicable Tranche Rate for the period of time such Tranche
was outstanding during the Interest Accrual Period with respect to the
Distribution Date (the "CLASS B INTEREST" for such Interest Accrual
Period) PLUS any Class B Interest due with respect to any prior Interest
Accrual Period pursuant to this subsection but not previously deposited in
the Distribution Account plus interest on such undeposited amounts as
described in clause (3) of subsection 4.6(a)(ii). Notwithstanding anything
to the contrary herein, Class B Interest shall be payable or distributable
to Class B Certificateholders only to the extent permitted by applicable
law.
(iii) CLASS A PROGRAM FEES. Third, withdraw from the Interest
Funding Account, to the extent of the funds available therein remaining
after giving effect to the withdrawals pursuant to subsections 4.8(a)(i)
and (ii), an amount equal to all unpaid Program Fees which have accrued
during such Interest Accrual Period with respect to the Class A VFCs plus
interest on such undeposited amounts as described in clause (2) of
subsection 4.6(a)(ii), and deposit such amount into the Distribution
Account for payment to the Class A Certificateholders.
(iv) CLASS B PROGRAM FEES. Fourth, withdraw from the Interest
Funding Account, to the extent of the funds available therein remaining
after giving effect to the withdrawals pursuant to subsections 4.8(a)(i)
through (iii), an amount equal to all unpaid Program Fees which have
accrued during such Interest Accrual Period with respect to the Class B
VFCs plus interest on such undeposited amounts as described in clause (4)
of subsection 4.6(a)(ii), and deposit such amount into the Distribution
Account for payment to the Class B Certificateholders.
(v) CLASS A MEZZANINE FACILITIES COSTS. Fifth, withdraw from
the Interest Funding Account, to the extent of the funds available therein
remaining after giving effect to the withdrawals pursuant to subsections
4.8(a)(i) through (iv), an amount equal to all unpaid Facilities Costs
(other than Program Fees) which have accrued during such Interest Accrual
Period with respect to the Class A VFCs, and deposit such amount into the
Distribution Account for payment to the Class A Certificateholders
(ratably as provided in the Class A Certificate Purchase Agreement);
PROVIDED that there shall not be distributed pursuant to this clause (v)
on any Distribution Date an amount in excess of the amounts then on
deposit in the Interest Funding Account which were allocated to such
Facilities Costs pursuant to subsection 4.6(a)(x).
(vi) CLASS B MEZZANINE FACILITIES COSTS. Sixth, withdraw from
the Interest Funding Account, to the extent of the funds available therein
remaining after giving effect to the withdrawals pursuant to subsections
4.8(a)(i) through (v), an amount equal to all unpaid Facilities Costs
(other than Program Fees) which have accrued during such Interest Accrual
Period with respect to the Class B VFCs, and deposit such amount into the
Distribution Account for payment to the Class B Certificateholders
(ratably as provided in the Class B Certificate Purchase Agreement);
PROVIDED that there shall not be distributed pursuant to this clause (vi)
on any Distribution Date an amount in excess of the amounts then on
deposit in the Interest Funding Account which were allocated to such
Facilities Costs pursuant to subsection 4.6(a)(x).
(vii) CLASS B-2 INTEREST. Seventh, withdraw from the Interest
Funding Account (and, if applicable, the Defeasance Account) to the extent
of the funds available therein remaining after giving effect to the
withdrawal pursuant to subsections 4.8(a)(i) through (vi), and deposit
into the Distribution Account for payment to Class B-2 Certificateholders,
an amount equal to the aggregate of the daily interest accrued on the
Class B-2 Principal Balance on each day of the Interest Accrual Period
with respect to the Distribution Date at the Class B-2 Certificate Rate on
such day (the "CLASS B-2 INTEREST" for such Interest Accrual Period) PLUS
any Class B-2 Interest due with respect to any prior Interest Accrual
Period pursuant to this subsection but not previously deposited in the
Distribution Account plus interest on such undeposited amounts as
described in clause (3) of subsection 4.6(a)(vii). Notwithstanding
anything to the contrary herein, Class B-2 Interest shall be payable or
distributable to Class B-2 Certificateholders only to the extent permitted
by applicable law.
(viii) CLASS B-2 PROGRAM FEES. Eighth, withdraw from the
Interest Funding Account, to the extent of the funds available therein
remaining after giving effect to the withdrawals pursuant to subsections
4.8(a)(i) through (vii), an amount equal to all unpaid Program Fees which
have accrued during such Interest Accrual Period with respect to the Class
B-2 VFCs plus interest on such undeposited amounts as described in clause
(4) of subsection 4.6(a)(vii), and
deposit such amount into the Distribution Account for payment to the Class
B-2 Certificateholders.
(ix) REMAINING CLASS A FACILITIES COSTS. Ninth, withdraw from
the Interest Funding Account, to the extent of the funds available therein
remaining after giving effect to the withdrawals pursuant to subsections
4.8(a)(i) through (viii), an amount equal to all remaining unpaid
Facilities Costs (other than Program Fees) which have accrued during such
Interest Accrual Period with respect to the Class A VFCs, and deposit such
amount into the Distribution Account for payment to the Class A
Certificateholders (ratably as provided in the Class A Certificate
Purchase Agreement).
(x) REMAINING CLASS B FACILITIES COSTS. Tenth, withdraw from
the Interest Funding Account, to the extent of the funds available therein
remaining after giving effect to the withdrawals pursuant to subsections
4.8(a)(i) through (ix), an amount equal to all remaining unpaid Facilities
Costs (other than Program Fees) which have accrued during such Interest
Accrual Period with respect to the Class B VFCs, and deposit such amount
into the Distribution Account for payment to the Class B
Certificateholders (ratably as provided in the Class B Certificate
Purchase Agreement).
(xi) CLASS B-2 FACILITIES COSTS. Eleventh, withdraw from the
Interest Funding Account, to the extent of the funds available therein
remaining after giving effect to the withdrawals pursuant to subsections
4.8(a)(i) through (x), an amount equal to all unpaid Facilities Costs
(other than Program Fees) which have accrued during such Interest Accrual
Period with respect to the Class B-2 VFCs, and deposit such amount into
the Distribution Account for payment to the Class B-2 Certificateholders
(ratably as provided in the Class B-2 Certificate Purchase Agreement).
(xii) MAXIMUM SPREAD ACCOUNT AMOUNT. Twelfth, withdraw from
the Interest Funding Account, to the extent of the funds available therein
remaining after giving effect to the withdrawals pursuant to subsections
4.8(a)(i) through (xii), and deposit into the Spread Account until the
amount therein equals the Maximum Spread Account Amount as of such
Transfer Date.
(xiii) Any amounts available in the Interest Funding Account
remaining after giving effect to the payments pursuant to subsections
4.8(a)(i) through (xii) shall be treated as Excess Finance Charge
Collections on such Transfer Date and the Servicer shall direct the
Trustee to make such Excess Finance Charge Collections available on such
date for the applications described in subsection 4.7(f).
(b) On each Distribution Date, the Paying Agent shall pay in
accordance with Section 5.1 of the Agreement to (w) the Class A
Certificateholders from the Distribution Account such amount deposited into the
Distribution Account on the
related Transfer Date allocable thereto pursuant to subsection 4.8(a)(i), (x)
the Class B Certificateholders from the Distribution Account the amount
deposited into the Distribution Account allocable thereto pursuant to subsection
4.8(a)(ii), (y) the Class B-2 Certificateholders from the Distribution Account
the amount deposited into the Distribution Account allocable thereto pursuant to
subsection 4.8(a)(vii) and (z) the Facility Agent from the Distribution Account
the amount deposited into the Distribution Account allocable thereto pursuant to
subsection 4.8(a)(iii), (iv), (v), (vi), (viii), (ix), (x) and (xi).
SECTION 4.9 PAYMENT OF CERTIFICATE PRINCIPAL. (a) No later than
10:00 a.m. on the Business Day immediately prior to each Principal Distribution
Date, the Transferor shall provide written notice to the Trustee and the
Facility Agent of such Principal Distribution Date and of the amount of
principal to be repaid on such Principal Distribution Date.
(b) On the Business Day preceding each Principal Distribution Date
during the Revolving Period, the Trustee, in accordance with the instructions
from the Servicer set forth in the Daily Report for such day, shall withdraw
from the Principal Account and deposit in the Distribution Account, to the
extent of the funds deposited in the Principal Account pursuant to subsection
4.6(d) and available therein as of such Business Day, an amount equal to the
largest multiple of US$50,000 that is available. On each Principal Distribution
Date with respect to the Revolving Period, the Paying Agent shall pay the amount
so deposited in the Distribution Account in accordance with Section 5.1 to the
Investor Certificateholders, in accordance with the instructions of the
Transferor, as set forth by the Servicer on its behalf in the Daily Report for
such Business Day, which instructions satisfy one or more of the following
provisions:
(A) the Transferor may apply all such funds to the
reduction of the Class A Invested Amount; or
(B) the Transferor may apply all such funds to the
reduction of the Class A Invested Amount, the Class B Invested
Amount, the Class B-2 Invested Amount and the Class C Invested
Amount in such proportions as it selects if, after giving effect to
the principal payments to be made on such Principal Distribution
Date, (1) no Series 1997-1 Pay Out Event has occurred and is
continuing, (2) the sum of the Class C Invested Amount, the Class
B-2 Invested Amount and the Class B Invested Amount to be at least
equal to 25% of the Invested Amount, (3) the Class B-2 Invested
Amount to be no greater than 10% of the Invested Amount, (4) the sum
of the Class C Invested Amount and the Class B-2 Invested Amount to
be at least equal to 17.5/25ths of the sum of the Class B Invested
Amount, the Class B-2 Invested Amount and the Class C Invested
Amount, (5) the Class C Invested Amount to be at least equal to
7.5/17.5ths of the sum of the Class B-2 Invested Amount and the
Class C Invested Amount, and (6) the sum of the Class B-2 Invested
Amount and
the Class C Invested Amount to be at least 5% of the highest
Invested Amount during the immediately preceding 180 days.
Notwithstanding the foregoing, at the option of the Transferor and to the extent
specified in the Daily Report, such amounts on deposit in the Principal Account
may, on any Business Day prior to such Transfer Date, be applied to the purchase
of VFC Additional Invested Amounts if the conditions precedent thereto pursuant
to Section 6.15 of the Agreement and Section 3.2 of the Class A Certificate
Purchase Agreement, Class B Certificate Purchase Agreement or Class B-2
Certificate Purchase Agreement, as the case may be, have been met on such
Business Day and the Transferor has delivered an Officer's Certificate to such
effect to the Trustee and the Servicer.
(c) Notwithstanding the provisions of subsection 4.9(b) above, if
subsection 4.6(e) is applicable, on the original Extension Date before the
relevant Extension occurs and on each Distribution Date thereafter during the
Revolving Period while subsection 4.6(e) remains applicable (and on such other
dates as the Transferor may elect with one day prior written notice to the
Facility Agent), the Trustee, in accordance with the instructions from the
Servicer set forth in the Daily Report for such day, shall withdraw from the
Principal Account and deposit in the Distribution Account, to the extent of the
funds deposited in the Principal Account pursuant to subsection 4.6(e) and
available therein as of such Business Day, an amount equal to the largest
multiple of US$50,000 that is available.
(d) On the Transfer Date preceding each Distribution Date with
respect to the Amortization Period, the Trustee, acting in accordance with
instructions from the Servicer set forth in the Daily Report for such day, shall
withdraw from the Principal Account and deposit in the Distribution Account an
amount equal to the lesser of the Class A Invested Amount (after taking into
account amounts set aside or paid with respect thereof pursuant to Sections 4.6
and 4.7) and the amount available in the Principal Account allocable to the
Series 1997-1 Variable Funding Certificates, and on each Distribution Date with
respect to the Amortization Period until the Class A Invested Amount is paid in
full, the Paying Agent shall pay in accordance with Section 5.1 to the Class A
Certificateholders from the Distribution Account such amount deposited into the
Distribution Account on the related Transfer Date.
(e) On the Transfer Date preceding the Class B Principal Payment
Commencement Date and each Distribution Date thereafter, the Trustee, acting in
accordance with instructions from the Servicer set forth in the Daily Report for
such day, shall withdraw from the Principal Account and deposit in the
Distribution Account an amount equal to the lesser of the Class B Invested
Amount (after taking into account amounts set aside or paid with respect thereof
pursuant to Sections 4.6 and 4.7) and the amount on deposit in the Principal
Account allocable to the Series 1997-1 Variable Funding Certificates (after
giving effect to transfers pursuant to subsection 4.9(a)). On the Class B
Principal Payment Commencement Date, after the payment of any principal amounts
with respect to the Class A Certificates on such day, and on each Distribution
Date thereafter until the Class B Invested Amount is paid in full, the Paying
Agent shall
pay in accordance with Section 5.1 to the Class B Certificateholders from the
Distribution Account such amount deposited into the Distribution Account on the
related Transfer Date.
(f) On the Transfer Date preceding the Class B-2 Principal Payment
Commencement Date and each Distribution Date thereafter, the Trustee, acting in
accordance with instructions from the Servicer set forth in the Daily Report for
such day, shall withdraw from the Principal Account and deposit in the
Distribution Account an amount equal to the lesser of the Class B-2 Invested
Amount (after taking into account amounts set aside or paid with respect thereof
pursuant to Sections 4.6 and 4.7) and the amount on deposit in the Principal
Account allocable to the Series 1997-1 Variable Funding Certificates (after
giving effect to transfers pursuant to subsection 4.9(a)). On the Class B-2
Principal Payment Commencement Date, after the payment of any principal amounts
with respect to the Class A Certificates and Class B Certificates on such day,
and on each Distribution Date thereafter until the Class B-2 Invested Amount is
paid in full, the Paying Agent shall pay in accordance with Section 5.1 to the
Class B-2 Certificateholders from the Distribution Account such amount deposited
into the Distribution Account on the related Transfer Date.
(g) On the Class C Principal Payment Commencement Date and each
Business Day thereafter, the Trustee, acting in accordance with instructions
from the Servicer set forth in the Daily Report for such day, shall make
payments of principal to the Class C Certificateholder in accordance with
subsection 4.6(c)(iv).
(h) On the Business Day preceding each Principal Distribution Date,
the Trustee, acting in accordance with instructions from the Servicer set forth
in the Daily Report for such day, shall withdraw from the Principal Account and
deposit into the Distribution Account, the amount of funds deposited in the
Principal Account pursuant to subsection 4.6(i) and available therein as of such
Business Day. On each Principal Distribution Date with respect to the Revolving
Period, the Paying Agent shall pay the amount so deposited in the Distribution
Account in accordance with Section 5.1 to the Investor Certificateholders, in
accordance with instructions of the Transferor, as set forth by the Servicer on
its behalf in the Daily Report for such Business Day, which instructions shall
satisfy one or more of the following provisions:
(i) the Transferor shall first apply all such funds to the
reduction of the Class A Invested Amount until either (A) the Partial
Amortization Amount has been reduced to zero or (B) the sum of the Class C
Invested Amount, the Class B-2 Invested Amount and the Class B Invested
Amount is at least equal to 25% of the Invested Amount;
(ii) after giving effect to the application of funds, if any,
pursuant to clause (i) above, the Transferor shall apply all such funds to
the reduction of the Class A Invested Amount and the Class B Invested
Amount, pro rata based on, in the case of the Class A Certificates, the
excess of the Class A Principal Balance over the Class A Purchase Limit
and, in the case of the Class B
Certificates, the excess of the Class B Principal Balance over the Class B
Purchase Limit, until the partial Amortization Amounts in respect of each
of the Class A VFCs and the Class B VFCs have been reduced to zero;
(iii) after giving effect to the application of funds, if any,
pursuant to clause (i) and (ii) above, the Transferor shall apply all such
funds to the reduction of the Class B-2 Invested Amount, until the Partial
Amortization Amounts in respect of the Class B-2 VFCs has been reduced to
zero; and
(iv) the Transferor may apply any such remaining funds to the
reduction of the Class A Invested Amount, the Class B Invested Amount, the
Class B-2 Invested Amount and the Class C Invested Amount in such
proportions as it selects if, after giving effect to the principal
payments to be made on such Principal Distribution Date, (1) no Series
1997-1 Pay Out Event has occurred and is continuing, (2) the sum of the
Class C Invested Amount, the Class B-2 Invested Amount and the Class B
Invested Amount to be at least equal to 25% of the Invested Amount, (3)
the Class B-2 Invested Amount to be no greater than 10% of the Invested
Amount, (4) the sum of the Class C Invested Amount and the Class B-2
Invested Amount to be at least equal to 17.5/25ths of the sum of the Class
B Invested Amount, the Class B-2 Invested Amount and the Class C Invested
Amount, (5) the Class C Invested Amount to be at least equal to
7.5/17.5ths of the sum of the Class B-2 Invested Amount and the Class C
Invested Amount, and (6) the sum of the Class B-2 Invested Amount and the
Class C Invested Amount to be at least 5% of the highest Invested Amount
during the immediately preceding 180 days.
Any amounts remaining in the Principal Account and allocable to the
Series 1997-1 Variable Funding Certificates, after the Class C Invested Amount
has been paid in full, will be treated as Shared Principal Collections and
applied in accordance with subsection 4.3(e) of the Agreement.
SECTION 4.10 INVESTOR CHARGE-OFFS. (a) If, on any Determination Date
with respect to a Distribution Date on or prior to the Class C Principal Payment
Commencement Date, the aggregate Investor Default Amount, if any, for each
Business Day in the preceding Monthly Period exceeded the Available Series
1997-1 Finance Charge Collections allocated to the payment thereof pursuant to
subsection 4.6(a)(iv) and the amount of Excess Finance Charge Collections,
Stored Excess Finance Charge Collections, Repayable Service Fee Amount, Spread
Account funds, Reallocated Class C Principal Collections, Reallocated Class B-2
Principal Collections and Reallocated Class B Principal Collections allocated
thereto pursuant to subsection 4.7, the Class C Invested Amount will be reduced
by the amount by which such aggregate Investor Default Amount exceeds the amount
applied with respect thereto during such preceding Monthly Period or on the
Transfer Date in respect of such Monthly Period (the "CLASS C INVESTOR
CHARGE-OFFS"). To the extent that on any subsequent Business Day there is a
positive balance of Available Series 1997-1 Finance Charge Collections after
giving effect to subsections 4.6(a)(i) through (viii), the Servicer will apply
such Excess Finance
Charge Collections as provided in subsection 4.6(a)(ix) to reimburse the
aggregate amount of Class C Investor Charge-Offs not previously reimbursed, up
to the amount so available.
(b) In the event that any such reduction of the Class C Invested
Amount would cause the Class C Invested Amount to be a negative number, the
Class C Invested Amount will be reduced to zero, and the Class B-2 Invested
Amount will be reduced by the amount by which the Class C Invested Amount would
have been reduced below zero, but not more than the aggregate Investor Default
Amount for such Monthly Period (the "CLASS B-2 INVESTOR CHARGE-OFFS"). To the
extent that on any subsequent Business Day there is a positive balance of
Available Series 1997-1 Finance Charge Collections after giving effect to
subsections 4.6(a)(i) through (vii), the Servicer will apply such Excess Finance
Charge Collections as provided in subsection 4.6(a)(viii) to reimburse the
aggregate amount of Class B-2 Investor Charge-Offs not previously reimbursed, up
to the amount so available.
(c) In the event that any such reduction of the Class B-2 Invested
Amount would cause the Class B-2 Invested Amount to be a negative number, the
Class B-2 Invested Amount will be reduced to zero, and the Class B Invested
Amount will be reduced by the amount by which the Class B-2 Invested Amount
would have been reduced below zero, but not more than the aggregate Investor
Default Amount for such Monthly Period (the "CLASS B INVESTOR CHARGE-OFFS"). To
the extent that on any subsequent Business Day there is a positive balance of
Available Series 1997-1 Finance Charge Collections after giving effect to
subsections 4.6(a)(i) through (v), the Servicer will apply such Excess Finance
Charge Collections as provided in subsection 4.6(a)(vi) to reimburse the
aggregate amount of Class B Investor Charge-Offs not previously reimbursed, up
to the amount so available.
(d) In the event that any such reduction of the Class B Invested
Amount would cause the Class B Invested Amount to be a negative number, the
Class B Invested Amount will be reduced to zero, and the Class A Invested Amount
will be reduced by the amount by which the Class B Invested Amount would have
been reduced below zero, but not more than the aggregate Investor Default Amount
for such Monthly Period (the "CLASS A INVESTOR CHARGE-OFFS"). To the extent that
on any subsequent Business Day there is a positive balance of Available Series
1997-1 Finance Charge Collections after giving effect to subsections 4.6(a)(i)
through (iv), the Servicer will apply such Excess Finance Charge Collections as
provided in subsection 4.6(a)(v) to reimburse the aggregate amount of Class A
Investor Charge-Offs not previously reimbursed, up to the amount so available.
SECTION 4.11 SHARED PRINCIPAL COLLECTIONS. Shared Principal
Collections allocated to the Series 1997-1 Variable Funding Certificates and to
be applied pursuant to subsections 4.6(c)(i)(z), 4.6(c)(ii)(z), 4.6(c)(iii)(z)
and 4.6(c)(iv)(z) for any Business Day with respect to the Amortization Period
shall mean an amount equal to the product of (x) Shared Principal Collections
for all Series for such Business Day and (y) a fraction, the numerator of which
is the Principal Shortfall for the Series 1997-1 Variable
Funding Certificates for such Business Day and the denominator of which is the
aggregate amount of Principal Shortfalls for all Series for such Business Day.
SECTION 7. ARTICLE V OF THE AGREEMENT. Article V of the Agreement
shall read in its entirety as follows and shall be applicable only to the Series
1997-1 Variable Funding Certificates:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
SECTION 5.1 DISTRIBUTIONS. (a) On each Distribution Date during the
Revolving Period (other than a Principal Distribution Date), the Paying Agent
shall distribute (in accordance with the Settlement Statement delivered by the
Servicer to the Trustee and the Paying Agent pursuant to subsection 3.4(c) of
the Agreement) to each Class A Certificateholder of record on the preceding
Record Date (other than as provided in subsection 2.4(d) or in Section 12.3 of
the Agreement respecting a final distribution) such Certificateholder's
applicable share (as directed by the Facility Agent) of such amounts on deposit
in the Distribution Account as are payable to the Class A Certificateholders
pursuant to Section 4.8 hereof by wire transfer to each Class A
Certificateholder to an account or accounts designated by such Class A
Certificateholder by written notice given to the Paying Agent not less than five
days prior to the related Distribution Date; PROVIDED, however, that the final
payment in retirement of the Class A VFCs will be made only upon presentation
and surrender of the Class A VFCs at the office or offices specified in the
notice of such final distribution delivered by the Trustee pursuant to Section
12.3 of the Agreement.
(b) On each Distribution Date during the Revolving Period (other
than a Principal Distribution Date), the Paying Agent shall distribute (in
accordance with the Settlement Statement delivered by the Servicer to the
Trustee and the Paying Agent pursuant to subsection 3.4(c) of the Agreement) to
each Class B Certificateholder of record on the preceding Record Date (other
than as provided in subsection 2.4(d) or in Section 12.3 of the Agreement
respecting a final distribution) such Certificateholder's applicable share (as
directed by the Facility Agent) of amounts on deposit in the Distribution
Account as are payable to the Class B Certificateholders pursuant to Section 4.8
hereof by wire transfer to each Class B Certificateholder to an account or
accounts designated by such Class B Certificateholder by written notice given to
the Paying Agent not less than five days prior to the related Distribution Date;
PROVIDED, HOWEVER, that the final payment in retirement of the Class B VFCs will
be made only upon presentation and surrender of the Class B VFCs at the office
or offices specified in the notice of such final distribution delivered by the
Trustee pursuant to Section 12.3 of the Agreement.
(c) On each Distribution Date during the Revolving Period (other
than a Principal Distribution Date), the Paying Agent shall distribute (in
accordance with the
Settlement Statement delivered by the Servicer to the Trustee and the Paying
Agent pursuant to subsection 3.4(c) of the Agreement) to each Class B-2
Certificateholder of record on the preceding Record Date (other than as provided
in subsection 2.4(d) or in Section 12.3 of the Agreement respecting a final
distribution) such Certificateholder's applicable share (as directed by the
Facility Agent) of amounts on deposit in the Distribution Account as are payable
to the Class B-2 Certificateholders pursuant to Section 4.8 hereof by wire
transfer to each Class B-2 Certificateholder to an account or accounts
designated by such Class B-2 Certificateholder by written notice given to the
Paying Agent not less than five days prior to the related Distribution Date;
PROVIDED, HOWEVER, that the final payment in retirement of the Class B-2 VFCs
will be made only upon presentation and surrender of the Class B-2 VFCs at the
office or offices specified in the notice of such final distribution delivered
by the Trustee pursuant to Section 12.3 of the Agreement.
(d) On each Distribution Date during the Revolving Period (other
than a Principal Distribution Date), the Paying Agent shall distribute (in
accordance with the Settlement Statement delivered by the Servicer to the
Trustee and the Paying Agent pursuant to subsection 3.4(c) of the Agreement) to
each Class C Certificateholder of record on the preceding Record Date (other
than as provided in subsection 2.4(d) or in Section 12.3 of the Agreement
respecting a final distribution) such Certificateholder's PRO RATA share (based
on the aggregate Undivided interests represented by Class C VFCs held by such
Certificateholder) of amounts on deposit in the Distribution Account as are
payable to the Class C Certificateholders pursuant to Section 4.9 hereof by wire
transfer to each Class C Certificateholder to an account or accounts designated
by such Class C Certificateholder by written notice given to the Paying Agent
not less than five days prior to the related Distribution Date; PROVIDED,
HOWEVER, that the final payment in retirement of the Class C VFCs will be made
only upon presentation and surrender of the Class C VFCs at the office or
offices specified in the notice of such final distribution delivered by the
Trustee pursuant to Section 12.3 of the Agreement.
(e) On each Principal Distribution Date and on each Distribution
Date following the Amortization Period Commencement Date, the Paying Agent shall
distribute (in accordance with instructions from the Servicer on behalf of the
Transferor pursuant to subsection 4.9(a) or 4.9(d), as applicable) to each Class
A Certificateholder, Class B Certificateholder and Class B-2 Certificateholder
of record on the preceding Record Date (other than as provided in subsection
2.4(d) or in Section 12.3 of the Agreement respecting a final distribution) such
Certificateholder's PRO RATA share (based on the aggregate Undivided Interests
represented by Class A VFCs, Class B VFCs or Class B-2 VFCs, as the case may be,
held by such Certificateholder) of amounts on deposit in the Distribution
Account as are payable to the Class A Certificateholders, the Class B
Certificateholders and the Class B-2 Certificateholders, as applicable, pursuant
to Section 4.9 hereof by wire transfer to each of such Certificateholders to an
account or accounts designated by the Facility Agent by written notice given to
the Paying Agent not less than five days prior to the related Distribution Date,
subject to the following special provisions:
(i) no payment in respect of Class A Invested Amount or Class
B Invested Amount for a Bank Rate Tranche shall be made on a date other
than a Monthly Distribution Date;
(ii) if, during the Revolving Period, one or more Bank Rate
Tranches and one or more Cost of Funds Tranches are outstanding with
respect to the Class A Certificates or the Class B Certificates, then
payments to Class A Certificateholders or Class B Certificateholders shall
be made in the priority specified in subsection 2.1(e) of the applicable
Certificate Purchase Agreement;
(iii) if, during the Revolving Period, on such Principal
Distribution Date, one or more Nonextending Class A Purchasers or
Nonextending Class B Purchasers has a remaining Class A Invested Amount or
Class B Invested Amount, as applicable, then the Transferor may elect (as
reflected in the instructions of the Servicer delivered pursuant to
Section 4.9(a) and subject to the requirements of subsection 4.9(b)) to
allocate any or all amounts available for distribution in respect of Class
A Invested Amount to such Nonextending Class A Purchasers (ratably among
all such Nonextending Class A Purchasers) and to allocate any or all
amounts available for distribution in respect of Class B Invested Amount
to such Nonextending Class B Purchasers (ratably among all such
Nonextending Class B Purchasers), so long as the amount allocated to any
such Nonextending Class A Purchasers or Nonextending Class B Purchasers is
not less than the PRO RATA share specified above;
(iv) if, during the Revolving Period, on such Principal
Distribution Date there are one or more Exiting Purchasers in respect of
whom funds have been deposited in the Principal Account pursuant to
Section 4.6(e), then such funds shall be paid, FIRST, to the Exiting Class
A Purchasers, PRO RATA in accordance with their respective Class A
Invested Amounts, until such Exiting Class A Purchasers' respective Class
A Invested Amounts have been reduced to zero, SECOND, to the extent
required by subsection 4.6(e), to Class A Purchasers who are not Exiting
Class A Purchasers, PRO RATA in accordance with their respective Class A
Invested Amounts, and THIRD, to the Exiting Class B Purchasers, PRO RATA
in accordance with their respective Class B Invested Amounts, until such
Exiting Class B Purchasers' respective Class B Invested Amounts have been
reduced to zero; and
(v) the final payment in retirement of the Class A VFCs, Class
B VFCs and Class B-2 VFCs will be made only upon presentation and
surrender of the Class A VFCs, Class B VFCs and Class B-2 VFCs at the
office or offices specified in the notice of such final distribution
delivered by the Trustee pursuant to Section 12.3 of the Agreement.
The provisions of clause (iii) above shall not apply for any Principal
Distribution Date until the Partial Amortization Amount has been reduced
to zero.
SECTION 5.2 CERTIFICATEHOLDERS' STATEMENT.
(a) On each Distribution Date, the Paying Agent shall forward to
each Certificateholder a statement substantially in the form of Exhibit B
prepared by the Servicer and delivered to the Trustee and the Paying Agent on
the preceding Determination Date setting forth the following information:
(i) the total amount distributed;
(ii) the amount of such distribution allocable to Certificate
Principal;
(iii) the amount of such distribution allocable to Certificate
Interest;
(iv) the amount of the Series 1997-1 Principal Collections
received in the Collection Account during the preceding Monthly Period and
the three preceding Monthly Periods and allocated in respect of the Class
A Certificates, the Class B Certificates, the Class B-2 Certificates and
the Class C Certificates, respectively;
(v) the amount of Finance Charge Collections received during
the three preceding Monthly Periods and allocated in respect of the Class
A Certificates, the Class B Certificates, the Class B-2 Certificates and
the Class C Certificates, respectively;
(vi) the Invested Amount, the Class A Invested Amount, the
Class B Invested Amount, the Class B-2 Invested Amount and the Class C
Invested Amount, the Floating Allocation Percentage and, during the
Amortization Period, the Class A Fixed Allocation Percentage, the Class B
Fixed Allocation Percentage, or the Class B-2 Fixed Allocation Percentage
as applicable, with respect to the Principal Receivables in the Trust as
of the end of the day on the Record Date;
(vii) the aggregate outstanding balance of Accounts which are
current, current/delinquent, 30, 60, 90, 120, 150 and 180 days delinquent
as of the end of the day on the Record Date;
(viii) the aggregate Investor Default Amount and the Default
Amount for the related Monthly Period and the two preceding Monthly
Periods;
(ix) the aggregate amount of Class A Investor Charge-Offs,
Class B Investor Charge-Offs, Class B-2 Investor Charge-Offs and Class C
Investor Charge-Offs for the related Monthly Period and the two preceding
Monthly Periods;
(x) the aggregate amount of the Servicing Fee and for the
related Monthly Period and the two preceding Monthly Periods;
(xi) the calculation of the Account Cap;
(xii) the Invested Amount of each Series then outstanding;
(xiii) the Transferor Interest;
(xiv) the Aggregate Principal Receivables, the amount on
deposit in the Equalization Account and the Eligible Principal
Receivables; and
(xv) the Partial Amortization Amount, if any for
each of the Class A Certificates, the Class B
Certificates and the Class B-2 Certificates.
(b) ANNUAL CERTIFICATEHOLDERS' TAX STATEMENT. On or before January
31 of each calendar year, beginning with calendar year 1998, the Trustee shall
distribute to each Person who at any time during the preceding calendar year was
a Series 1997-1 Certificateholder, a statement prepared by the Servicer
containing the information required to be contained in the regular report to
Series 1997-1 Certificateholders, as set forth in subclauses (i), (ii) and (iii)
of Section 5.2(a) above, aggregated for such calendar year or the applicable
portion thereof during which such Person was a Series 1997-1 Certificateholder,
together with such other customary information (consistent with the treatment of
the Certificates as debt) as the Trustee or the Servicer deems necessary or
desirable to enable the Series 1997-1 Certificateholders to prepare their tax
returns. Such obligations of the Trustee shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the
Trustee pursuant to any requirements of the Internal Revenue Code as from time
to time in effect.
SECTION 8. SERIES 1997-1 PAY OUT EVENTS. The Pay Out Events which
can cause the commencement of the Amortization Period with respect to the Series
1997-1 Variable Funding Certificates include the Trust Pay Out Events described
in Section 9.1 of the Agreement and the Series 1997-1 Pay Out Events described
in the following sentence. If any one of the following events shall occur with
respect to the Series 1997-1 Variable Funding Certificates:
(a) failure:
(x) on the part of the Transferor or the Servicer to make any
payment or deposit required to be made by the Transferor or the
Servicer by the terms of (A) the Agreement, or a Certificate
Purchase Agreement, or (B) this Series Supplement, in each case on
or before the date occurring five (5) Business Days after the date
on which written notice of such failure requiring the same to be
remedied, shall have been given to the Transferor or the Servicer,
as applicable, by the Trustee, or to the
Transferor or the Servicer, as applicable, and to the Trustee by the
Facility Agent,
(y) on the part of the Originator to make any payment or
deposit required to be made by the Originator by the terms of the
Receivables Purchase Agreement (other than any payment or deposit in
respect of any Defaulted Receivable Repurchase) on or before the
date occurring five (5) Business Days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Originator by the Trustee, or to the
Originator and the Trustee by the Facility Agent, or
(z) on the part of the Transferor or the Originator duly to
observe or perform in any material respect any covenants or
agreements of the Transferor set forth in the Agreement, the
Receivables Purchase Agreement or a Certificate Purchase Agreement
or this Series Supplement, which failure has a material adverse
effect on the Series 1997-1 Certificateholders and which continues
unremedied for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall
have been given to the Transferor or the Originator, as applicable,
by the Trustee, or to the Transferor or the Originator, as
applicable, and the Trustee by the Facility Agent, and continues to
affect materially and adversely the interests of the Series 1997-1
Certificateholders for such period;
(b) any representation or warranty made by the Transferor in the
Agreement or a Certificate Purchase Agreement, other than as covered by clause
(1) below, or this Series Supplement, or by the Originator in the Receivables
Purchase Agreement, or any information contained in a computer file or
microfiche list required to be delivered by the Transferor pursuant to Section
2.1 or 2.6 of the Agreement, (x) shall prove to have been incorrect in any
material respect when made or when delivered, which continues to be incorrect in
any material respect for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Transferor or the Originator, as applicable, by the Trustee, or to the
Transferor and the Trustee by the Facility Agent, and (y) as a result of which
the interests of the Series 1997-1 Certificateholders are materially and
adversely affected and continue to be materially and adversely affected for such
period; PROVIDED, HOWEVER, that a Series 1997-1 Pay Out Event pursuant to this
subsection 8(b) shall not be deemed to have occurred hereunder (1) with respect
to the representations and warranties made by the Transferor referenced in
Section 2.4 of the Agreement, if the Transferor has assigned a zero balance to
an Ineligible Receivable or has made a deposit to the Equalization Account with
respect thereto as required by subsection 2.4(d) of the Agreement or has
accepted reassignment of the related Receivable, or all of such Receivables, if
applicable, during such period in accordance with the provisions of the
Agreement, or (2) with respect to the representations and warranties made by the
Originator referenced in Section
2.04 of the Receivables Purchase Agreement, if the Originator shall have
performed its obligations under such Section 2.04;
(c) the average of the Trust Portfolio Yields for any three
consecutive Monthly Periods is reduced to a rate which is less than the weighted
average of the Trust Base Rates for such three consecutive Monthly Periods;
(d) the Transferor Interest shall be less than the Minimum
Transferor Interest for five consecutive days;
(e) any Servicer Default shall occur which would have, or would
reasonably be expected to have, a material adverse effect on the Series 1997-1
Certificateholders;
(f) failure on the part of the Servicer to deliver the Daily Report
or Settlement Statement to the Trustee when due, which failure continues for a
period of five Business Days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given by the Trustee
to the Servicer;
(g) failure on the part of the Servicer duly to observe or perform
in any respect any covenants or agreements of the Servicer set forth in the
Agreement or a Certificate Purchase Agreement (other than those set forth in
subsection 10.1(a) thereof), which has a material adverse effect on the Holders
of the Senior Certificates and which continues unremedied for a period of 30
days after the date on which written notice of such failure, requiring the same
to be remedied, has been given to the Servicer by the Trustee, or to the
Servicer and the Trustee by the Facility Agent and continues to materially
adversely affect the Holders of the Senior Certificates for such period; or the
Servicer shall delegate its duties under the Agreement, except as permitted by
Section 8.7 thereof; or any representation, warranty or certification made by
the Servicer in the Agreement or in any certificate delivered pursuant to the
Agreement shall prove to have been incorrect when made, which has a material
adverse effect on the Holders of the Senior Certificates and which continues to
be incorrect in any material respect for a period of 45 days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Trustee, or to the Servicer and the
Trustee by the Required Class A Purchasers or the Facility Agent and continues
to materially adversely affect such Certificateholders for such period; and
(h) if for any three consecutive Monthly Periods, (A) the sum of (I)
the aggregate daily amount of the Floating Allocation Percentage of Finance
Charge Collections for such day which are available in the Collection Account,
PLUS (II) the aggregate daily amount of Excess Finance Charge Collections of all
other Series which were available during such period to be allocated to the
Series 1997-1 Variable Funding Certificates pursuant to subsection 4.7(c), is
less than (B) the sum for such period of (I) the aggregate amount of Class A
Interest, Class B Interest and Class B-2 Interest accrued on the Series 1997-1
Certificates, PLUS (II) the aggregate Facility Costs accrued or (without
duplication) became payable, PLUS (III) the aggregate Investor Default Amount,
PLUS (IV) the aggregate Servicing Fee Accrual for each Business Day on which
neither
SRI nor an Affiliate of SRI was the Servicer, PLUS (V) the aggregate Class A
Investor Charge-Offs, Class B Investor Charge-Offs, Class B-2 Investor
Charge-Offs and Class C Investor Charge-Offs (each determined without
duplication of amounts included in clause (III) above);
then, in the case of any event described in subparagraphs (a) through (h) after
the applicable grace period, if any, set forth in such subparagraphs or below,
either the Trustee, the Facility Agent by notice then given in writing to the
Transferor and the Servicer (and to the Trustee if given by the Facility Agent)
may declare that a pay out event (a "SERIES 1997-1 PAY OUT EVENT") has occurred
as of the date of such notice.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in subsection 8(f) or (g) for a period of 60 days (less the
applicable grace periods specified in such subsections), shall not constitute a
Series 1997-1 Pay Out Event if such delay or failure could not be prevented by
the exercise of reasonable diligence by the Servicer and such delay or failure
was caused by an act of God or the public enemy, acts of declared or undeclared
war, public disorder, rebellion, riot or sabotage, epidemics, landslides,
lightning, fire, hurricanes, tornadoes, earthquakes, nuclear disasters or
meltdowns, floods, power outages, computer failure or similar causes; PROVIDED,
HOWEVER, that the Servicer shall not be excused by reason of any of the
foregoing events from causing the Trustee to make timely payment of amounts
required to be paid pursuant to Sections 4.8 and 4.9. The preceding sentence
shall not relieve the Servicer from using its best efforts to perform its
obligations in a timely manner in accordance with the terms of this Agreement
and the Servicer shall provide the Trustee, the Transferor and the Holders of
the Senior Certificates with an Officer's Certificate giving prompt notice of
such failure or delay by it, together with a description of the cause of such
failure or delay and its efforts so to perform its obligations.
SECTION 9. ARTICLE VI OF THE AGREEMENT. Article VI (except for
Sections 6.1 through 6.14 thereof) shall read in its entirety as follows and
shall be applicable only to the Series 1997-1 Variable Funding Certificates:
SECTION 6.15 ADDITIONAL INVESTED AMOUNTS.
(a) Each Series 1997-1 Certificateholder agrees (or, if such Series
1997-1 Certificateholder is a nominee for Class A Owners, Class B Owners or
Class B-2 Owners, such Class A Owners, Class B Owners or Class B-2 Owners agree
in lieu of such Series 1997-1 Certificateholder), by acceptance of its Series
1997-1 Variable Funding Certificate, that the Transferor may, from time to time
prior to the Termination Date (as defined in the applicable Certificate Purchase
Agreement) for such Certificateholder or Owner, subject to Section 11 hereof,
upon satisfaction of the conditions set forth in Section 3.2 of the Class A
Certificate Purchase Agreement (or Section 3.2 of the Class B Certificate
Purchase Agreement or Section 3.2 of the Class B-2 Purchase Agreement, as the
case may be) request that each Noncommitted Class A Purchaser and Noncommitted
Class B Purchaser acquire, and require that each Committed Class A Purchaser,
Committed Class B Purchaser and Class B-2 Purchaser, acquire, as of any Business
Day additional undivided interests in the Trust in specified amounts (such
amounts, respectively, the "ADDITIONAL CLASS A INVESTED AMOUNT," the "ADDITIONAL
CLASS B INVESTED AMOUNT" and the "ADDITIONAL CLASS B-2 INVESTED AMOUNT") and
require that each Class C Certificateholder acquire, as of any Business Day,
additional undivided interests in the Trust in specified amounts (the
"ADDITIONAL CLASS C INVESTED AMOUNT" and, collectively with the Additional Class
A Invested Amount, the Additional Class B Invested Amount and the Additional
Class B-2 Invested Amount, the "ADDITIONAL INVESTED AMOUNTS"). The VFC
Additional Invested Amounts on any Business Day shall not exceed an amount equal
to the excess of the aggregate amount of Principal Receivables and amounts on
deposit in the Equalization Account (other than investment earnings thereon)
over the greater of (a) the sum of (i) the aggregate Invested Amount of each
Series, including the Series 1997-1 Variable Funding Certificates, then
outstanding after giving effect to the additions of such Additional Invested
Amounts, MINUS amounts on deposit in the principal funding account for any
Series, if any, and (ii) the Minimum Transferor Interest and (b) the Minimum
Aggregate Principal Receivables. The aggregate Additional Class A Invested
Amounts and Additional Class B Invested Amounts to be purchased shall have a
minimum aggregate amount of $1,000,000 or more, and shall be in integral
multiples of $250,000, but in no event shall the aggregate Additional Class A
Invested Amounts exceed the aggregate Available Commitments (prior to such
additions) of all Committed Class A Purchasers or the aggregate Additional Class
B Invested Amounts exceed the aggregate Available Commitments (prior to such
additions) of all Committed Class B Purchasers. The aggregate Additional Class
B-2 Invested Amount to be purchased shall have a minimum amount of $500,000 or
more, and shall be in integral multiples of $100,000, but in no event shall the
aggregate Additional Class B-2 Invested Amounts exceed the aggregate Available
Commitments (prior to such additions) of all Class B-2 Purchasers.
(b) The Transferor shall give to each Facility Agent by no later
than 4:00 p.m. New York City time on the Business Day immediately prior to the
Purchase Date, written notice of the sale of Additional Class A Invested
Amounts, Additional Class B Invested Amounts and Additional Class B-2 Invested
Amounts specifying (i) the
aggregate amount of requested Additional Class A Invested Amounts, Additional
Class B Invested Amounts and Additional Class B-2 Invested Amounts, (ii) the
applicable Purchase Date (which shall be a Business Day) and (iii) wire transfer
instructions as to the account(s) to which the purchase price therefore should
be delivered. On the Business Day immediately after the Purchase Date, the
Facility Agent shall report to the Transferor, the Servicer and the Trustee (i)
the amount of the Additional Class A Invested Amounts purchased by the
Noncommitted Class A Purchasers, (ii) the amount of the Additional Class B
Invested Amounts purchased by the Noncommitted Class B Purchasers, (iii) the
amount of the Additional Class A Invested Amounts which have been purchased by
the Committed Class A Purchasers, (iv) the amount of the Additional Class B
Invested Amounts which have been purchased by the Committed Class B Purchasers
and (v) the amount of the Additional Class B-2 Invested Amounts which have been
purchased by the Class B-2 Purchasers.
(c) Each Noncommitted Class A Purchaser may, but shall not be
obligated to, purchase its Noncommitted Purchaser Percentage (as defined in the
Class A Certificate Purchase Agreement) of any Additional Class A Invested
Amount offered by the Transferor pursuant to subsection 6.15(b). Each Committed
Class A Purchaser shall purchase its share of the Additional Class A Invested
Amount not so purchased by the Noncommitted Class A Purchasers pursuant to the
immediately previous sentence in accordance with the applicable Certificate
Purchase Agreement. In no event shall any Additional Class A Invested Amount be
purchased if, after giving effect thereto, the Class A Invested Amount on the
applicable Purchase Date (after giving effect to those purchases which are made
on the applicable Purchase Date) exceeds (i) the Class A Purchase Limit or (ii)
the amount which would result in the sum of the Class B Invested Amount, the
Class B-2 Invested Amount and the Class C Invested Amount being less than 25% of
the Invested Amount on such Purchase Date.
(d) The Class C Certificateholder by acceptance of its Class C
Certificate agrees that it shall be deemed to purchase Additional Class C
Invested Amounts at the same time as (x) either Class A Certificateholders, the
Class B Certificateholders or the Class B-2 Certificateholders purchase any
Additional Class A Invested Amount, any Additional Class B Invested Amount or
any the Additional Class B-2 Invested Amount or (y) a Partial Amortization
Amount in respect of the Class B-2 VFCs shall be paid to the Class B-2
Certificateholders. The Class C Certificateholder shall be deemed to purchase
the Additional Class C Interest in an amount that is not less than the amount
which would result in the sum of Class B-2 Invested Amount and Class C Invested
Amount, (calculated after giving effect to any distribution of a Partial
Amortization Amount pursuant to section 4.9(h)), being at least equal to the
greater of 17.5% of the Invested Amount on such Purchase Date or (together with
the Class B-2 Invested Amount) 5% of the highest Invested Amount during the 180
days preceding such Purchase Date, and shall pay the Trust the purchase price
for such Additional Class C Invested Amount, in an amount equal to such
Additional Class C Invested Amount in immediately available funds. In addition,
the Class C Certificateholder may at any time purchase an Additional Class C
Invested Amount, by
payment to the Trust in immediately available funds of the purchase price
therefore, which shall be an amount equal to such Additional Class C invested
Amount.
(e) Each Noncommitted Class B Purchaser may, but shall not be
obligated to, purchase its Noncommitted Purchaser Percentage (as defined in the
Class B Certificate Purchase Agreement) of any Additional Class B Invested
Amount offered by the Transferor pursuant to subsection 6.15(b). Each Committed
Class B Purchaser shall purchase its share of the Additional Class B Invested
Amount not so purchased by the Noncommitted Class B Purchasers pursuant to the
immediately previous sentence in accordance with the applicable Certificate
Purchase Agreement. In no event shall any Additional Class B Invested Amount be
purchased if, after giving effect thereto, the Class B Invested Amount on the
applicable Purchase Date (after giving effect to those purchases which are made
on the applicable Purchase Date) exceeds (i) the Class B Purchase Limit or (ii)
the amount which would result in the sum of the Class B-2 Invested Amount and
the Class C Invested Amount being less than 17.5% of the Invested Amount on such
Purchase Date.
(f) Each Class B-2 Purchaser shall purchase its share of the
Additional Class B-2 Invested Amount in accordance with the applicable
Certificate Purchase Agreement. In no event shall the Class B-2 Invested Amount
on the applicable Purchase Date (after giving effect to those purchases which
shall be made on the applicable Purchase Date) exceed the lowest of (i) 10.0% of
the Invested Amount, (ii) the Class B-2 Purchase Limit or (iii) the amount which
would result in the Class C Invested Amount being less than 7.5% of the Invested
Amount on such Purchase Date.
(g) If the Class A Certificateholders acquire such additional
interest, then in consideration of such Class A Certificateholders' payments of
the Additional Class A Invested Amount, the Servicer shall appropriately note
such Additional Class A Invested Amount on the related Daily Report and direct
the Trustee to pay to the Transferor such Additional Class A Invested Amounts,
and the Invested Amount of the Class A Certificates will be equal to the
Invested Amount of the Class A Certificates stated in such Daily Report. If the
Class B Certificateholders acquire such additional interest, then in
consideration of such Class B Certificateholders' payments of the Additional
Class B Invested Amount, the Servicer shall appropriately note such Additional
Class B Invested Amount on the related Daily Report and direct the Trustee to
pay to the Transferor such Additional Class B Invested Amounts, and the Invested
Amount of the Class B Certificates will be equal to the Invested Amount of the
Class B Certificates stated in such Daily Report. If the Class B-2
Certificateholders acquire such additional interest, then in consideration of
such Class B-2 Certificateholders' payments of the Additional Class B-2 Invested
Amount, the Servicer shall appropriately note such Additional Class B-2 Invested
Amount on the related Daily Report and direct the Trustee to pay to the
Transferor such Additional Class B-2 Invested Amounts, and the Invested Amount
of the Class B-2 Certificates will be equal to the Invested Amount of the Class
B-2 Certificates stated in such Daily Report. If the Class C Certificateholders
acquire such additional interest, then in consideration of such Class C
Certificateholders' payments of the Additional Class C Invested Amount, the
Servicer shall appropriately note such Additional
Class C Invested Amount on the related Daily Report and direct the Trustee to
pay to the Transferor such Additional Invested Amounts, and the Invested Amount
of the Class C Certificates will be equal to the Invested Amount of the Class C
Certificates stated in such Daily Report.
(h) Subject to the provisions of subsections 6.15(c) through (f),
the failure of any Holder of the Senior Certificates to purchase any Additional
Class A Invested Amount, any Additional Class B Invested Amount or any
Additional Class B-2 Invested Amount in accordance with Section 6.15 and the
applicable Certificate Purchase Agreement shall not in itself relieve any other
Series 1997-1 Certificateholder of its obligation to purchase any Additional
Invested Amounts. Notwithstanding any provision to the contrary contained in
this Section 6.15, no Senior Certificateholder shall be required to purchase any
Additional Class A Invested Amounts, any Additional Class B Invested Amounts or
any Additional Class B-2 Invested Amount unless the conditions to such purchase
contained in the applicable Certificate Purchase Agreement (including without
limitation Section 3.2 thereof) have been satisfied.
(i) The outstanding amounts of any Additional Class A Invested
Amount purchased by each Class A Certificateholder shall be evidenced by a Class
A Certificate to be issued on the Closing Date substantially in the form of
EXHIBIT A-1 hereto. Each Class A Certificateholder shall and is hereby
authorized to record on the grid attached to its Class A Certificate (or at such
Class A Certificateholder's option, in its internal books and records) the date
and amount of any Additional Class A Invested Amount purchased by it, and each
repayment thereof; PROVIDED that failure to make any such recordation on such
grid or any error in such grid shall not adversely affect such Class A
Certificateholder's rights with respect to its Class A Invested Amount and its
right to receive interest payments in respect of the Class A Invested Amount
held by such Class A Certificateholder.
(j) The outstanding amounts of any Additional Class B Invested
Amount purchased by each Class B Certificateholder shall be evidenced by a Class
B Certificate to be issued on the Closing Date substantially in the form of
EXHIBIT A-2 hereto. Each Class B Certificateholder shall and is hereby
authorized to record on the grid attached to its Class B Certificate (or at such
Class B Certificateholder's option, in its internal books and records) the date
and amount of any Additional Class B Invested Amount purchased by it, and each
repayment thereof; PROVIDED that failure to make any such recordation on such
grid or any error in such grid shall not adversely affect such Class B
Certificateholder's rights with respect to its Class B Invested Amount and its
right to receive interest payments in respect of the Class B Invested Amount
held by such Class B Certificateholder.
(k) The outstanding amounts of any Additional Class B-2 Invested
Amount purchased by each Class B-2 Certificateholder shall be evidenced by a
Class B-2 Certificate to be issued on the Closing Date substantially in the form
of EXHIBIT A-3 hereto. Each Class B-2 Certificateholder shall and is hereby
authorized to record on the grid attached to its Class B-2 Certificate (or at
such Class B-2 Certificateholder's option, in its
internal books and records) the date and amount of any Additional Class B-2
Invested Amount purchased by it, and each repayment thereof; PROVIDED that
failure to make any such recordation on such grid or any error in such grid
shall not adversely affect such Class B-2 Certificateholder's rights with
respect to its Class B-2 Invested Amount and its right to receive interest
payments in respect of the Class B-2 Invested Amount held by such Class B-2
Certificateholder.
SECTION 6.16 EXTENSION.
(a) If a Series 1997-1 Pay Out Event has not occurred or has
occurred but has been waived or remedied on or before the 30th Business Day
preceding the Extension Date, the Transferor, in its sole discretion, may
deliver to the Trustee on or before such date a notice substantially in the form
of Exhibit C (the "EXTENSION NOTICE") to this Supplement. The Trustee shall
deliver a copy of the Extension Notice and all documents annexed thereto to the
Investor Certificateholders of record on the date of receipt thereof. The
Transferor shall state in the Extension Notice that it intends to extend the
Revolving Period until the later Amortization Period Commencement Date set forth
in the Extension Notice. The Extension Notice shall also set forth the next
Extension Date. The following documents shall be annexed to the Extension
Notice: (i) a form of the Opinion of Counsel addressed to the Transferor and the
Trustee to the effect that despite the Extension the Trust will not be treated
as an association taxable as a corporation (the "EXTENSION TAX OPINION"); (ii) a
form of the Opinion of Counsel addressed to the Transferor and the Trustee (the
"EXTENSION OPINION") to the effect that (A) the Transferor has the corporate
power and authority to effect the Extension, and (B) the Extension has been duly
authorized by the Transferor; and (iii) a form of Investor Certificateholder
Election Notice substantially in the form of Exhibit D (the "ELECTION NOTICE")
to this Supplement. In addition, the Extension Notice shall state that any
Investor Certificateholder electing to approve the Extension must do so on or
before the Election Date (as defined below) by returning the annexed Election
Notice properly executed to the Trustee in the manner described below. The
Extension Notice shall also state that an Investor Certificateholder may
withdraw any such election in whole or in part on or before the Election Date,
and the Transferor, in its sole discretion, may, prior to the Election Date,
withdraw its election to extend the Revolving Period. Any Holder that elects to
approve an Extension hereunder shall deliver a duly executed Election Notice to
the Trustee at the address designated in the Extension Notice on or before 3:00
p.m., New York City time, on or before the fifth Business Day preceding the
Extension Date (such Business Day constituting the "ELECTION DATE").
(b) No Extension shall occur until prior satisfaction of the
following conditions at the close of business on the Election Date: (i) no Pay
Out Event shall have occurred and be continuing, (ii) there shall have been
delivered to the Trustee (A) the Extension Tax Opinion and the Extension
Opinion, each addressed to the Trustee and (B) written confirmation from any
Rating Agency rating that the Extension will not cause such Rating Agency to
lower or withdraw its ratings of either class of Senior Certificates, (iii) at
least one Holder of the Senior Certificates shall have elected to approve the
Extension by returning to the Trustee on or before the Election Date the
executed
Election Notice annexed to the Extension Notice delivered to such Holder of the
Senior Certificates pursuant to subsection 6.16(a) of the Agreement, (iv) all of
the Holders of the Class C Certificates shall have elected to approve of the
Extension by returning to the Trustee on or before the Election Date the
executed form of Election Notice annexed to the Extension Notice delivered to
such Class C Certificateholders pursuant to subsection 6.16(a) and (v) (1) the
sum of Class B Invested Amount and the Class C Invested Amount will equal or
exceed 25% of the Invested Amount on the Election Date and (2) the Class C
Invested Amount on the Election Date will equal or exceed 17.5% of the Invested
Amount. If not all of the Holders of the Senior Certificates give written notice
of such agreement, then the Transferor shall re-notify the Holders of the Senior
Certificates willing to so extend in writing that one or more Senior
Certificateholders have declined to so extend and such remaining Holders of the
Senior Certificates willing to extend have the option of extending only for such
Holders of the Senior Certificates so consenting to such extension and the
outstanding Invested Amount of such non-extending Holders of the Senior
Certificates shall not be extended. If, by the close of business on the Election
Date, all of the conditions stated in this subsection 6.16(b) have not been
satisfied and all such documents delivered to the Trustee pursuant to this
subsection 6.16(b) are not in form satisfactory to it, or if the Transferor has
notified the Trustee, prior to the Election Date, that the Transferor has
exercised its right to withdraw its election of an Extension, no Extension shall
occur.
(c) The execution by the Holders of the Senior Certificates of the
applicable Election Notice and return thereof to the Trustee by the required
date and time, the continued election by the Transferor to extend the Revolving
Period at the Election Date, and the compliance with all of the provisions of
this Section 6.16, shall evidence an extension or renewal of the obligations
represented by the Investor Certificates delivered in exchange therefor, and not
a novation or extinguishment of such obligations or a substitution with respect
thereto.
SECTION 10. SERIES 1997-1 TERMINATION. The right of the Series
1997-1 Certificateholders to receive payments from the Trust will terminate on
the first Business Day following the Series 1997-1 Termination Date unless such
Series is an Affected Series as specified in Section 12.1(c) of the Agreement
and the sale contemplated therein has not occurred by such date, in which event
the Series 1997-1 Certificateholders shall remain entitled to receive proceeds
of such sale when such sale occurs.
SECTION 11. LIMITATION ON CHANGES IN INVESTED AMOUNT. The Transferor
shall not effect more than two "Invested Amount Changes" and two "B-2 Invested
Amount Changes" in any calendar week. An "INVESTED AMOUNT CHANGE" shall mean a
sale of Class A Additional Invested Amounts or Class B Additional Invested
Amounts pursuant to Section 6.15 or a repayment of any Class A Invested Amount
or Class B Invested Amount pursuant to subsection 5.1(e). A "B-2 INVESTED AMOUNT
CHANGE" shall mean a sale of Class B-2 Additional Invested Amounts pursuant to
Section 6.15 or a repayment of any Class B-2 Invested Amount pursuant to
subsection 5.1(e).
SECTION 12. LEGENDS; TRANSFER AND EXCHANGE; RESTRICTIONS ON
TRANSFER OF SERIES 1997-1 VARIABLE FUNDING CERTIFICATES; TAX TREATMENT.
(a) Each Series 1997-1 Certificate will bear a legend substantially
in the following form:
THIS CERTIFICATE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OF ANY
STATE AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
UNLESS REGISTERED PURSUANT TO OR EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES LAW. EACH HOLDER OF
THIS CERTIFICATE AGREES FOR THE BENEFIT OF SRI RECEIVABLES PURCHASE CO.,
INC. THAT (A) NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE
EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (2) IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES OR
"BLUE SKY" LAWS, OR (3) TO THE TRANSFEROR, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE
FROM IT OF THE TRANSFER RESTRICTIONS REFERRED TO ABOVE.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF SRI
RECEIVABLES PURCHASE CO., INC. THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE
BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION
4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR (III) AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S
INVESTMENT IN THE ENTITY.
(b) Upon surrender for registration of transfer of any Series 1997-1
Variable Funding Certificate at the office of the Transfer Agent and Registrar,
accompanied by a certification by the Series 1997-1 Certificateholder
substantially in the form attached as Exhibit E if the new purchaser is a
"qualified institutional buyer" as defined in Rule 144A under the Securities Act
of 1933, or in the form attached as Exhibit F if the new purchaser is not a
"qualified institutional buyer," and by a written instrument of transfer in the
form approved by the Transferor and the Trustee (it being understood that, until
notice to the contrary is given to Series 1997-1 Certificateholders, the
Transferor and the Trustee shall each be deemed to have approved the form of
instrument of transfer, if any printed on any definitive Series 1997-1
Certificate), executed by the
registered owner, in person or by such Series 1997-1 Certificateholder's
attorney thereunto duly authorized in writing, such Series 1997-1 Certificate
shall be transferred upon the register, and the Transferor shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferees one or more new registered Series 1997-1 Certificate of any
authorized denominations and of a like aggregate principal amount and tenor.
Transfers and exchanges of Series 1997-1 Variable Funding Certificates shall be
subject to such restrictions as shall be set forth in the text of the Series
1997-1 Variable Funding Certificates and such reasonable regulations as may be
prescribed by the Transferor. Successive registrations and registrations of
transfers as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register.
(c) In no event shall the Class C Certificates or any interest
therein be transferred, sold, exchanged, pledged, participated or otherwise
assigned hereunder, in whole or in part, unless: (i) the Servicer shall have
provided an Officer's Certificate to the Trustee to the effect that such sale,
exchange, pledge, participation and assignment will not materially adversely
affect the interests of the Certificateholders and is permitted by each
Certificate Purchase Agreement, (ii) the Trustee shall have been delivered an
Opinion of Counsel to the effect that (A) any securities or interests issued in
conjunction with such sale, exchange, pledge, participation and assignment and
sold to third parties will be characterized as either indebtedness or
partnership interests (other than interests in a publicly traded partnership)
for Federal and applicable state income tax purposes, (B) such sale, exchange,
pledge, participation and assignment or such issuance will not adversely affect
the Federal and applicable state income tax characterization of any outstanding
Series of Investor Certificates (other than the Class C VFCs, as to the
characterization of which Counsel shall express no opinion), and (C) such sale,
exchange, pledge, participation and assignment or such issuance will not result
in the Trust being subject to tax at the entity level for Federal or applicable
state income tax purposes, (iii) the Servicer shall have provided at least ten
Business Days prior written notice to each Rating Agency and the Trustee of such
sale, exchange, pledge, participation and assignment and shall have received
written confirmation from each Rating Agency to the effect of the original
rating of any Series or any class of any Series will not be reduced or withdrawn
as a result of such sale, exchange, pledge, participation and assignment, and
(iv) the holders of any securities or interests issued in conjunction with such
sale, exchange, pledge, participation and assignment (or any trustee or
collateral agent on their behalf) (A) will have no right to foreclose upon the
Class C VFCs or exercise any voting rights as a Class C Certificateholder unless
and until all outstanding Investor Certificates (other than the Class C VFCs)
and all outstanding investor certificates (other than any Transferor Retained
Certificates) have been paid in full and (B) covenant and agree that, prior to
the date which is one year and one day after the payment in full of all
outstanding investor certificates issued by the Trust, none of them will
institute against, or join any other Person in instituting against, the
Transferor any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States, and the Trustee shall have received an
Officer's Certificate to that effect.
(d) Each Certificateholder, by accepting and holding such
Certificate or interest therein, will be deemed to have represented and
warranted that it is not (i) an employee benefit plan (as defined in Section
3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (ii) a
plan described in Section 4975(e)(1) of the Code, or (iii) any entity whose
underlying assets include plan assets by reason of a plan's investment in the
entity.
(e) Each Class B-2 Certificateholder, by its holding of an interest
in a Class B-2 Certificate, hereby severally represents, warrants and covenants,
and each Class B-2 Certificateholder that acquires an interest in a Class B-2
Certificate shall be deemed to have severally represented, warranted and
covenanted upon such acquisition, that:
(i) such Class B-2 Certificateholder has not acquired and
shall not sell, trade or transfer any interest in the Class
B-2 Certificates, nor cause any interest in the Class B-2
Certificates to be marketed, on or through either
(A) an established securities market within the meaning
of Section 7704(b)(1) of the Code (including, but not
limited to, an interdealer quotation system that
regularly disseminates firm buy or sell quotations by
identified brokers or dealers by electronic means or
otherwise), or
(B) a secondary market (or the substantial equivalent
thereof) within the meaning of Section 7704(b)(2) of the
Code (including, but not limited to, a market wherein
interests in the Class B-2 Certificates are regularly
quoted by any person making a market in such interests
and a market wherein any person regularly makes
available bid or offer quotes with respect to interests
in the Class B-2 Certificates and stands ready to effect
buy or sell transactions at the quoted prices for itself
or on behalf of others); and
(ii) unless the Transferor consents otherwise, such
Class B-2 Certificateholder
(A) is properly classified as, and shall remain
classified as, a "corporation" as defined in Section
7701(a)(3) of the Code and
(B) is not, and shall not become, an "S corporation" as
described in Section 1361 of the Code.
The consent of the Transferor described in clause (ii) immediately
above shall not be unreasonably withheld, subject to the limitations discussed
below if such transfer would cause the number of Private Holders to exceed 80.
Each Class B-2 Certificateholder represents, warrants and covenants
that it shall cause each of its Participants to make representations, warranties
and covenants similar to those described in (i) and (ii) above for the benefit
of the Transferor and the Trust at the time such Participant becomes a
Participant. In the event of any breach of the representation, warranty and
covenant of a Class B-2 Certificateholder or its Participant that such
Certificateholder or Participant shall remain classified as a corporation other
than an S corporation (unless the Transferor otherwise consents), such Class B-2
Certificateholder shall notify the Transferor promptly upon such Class B-2
Certificateholder's becoming aware thereof, and thereupon such Class B-2
Certificateholder agrees to use reasonable efforts to procure a replacement
investor not so affected in accordance with the Class B-2 Certificate Purchase
Agreement. In any such event, the Transferor shall also have the right to
procure a replacement investor permitted under and otherwise in accordance with
the Class B-2 Certificate Purchase Agreement. Each affected Class B-2
Certificateholder hereby agrees to take all actions reasonably necessary to
permit a replacement investor to succeed to its rights and obligations
hereunder.
Each Class B-2 Certificateholder that has a Participant that has
breached its representation, warranty and covenant that it shall remain
classified as a corporation other than an S corporation (unless the Transferor
otherwise consents) hereby agrees (without limiting the right of the Transferor
to procure a replacement investor for such Class B-2 Certificateholder as
provided above in this paragraph or to pursue other remedies) to notify the
Transferor of such breach promptly upon such Class B-2 Certificateholder's
becoming aware thereof and to use reasonable efforts to procure a replacement
Participant not so affected in accordance with the Class B-2 Certificate
Purchase Agreement.
Any Class B-2 Certificateholder or assignee Class B-2
Certificateholder that is an S corporation described in Code Section 1361 hereby
further agrees that, in the event its owners shall be treated as Private Holders
under Treasury Regulations promulgated under Code Section 7704, it shall take
such reasonable measures as shall be agreed upon with the Transferor as shall
reduce the risk that the Trust would be treated as a publicly traded partnership
pursuant to Code Section 7704. Any such Class B-2 Certificateholder or assignee
Certificateholder which has a Participant which is an S corporation described in
Code Section 1361 additionally agrees that, in the event the owners of such
Participant shall be treated as Private Holders under Treasury Regulations
promulgated under Code Section 7704, it shall take such reasonable measures as
shall be agreed upon with the Transferor as shall reduce the risk that the Trust
would be treated as a publicly traded partnership pursuant to Section 7704 of
the Code.
Each Class B-2 Certificateholder shall notify the Transferor of its
sale, transfer or assignment of any interest in a Class B-2 Certificate to any
Participant, and the
Transferor shall maintain a register of each Participant and the amount of each
Participation. No Participant shall be entitled to sell, transfer, assign or
otherwise dispose of less than its entire interest in its participation in the
Class B-2 Certificates (including by means of a pledge, hypothecation or
subparticipation thereof), without the prior written consent of the Transferor.
At no time shall the aggregate number of Class B-2
Certificateholders and Participants exceed five (5) Private Holders or such
greater number as to which the Transferor shall consent in writing, which
consent shall not be unreasonably withheld. In the event that, after giving
effect to such consent or after any other transfer, the number of Private
Holders would exceed 80, the Transferor shall not grant such consent and shall
not permit such transfer unless the Transferor has provided to the Trustee an
Opinion of Counsel to the effect that the transfers would not cause the Trust to
be treated as a "publicly traded partnership" taxable as a corporation under
Section 7704 of the Code. Any transfer of an interest in a Class B-2 Certificate
in contravention of this paragraph shall be void AB INITIO.
Notwithstanding any provisions of this subsection 12(e) to the
contrary, each Class B-2 Certificateholder and any of its Participants may
pledge its interest in the Class B-2 Certificates to any Federal Reserve Bank as
collateral in accordance with applicable law.
As used in this subsection 12(e):
"PARTICIPANT" means each Person that has been granted a
participation interest by a Class B-2 Certificateholder in all or part of
its Class B-2 Certificates.
"PRIVATE HOLDER" means each holder of a right to receive interest or
principal in respect of any direct or indirect interest in the Trust,
including any financial instrument or contract the value of which is
determined in whole or part by reference to the Trust (including the
Trust's assets, income of the Trust or distributions made by the Trust),
but excluding any interest in the Trust represented by any Series or Class
of Certificates or any other interest as to which the Transferor has
provided to the Trustee an Opinion of Counsel to the effect that such
Series, Class or other interest will be treated as debt or otherwise not
as an equity interest in either the Trust or the Receivables for federal
income tax purposes, in each case, provided such interest is not
convertible or exchangeable into an interest in the Trust or the Trust's
income or equivalent value. Notwithstanding the immediately preceding
sentence, "Private Holder" shall also include any other Person that the
Transferor determines
is, or may be or may become, a "partner" within the meaning of Section
1.7704-1(h)(l)(ii) of the United States Treasury Regulations (including by
reason of Section 1.7704-1(h)(3)). The holders of (i) the Transferor
Interest, (ii) the interest of the Servicer, (iii) any similar interests
in the Trust represented by any other Class of any Series of Certificates,
and (iv) any interest described in Section 12.1(b) of the Pooling and
Servicing Agreement shall be treated as Private Holders. Any Person
holding more than one interest in the Trust each of which separately would
cause such Person to be a Private Holder shall be treated as a single
Private Holder. Each holder of an interest in a Private Holder which is a
partnership, an S corporation or a grantor trust under the Code shall be
treated as a Private Holder unless excepted with the consent of the
Transferor (which consent shall be based on an Opinion of Counsel
generally to the effect that the action taken pursuant to the consent will
not cause the Trust to become a "publicly traded partnership" taxable as a
corporation under Section 7704 of the Code).
(f) Each Class B Certificateholder, by its holding of an
interest in a Class B Certificate, hereby severally represents, warrants
and covenants, and each Class B Certificateholder that acquires an
interest in a Class B Certificate shall be deemed to have severally
represented, warranted and covenanted upon such acquisition, that:
(i) such Class B Certificateholder has not acquired and
shall not sell, trade or transfer any interest in the
Class B Certificates, nor cause any interest in the
Class B Certificates to be marketed, on or through
either
(A) an established securities market within the
meaning of Section 7704(b)(1) of the Code
(including, but not limited to, an interdealer
quotation system that regularly disseminates firm
buy or sell quotations by identified brokers or
dealers by electronic means or otherwise), or
(B) a secondary market (or the substantial
equivalent thereof) within the meaning of
Section 7704(b)(2) of the Code (including, but
not limited to, a market wherein interests in
the Class B Certificates are regularly quoted
by any person making a market in such interests
and a market wherein any person regularly makes
available bid or offer quotes with respect to
interests in the Class B Certificates and
stands ready to effect buy or sell transactions
at the quoted prices for itself or on behalf of
others); and
(ii) unless the Transferor consents otherwise, such Class B
Certificateholder
(A) is properly classified as, and shall remain
classified as, a "corporation" as defined in
Section 7701(a)(3) of the Code and
(B) is not, and shall not become, an "S corporation"
as described in Section 1361 of the Code.
The consent of the Transferor described in clause (ii) immediately
above shall not be unreasonably withheld, subject to the limitations discussed
below if such transfer would cause the number of Private Holders to exceed 80.
Each Class B Certificateholder represents, warrants and covenants
that it shall cause each of its Participants and each of its Support Parties to
make representations, warranties and covenants similar to those described in (i)
and (ii) above for the benefit of the Transferor and the Trust at the time such
Participant becomes a Participant or Support Party, as the case may be. In the
event of any breach of the representation, warranty and covenant of a Class B
Certificateholder or any of its Participants or Support Parties that such
Certificateholder or its Participant or Support Party shall remain classified as
a corporation other than an S corporation (unless the Transferor otherwise
consents), such Class B Certificateholder shall notify the Transferor promptly
upon such Class B Certificateholder's becoming aware thereof, and thereupon such
Class B Certificateholder agrees to use reasonable efforts to procure a
replacement investor not so affected in accordance with the Class B Certificate
Purchase Agreement. In any such event, the Transferor shall also have the right
to procure a replacement investor permitted under and otherwise in accordance
with the Class B Certificate Purchase Agreement. Each affected Class B
Certificateholder hereby agrees to take all actions reasonably necessary to
permit a replacement investor to succeed to its rights and obligations
hereunder.
Each Class B Certificateholder that has a Participant or Support
Party that has breached its representation, warranty and covenant that it shall
remain classified as a corporation other than an S corporation (unless the
Transferor otherwise consents) hereby agrees (without limiting the right of the
Transferor to procure a replacement investor for such Class B Certificateholder
as provided above in this paragraph or to pursue other remedies) to notify the
Transferor of such breach promptly upon such Class B Certificateholder's
becoming aware thereof and to use reasonable efforts to procure a replacement
Participant or Support Party, as the case may be, not so affected in accordance
with the Class B Certificate Purchase Agreement.
Any Class B Certificateholder or assignee Class B Certificateholder
that is an S corporation described in Code Section 1361 hereby further agrees
that, in the event its owners shall be treated as Private Holders under Treasury
Regulations promulgated under Code Section 7704, it shall take such reasonable
measures as shall be agreed upon with the Transferor as shall reduce the risk
that the Trust would be treated as a publicly traded partnership pursuant to
Code Section 7704. Any such Class B Certificateholder or assignee
Certificateholder which has a Participant which is an S corporation described in
Code Section 1361 additionally agrees that, in the event the owners of such
Participant
shall be treated as Private Holders under Treasury Regulations promulgated under
Code Section 7704, it shall take such reasonable measures as shall be agreed
upon with the Transferor as shall reduce the risk that the Trust would be
treated as a publicly traded partnership pursuant to Section 7704 of the Code.
Each Class B Certificateholder shall notify the Transferor of its
sale, transfer or assignment of any interest in a Class B Certificate to any
Participant, and the Transferor shall maintain a register of each Participant
and the amount of each Participation. No Participant shall be entitled to sell,
transfer, assign or otherwise dispose of less than its entire interest in its
participation in the Class B Certificates (including by means of a pledge,
hypothecation or subparticipation thereof), without the prior written consent of
the Transferor.
At no time shall the aggregate number of Class B Certificateholders,
Participants and Support Parties exceed five (5) Private Holders or such greater
number as to which the Transferor shall consent in writing, which consent shall
not be unreasonably withheld. In the event that, after giving effect to such
consent or after any other transfer, the number of Private Holders would exceed
80, the Transferor shall not grant such consent and shall not permit such
transfer unless the Transferor has provided to the Trustee an Opinion of Counsel
to the effect that the transfers would not cause the Trust to be treated as a
"publicly traded partnership" taxable as a corporation under Section 7704 of the
Code. Any transfer of an interest in a Class B Certificate in contravention of
this paragraph shall be void AB INITIO.
Notwithstanding any provisions of this subsection 12(e) to the
contrary, (i) each Class B Certificateholder and any of its Participants may
pledge its interest in the Class B Certificates to any Federal Reserve Bank as
collateral in accordance with applicable law, and (ii) each Class B
Certificateholder may at any time and from time to time sell, transfer or assign
all or any interest in its Class B Certificates or any portion thereto to any of
its Support Parties.
As used in this subsection 12(f):
"PARTICIPANT" means each Person that has been granted a
participation interest by a Class B Certificateholder in all or part of its
Class B Certificates.
"PRIVATE HOLDER" means each holder of a right to receive interest or
principal in respect of any direct or indirect interest in the Trust,
including any financial instrument or contract the value of which is
determined in whole or part by reference to the Trust (including the
Trust's assets, income of the Trust or distributions made by the Trust),
but excluding any interest in the Trust represented by any Series or Class
of Certificates or any other interest as to which the Transferor has
provided to the Trustee an Opinion of Counsel
to the effect that such Series, Class or other interest will be treated as
debt or otherwise not as an equity interest in either the Trust or the
Receivables for federal income tax purposes, in each case, provided such
interest is not convertible or exchangeable into an interest in the Trust
or the Trust's income or equivalent value. Notwithstanding the immediately
preceding sentence, "Private Holder" shall also include any other Person
that the Transferor determines is, or may be or may become, a "partner"
within the meaning of Section 1.7704-1(h)(l)(ii) of the United States
Treasury Regulations (including by reason of Section 1.7704-1(h)(3)). The
holders of (i) the Transferor Interest, (ii) the interest of the Servicer,
(iii) any similar interests in the Trust represented by any other Class of
any Series of Certificates, and (iv) any interest described in Section
12.1(b) of the Pooling and Servicing Agreement shall be treated as Private
Holders. Any Person holding more than one interest in the Trust each of
which separately would cause such Person to be a Private Holder shall be
treated as a single Private Holder. Each holder of an interest in a
Private Holder which is a partnership, an S corporation or a grantor trust
under the Code shall be treated as a Private Holder unless excepted with
the consent of the Transferor (which consent shall be based on an Opinion
of Counsel generally to the effect that the action taken pursuant to the
consent will not cause the Trust to become a "publicly traded partnership"
taxable as a corporation under Section 7704 of the Code).
"SUPPORT PARTY" means any bank or other financial institution
extending or having a commitment to extend funds to or for the account of
a Class B Certificateholder or other owner of an interest in Class B
Certificates (including by agreement to purchase an assignment of or
participation in Class B Certificates) under any liquidity or credit
support agreement which relates to the Class B Certificates.
SECTION 13. SUCCESSOR TRUSTEE. Section 11.7 of the Agreement shall
read in its entirety as provided in the Agreement and, in addition, the
following sentence shall be added to the end of subsection 11.7(c) of the
Agreement and shall be applicable only to the Series 1997-1 Variable Funding
Certificates: "Any successor trustee appointed pursuant to this Section 11.7
shall be subject to the written consent of the Facility Agent, which consent
shall not be unreasonably withheld."
SECTION 14. NOTICE TO FACILITY AGENT. A copy of each notice, demand,
direction, report, Officer's Certificate or other certificate, election and
opinion required to be sent or delivered to the Rating Agency or the Trustee
shall also be sent or delivered and, in the case of opinions or letters of
reliance thereon, shall be addressed to the Facility Agent.
SECTION 15. CHARGE ACCOUNT AGREEMENTS AND CREDIT AND COLLECTION
POLICIES . Section 2.5(c) of the Agreement shall read in its entirety as set
forth below and as so amended and restated shall be applicable only with respect
to the Series 1997-1 Variable Funding Certificates: "The Transferor shall comply
with and perform its obligations and shall cause the Originators to comply with
and perform their obligations under the Charge Account Agreements relating to
the Accounts and the Credit and
Collection Policy except insofar as any failure to comply or perform would not
materially and adversely affect the rights of the Trust or the
Certificateholders hereunder or under the Certificates. The Transferor may
change the terms and provisions of the Charge Account Agreements or the Credit
and Collection Policy in any respect (including the reduction of the required
minimum monthly payment, the calculation of the amount, or the timing, or charge
offs and the periodic finance charges and other fees to be assessed thereon)
only if such change (i) would not, in the reasonable belief of the Transferor,
cause, immediately or with the passage of time, a Series 1997-1 Pay Out Event to
occur, (ii) it will not make any such change with the intent to materially
benefit the Transferor or any Originator over the Investor Certificateholders,
except as otherwise restricted by an endorsement, sponsorship, or other
agreement between the Transferor and an unrelated third party or by the terms of
the Charge Account Agreements, and (iii) if the Servicer is servicing charge
card accounts owned by an unrelated third party, such change would not result in
the Servicer's applying a materially higher standard of care to the servicing of
such accounts than it applies under this Agreement."
SECTION 16. SUCCESSOR SERVICER. Section 10.2 of the Agreement shall
read in its entirety as provided in the Agreement and, in addition, the
following sentence should be inserted in the fifteenth line of Section 10.2(a)
between the phrase "acceptable to the Trustee." and "If such Successor Servicer
is" and shall be applicable only with respect to the Series 1997-1 Variable
Funding Certificates: "Any Successor Servicer must either (A) be approved by the
Facility Agent or (B) be a Person which (i) has a tangible net worth of at least
$50,000,000, (ii) has serviced an average of at least $1,000,000,000 of credit
or charge card receivables outstanding during the previous 12 months and (iii)
has a senior long-term debt rating, as determined by at least one nationally
recognized statistical rating organization, of at least "BBB" or its equivalent,
provided, that if such Successor Servicer has no long term debt or such debt is
not rated by a nationally recognized statistical rating organization, the long
term debt rating of its parent must be at least "BBB" or its equivalent."
SECTION 17. SERIES 1997-1 INVESTOR EXCHANGE; CERTIFICATE DEFEASANCE.
(a) Pursuant to subsection 6.9(b), the Class A Certificateholders may
tender their Class of Series 1997-1 Certificates (and with the consent of all
Class A Certificateholders so may the Class B Certificateholders, and with the
consent of all Class A Certificateholders and Class B Certificateholders so may
the Class B-2 Certificateholders, and with the consent of all Senior
Certificateholders so may the Class C Certificateholders), and the Holders of
the Exchangeable Transferor Certificate may tender the Exchangeable Transferor
Certificate, in exchange for (i) one or more newly issued classes of Investor
Certificates and (ii) a reissued Exchangeable Transferor Certificate in
accordance with the terms and conditions contained in a notice of exchange
delivered to the Series 1997-1 Certificateholders. Such notice of exchange will
specify, among other things: (a) the amount and Classes of Series 1997-1
Certificates that may be tendered, (b) the Certificate Rate with respect to the
new Series, (c) the term of the Series, (d) the method of computing the investor
percentage, (e) the manner of Enhancement, if any, with respect to the Series
and (f) the time and the manner at which the tender and cancellation of the
Series 1997-1 Certificates and the issuance of the new class of Certificates
will be effectuated. Upon satisfaction of the conditions contained in
subsections 6.9(b) and 6.9(c), and the receipt by the Trustee of the exchange
notice and the related Supplement, the Trustee shall cancel the existing
Exchangeable Transferor Certificate and the applicable class of Series 1997-1
Certificates, and shall issue such Series of Investor Certificates and a new
Exchangeable Transferor Certificate, each dated the Exchange Date.
(b) The Trustee, for the benefit of the Series 1997-1
Certificateholders, shall establish and maintain with a Qualified Institution in
the name of the Trust, a certain segregated trust account (the "DEFEASANCE
ACCOUNT"). At the option of the Transferor, all amounts received by the Trustee
from the issuance of new Certificates of another Series (or any class within any
such other Series) on the settlement date for such issuance shall be deposited
in the Defeasance Account.
(c) Amounts on deposit in the Defeasance Account shall be applied as
Collections allocable to the Series 1997-1 Variable Funding Certificates in
payment of, the Class A Invested Amount and accrued and unpaid interest thereon,
the Class B Invested Amount and accrued and unpaid interest thereon the Class
B-2 Invested Amount and accrued and unpaid interest thereon, accrued and unpaid
Program Fees and other Facilities Costs and interest on overdue payments of the
foregoing, in accordance with and subject to the priorities set forth in
Sections 4.8 and 4.9 of the Agreement. Any day upon which payments are received
in the Defeasance Account shall be a Distribution Date. Any funds remaining in
the Defeasance Account after all amounts payable to the Senior
Certificateholders pursuant to Section 4.8 and 4.9 have been paid in full shall
be paid to the Transferor.
SECTION 18. RATIFICATION OF AGREEMENT. As supplemented by this Series
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as
so supplemented by this Series Supplement shall be read, taken, and construed as
one and the same instrument.
SECTION 19. COUNTERPARTS. This Series Supplement may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 20. GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 21. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the sufficiency of this Series Supplement
or for or in respect of the Preliminary Statement contained herein, all of which
recitals are made solely by the Transferor.
SECTION 22. INSTRUCTIONS IN WRITING. All instructions or other
communications given by the Servicer or any other person to the Trustee pursuant
to this Series Supplement shall be in writing, and, with respect to the
Servicer, may be included in a Daily Report or Settlement Statement.
SECTION 23. AMEMDMENT. The Agreement (including any Supplement)
shall not be amended by the Servicer, the Transferor and the Trustee in reliance
on the second paragraph of Section 13.1(a) without the consent of (i) Holders of
Investor Certificates evidencing Undivided Interests aggregating not less than
66 2/3% of the Invested Amount of the Series 1997-1 Variable Funding
Certificates (ii) the Required Class A Purchasers and the Required Class A
Owners, (iii) the Required Class B Purchasers and the Required Class B Owners
and (iv) the Required Class B-2 Purchasers.
SECTION 24. DISCOUNT OPTION. The Transferor shall not exercise its
option to designate a Discount Percentage under Section 2.8 of the Agreement
unless it has obtained the consent of the Facility Agent, which will not
unreasonably be withheld. The Transferor shall not withdraw such designation of
a Discount Percentage thereafter unless (i) it has obtained the consent of the
Facility Agent, which will not unreasonably be withheld, or (ii) the Excess
Spread Percentage for each of the three most recently completed Monthly Periods
exceeds 3.0%. The Transferor shall not reduce the Discount Percentage more than
once in any twelve month period.
SECTION 25. RATING AGENCY CONDITION. For purposes of any provision
of the Agreement or the Supplement which requires that any Rating Agency confirm
that an action or condition would not result in a reduction or withdrawal of its
rating of Series 1997-1 Certificates or any class thereof (if such Series were
rated by such Rating Agency), such requirement shall mean for purposes of Series
1997-1 that (a) for each class of Series 1997-1 Certificates then rated by such
Rating Agency, if any, that such
action or condition would not result in a reduction or withdrawal of its rating
of such class of Series 1997-1 Certificates, and (b) that each of Xxxxx'x and
Standard & Poor's has confirmed in writing to the Facility Agent that such
action or condition would not result in a reduction or withdrawal of such Rating
Agency's then applicable rating of the CP Notes issued by any Noncommitted Class
A Purchaser or Noncommitted Class B Purchaser, without giving effect to any
increase in any letter of credit or other enhancement provided to such
Noncommitted Class A Purchaser or Noncommitted Class B Purchaser (other than, in
the case of a purchase of Additional Class A Invested Amounts or Additional
Class B Invested Amounts, as applicable, an increase in liquidity support
provided to such Noncommitted Class A Purchaser, Noncommitted Class B Purchaser
by Liquidity Providers (as defined in the applicable Certificate Purchase
Agreement).
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Series 1997-1 Supplement to be duly executed by their respective
officers as of the day and year first above written.
SRI RECEIVABLES PURCHASE CO., INC.
Transferor
By: /S/ XXXX X. XXXX
Xxxx X. Xxxx
Treasurer
THE FOREGOING SPECIALTY RETAILERS, INC.
AMENDED AND RESTATED Servicer
SERIES 1997-1 SUPPLEMENT
IS HEREBY CONSENTED TO:
By: /S/ XXXXX X. XXXXXX
SRI RECEIVABLES PURCHASE CO., Xxxxx X. Xxxxxx
INC., as Class C Certificateholders Vice Chairman and Chief
Financial Officer (principal
financial and
By: /S/ XXXX X. XXXX accounting officer)
Name: Xxxx X. Xxxx
Title: Treasurer BANKERS TRUST (DELAWARE)
Trustee
CREDIT SUISSE FIRST BOSTON
New York Branch, as Class A Agent
and Class B Agent, acting as Class A By: /S/ XXXXX X. XXXXXXXXX
Certificateholder and Class B Xxxxx X. Xxxxxxxxx
Certificateholder President
By: /S/ XXXXXX X. XXXXXXXXX
Name: Xxxxxx X. Xxxxxxxxx
Title: Associate
By: /S/ XXXXXXX XXXXX
Name: Xxxxxxx Xxxxx
Title: Associate
