Exhibit 10.19
EXECUTION COPY
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CM CAPITAL CORPORATION,
as Company,
CORE-XXXX INTERNATIONAL, INC.,
as Servicer
and
THE CHASE MANHATTAN BANK,
as Trustee
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SERIES 1998-1 SUPPLEMENT
Dated as of April 1, 1998
to
POOLING AGREEMENT
Dated as of April 1, 1998
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CORE-XXXX RECEIVABLES MASTER TRUST
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
DESIGNATION OF CERTIFICATES AND INTERESTS; PURCHASE AND SALE
OF THE TERM CERTIFICATES. . . . . . . . . . . . . . 16
SECTION 2.1. Designation . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.2. The Term Certificates . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.3. Delivery. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.4. Restrictions on Transfer. . . . . . . . . . . . . . . . . . . . 17
SECTION 2.5. Application of Proceeds . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.6. Procedure for Decreasing the Series 1998-1 Invested
Amount; Optional Termination. . . . . . . . . . . . . . . . . . 21
SECTION 2.7. Sale of Additional Term Certificates. . . . . . . . . . . . . . 22
SECTION 2.8. Optional Redemption . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE III
ARTICLE III OF THE AGREEMENT. . . . . . . . . . . . . 25
SECTION 3A.2. Establishment of Trust Accounts. . . . . . . . . . . . . . . . 25
SECTION 3A.3. Daily Allocations. . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3A.4. Determination of Interest. . . . . . . . . . . . . . . . . . . 28
SECTION 3A.5. Determination of Series 1998-1 Monthly Principal . . . . . . . 29
SECTION 3A.6. Applications . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE IV
DISTRIBUTIONS AND REPORTS
SECTION 4A.1. Distributions. . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4A.2. Statements and Notices . . . . . . . . . . . . . . . . . . . . 33
SECTION 4A.3. Notice Procedures. . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE V
ADDITIONAL EARLY AMORTIZATION EVENTS
SECTION 5.1. Additional Early Amortization Events. . . . . . . . . . . . . . 34
ARTICLE VI
SERVICING FEE
SECTION 6.1. Servicing Compensation. . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VII
REPRESENTATIONS AND WARRANTIES, COVENANTS
SECTION 7.1. Representations and Warranties of the Company and the
Servicer. . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.2. Covenants of the Company and the Servicer . . . . . . . . . . . 37
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Ratification of Agreement . . . . . . . . . . . . . . . . . . . 38
SECTION 8.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.3. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.4. No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . 38
SECTION 8.5. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.6. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.7. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.8. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.9. Limitation on Addition and Termination of Sellers.. . . . . . . 39
ARTICLE IX
FINAL DISTRIBUTIONS
SECTION 9.1. Certain Distributions . . . . . . . . . . . . . . . . . . . . . 41
EXHIBITS
Exhibit A Form of Class A Certificate, Series 1998-1
Exhibit B Form of Class B Certificate, Series 1998-1
Exhibit C Form of Daily Report
Exhibit D Form of Monthly Settlement Statement
Exhibit E Form of Purchaser Letter
Exhibit F Form of Definitive Certificate Conversion Letter
SCHEDULES
Schedule 1 Trust Accounts
SERIES 1998-1 SUPPLEMENT, dated as of April 1, 1998 (as amended,
supplemented or otherwise modified from time to time, this "SUPPLEMENT"),
among CM Capital Corporation, a Delaware corporation (the "COMPANY"),
Core-Xxxx International, Inc., a Delaware corporation ("CORE-XXXX"), as
servicer (except where otherwise noted) (in such capacity, the "SERVICER"),
and The Chase Manhattan Bank, a New York banking corporation, in its capacity
as Trustee (the "TRUSTEE") under the Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, the Company, the Servicer and the Trustee have entered
into a Pooling Agreement, dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the "AGREEMENT");
WHEREAS, the Agreement provides, among other things, that the
Company, the Servicer and the Trustee may at any time and from time to time
enter into supplements to the Agreement for the purpose of authorizing the
issuance on behalf of the Trust by the Company for execution and redelivery
to the Trustee for authentication of one or more Series of Investor
Certificates; and
WHEREAS, the Company, the Servicer and the Trustee wish to
supplement the Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby expressly acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION I.1. DEFINITIONS. (a) The following words and phrases
shall have the following meanings with respect to Series 1998-1 and the
definitions of such terms are applicable to the singular as well as the
plural form of such terms and to the masculine as well as the feminine and
neuter genders of such terms:
"ACCRUAL PERIOD" shall mean the period from and including a
Distribution Date, or, in the case of the initial Accrual Period, the
Issuance Date, to but excluding the immediately succeeding Distribution
Date.
"ACCRUED EXPENSE AMOUNT" shall mean, for each Business Day during an
Accrual Period, the sum of (i) the Series 1998-1 Daily Interest Expense for
such Business Day, (ii) for each of the first ten of such Business Days,
one-tenth of the Series 1998-1 Monthly Servicing Fee due and payable on the
immediately succeeding Distribution Date and zero on each Business Day
thereafter (until such immediately
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succeeding Distribution Date) and (iii) all Program Costs which have
accrued since the preceding Business Day; PROVIDED, HOWEVER, that if by
the tenth Business Day of an Accrual Period, the entire amount of (A) the
Series 1998-1 Monthly Interest, (B) the Series 1998-1 Monthly Servicing
Fee and (C) all accrued Program Costs, in each case for such Accrual
Period, shall not have been transferred to the applicable Series
Collection Subaccount (or subaccount thereof), the Accrued Expense Amount
for such tenth Business Day (and each Business Day thereafter until paid)
shall also include the amount of such shortfall.
"AGED RECEIVABLES RATIO" shall mean, as of the last day of each
Settlement Period, the percentage equivalent of a fraction, (i) the
numerator of which shall be the sum of (A) the aggregate unpaid balance of
Receivables that were 91-120 days past their respective original due dates
as of such last day and (B) the aggregate amount of Receivables of the
Sellers which were charged off as uncollectible prior to the day which is
91 days after their respective original due dates during such Settlement
Period, and (ii) the denominator of which shall be the aggregate Principal
Amount of Receivables originated by the Sellers during the fourth prior
Settlement Period (including the Settlement Period ended on such day).
"CARRYING COST RESERVE RATIO" shall mean, as of any Settlement Report
Date and continuing until (but not including) the next Settlement Report
Date, an amount (expressed as a percentage) equal to the product of (a)
2.00 TIMES Days Sales Outstanding as of such day and (b) (i) 1.50 TIMES a
rate per annum equal to the weighted average Class A Certificate Rate and
Class B Certificate Rate in effect with respect to the outstanding Class A
Certificates and Class B Certificates, respectively, as of the end of the
Settlement Period immediately preceding such earlier Settlement Report
Date, DIVIDED BY (ii) 360.
"CHANGE IN CONTROL" shall mean the occurrence of any event the result
of which causes the Company not to be a direct, wholly-owned Subsidiary of
Core-Xxxx.
"CLASS A ADDITIONAL INTEREST" shall have the meaning specified in
subsection 3A.4(b)(i).
"CLASS A ADJUSTED INVESTED AMOUNT" shall mean, as of any date of
determination, (i) the Class A Invested Amount on such date, MINUS (ii) the
amount on deposit in the Series 1998-1 Principal Collection Sub-subaccount
on such date (up to a maximum of the Class A Invested Amount).
"CLASS A CERTIFICATE" shall mean a Class A Certificate, Series 1998-1,
executed by the Company and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A.
"CLASS A CERTIFICATEHOLDER" shall mean each holder of a Class A
Certificate.
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"CLASS A CERTIFICATE RATE" shall mean, (a) in the case of the initial
Class A Certificates, with respect to (i) the initial Accrual Period, 5.97%
per annum, and (ii) any Accrual Period thereafter, One-Month LIBOR for such
Accrual Period PLUS 0.28% per annum, and (b) in the case of any additional
Class A Certificates issued pursuant to Section 2.7, the rate per annum set
forth in the written direction delivered by the Company to the Trustee
pursuant to subsection 2.7(c).
"CLASS A INITIAL INVESTED AMOUNT" shall mean $50,000,000.
"CLASS A INTEREST SHORTFALL" shall have the meaning specified in
subsection 3A.4(b)(i).
"CLASS A INVESTED AMOUNT" shall mean, with respect to any date of
determination, an amount equal to (i) the Class A Initial Invested Amount
(plus the Initial Invested Amount of any Class A Certificate issued
subsequent to the Issuance Date) MINUS (ii) the aggregate amount of
distributions to the Class A Certificateholders (including the holders of
any such subsequently issued Class A Certificates) made in respect of
principal on or prior to such date MINUS (iii) the aggregate Series 1998-1
Allocable Charged-Off Amount applied to the Class A Certificates on or
prior to such date pursuant to subsection 3A.5(b)(ii) PLUS (iv) (but only
to the extent of any unreimbursed reductions made pursuant to clause (iii)
above) the aggregate Series 1998-1 Allocable Recoveries Amount applied to
the Class A Certificates on or prior to such date pursuant to subsection
3A.5(c)(i).
"CLASS A MONTHLY INTEREST" shall have the meaning specified in
subsection 3A.4(a)(i).
"CLASS A RATIO" shall mean, on any date of determination with respect
to the Class A Certificates, the greatest of (a) the sum of the Loss
Reserve Ratio I and the Dilution Reserve Ratio I, (b) the sum of the Loss
Reserve Ratio II and the Dilution Reserve Ratio II and (c) the Minimum
Ratio, in each case applicable to the Class A Certificates.
"CLASS A REDEMPTION PREMIUM" shall have the meaning specified in
subsection 2.4(a)(i).
"CLASS A REDEMPTION PRICE" shall have the meaning specified in
subsection 2.4(a)(i).
"CLASS B ADDITIONAL INTEREST" shall have the meaning specified in
subsection 3A.4(b)(ii).
"CLASS B ADJUSTED INVESTED AMOUNT" shall mean, as of any date of
determination, (i) the Class B Invested Amount on such date, MINUS (ii) the
excess, if any, on deposit on such date in the Series 1998-1 Principal
Collection Sub-subaccount
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over the Class A Invested Amount on such date (up to a maximum of the Class
B Invested Amount).
"CLASS B CERTIFICATE" shall mean a Class B Certificate, Series 1998-1,
executed by the Company and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit B.
"CLASS B CERTIFICATEHOLDER" shall mean each holder of a Class B
Certificate.
"CLASS B CERTIFICATE RATE" shall mean, (a) in the case of the initial
Class B Certificates, with respect to (i) the initial Accrual Period, 6.34%
per annum, and (ii) any Accrual Period thereafter, One-Month LIBOR for such
Accrual Period PLUS 0.65% per annum, and (b) in the case of any additional
Class B Certificates issued pursuant to Section 2.7, the rate per annum set
forth in the written direction delivered by the Company to the Trustee
pursuant to subsection 2.7(c).
"CLASS B INITIAL INVESTED AMOUNT" shall mean $5,000,000.
"CLASS B INTEREST SHORTFALL" shall have the meaning specified in
subsection 3A.4(b)(ii).
"CLASS B INVESTED AMOUNT" shall mean, with respect to any date of
determination, an amount equal to (i) the Class B Initial Invested Amount
(plus the Initial Invested Amount of any Class B Certificate issued
subsequent to the Issuance Date) MINUS (ii) the aggregate amount of
distributions to the Class B Certificateholders (including the holders of
any such subsequently issued Class B Certificates) made in respect of
principal on or prior to such date MINUS (iii) the aggregate Series 1998-1
Allocable Charged-Off Amount applied to the Class B Certificates on or
prior to such date pursuant to subsection 3A.5(b)(ii) PLUS (iv) (but only
to the extent of any unreimbursed reductions made pursuant to clause (iii)
above) the aggregate Series 1998-1 Allocable Recoveries Amount applied to
the Class B Certificates on or prior to such date pursuant to subsection
3A.5(c)(ii).
"CLASS B MONTHLY INTEREST" shall have the meaning specified in
subsection 3A.4(a)(ii).
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"CLASS B RATIO" shall mean, on any date of determination with respect
to the Class B Certificates, the greatest of (a) the sum of the Loss
Reserve Ratio I and the Dilution Reserve Ratio I, (b) the sum of the Loss
Reserve Ratio II and the Dilution Reserve Ratio II and (c) the Minimum
Ratio, in each case applicable to the Class B Certificates.
"CLASS B REDEMPTION PREMIUM" shall have the meaning specified in
subsection 2.4(a)(ii).
"CLASS B REDEMPTION PRICE" shall have the meaning specified in
subsection 2.4(a)(ii).
"CLEAN-UP CALL AMOUNT" shall mean the product of (i) the Clean-Up Call
Percentage and (ii) the Series 1998-1 Initial Invested Amount.
"CLEAN-UP CALL PERCENTAGE" shall mean 10%.
"CORE-XXXX" shall have the meaning specified in the preamble hereto.
"DAILY REPORT" shall mean a report prepared by the Servicer on each
Business Day for the period specified therein, in substantially the form of
Exhibit C.
"DAYS SALES OUTSTANDING" shall mean, as of any Settlement Report Date
and continuing until (but not including) the next Settlement Report Date,
the number of days equal to the product of (a) 91 and (b) the amount
obtained by dividing (i) the aggregate Principal Amount of Eligible
Receivables as of the last day of the immediately preceding Settlement
Period by (ii) the aggregate Principal Amount of Receivables generated by
the Sellers for the three Settlement Periods immediately preceding such
earlier Settlement Report Date.
"DCR" shall mean Duff & Xxxxxx Credit Rating Co. or any successor
thereto.
"DEFINITIVE CERTIFICATE CONVERSION LETTER" shall mean a Definitive
Certificate Conversion Letter in substantially the form attached hereto as
Exhibit F.
"DEPOSITORY" shall mean The Depository Trust Company, the nominee of
which is Cede & Co., or any successor thereto.
"DEPOSITORY PARTICIPANT" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time the
Depository effects book-entry transfers and pledges of securities deposited
with the Depository.
"DILUTION HORIZON" shall mean, (i) for the period from the Issuance
Date until the sixth Settlement Report Date to occur thereafter, 5.3 days
as representing the time period it takes the Sellers to recognize a
Dilution Adjustment, and (ii) for each
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six-month period (beginning and ending on the previous Settlement Report
Date) to occur after such initial period, the number of days (expressed as
a dollar weighted average based upon the Dilution Adjustments for such
period), as determined by the Servicer in accordance with the procedures
utilized to calculate the dilution horizon in clause (i) above; PROVIDED
that in no event shall the Dilution Horizon be less than 2 days.
"DILUTION HORIZON FACTOR" shall mean (a) for the period from the
Issuance Date until the sixth Settlement Report Date to occur thereafter,
0.18 months and (b) for each six-month period (beginning and ending on a
Settlement Report Date) to occur after such initial period, a fraction, (i)
the numerator of which is the Dilution Horizon for such period and (ii) the
denominator of which is 30; PROVIDED, HOWEVER, that if the Dilution Horizon
Factor for any period would be less than the Dilution Horizon Factor for
the immediately preceding period, then the actual Dilution Horizon Factor
for such current period shall be recalculated to equal a fraction, the
numerator of which is equal to the average of the numerators used to
calculate the Dilution Horizon Factor for such immediately preceding period
and such current period and the denominator of which is 30.
"DILUTION PERIOD" shall mean, as of any Settlement Report Date and
continuing until (but not including) the next Settlement Report Date, the
quotient of (i) the product of (A) the aggregate Principal Amount of
Receivables which were originated by the Sellers during the Settlement
Period immediately preceding such earlier Settlement Report Date and (B)
the Dilution Horizon Factor then in effect and (ii) the Aggregate
Receivables Amount as of the last day of the Settlement Period preceding
such earlier Settlement Report Date.
"DILUTION RATIO" shall mean, for each Settlement Period, an amount
(expressed as a percentage) equal to the aggregate amount of Dilution
Adjustments (other than Dilution Adjustments related to rebates given by a
Seller to its customers relating to general price increases by the Tobacco
Companies for which the Tobacco Companies have granted rebates to the
Sellers, so long as the Seller has granted the rebate to its customer prior
to the time that the merchandise giving rise to the Receivable to which
such rebate is applied is shipped by the Seller) made during such
Settlement Period DIVIDED BY the aggregate Principal Amount of Receivables
which were originated by the Sellers during such Settlement Period.
"DILUTION RESERVE RATIO I" shall mean, as of any Settlement Report
Date and continuing until (but not including) the next Settlement Report
Date, an amount (expressed as a percentage) which is calculated for either
the Class A Certificates or the Class B Certificates, as the case may be,
as follows:
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DRR = [(c * d) + [(e-d) * (e/d)]] * f
Where:
DRR = Dilution Reserve Ratio I;
c = with respect to the Class A Certificates, 2.5, and with respect
to the Class B Certificates, 2.0;
d = the average of the Dilution Ratio during the period of twelve
consecutive Settlement Periods ending prior to such earlier
Settlement Report Date;
e = the highest Dilution Ratio for any Settlement Period during the
period of twelve consecutive Settlement Periods ending prior to
such earlier Settlement Report Date; and
f = the Dilution Period.
"DILUTION RESERVE RATIO II" shall mean, as of any Settlement Report
Date and continuing until (but not including) the next Settlement Report
Date, an amount (expressed as a percentage) which is calculated for either
the Class A Certificates or the Class B Certificates, as the case may be,
as follows:
DRR = [(c * d) + e] * f
Where:
DRR = Dilution Reserve Ratio II
c = with respect to the Class A Certificates, 2.5, and with respect
to the Class B Certificates, 2.0;
d = the average of the Dilution Ratio during the period of twelve
consecutive Settlement Periods ending prior to such earlier
Settlement Report Date;
e = the product of (i) the twelve-month sample standard deviation of
the Dilution Ratio as of the end of each of the twelve
consecutive Settlement Periods immediately preceding such earlier
Settlement Report Date and (ii) (A) for calculations with respect
to Class A Certificates, 2.58, and (B) for calculations with
respect to Class B Certificates, 1.96; and
f = the Dilution Period.
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"EARLY AMORTIZATION EVENT" shall have the meanings assigned in Section
5.1 of this Supplement and Section 7.1 of the Agreement.
"EARLY AMORTIZATION PERIOD" shall have the meaning assigned in Section
5.1 of this Supplement and Section 7.1 of the Agreement.
"ERISA ENTITY" shall mean (i) an "employee benefit plan" within the
meaning of Section 3(3) of ERISA or other retirement arrangement,
individual retirement account or Xxxxx plan, whether or not it is subject
to the provisions of Title I of ERISA, (ii) any plan described in Section
4975(e)(1) of the Internal Revenue Code or (iii) any other entity that
would be deemed to be a "benefit plan investor" within the meaning of
Department of Labor regulation Section 2510.3-101(f)(2).
"INITIAL PURCHASER" shall mean Chase Securities Inc., who is
purchasing the Term Certificates on the Issuance Date pursuant to the
Purchase Agreement.
"INSTITUTIONAL ACCREDITED INVESTOR" shall mean an "accredited
investor" within the meaning of Rule 501(a)(1),(2),(3) or (7) of Regulation
D under the Securities Act.
"INVESTED PERCENTAGE" shall mean, with respect to any Business Day (i)
during the Series 1998-1 Revolving Period, the percentage equivalent of a
fraction, the numerator of which is the Series 1998-1 Allocated Receivables
Amount as of the end of the immediately preceding Business Day and the
denominator of which is the Aggregate Receivables Amount as of the end of
the immediately preceding Business Day and (ii) during the Series 1998-1
Amortization Period, the percentage equivalent of a fraction, the numerator
of which is the Series 1998-1 Allocated Receivables Amount as of the end of
the last Business Day of the Series 1998-1 Revolving Period (PROVIDED THAT
if during the Series 1998-1 Amortization Period, the amortization periods
of all other Outstanding Series which were outstanding prior to the
commencement of the Series 1998-1 Amortization Period commence, then,
from and after the date the last of such Series commences its
Amortization Period, the numerator shall be the Series 1998-1 Allocated
Receivables Amount as of the end of the Business Day preceding such date)
and the denominator of which is the greater of (A) the Aggregate
Receivables Amount as of the end of the immediately preceding Business
Day and (B) the sum of the numerators used to calculate the Invested
Percentage for all Outstanding Series on the Business Day for which such
percentage is determined.
"ISSUANCE DATE" shall mean April 1, 1998.
"LOSS RESERVE RATIO I" shall mean, as of any Settlement Report Date
and continuing until (but not including) the next Settlement Report Date,
an amount (expressed as a percentage) which is calculated for either the
Class A Certificates or the Class B Certificates, as the case may be, as
follows:
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LRR = [(a * b)/c] * d * e
Where:
LRR = Loss Reserve Ratio I;
a = the aggregate Principal Amount of Receivables originated by the
Sellers during the three Settlement Periods immediately preceding
such earlier Settlement Report Date;
b = the highest three-month rolling average of the Aged Receivables
Ratio that occurred during the period of twelve consecutive
Settlement Periods preceding such earlier Settlement Report Date;
c = the Aggregate Receivables Amount as of the last day of the
Settlement Period preceding such earlier Settlement Report Date;
d = with respect to the Class A Certificates, 2.5, and with respect
to the Class B Certificates, 2.0; and
e = Payment Terms Factor.
"LOSS RESERVE RATIO II" shall mean, as of any Settlement Report Date
and continuing until (but not including) the next Settlement Report Date,
an amount (expressed as a percentage) which is calculated for either the
Class A Certificates or the Class B Certificates, as the case may be, as
follows:
LRR = [[(a * b)/c] * d] * e + f
Where:
LRR = Loss Reserve Ratio II;
a = the aggregate Principal Amount of Receivables originated by the
Sellers during the three Settlement Periods immediately preceding
such earlier Settlement Report Date;
b = the highest three-month rolling average of the Aged Receivables
Ratio that occurred during the period of twelve consecutive
Settlement Periods preceding such earlier Settlement Report Date;
c = for the period prior to the first Settlement Report Date, the
difference between (i) the aggregate outstanding Principal Amount
of all Receivables and (ii) the aggregate outstanding Principal
Amount of all Aged Receivables, in each case, originated by the
Sellers as of the last
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day of the Settlement Period preceding such earlier Settlement
Report Date; and thereafter, the Aggregate Receivables Amount as
of the last day of the Settlement Period preceding such earlier
Settlement Report Date;
d = with respect to the Class A Certificates, 2.5, and with respect
to the Class B Certificates, 2.0;
e = Payment Terms Factor; and
f = the product of (i) the twelve-month sample standard deviation of
the Aged Receivables Ratio as of the end of each of the twelve
consecutive Settlement Periods preceding such earlier Settlement
Report Date and (ii) (A) for calculations with respect to Class A
Certificates, 2.58, and (B) for calculations with respect to
Class B Certificates, 1.96.
"MAJORITY TERM CERTIFICATEHOLDERS" shall mean, on any day, Term
Certificateholders representing, in the aggregate, more than 50% of the
Series 1998-1 Invested Amount.
"MINIMUM RATIO" shall mean, as of any Settlement Report Date and
continuing until (but not including) the next Settlement Report Date, an
amount (expressed as a percentage) which is calculated for either the Class
A Certificates or the Class B Certificates, as the case may be, as follows:
MR = (a * b) + c
Where:
MR = Minimum Ratio;
a = the average of the Dilution Ratio during the period of the twelve
consecutive Settlement Periods ending prior to such earlier
Settlement Report Date;
b = the Dilution Period; and
c = with respect to the Class A Certificates, 11.25%, and with
respect to the Class B Certificates, 9.0%.
"ONE-MONTH LIBOR" shall mean, for any Accrual Period after the initial
Accrual Period, the rate per annum, as recorded by the Trustee, which is
the arithmetic mean (rounded to the nearest 1/100th of 1%) of the offered
rates for Dollar deposits having a maturity of one month commencing on the
first day of such Accrual Period that appears on the Telerate British
Bankers Assoc. Interest Settlement Rates Page (as
11
defined below) at approximately 11:00 a.m., London time, on the second
full Business Day prior to such date; PROVIDED, HOWEVER, that if there
shall at any time no longer exist a Telerate British Bankers Assoc.
Interest Settlement Rates Page, "One-Month LIBOR" shall mean with respect
to each day during each Accrual Period, the rate per annum equal to the
rate at which The Chase Manhattan Bank is offered Dollar deposits at or
about 10:00 a.m., New York City time, two Business Days prior to the
beginning of such Accrual Period in the London interbank eurodollar
market for delivery on the first day of such Accrual Period for one month
and in a principal amount equal to an amount of not less than $1,000,000.
"TELERATE BRITISH BANKERS ASSOC. INTEREST SETTLEMENT RATES PAGE" shall
mean the display designated as Page 3750 on the Telerate System
Incorporated Service (or such other page as may replace such page on such
service for the purpose of displaying the rates at which Dollar deposits
are offered by leading banks in the London interbank deposit market).
"OPTIONAL TERMINATION DATE" shall have the meaning assigned in
subsection 2.6(b).
"OPTIONAL TERMINATION NOTICE" shall have the meaning assigned in
subsection 2.6(b).
"PAYMENT TERMS FACTOR" shall mean, (a) for the period from the
Issuance Date until the sixth Settlement Report Date to occur thereafter,
0.82 months and (b) for each six-month period to occur after such initial
period, a fraction, the numerator of which is the sum of (i) the weighted
average payment terms (based upon the principal amount of the Receivables
and expressed as a number of days) for the Receivables originated during
such period and (ii) 60 and the denominator which is 90; PROVIDED, HOWEVER,
that if the Payment Terms Factor for any period is less than the Payment
Terms Factor for the immediately preceding period, then the actual Payment
Terms Factor for such current period shall be recalculated to equal a
fraction, the numerator of which is equal to the average of the numerators
used to calculate the Payment Terms Factor for such current period and the
three immediately preceding periods (without giving effect to this proviso)
and the denominator of which is 90.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PREPAYMENT PREMIUM" shall have the meaning assigned in subsection
2.6(b).
"PROGRAM COSTS" shall mean, for any Business Day, the sum of (a) the
product of (i) all unpaid fees and expenses due and payable to counsel to,
and independent auditors of, the Company (other than fees and expenses
payable on or in connection with the closing of any issuance of the Term
Certificates) on such Business Day and (ii) a fraction, the numerator of
which is the Series 1998-1 Invested Amount on such Business Day and the
denominator of which is the Aggregate Invested Amount on such Business Day
and (b) all unpaid fees and expenses due and payable to Rating
12
Agencies rating the Term Certificates; PROVIDED, HOWEVER, that Program
Costs shall not exceed $100,000 in the aggregate in any fiscal year of the
Company.
"PURCHASE AGREEMENT" shall mean the agreement to be entered into on
the Issuance Date among the Company, Core-Xxxx and the Initial Purchaser
pursuant to which the Company agrees to sell, and the Initial Purchaser
agrees to purchase, the principal amounts and Classes of Term Certificates
set forth therein.
"PURCHASER LETTER" shall mean a Purchaser Letter in substantially the
form attached hereto as Exhibit E.
"QUALIFIED INSTITUTIONAL BUYER" has the meaning ascribed to such term
in Rule 144A(a) under the Securities Act.
"RATING AGENCY" shall mean the collective reference to S&P and DCR.
"RECORD DATE" shall mean, with respect to any Distribution Date, the
last Business Day of the immediately preceding Settlement Period.
"REDUCTION" shall have the meaning specified in subsection 2.6(a).
"REDUCTION AMOUNT" shall have the meaning specified in subsection
2.6(a).
"REDUCTION THRESHOLD" shall mean, at any date of determination,
$10,000,000.
"SCHEDULED REVOLVING TERMINATION DATE" shall mean the last day of the
Settlement Period ending in January, 2003.
"SERIES 1998-1" shall mean Series 1998-1, the Principal Terms of which
are set forth in this Supplement.
"SERIES 1998-1 ACCRUED INTEREST SUB-SUBACCOUNT" shall have the meaning
assigned in subsection 3A.2(a).
"SERIES 1998-1 ADJUSTED INVESTED AMOUNT" shall mean, as of any date of
determination, (i) the Series 1998-1 Invested Amount on such date, MINUS
(ii) the amount on deposit in the Series 1998-1 Principal Collection Sub-
subaccount on such date.
"SERIES 1998-1 ALLOCABLE CHARGED-OFF AMOUNT" shall mean, with respect
to any Special Allocation Settlement Report Date, the "Allocable Charged-
Off Amount", if any, which has been allocated to Series 1998-1.
13
"SERIES 1998-1 ALLOCABLE RECOVERIES AMOUNT" shall mean, with respect
to any Special Allocation Settlement Report Date, the "Allocable Recoveries
Amount", if any, which has been allocated to Series 1998-1.
"SERIES 1998-1 ALLOCATED RECEIVABLES AMOUNT" shall mean, on any date
of determination, the lower of (i) the Series 1998-1 Target Receivables
Amount on such day and (ii) the product of (x) the Aggregate Receivables
Amount on such day and (y) the percentage equivalent of a fraction the
numerator of which is the Series 1998-1 Target Receivables Amount on such
day and the denominator of which is the Aggregate Target Receivables Amount
on such day.
"SERIES 1998-1 AMORTIZATION PERIOD" shall mean the period commencing
on the Business Day following the earliest to occur of (i) the date on
which an Early Amortization Period is declared to commence or automatically
commences, (ii) the Optional Termination Date and (iii) the Scheduled
Revolving Termination Date and ending on the earlier of (x) the date when
the Series 1998-1 Invested Amount shall have been reduced to zero and all
accrued interest on the Term Certificates shall have been paid in full and
(y) the Series 1998-1 Termination Date.
"SERIES 1998-1 CERTIFICATEHOLDERS' INTEREST" shall have the meaning
assigned in subsection 2.2(a).
"SERIES 1998-1 COLLECTION SUBACCOUNT" shall have the meaning assigned
in subsection 3A.2(a).
"SERIES 1998-1 DAILY INTEREST EXPENSE" shall mean, for each Business
Day during an Accrual Period, the sum (without duplication) of (a) for each
of the first ten of such Business Days, one-tenth of the Series 1998-1
Monthly Interest due and payable on the immediately succeeding Distribution
Date and zero on each Business Day thereafter (until such immediately
succeeding Distribution Date), (b) the aggregate amount of all previously
accrued and unpaid Series 1998-1 Daily Interest Expense (up to but not
exceeding the full amount thereof) and (c) the aggregate amount of all
accrued and unpaid Class A Additional Interest and Class B Additional
Interest for each day since the preceding Business Day (up to but not
exceeding the full amount thereof).
"SERIES 1998-1 INITIAL INVESTED AMOUNT" shall mean, collectively, the
Class A Initial Invested Amount and the Class B Initial Invested Amount.
"SERIES 1998-1 INTERESTS" shall mean, collectively, the Class A
Certificates, the Class B Certificates and the Series 1998-1 Subordinated
Interest.
"SERIES 1998-1 INVESTED AMOUNT" shall mean, collectively, the Class A
Invested Amount and the Class B Invested Amount.
14
"SERIES 1998-1 MONTHLY INTEREST" shall mean, collectively, the Class A
Monthly Interest and the Class B Monthly Interest.
"SERIES 1998-1 MONTHLY PRINCIPAL PAYMENT" shall have the meaning
assigned in Section 3A.5.
"SERIES 1998-1 MONTHLY SERVICING FEE" shall have the meaning assigned
in Section 6.1.
"SERIES 1998-1 NON-PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have the
meaning assigned in subsection 3A.2(a).
"SERIES 1998-1 PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have the
meaning assigned in subsection 3A.2(a).
"SERIES 1998-1 REQUIRED RESERVES" shall mean, subject to Section 8.9,
(x) on any date of determination during the Series 1998-1 Revolving Period,
an amount equal to the sum of:
(a) an amount equal to the greater of (i) the difference between
(A) product of (1) the Class A Adjusted Invested Amount on such day
(after giving effect to any increase or decrease thereof on such day)
and (2) a fraction, the numerator of which is the Class A Ratio, and
the denominator of which is one MINUS the Class A Ratio, and (B) the
Class B Invested Amount and (ii) the product of (A) the Series 1998-1
Adjusted Invested Amount on such day (after giving effect to any
increase or decrease thereof on such day) and (B) a fraction, the
numerator of which is the Class B Ratio, and the denominator of which
is one MINUS the Class B Ratio;
(b) the product of (i) the Series 1998-1 Invested Amount on such
day (after giving effect to any increase or decrease thereof on such
day) and (ii) a fraction, the numerator of which is the Carrying Cost
Reserve Ratio, and the denominator of which is one MINUS the Class A
Ratio; and
(c) the product of (i) the aggregate Principal Amount of
Receivables in the Trust on such day, (ii) a fraction, the numerator
of which is the Series 1998-1 Invested Amount on such day (after
giving effect to any increase or decrease thereof on such day), and
the denominator of which is the Aggregate Invested Amount on such day,
and (iii) a fraction, the numerator of which is the Servicing Reserve
Ratio, and the denominator of which is one MINUS the Class A Ratio;
and (y) on any date of determination during the Series 1998-1 Amortization
Period, an amount equal to the Series 1998-1 Required Reserves on the last
Business Day of the Series 1998-1 Revolving Period; PROVIDED, in the case
of this clause (y), that such
15
amount shall be adjusted on each Special Allocation Settlement Report Date,
if any, to the extent required as set forth in Section 3A.5(b)(i) and
Section 3A.5(c)(ii).
"SERIES 1998-1 REVOLVING PERIOD" shall mean the period commencing on
the Issuance Date and terminating on the earliest to occur of the close of
business on (i) the date on which an Early Amortization Period is declared
to commence or automatically commences, (ii) the Optional Termination Date
and (iii) the Scheduled Revolving Termination Date.
"SERIES 1998-1 SUBORDINATED INTEREST" shall have the meaning assigned
in subsection 2.2(b).
"SERIES 1998-1 TARGET RECEIVABLES AMOUNT" shall mean, on any date of
determination, the sum of (i) the Series 1998-1 Adjusted Invested Amount on
such day and (ii) the Series 1998-1 Required Reserves for such day.
"SERIES 1998-1 TERMINATION DATE" shall mean the Distribution Date that
occurs in December, 2003.
"SERVICING RESERVE RATIO" shall mean, as of any Settlement Report Date
and continuing until (but not including) the next Settlement Report Date,
an amount (expressed as a percentage) equal to (i) the product of (A) the
Servicing Fee Percentage and (B) 2 TIMES Days Sales Outstanding as of such
earlier Settlement Report Date, DIVIDED BY (ii) 360.
"SPECIAL DISTRIBUTION DATE" shall have the meaning assigned in
subsection 2.6(a).
"SUBSEQUENT ISSUANCE DATE" shall mean each Distribution Date, if any,
on which the Trustee issues additional Class A Certificates and/or Class B
Certificates.
"TERM CERTIFICATES" shall mean, collectively, those Certificates
designated as the Class A Certificates and the Class B Certificates.
"TERM CERTIFICATEHOLDERS" shall mean, collectively, the Class A
Certificateholders and the Class B Certificateholders.
"TRUST ACCOUNTS" shall have the meaning specified in
subsection 3A.2(a).
(b) If any term or provision contained herein conflicts with or is
inconsistent with any term, definition or provision contained in the Agreement,
the terms and provisions of this Supplement shall govern. All capitalized terms
not otherwise defined herein are defined in the Agreement. All Article, Section
or subsection references herein shall mean Article, Section or subsections of
this Supplement, except as otherwise provided herein. Unless otherwise stated
herein, the context otherwise requires or such term is otherwise
16
defined in the Agreement, each capitalized term used or defined herein shall
relate only to the Term Certificates and no other Series of Investor
Certificates issued by the Trust.
ARTICLE II
DESIGNATION OF CERTIFICATES AND INTERESTS; PURCHASE AND SALE
OF THE TERM CERTIFICATES
SECTION II.1. DESIGNATION. The Certificates and interests created
and authorized pursuant to the Agreement and this Supplement shall be divided
into (i) two classes, which shall be designated as (a) the "Class A
Certificates, Series 1998-1" and (b) the "Class B Certificates, Series
1998-1", respectively, and (ii) an interest designated as the "Series 1998-1
Subordinated Interest".
SECTION II.2. THE TERM CERTIFICATES. (a) The Term Certificates
shall represent fractional undivided interests in the Trust, including the
right to receive distributions from (i) the Invested Percentage (expressed as
a decimal) of Collections received with respect to the Receivables and all
other funds on deposit in the Collection Account (other than the Series
Collection Subaccounts) and (ii) all other funds on deposit in the Series
1998-1 Collection Subaccounts and any subaccounts thereof (collectively, the
"SERIES 1998-1 CERTIFICATEHOLDERS' INTEREST").
(b) The "SERIES 1998-1 SUBORDINATED INTEREST" shall be a fractional
undivided interest in the Trust, consisting of the right to receive Collections
with respect to the Receivables allocated to the Series 1998-1
Certificateholders' Interest and not required to be distributed to or for the
benefit of the Term Certificateholders. The Exchangeable Company Interest and
any Series of Investor Certificates (or any related Series Subordinated
Interest) outstanding shall represent the ownership interest in the remainder of
the Trust not allocated pursuant hereto to the Series 1998-1 Certificateholders'
Interest or the Series 1998-1 Subordinated Interest.
(c) The Class A Certificates and the Class B Certificates shall be
issued in registered form substantially in the forms of Exhibits A and B,
respectively, (provided that in the case of any additional Term Certificates
issued pursuant to Section 2.7, such Certificates may be modified to reflect
that they are being issued on a subsequent Issuance Date, rather than on the
Issuance Date), and shall, upon issue, be executed and delivered by the Company
to the Trustee for authentication and redelivery as provided in Section 2.4
hereof and Section 5.2 of the Agreement.
SECTION II.3. DELIVERY. (a) On the Issuance Date, the Company shall
sign, on behalf of the Trust, and shall direct the Trustee in writing pursuant
to Section 5.2 of the Agreement to duly authenticate, and the Trustee, upon
receiving such direction, shall so authenticate, subject to the provisions set
forth in subsection 2.3(b), the Term Certificates in such names and such
denominations and deliver such Term Certificates to the Initial
17
Purchaser in accordance with such written directions. The Term Certificates
shall be issued in minimum denominations of $1,000,000 and in integral
multiples of $100,000 in excess thereof.
(b) Except with respect to any Term Certificates purchased on the
Issuance Date or Subsequent Issuance Date by an entity described in
subsection 2.4(a)(ii), which will be issued in the form of Definitive
Certificates, the Term Certificates initially shall be issued in the form of
one or more global Certificates, representing the Book-Entry Certificates, to
be delivered to the Depository. Except as provided in Section 5.13 of the
Agreement or Section 2.4 of this Supplement, such Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of such Book-Entry Certificates
may not be transferred by the Trustee except to a successor to the
Depository; (ii) ownership and transfers of registration of such Book-Entry
Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository and by Section 2.4; (iii) the Depository
may collect its usual and customary fees, charges and expenses from its
Depository Participants; (iv) the Trustee shall deal with the Depository,
Depository Participants and indirect participating firms as representatives
of such Certificate Book-Entry Holders of such Book-Entry Certificates for
purposes of exercising the rights of such Certificate Book-Entry Holders
under the Agreement and this Supplement, and requests and directions for and
votes of such representatives shall not be deemed to be inconsistent if they
are made with respect to different Certificate Book-Entry Holders; and (v)
the Trustee may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its Depository Participants and
furnished by the Depository Participants with respect to indirect
participating firms and Persons shown on the books of such indirect
participating firms as direct or indirect Certificate Book-Entry Holders.
All transfers by Certificate Book-Entry Holders of interest in Term
Certificates shall be made in accordance with the procedures established by
the Depository Participant or brokerage firm representing such Book-Entry
Certificate Holders and, notwithstanding any other provision herein to the
contrary, the Trustee shall have no responsibility with respect to any such
transfers (except as set forth in subsection 2.4(d) below). Each Depository
Participant shall only transfer Term Certificates of Certificate Book-Entry
Holders it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures and in accordance with
applicable law.
SECTION II.4. RESTRICTIONS ON TRANSFER. (a) On the Issuance Date,
the Company shall sell the Term Certificates to the Initial Purchaser
pursuant to the Purchase Agreement and deliver the Term Certificates in the
form specified therein. The Term Certificates may not, after the Issuance
Date or Subsequent Issuance Date, as the case may be, be transferred except
in accordance with any applicable state securities laws, in amounts of at
least U.S. $1,000,000 each and otherwise as follows:
(i) with respect to Term Certificates evidenced by Book-Entry
Certificates, to Qualified Institutional Buyers in reliance on the
exemption from the registration
18
requirements of the Securities Act provided by Rule 144A promulgated
thereunder ("Rule 144A"); and
(ii) with respect to Term Certificates evidenced by Definitive
Certificates, (A) to Qualified Institutional Buyers in reliance on the
exemption from the registration requirements of the Securities Act provided
by Rule 144A thereunder, (B) to other Institutional Accredited Investors
who deliver a Purchaser Letter to the Trustee or (C) to a person who is
taking delivery of such Certificate in definitive form pursuant to a
transaction that is otherwise exempt from the registration requirements of
the Securities Act, as confirmed in an Opinion of Counsel addressed to the
Trustee and the Company, which counsel and opinion are satisfactory to the
Trustee and the Company.
The Trustee shall have no obligations or duties with respect to determining
whether any transfers of the Certificates are made in accordance with the
Securities Act or any other Requirements of Law; PROVIDED that with respect
to Definitive Certificates, the Trustee shall enforce such transfer
restrictions in accordance with the terms set forth on the related
Certificate and the provisions of the Agreement and this Supplement.
(b) Each purchaser (other than the Initial Purchaser) of the Term
Certificates (including, without limitation, any purchaser of an interest in
the Book-Entry Certificates) will be deemed to have represented and agreed as
follows:
(i) It is (A) a Qualified Institutional Buyer as defined in Rule
144A(a) and is acquiring the Term Certificates for its own institutional
account or for the account or accounts of a Qualified Institutional Buyer
or (B) purchasing Term Certificates being delivered in the form of
Definitive Certificates in a transaction exempt from registration under the
Securities Act and in compliance with the provisions of the Agreement and
in compliance with the legend set forth in clause (v) below;
(ii) It is purchasing one or more Term Certificates in an amount of
at least U.S. $1,000,000 and it understands that such Term Certificates may
be resold, pledged or otherwise transferred only in an amount of at least
U.S. $1,000,000;
(iii) It is not an ERISA Entity and it is not acquiring or holding
any Term Certificate, directly or indirectly, for or on behalf of an ERISA
Entity;
(iv) It understands that the Term Certificates are being transferred
to it in a transaction not involving any public offering within the meaning
of the Securities Act, and that, if in the future it decides to resell,
pledge or otherwise transfer any Term Certificates, such Term Certificates
may be resold, pledged or transferred only (A) in a transaction meeting the
requirements of Rule 144A to a person who the seller reasonably believes is
a Qualified Institutional Buyer that purchases for its own account or for
the account or accounts of a Qualified Institutional Buyer to whom
19
notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A or (B) to purchasers of Term Certificates being
delivered in the form of Definitive Certificates, pursuant to a
transaction otherwise exempt from registration under the Securities Act
and in compliance with the provisions of the Agreement and in compliance
with the legend set forth in clause (v) below;
(v) It understands that each Term Certificate will bear a legend
substantially to the following effect:
[FOR BOOK-ENTRY CERTIFICATES ONLY: "UNLESS THIS TERM CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
INTERESTS IN THIS TERM CERTIFICATE MAY ONLY BE HELD BY QUALIFIED
INSTITUTIONAL BUYERS (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF
1933, AS AMENDED).]
THIS TERM CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS TERM CERTIFICATE, AGREES
THAT SUCH TERM CERTIFICATE MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY IN
ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, IN AN AMOUNT OF AT
LEAST U.S. $1,000,000 AND (1) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A UNDER THE ACT ("RULE 144A"), TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (INCLUDING FOREIGN
QUALIFIED INSTITUTIONAL BUYER) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER (INCLUDING
FOREIGN QUALIFIED INSTITUTIONAL BUYER) TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR
(2) TO A PERSON (A) WHO IS AN INSTITUTIONAL "ACCREDITED INVESTOR", WITHIN
THE MEANING OF RULE 501(a)(1),(2),(3) OR (7) OF REGULATION D UNDER THE ACT,
AND
20
WHO DELIVERS A PURCHASER LETTER TO THE TRUSTEE IN THE FORM ATTACHED TO
THE SERIES 1998-1 SUPPLEMENT OR (B) WHO IS TAKING DELIVERY OF SUCH
CERTIFICATE PURSUANT TO A TRANSACTION THAT IS OTHERWISE EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT, AS CONFIRMED IN AN OPINION OF COUNSEL
ADDRESSED TO THE TRUSTEE AND THE COMPANY, WHICH SUCH COUNSEL AND OPINION
ARE SATISFACTORY TO THE COMPANY AND THE TRUSTEE.
THIS TERM CERTIFICATE MAY NOT BE ACQUIRED OR HELD BY OR ON BEHALF OF (1) AN
"EMPLOYEE BENEFIT PLAN" WITHIN THE MEANING OF SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR OTHER RETIREMENT
ARRANGEMENT, INDIVIDUAL RETIREMENT ACCOUNT OR XXXXX PLAN, WHETHER OR NOT IT
IS SUBJECT TO THE PROVISIONS OF TITLE I THEREOF, (2) ANY PLAN DESCRIBED IN
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR (3) ANY
OTHER ENTITY THAT WOULD BE DEEMED TO BE A "BENEFIT PLAN INVESTOR" WITHIN
THE MEANING OF DEPARTMENT OF LABOR REGULATION SECTION 2510.3-101(f)(2) (ANY
OF THE FOREGOING, AN "ERISA ENTITY").
THIS TERM CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY OR BY ANY OTHER PERSON.
In addition, any Class B Certificate will contain the following
additional legend:
THE CLASS B CERTIFICATES ARE SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS
A CERTIFICATES AS PROVIDED IN THE POOLING AGREEMENT AND THE SERIES 1998-1
SUPPLEMENT.
(c) The Transfer Agent and Registrar shall not permit the transfer
of any Term Certificates unless such transfer complies with the terms of the
foregoing legend and, in the case of a transfer (i) to an Institutional
Accredited Investor (other than a Qualified Institutional Buyer), the
transferee delivers a completed Purchaser Letter or (ii) to a Person other
than a Qualified Institutional Buyer or an Institutional Accredited Investor,
upon delivery of an opinion of counsel, satisfactory to the Trustee and the
Company, to the effect that the transferee is taking delivery of the Term
Certificates in a transaction that is otherwise exempt from the registration
requirements of the Securities Act.
(d) If a Certificate Book-Entry Holder of Term Certificates wishes
at any time to transfer its interest therein to one or more Institutional
Accredited Investors or persons described in subsection 2.4(a)(ii)(C) above,
such interest may be so transferred only if, in
21
addition to satisfaction of any other applicable requirements pursuant hereto
and to the Agreement, the transferor has delivered to the Trustee and the
Transfer Agent and Registrar a Definitive Certificate Conversion Letter.
Upon (i) receipt by the Trustee and the Transfer Agent and Registrar of (x)
such Definitive Certificate Conversion Letter and (y) instructions given in
accordance with the Depository's procedures therefor and (ii) satisfaction of
any other applicable requirements pursuant hereto and to the Agreement, the
Transfer Agent and Registrar shall reflect on the Certificate Register the
date and a decrease in the principal amount of the applicable Book-Entry
Certificate in an amount equal to the principal amount of the beneficial
interest in such Book-Entry Certificate to be transferred, and the Company
shall sign, on behalf of the Trust, and shall direct the Trustee in writing
to duly authenticate, and the Trustee, upon receiving such direction, shall
so authenticate and deliver one or more Definitive Certificates of like tenor
and amount to the transferee or transferees indicated in the related
Definitive Certificate Conversion Letter.
SECTION II.5. APPLICATION OF PROCEEDS. On the Issuance Date, the
Trustee shall remit to the Company any cash proceeds received by it upon the
issuance of the Term Certificates.
SECTION II.6. PROCEDURE FOR DECREASING THE SERIES 1998-1 INVESTED
AMOUNT;
OPTIONAL TERMINATION. (a) If as of the last day of any period of three
consecutive Settlement Periods the daily average excess during such period of
the Series 1998-1 Invested Amount over the Series 1998-1 Adjusted Invested
Amount equals or exceeds the Reduction Threshold, as of the last day of any
Settlement Period, the Company shall reduce the Class A Invested Amount and
the Class B Invested Amount (a "REDUCTION"), by causing the Trustee to
distribute to the Term Certificateholders in accordance with this subsection
2.6(a) an amount (the "REDUCTION AMOUNT") at least equal to such Reduction
Threshold, PROVIDED that in no event shall a Reduction be made if it would
cause the Series 1998-1 Invested Amount to be reduced below $25,000,000. The
Company shall direct the Trustee in writing to make such distribution and
shall specify the amount of the Reduction to be distributed as specified
below. The distribution of the Reduction Amount shall be made to the Term
Certificateholders PRO RATA based on the Initial Invested Amount of each
Class, from the funds on deposit in the Series 1998-1 Principal Collection
Sub-subaccount on the immediately succeeding Distribution Date (a "SPECIAL
DISTRIBUTION DATE"); PROVIDED that no Early Amortization Event or Potential
Early Amortization Event has occurred and is continuing and the Servicer on
behalf of the Company shall have given the Trustee written notice of such
Reduction and the related Reduction Amount (which amount shall not exceed the
available funds on deposit in the Series 1998-1 Principal Collection
Sub-subaccount as of the date of such notice) at least five Business Days
prior to the related Special Distribution Date setting forth the amount of
such Reduction and, in the case of such notice to the Trustee, instructions
not to distribute to the Company any amounts pursuant to subsection
3A.3(b)(i) until the condition set forth in the second proviso in such
subsection is satisfied. The Trustee shall send written notice of any
proposed Reduction to the Term Certificateholders and each Rating Agency as
promptly as reasonably practicable.
22
(b)(i) On any Business Day, the Company shall have the right to
deliver an irrevocable written notice (an "OPTIONAL TERMINATION NOTICE") to
the Trustee and the Servicer in which the Company declares that the Series
1998-1 Revolving Period shall terminate on the date (the "OPTIONAL
TERMINATION DATE") set forth in such notice (which date, in any event, shall
not be less than 10 days from the date on which such notice is delivered);
PROVIDED that if the Optional Termination Date occurs prior to the second
anniversary of the Issuance Date, the Company shall pay to the Term
Certificateholders, in addition to the Invested Amount (and interest accrued
thereon) to which such holders are entitled, an amount calculated by the
Company equal to the present value of a series of payments equal to the
product of (i) the Class A Invested Amount or the Class B Invested Amount, as
the case may be, and (ii) the spread over One-Month LIBOR applicable to the
Class A Certificates and the Class B Certificates, as the case may be, which
would be payable monthly on each Distribution Date in arrears from the
Optional Termination Date through the second anniversary of the Issuance Date
and discounted at a rate equal to One-Month LIBOR being used to calculate the
applicable Certificate Rates on the Optional Termination Date (the
"PREPAYMENT PREMIUM"); PROVIDED FURTHER that the Prepayment Premium shall be
paid in accordance with the following sentence. On the Distribution Date on
which the Series 1998-1 Invested Amount has been repaid in full, the Company
shall pay, FIRST, to the Class A Certificateholders, and SECOND, to the Class
B Certificateholders, solely from funds available to the Company which are
not otherwise needed to be applied to the payment of any amounts by the
Company pursuant to any Pooling and Servicing Agreement, the applicable
Prepayment Premium.
(ii) From and after the Optional Termination Date, the Series 1998-1
Amortization Period shall commence for all purposes under this Agreement and
the other Transaction Documents. The Trustee shall give prompt written
notice of its receipt of an Optional Termination Notice to the Term
Certificateholders and each Rating Agency.
SECTION II.7. SALE OF ADDITIONAL TERM CERTIFICATES. (a) The
Company may, upon written notice to the Trustee, the Servicer and the Term
Certificateholders and upon satisfaction of each of the conditions set forth
in subsection (b) of this Section 2.7 and Section 5.10 of the Agreement,
direct the Trustee in writing to issue on the following Distribution Date
(each such date a "SUBSEQUENT ISSUANCE DATE") additional Class A Certificates
and Class B Certificates, identical to the existing Class A Certificates and
Class B Certificates (except that the Certificate Rate applicable to such
additional Class A Certificates or Class B Certificates, as the case may be,
may differ from the Certificate Rate applicable to such existing Class A
Certificates or Class B Certificates, as the case may be) in an aggregate
principal amount and in such names and denominations as specified by the
Company in accordance with subsection 2.7(c) below; PROVIDED that the Series
1998-1 Target Receivables Amount shall not exceed the Series 1998-1 Allocated
Receivables Amount after giving effect to any increase in the Invested Amount
on such Subsequent Issuance Date; PROVIDED FURTHER that the principal amount
of the Class A Certificates and the Class B Certificates issued in any such
additional issuance shall be issued in such proportion that would cause,
after giving effect to such issuance, the Class B Invested Amount to be no
less than the same percentage of the Series 1998-1 Invested Amount as the
Class B Initial Invested Amount was of the Series 1998-1 Initial Invested
Amount.
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The Company may arrange for the sale of such additional Class A
Certificates and Class B Certificates pursuant to a private placement or any
other sale arrangement. On each Subsequent Issuance Date, if any, the Series
1998-1 Invested Amount, the Class A Invested Amount and the Class B Invested
Amount (and each other amount set forth herein, the calculation of which is
based on such amount) shall be recalculated by the Servicer to include the
additional Initial Invested Amounts with respect to the Class A Certificates
and Class B Certificates issued on such date.
(b) On any Subsequent Issuance Date, the Trustee shall only
authenticate and deliver any additional Class A Certificates and Class B
Certificates upon satisfaction of the following conditions on or prior to
such Subsequent Issuance Date:
(i) the Rating Agencies shall have been notified by the Company of
the proposed issuance of additional Class A Certificates and Class B
Certificates at least 10 days prior to the proposed Subsequent Issuance
Date, each Rating Agency shall have issued a rating (as confirmed in a
letter delivered to the Trustee) on the additional Class A Certificates and
Class B Certificates that is equivalent to that rating issued by such
Rating Agency on the Issuance Date and the Rating Agency Condition shall
have been satisfied on or prior to such Subsequent Issuance Date with
respect to such issuance;
(ii) the Trustee shall have received from the Company an Officer's
Certificate certifying that no Early Amortization Event or Potential Early
Amortization Event has occurred and is continuing with respect to Series
1998-1 or would occur as a result of such issuance;
(iii) a Tax Opinion addressed to the Trust and the Trustee shall have
been delivered to the Trustee;
(iv) an Opinion of Counsel addressed to the Trust and the Trustee
shall have been delivered to the Trustee stating that all of the conditions
to the issuance of such additional Class A Certificates and Class B
Certificates shall have been satisfied (which opinion may, to the extent it
concerns questions of fact, rely on an Officer's Certificate with respect
to such questions of fact); and
(v) a General Opinion addressed to the Trust and the Trustee.
(c) On each Subsequent Issuance Date, the Company shall sign, on
behalf of the Trust, and shall direct the Trustee in a written communication
signed by a Responsible Officer to duly authenticate, and the Trustee, upon
receiving such direction, shall so authenticate and deliver the related
additional Term Certificates in such names and such denominations and deliver
such additional Term Certificates in accordance with such written directions.
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SECTION II.8. OPTIONAL REDEMPTION. (a) On any Distribution Date
the Company may, at its option, redeem at any time all of the Term
Certificates by delivering an irrevocable written notice (an "OPTIONAL
REDEMPTION NOTICE") to the Trustee and the Servicer on such date (the
"OPTIONAL NOTICE DATE"; which date shall not be less than 10 days prior to
the date fixed for redemption) at a redemption price equal to:
(i) for the Class A Certificateholders, the Class A Invested
Amount PLUS all accrued, unpaid interest thereon (the "CLASS A
REDEMPTION PRICE") to the date fixed for redemption; PROVIDED that if
such Optional Redemption Notice is delivered prior to the second
anniversary of the Issuance Date, the Company shall pay, in addition
to the Redemption Price to which such holders are entitled, an amount
calculated by the Company equal to the present value of a series of
payments equal to the product of (i) the Class A Invested Amount and
(ii) the spread over One-Month LIBOR applicable to the Class A
Certificate Rate which would be payable monthly on each Distribution
Date in arrears from the Optional Notice Date through the second
anniversary of the Issuance Date, discounted at a rate equal to
One-Month LIBOR being used to calculate the Class A Certificate Rate on
the Optional Notice Date (the "CLASS A REDEMPTION PREMIUM"); and
(ii) for the Class B Certificateholders, the Class B Invested Amount
PLUS all accrued, unpaid interest thereon (the "CLASS B REDEMPTION PRICE")
to the date fixed for redemption; PROVIDED that if such Optional Redemption
Notice is delivered prior to the second anniversary of the Issuance Date,
the Company shall pay, in addition to the Redemption Price to which such
holders are entitled, an amount calculated by the Company equal to the
present value of a series of payments equal to the product of (i) the Class
B Invested Amount and (ii) the spread over One-Month LIBOR applicable to
the Class B Certificate Rate which would be payable monthly on each
Distribution Date in arrears from the Optional Notice Date through the
second anniversary of the Issuance Date, discounted at a rate equal to
One-Month LIBOR being used to calculate the Class B Certificate Rate on the
Optional Notice Date (the "CLASS B REDEMPTION PREMIUM").
(b) Each Optional Redemption Notice shall specify the total
principal amount to be redeemed, the date fixed for redemption and the
Redemption Price at which the Class A Certificates and the Class B
Certificates, as the case may be, are to be redeemed. On or prior to the
Optional Notice Date, the Company shall deposit with the Trustee immediately
available funds (or Eligible Investments which shall mature prior to the date
fixed for redemption) sufficient to redeem on the date fixed for redemption
all the Class A Certificates and the Class B Certificates, so called for
redemption at the appropriate Redemption Price, together with the applicable
Redemption Premium, if any.
(c) If the giving of the Optional Redemption Notice shall have
been completed as above provided, the Class A Certificates and/or the Class B
Certificates, as the case may be, shall become due and payable on the date
and at the place stated in such notice at the applicable Redemption Price,
together with the applicable Redemption Premium, if any,
25
and on and after such date fixed for redemption (unless the Company shall
default in the payment of such Class A Certificates and/or the Class B
Certificates, as the case may be, at the Redemption Price, together with the
applicable Redemption Premium, if any) interest on the Class A Certificates
and/or the Class B Certificates, as the case may be, so called for redemption
shall cease to accrue. On presentation and surrender of such Class A
Certificates and/or Class B Certificates, as the case may be, at said place
of payment in said notice specified, on or after the date fixed for
redemption the said Term Certificates shall be paid and redeemed by the
Company at the applicable Redemption Price, together with the applicable
Redemption Premium to the date fixed for redemption, if any. All Term
Certificates surrendered to the Trustee, upon redemption pursuant to the
provisions of this Article II, shall be forthwith cancelled by it.
ARTICLE III
ARTICLE III OF THE AGREEMENT
Section 3.1 of the Agreement and each other section of Article III
of the Agreement relating to another Series shall read in their entirety as
provided in the Agreement. Article III of the Agreement (except for Section
3.1 thereof and any portion thereof relating to another Series) shall read in
its entirety as follows and shall be exclusively applicable to the Term
Certificates:
SECTION 3A.2. ESTABLISHMENT OF TRUST ACCOUNTS. (a) The Trustee
shall cause to be established and maintained in the name of the Trustee, on
behalf of the Trust, (i) for the benefit of the Class A Certificateholders,
(ii) for the benefit, subject to the prior and senior interest of the Class A
Certificateholders, of the Class B Certificateholders and (iii) in the case
of clauses (A), (B) and (C) below, for the benefit, subject to the prior and
senior interest of the Term Certificateholders, of the owner of the Series
1998-1 Subordinated Interest, (A) a subaccount of the Collection Account (the
"SERIES 1998-1 COLLECTION SUBACCOUNT"), which subaccount is the Series
Collection Subaccount with respect to Series 1998-1; (B) two subaccounts of
the Series 1998-1 Collection Subaccount: (1) the Series 1998-1 Principal
Collection Sub-subaccount and (2) the Series 1998-1 Non-Principal Collection
Sub-subaccount (respectively, the "SERIES 1998-1 PRINCIPAL COLLECTION
SUB-SUBACCOUNT" and the "SERIES 1998-1 NON-PRINCIPAL COLLECTION
SUB-SUBACCOUNT"); and (C) a subaccount of the Series 1998-1 Non-Principal
Collection Sub-subaccount (the "SERIES 1998-1 ACCRUED INTEREST
SUB-SUBACCOUNT"; all accounts established pursuant to this subsection 3A.2(a)
and listed on Schedule 1, collectively, the "TRUST ACCOUNTS"), each Trust
Account to bear a designation indicating that the funds deposited therein are
held for the benefit of the Persons (and, for each such Person, to the
extent) set forth in clauses (i), (ii) and (iii) above. The Trustee, on
behalf of the Holders, shall possess all right, title and interest in all
funds from time to time on deposit in, and all Eligible Investments credited
to, the Trust Accounts and in all proceeds thereof. The Trust Accounts shall
be under the sole dominion and control of the Trustee for the exclusive
benefit of the Persons (and, for each such Person, to the extent) set forth
in clauses (i), (ii) and (iii) above.
26
(b) All Eligible Investments in the Trust Accounts shall be held
by the Trustee, on behalf of the Holders, for the exclusive benefit of the
Persons (and, for each such Person, to the extent) set forth in clauses (A),
(B) and (C) of subsection 3A.2(a) and, subject to the prior interest of such
Persons, the owner of the Series 1998-1 Subordinated Interest; PROVIDED,
HOWEVER, that funds on deposit in a Trust Account which is a Sub-subaccount
of a Collection Account may, at the direction of the Company, be invested
together with funds held in other Sub-subaccounts of the Collection Account.
After giving effect to any distribution to the Company pursuant to subsection
3A.3(b), amounts on deposit and available for investment in the Series 1998-1
Principal Collection Sub-subaccount shall be invested by the Trustee at the
written direction of the Company in Eligible Investments that mature, or that
are payable or redeemable upon demand of the holder thereof, (i) in the case
of any such investment made during the Series 1998-1 Revolving Period, on or
prior to the next Business Day and (ii) in the case of any such investment
made during the Series 1998-1 Amortization Period, on or prior to the
Business Day immediately preceding the next Distribution Date. Amounts on
deposit and available for investment in the Series 1998-1 Non-Principal
Collection Sub-subaccount and the Series 1998-1 Accrued Interest
Sub-subaccount shall be invested by the Trustee at the written direction of
the Company in Eligible Investments that mature, or that are payable or
redeemable upon demand of the holder thereof, on or prior to the Business Day
immediately preceding the next Distribution Date. As of the Business Day
immediately preceding such next Distribution Date, (x) all interest and other
investment earnings (net of losses and investment expenses) on funds
deposited in the Series 1998-1 Accrued Interest Sub-subaccount shall be
deposited in the Series 1998-1 Non-Principal Collection Sub-subaccount and
(y) all interest and investment earnings (net of losses and investment
expenses) on funds deposited in the Series 1998-1 Principal Collection
Sub-subaccount shall be deposited in the Series 1998-1 Non-Principal
Collection Sub-subaccount.
SECTION 3A.3. DAILY ALLOCATIONS. In accordance with the written
direction of the Servicer, upon which the Trustee may conclusively rely:
(a) The portion of the Aggregate Daily Collections allocated to the
Term Certificates pursuant to Article III of the Agreement shall be allocated
and distributed on each Business Day as set forth in this Article III by the
Trustee as follows:
(i) an amount equal to the Accrued Expense Amount for such day
(or, during the Series 1998-1 Revolving Period, such greater amount as the
Company may request in writing) shall be transferred from the Series 1998-1
Collection Subaccount to the Series 1998-1 Non-Principal Collection Sub-
subaccount;
(ii) any remaining funds on deposit in the Series 1998-1
Collection Subaccount shall be transferred by the Trustee to the Series
1998-1 Principal Collection Sub-subaccount.
(b)(i) On each Business Day during the Series 1998-1 Revolving
Period (including Distribution Dates), after giving effect to all allocations
of Aggregate Daily Collections on such Business Day, amounts on deposit in
the Series 1998-1 Principal
27
Collection Sub-subaccount shall be distributed by the Trustee to the Company
(but only to the extent that the Trustee has received a Daily Report which
reflects the receipt of the Collections on deposit therein) not later than
2:00 p.m., New York City time, in accordance with directions contained in
such Daily Report; PROVIDED that such distribution shall be made only if no
Potential Early Amortization Event or Early Amortization Event, in each case
pursuant to Section 7.1 of the Agreement or subsections (a), (d) (but only
with respect to a Servicer Default set forth in subsection 6.1(e) of the
Servicing Agreement), (g), (i) or (j) of Section 5.1 of this Supplement, has
occurred and is continuing and only to the extent that, after giving effect
to such distribution, the Series 1998-1 Target Receivables Amount would not
exceed the Series 1998-1 Allocated Receivables Amount; PROVIDED FURTHER that
if the Company or the Servicer, on behalf of the Company, shall have given a
notice of a Reduction and the related Reduction Amount to the Trustee and the
Servicer pursuant to subsection 2.6(a) (and the Trustee shall have received
such notice), the Trustee shall retain, until the related Special
Distribution Date, aggregate amounts on deposit in the Series 1998-1
Principal Collection Sub-subaccount equal to the sum of the Reduction Amount
in respect thereof; PROVIDED STILL FURTHER that in the event that an amount
less than the Accrued Expense Amount for such day was transferred from the
Series 1998-1 Collection Subaccount to the Series 1998-1 Non-Principal
Collection Sub-subaccount on such day pursuant to subsection 3A.3(a)(i), the
amount on deposit in the Series 1998-1 Principal Collection Sub-subaccount,
up to the amount of such deficiency, shall be transferred to the Series
1998-1 Non-Principal Collection Sub-subaccount. Amounts distributed to the
Company hereunder shall be deemed to be paid first from Collections received
directly by the Servicer and second from Collections received in the
Lockboxes.
(ii) On each Business Day during the Series 1998-1
Amortization Period (including Distribution Dates), funds deposited in the
Series 1998-1 Principal Collection Sub-subaccount shall be invested in
Eligible Investments that mature on or prior to the Business Day immediately
preceding the next Distribution Date and shall be distributed on such
Distribution Date in accordance with subsection 3A.6(c). No amounts on
deposit in the Series 1998-1 Principal Collection Sub-subaccount shall be
distributed by the Trustee to the Company or the owner of the Series 1998-1
Subordinated Interest during the Series 1998-1 Amortization Period.
(c) On each Business Day, an amount equal to the Series 1998-1
Daily Interest Expense for such day shall be transferred by the Trustee from
the Series 1998-1 Non-Principal Collection Sub-subaccount to the Series
1998-1 Accrued Interest Sub-subaccount.
(d) The allocations to be made pursuant to this Section 3A.3 are
subject to the provisions of Sections 2.5, 2.6, 7.2 and 9.1 of the Agreement.
SECTION 3A.4. DETERMINATION OF INTEREST. (a) The amount of interest
distributable with respect to the Term Certificates on each Distribution Date
for the Accrual Period ending on such Distribution Date shall be determined as
follows:
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(i) for the Class A Certificates, an amount (the "CLASS A MONTHLY
INTEREST") equal to the product of (A) the Class A Certificate Rate for
such Accrual Period, (B) the Class A Invested Amount on the first day of
such Accrual Period (after giving effect to any distributions of principal
on such date) and (C) the actual number of days in such Accrual Period
DIVIDED BY 360; PROVIDED that if any additional Class A Certificates have
been issued on any Subsequent Issuance Date, the Class A Monthly Interest
shall equal the sum of the monthly interest amount for each outstanding
tranche of Class A Certificates (based on the outstanding Invested Amount
and the applicable Class A Certificate Rate in respect of such tranche);
(ii) for the Class B Certificates, an amount (the "CLASS B MONTHLY
INTEREST") equal to the product of (A) the Class B Certificate Rate for
such Accrual Period, (B) the Class B Invested Amount on the first day of
such Accrual Period (after giving effect to any distributions of principal
on such date) and (C) the actual number of days in such Accrual Period
DIVIDED BY 360; PROVIDED that if any additional Class B Certificates have
been issued on any Subsequent Issuance Date, the Class B Monthly Interest
shall equal the sum of the monthly interest amount for each outstanding
tranche of Class B Certificates (based on the outstanding Invested Amount
and the applicable Class B Certificate Rate in respect of such tranche);
and
(iii) The Servicer shall notify the Trustee in writing (upon which
the Trustee may conclusively rely) on each Settlement Report Date of the
amount calculated pursuant to clauses (i) and (ii) above.
(b)(i) On each Distribution Date, the Servicer shall determine
the excess, if any (the "CLASS A INTEREST SHORTFALL"), of (A) the Class A
Monthly Interest for the Accrual Period ending on such Distribution Date OVER
(B) the amount which is available to be distributed to the Class A
Certificateholders on such Distribution Date in respect thereof pursuant to
this Supplement. If the Class A Interest Shortfall with respect to any
Distribution Date is greater than zero, an additional amount ("CLASS A
ADDITIONAL INTEREST") equal to the product, for the next Accrual Period (or
portion thereof) until such Class A Interest Shortfall is repaid, of (A) a
rate per annum equal to the sum of (x) the Class A Certificate Rate for the
next Accrual Period and (y) 1%, (B) such Class A Interest Shortfall (or the
portion thereof which has not been paid to the Class A Certificateholders)
and (C) the actual number of days in such Accrual Period (or portion thereof)
DIVIDED BY 360, shall be payable as provided herein with respect to the Class
A Certificates on each Distribution Date following such Distribution Date, to
but excluding the Distribution Date on which such Class A Interest Shortfall
is paid in full to the Class A Certificateholders.
(ii) On each Distribution Date, the Servicer shall determine
the excess, if any (the "CLASS B INTEREST SHORTFALL"), of (A) the Class B
Monthly Interest for the Accrual Period ending on such Distribution Date OVER
(B) the amount which will be available to be distributed to the Class B
Certificateholders on such Distribution Date in respect thereof pursuant to
this Supplement. If the Class B Interest Shortfall with respect to any
Distribution Date is greater than zero, an additional amount ("CLASS B
ADDITIONAL INTEREST") equal to the
29
product, for the next Accrual Period (or portion thereof) until such Class B
Interest Shortfall is repaid, of (A) a rate per annum equal to the sum of (x)
the Class B Certificate Rate for the next Accrual Period and (y) 1%, (B) such
Class B Interest Shortfall (or the portion thereof which has not been paid to
the Class B Certificateholders) and (C) the actual number of days in the next
Accrual Period (or portion thereof) DIVIDED BY 360, shall be payable as
provided herein with respect to the Class B Certificates on each Distribution
Date following such Distribution Date, to but excluding the Distribution Date
on which such Class B Interest Shortfall is paid in full to the Class B
Certificateholders.
SECTION 3A.5. DETERMINATION OF SERIES 1998-1 MONTHLY PRINCIPAL.
(a) PAYMENTS OF SERIES 1998-1 PRINCIPAL. The amount (the "SERIES 1998-1
MONTHLY PRINCIPAL PAYMENT") distributable from the Series 1998-1 Principal
Collection Sub-subaccount on each Distribution Date during the Series 1998-1
Amortization Period shall be equal to the amount on deposit in such account
on the immediately preceding Settlement Report Date; PROVIDED, HOWEVER, that
the Series 1998-1 Monthly Principal Payment on any Distribution Date shall
not exceed the Series 1998-1 Invested Amount on such Distribution Date after
giving effect to the reductions and increases pursuant to paragraphs (b) and
(c) below.
(b) REDUCTIONS TO SERIES 1998-1 PRINCIPAL. If, on any Special
Allocation Settlement Report Date, the Series 1998-1 Allocable Charged-Off
Amount is greater than zero for the related Settlement Period, the Trustee shall
(in accordance with written directions from the Servicer, upon which the Trustee
may conclusively rely) make the following applications of such amounts in the
following order of priority:
(i) the Series 1998-1 Required Reserves shall be reduced (but
not below zero) by an amount equal to the Series 1998-1 Allocable Charged-
Off Amount (which shall also be reduced by the amount so applied);
(ii) then, to the extent that the Series 1998-1 Allocable
Charged-Off Amount is greater than zero following the application in
clause (i) above, the Class B Invested Amount shall be reduced (but not
below zero) by an amount equal to such remaining Series 1998-1 Allocable
Charged-Off Amount (which shall also be reduced by the amount so applied);
and
(iii) then, to the extent that the Series 1998-1 Allocable
Charged-Off Amount is greater than zero following the applications in
clauses (i) and (ii) above, the Class A Invested Amount shall be reduced
(but not below zero) by an amount equal to such remaining Series 1998-1
Allocable Charged-Off Amount (which shall also be reduced by the amount
so applied).
(c) INCREASES TO SERIES 1998-1 PRINCIPAL. If, on any Special
Allocation Settlement Report Date, the Series 1998-1 Allocable Recoveries
Amount is greater than zero for the related Settlement Period, the Trustee
shall (in accordance with written directions from the Servicer upon which the
Trustee may conclusively rely) make the following applications
30
(after giving effect to the applications in paragraph (b) of such amount in the
following order of priority):
(i) the Class A Invested Amount shall be increased (but only to
the extent of any previous reductions of the Class A Invested Amount
pursuant to subsection 3A.5(b)(iii)) by the amount of the Series 1998-1
Allocable Recoveries Amount (which shall also be reduced by the amount so
applied); and
(ii) then, to the extent that the Series 1998-1 Allocable
Recoveries Amount is greater than zero following the application in clause
(i) above, the Class B Invested Amount shall be increased (but only to the
extent of any previous reductions of the Class B Invested Amount pursuant
to subsection 3A.5(b)(ii)) by such remaining Series 1998-1 Allocable
Recoveries Amount (which shall also be reduced by the amount so applied);
and
(iii) then, to the extent that the Series 1998-1 Allocable
Recoveries Amount is greater than zero following the applications in
clauses (i) and (ii) above, the Series 1998-1 Required Reserves shall be
increased (but only to the extent of any previous reductions of the Series
1998-1 Required Reserves pursuant to subsection 3A.5(b)(i)) by such
remaining Series 1998-1 Allocable Recoveries Amount (which shall also be
reduced by the amount so applied).
SECTION 3A.6. APPLICATIONS. (a) On each Distribution Date, the
Trustee shall distribute from amounts on deposit in the Series 1998-1 Accrued
Interest Sub-subaccount in the following order of priority to the extent
funds are available:
(i) to the Class A Certificateholders, an amount equal to the Class
A Monthly Interest payable on such Distribution Date, PLUS the amount of
any Class A Monthly Interest previously due but not distributed to the
Class A Certificateholders on a prior Distribution Date, PLUS the amount of
any Class A Additional Interest for such Distribution Date and any Class A
Additional Interest previously due but not distributed to the Class A
Certificateholders on a prior Distribution Date; PROVIDED, HOWEVER, that
during the Series 1998-1 Amortization Period, no Class A Additional
Interest will be paid until repayment in full of the Series 1998-1 Invested
Amount and payment in full of all Class A Monthly Interest and Class B
Monthly Interest.
(ii) to the Class B Certificateholders, an amount equal to the Class
B Monthly Interest payable on such Distribution Date, PLUS the amount of
any Class B Monthly Interest previously due but not distributed to the
Class B Certificateholders on a prior Distribution Date, PLUS the amount of
any Class B Additional Interest for such Distribution Date and any Class B
Additional Interest previously due but not distributed to the Class B
Certificateholders on a prior Distribution Date; PROVIDED, HOWEVER, that
during the Series 1998-1 Amortization Period, no Class B Additional
Interest will be paid until repayment in full of the Series 1998-1 Invested
Amount and payment in full of all Class A Monthly Interest and Class B
Monthly Interest.
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(b) On each Distribution Date, the Trustee shall apply funds on
deposit in the Series 1998-1 Non-Principal Collection Sub-subaccount in the
following order of priority to the extent funds are available:
(i) an amount equal to the Series 1998-1 Monthly Servicing Fee
for the Accrual Period ending on such Distribution Date shall be withdrawn
from the Series 1998-1 Non-Principal Collection Sub-subaccount by the
Trustee and paid to the Servicer or the Successor Servicer, as the case may
be (less any amounts payable to the Trustee pursuant to Section 8.5 of the
Agreement, which shall be paid to the Trustee); and
(ii) an amount equal to any unpaid Program Costs due and payable
shall be withdrawn from the Series 1998-1 Non-Principal Collection Sub-
subaccount by the Trustee and paid to the Persons owed such amounts.
Any remaining amounts on deposit in the Series 1998-1 Non-Principal
Collection Sub-subaccount on any Distribution Date (in excess of the Accrued
Expense Amount as of such day) not allocated pursuant to clauses (i) and (ii)
above shall be paid to the owner of the Series 1998-1 Subordinated Interest;
PROVIDED, HOWEVER, that during the Series 1998-1 Amortization Period, such
remaining amounts shall be deposited in the Series 1998-1 Principal
Collection Sub-subaccount for distribution in accordance with subsection
3A.6(c).
(c) During the Series 1998-1 Amortization Period, the Trustee
shall apply, on each Distribution Date, amounts on deposit in the Series
1998-1 Principal Collection Sub-subaccount in the following order of priority:
(i) an amount equal to the Series 1998-1 Monthly Principal
Payment for such Distribution Date shall be distributed from the Series
1998-1 Principal Collection Sub-subaccount:
(A) first, pro rata, to the Class A Certificateholders until the
repayment in full of the Class A Invested Amount; and
(B) second, pro rata, to the Class B Certificateholders until
the repayment in full of the Class B Invested Amount; and
(ii) following the repayment in full of the Series 1998-1
Invested Amount, (x) if any amounts are owed to the Trustee or any other
Person, on account of its expenses, advances and disbursements incurred
in respect of the performance of its responsibilities hereunder or as
Successor Servicer, such amounts shall be transferred from the Series
1998-1 Principal Collection Sub-subaccount and paid to the Trustee or
such other Person and (y) if the Optional Termination Date has occurred
and any portion of the Prepayment Premium payable to the Term
Certificateholders pursuant to subsection 2.6(b) has not been paid, then
funds in an amount equal to the unpaid portion of such Prepayment
Premium shall be transferred from the Series 1998-1
32
Principal Collection Sub-subaccount and paid, FIRST, to the Class A
Certificateholders and, SECOND, to the Class B Certificateholders; and
(iii) following the repayment in full of the Series 1998-1
Invested Amount and of all of the amounts set forth in clause (ii), the
remaining amount on deposit in the Series 1998-1 Principal Collection
Sub-subaccount on such Distribution Date, if any, shall be distributed
to the owner of the Series 1998-1 Subordinated Interest.
(d) On each Special Distribution Date occurring in respect of a
Reduction hereunder, the Trustee shall distribute to the Term Certificateholders
on such Special Distribution Date (PRO RATA based on the then outstanding
Invested Amount of each Class and PRO RATA within each Class), from amounts on
deposit in the Series 1998-1 Principal Collection Sub-subaccount an amount equal
to the Reduction Amount to be made on such Special Distribution Date.
ARTICLE IV
DISTRIBUTIONS AND REPORTS
Article IV of the Agreement (except for any portion thereof relating
to another Series) shall read in its entirety as follows and the following shall
be exclusively applicable to the Term Certificates:
SECTION 4A.1. DISTRIBUTIONS. (a) The final distribution of principal
in respect of the Term Certificates will be made after due notice by the Trustee
of the pendency of such distribution (subject to at least five Business Days'
prior written notice from the Servicer to the Trustee containing all information
required for the Trustee's notice, upon which the Trustee may conclusively rely)
and only upon presentation and surrender of such Term Certificates at the office
of the Paying Agent or at the Corporate Trust Office of the Trustee, by check
drawn on, or by transfer to an account maintained by the holder with, a bank in
New York City. Any other distribution of principal in respect of the Term
Certificates or on account of interest or fees on the Term Certificates on each
Distribution Date will be made or caused to be made by the Paying Agent or the
Trustee to the persons in whose name the Term Certificates are registered at the
close of business on the related Record Date. Such payment will be made by a
check mailed to the Term Certificateholders at such Term Certificateholders'
registered addresses or, upon application by any Term Certificateholder of at
least $5,000,000 in original principal amount thereof to the Trustee not later
than five Business Days prior to the related Distribution Date, by transfer to
an account maintained by the Term Certificateholder with a bank in New York
City.
(b) All allocations and distributions hereunder shall be in accordance
with the Daily Report and the Monthly Settlement Statement and subject to
subsection 3.1(h) of the Agreement.
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SECTION 4A.2. STATEMENTS AND NOTICES. (a) MONTHLY SETTLEMENT
STATEMENTS. On each Settlement Report Date, the Servicer shall deliver to the
Trustee and each Rating Agency (commencing with the Settlement Report Date
occurring on May 15, 1998) a Monthly Settlement Statement in the Form of Exhibit
D setting forth, among other things, the Loss Reserve Ratio I, the Loss Reserve
Ratio II, the Dilution Reserve Ratio I, the Dilution Reserve Ratio II, the
Minimum Ratio, in each case, where applicable, with respect to the Class A
Certificates and the Class B Certificates, the Carrying Cost Reserve Ratio and
the Servicing Reserve Ratio and the components of the calculation thereof, each
as recalculated for the period until the next succeeding Settlement Report Date.
The Trustee shall forward a copy of each Monthly Settlement Statement to any
Term Certificateholder upon request by such Term Certificateholder. The
Company and the Servicer will deliver copies of all notices, reports,
statements and other documents delivered by it pursuant to the Pooling and
Servicing Agreements to each Rating Agency. A copy of any such items may be
obtained by any Certificateholder upon a written request delivered to the
Trustee at the Corporate Trust Office.
(b) ANNUAL HOLDERS' TAX STATEMENT. On or before January 31 of each
calendar year (or such earlier date as required by applicable law), beginning
with calendar year 1999, the Trustee shall furnish, or cause to be furnished, to
each Person who at any time during the preceding calendar year was a Term
Certificateholder, a statement prepared by the Company containing the aggregate
amount distributed to such Person for such calendar year or the applicable
portion thereof during which such Person was a Term Certificateholder, together
with such other information as is required to be provided by an issuer of
indebtedness under the Internal Revenue Code and such other customary
information as the Company deems necessary or desirable to enable the Term
Certificateholders to prepare their tax returns; PROVIDED, that such statement
or such other information is delivered to the Trustee by the Company in a
reasonably timely fashion to allow the Trustee to fulfill its obligation
hereunder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall have
been prepared by the Servicer and provided to the Trustee and to the Term
Certificateholders, in each case pursuant to any requirements of the Internal
Revenue Code as from time to time in effect.
(c) EARLY AMORTIZATION EVENT/DISTRIBUTION OF PRINCIPAL NOTICES. Upon
the occurrence of an Early Amortization Event or Potential Early Amortization
Event with respect to Series 1998-1, the Company or the Servicer, as the case
may be, shall give prompt written notice thereof to the Trustee. As promptly as
reasonably practicable after its receipt of notice of the occurrence of an Early
Amortization Event with respect to Series 1998-1, the Trustee shall give notice
thereof (i) to each Rating Agency (which notice shall be given in writing not
later than the second Business Day after such receipt) and (ii) each Term
Certificateholder.
SECTION 4A.3. NOTICE PROCEDURES. Notices required to be given to the
Term Certificateholders hereunder will be delivered by first class mail to the
addresses of such holders as they appear in the Certificate Register. Each of
the Company and the Servicer will deliver copies of all notices, reports,
statements and other documents delivered by it pursuant to the Pooling and
Servicing Agreements to each Rating Agency.
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ARTICLE V
ADDITIONAL EARLY AMORTIZATION EVENTS
SECTION V.1. ADDITIONAL EARLY AMORTIZATION EVENTS. If any one of
the events specified in Section 7.1 of the Agreement (after any grace periods
or consents applicable thereto) or any one of the following events (each, an
"EARLY AMORTIZATION EVENT") shall occur during the Series 1998-1 Revolving
Period with respect to the Term Certificates:
(a) (i) failure on the part of the Servicer to direct any payment or
deposit to be made or failure of any payment or deposit to be made in
respect of interest owing on any Term Certificates within two Business
Days of the date such interest is due, (ii) failure on the part of the
Servicer to direct any payment or deposit to be made or failure of any
payment or deposit to be made in respect of principal owing on any Term
Certificates on the date such principal is due or (iii) failure on the
part of the Servicer to direct any payment or deposit to be made, or of
the Company to make any payment or deposit in respect of any other
amounts owing by the Company, under any Pooling and Servicing Agreement
within five Business Days of the date such other amount is due or such
deposit is required to be made;
(b) (i) failure on the part of the Company duly to observe or perform
in any material respect any of the covenants or agreements of the Company
set forth in Section 2.7(b) or (l) or 2.8 of the Agreement or (ii) failure
on the part of the Company duly to observe or perform in any material
respect any other covenants or agreements of the Company set forth in any
Pooling and Servicing Agreement, which failure continues unremedied 30 days
after the earlier of the date on which a Responsible Officer of the Company
or the Servicer has knowledge thereof and the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
to the Company by the Trustee, or to the Company and the Trustee by Term
Certificateholders representing 25% or more of the Series 1998-1 Invested
Amount;
(c) any representation or warranty made or deemed made by the Company
in any Pooling and Servicing Agreement to or for the benefit of the Term
Certificateholders (i) proves to have been incorrect in any material
respect when made or when deemed made and (ii) continues to be incorrect 30
days after the earlier of the date on which a Responsible Officer of the
Company or the Servicer has knowledge thereof and the date on which notice
of such failure, requiring the same to be remedied, has been given by the
Trustee to the Company or by Term Certificateholders representing 25% or
more of the Series 1998-1 Invested Amount to the Company and the Trustee;
PROVIDED, HOWEVER, that an Early Amortization Event with respect to the
Term Certificates shall not be deemed to have occurred under this paragraph
if the incorrectness of such representation or warranty gives rise to an
obligation to repurchase the related Receivables and the Company has
repurchased the related Receivable or all such Receivables, if applicable,
in accordance with the
35
provisions of any Pooling and Servicing Agreement within ten Business Days
of the day on which the Company was obligated to do so;
(d) a Servicer Default with respect to the Servicer shall have
occurred and be continuing;
(e) a Purchase Termination Event (as defined in the Receivables Sale
Agreement) with respect to Core-Xxxx shall have occurred and be continuing
under the Receivables Sale Agreement;
(f) a Change in Control shall have occurred;
(g) the Series 1998-1 Allocated Receivables Amount shall be less than
the Series 1998-1 Target Receivables Amount for a period of five
consecutive Business Days;
(h) any of the Agreement, the Servicing Agreement, this Supplement or
the Receivables Sale Agreement shall cease, for any reason, to be in full
force and effect in any material respect, or the Company, any Seller, the
Servicer, any Sub-Servicer or any Affiliate of any thereof shall so assert
in writing;
(i) the Trust shall for any reason cease to have a valid and perfected
first priority undivided ownership or security interest in substantially
all of the Trust Assets (subject to no other Liens other than Permitted
Liens described in clauses (i) and (iv) of the definition thereof), or any
of Core-Xxxx, the Company or any Affiliate of any thereof shall so assert;
(j) 15 days shall have elapsed after there shall have been filed
against Core-Xxxx, the Company or the Trust (i) a notice of federal tax
Lien with respect to taxes exceeding $100,000 in the aggregate from the
Internal Revenue Service, (ii) a notice of Lien with respect to amounts
exceeding $100,000 in the aggregate from the PBGC under Section 412(n) of
the Internal Revenue Code or Section 302(f) of ERISA for a failure to make
a required installment or other payment to a plan to which either of such
sections applies, (iii) a notice of state tobacco excise tax Lien with
respect to taxes exceeding $100,000 in the aggregate from any state
Governmental Authority or (iv) a notice of any other Lien the existence of
which could reasonably be expected to have a material adverse effect on the
business, operations or financial condition of such Person, unless in each
case there shall have been delivered to the Trustee and each Rating Agency
proof of the release of, or payment of amounts secured by, such Lien;
(k) a Reduction shall have occurred and, as a result thereof, the
Series 1998-1 Invested Amount shall have been reduced to an amount below
$25,000,000; or
36
(l) any action, suit, investigation or proceeding at law or in equity
(including, without limitation, injunctions, writs or restraining orders)
shall be brought or commenced or filed by or before any arbitrator, court
or Governmental Authority against the Company or the Servicer or any
properties, revenues or rights of either thereof which could reasonably be
expected to have a Material Adverse Effect;
then, in the case of (x) any event described in Section 7.1 of the Agreement,
after the applicable grace period (if any) set forth in such Section,
automatically without any notice or action on the part of the Trustee or the
Term Certificateholders, an early amortization period shall immediately commence
or (y) any other event described above, after the applicable grace period (if
any) set forth in such subsections, the Trustee may, and at the written
direction of the Majority Term Certificateholders voting as a single class
shall, by written notice then given to the Company and the Servicer, declare
that an early amortization period has commenced as of the date of such notice
with respect to Series 1998-1 (any such period under clause (x) or (y) above, an
"EARLY AMORTIZATION PERIOD"); PROVIDED, HOWEVER, that in the case of the event
described in clause (g) above, if an Early Amortization Period has not been
declared within ten Business Days after the occurrence of such event, then an
Early Amortization Period shall occur automatically unless, (i) prior to the end
of such ten Business Day period, the Series 1998-1 Allocated Receivables Amount
shall no longer be less than the Series 1998-1 Target Receivables Amount and
(ii) so long as the Series 1998-1 Allocated Receivables Amount continues to be
equal to or greater than the Series 1998-1 Target Receivables Amount, Term
Certificateholders representing 66-2/3% or more of the Series 1998-1 Invested
Amount voting as a single class shall have waived the occurrence of such
event.
Notwithstanding the foregoing, a delay or failure in performance
referred to in clause (a) or (b)(i) above for a period of up to five Business
Days after the applicable grace period, or in clause (b)(ii) above for a period
of up to 30 Business Days after the applicable grace period, will not constitute
an Early Amortization Event if such delay or failure could not have been
prevented by the exercise of reasonable diligence by the Company and such delay
or failure was caused by a Force Majeure Delay. The Company nevertheless will
be required to use its best efforts to perform its obligations in a timely
manner in accordance with the terms of the Transaction Documents, and the
Company shall promptly give the Trustee an Officer's Certificate notifying it of
any such failure or delay by the Company.
ARTICLE VI
SERVICING FEE
SECTION VI.1. SERVICING COMPENSATION. A monthly servicing fee (the
"SERIES 1998-1 MONTHLY SERVICING FEE") shall be payable to the Servicer on each
Distribution Date for the immediately preceding Settlement Period in an amount
equal to the product of (a) the Servicing Fee and (b) a fraction the numerator
of which is the Series 1998-1 Invested Amount as of the end of such Settlement
Period and the denominator of which is the Aggregate Invested Amount as of the
end of such Settlement Period.
37
ARTICLE VII
REPRESENTATIONS AND WARRANTIES, COVENANTS
SECTION VII.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SERVICER. The Company and the Servicer each hereby represents and warrants to
the Trustee and each of the Term Certificateholders that each and every of their
respective representations and warranties contained in the Agreement is true and
correct in all material respects as of the Issuance Date and any Subsequent
Issuance Date (except if made as of a specific date).
SECTION VII.2. COVENANTS OF THE COMPANY AND THE SERVICER. The
Company and the Servicer hereby agree, in addition to observing all their
obligations under the Agreement and the Servicing Agreement, that:
(a) they shall not terminate the Agreement unless in compliance with
the terms of the Agreement and each Supplement relating to an Outstanding
Series;
(b) no later than 60 days after the date hereof, they will (i) deliver
to the Trustee executed copies of software licenses or sublicenses, in a
form reasonably acceptable to the Trustee, which grant to the Trustee the
right to utilize any of the software owned or licensed by the Servicer that
is necessary to perform the collection and administrative functions to be
performed by the Trustee under the Transaction Documents, (ii) deliver to
the Trustee executed copies of any landlord waivers, in a form reasonably
acceptable to the Trustee, that may be necessary to grant to the Trustee
access to the leased premises of the Servicer for which the Trustee may
require access to perform the collection and administrative functions to
be performed by the Trustee under the Transaction Documents, except to
the extent the Company or the Servicer, as the case may be, owns such
property and (iii) have taken all actions reasonably requested by the
Trustee in connection with, and to ensure completion of, each of the
Servicer Site Review and the Standby Liquidation System;
(c) for so long as any Term Certificates are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company will cause to be provided to any holder of Term
Certificates or an interest therein and any prospective purchaser of Term
Certificates or an interest therein (which prospective purchaser is
designated by any holder of Term Certificates), upon the request of such
holder or prospective purchaser, the information required to be provided to
such holder or prospective purchaser by Rule 144A(d)(4) under the
Securities Act; and
(d) they shall cooperate in good faith to allow the Trustee to use the
Servicer's available facilities and expertise upon the Servicer's
termination or default.
38
ARTICLE VIII
MISCELLANEOUS
SECTION VIII.1. RATIFICATION OF AGREEMENT. As supplemented by this
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Supplement shall be read, taken and
construed as one and the same instrument.
SECTION VIII.2. GOVERNING LAW. THIS SUPPLEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION VIII.3. FURTHER ASSURANCES. Each of the Company, the
Servicer and the Trustee agrees, from time to time, to do and perform any and
all acts and to execute any and all further instruments required or reasonably
requested by the other more fully to effect the purposes of this Supplement and
the sale of the Term Certificates hereunder, including, without limitation, in
the case of the Company and the Servicer, the execution of any financing
statements or similar documents or notices or continuation statements relating
to the Receivables and the other Trust Assets for filing under the provisions of
the UCC or similar legislation of any applicable jurisdiction.
SECTION VIII.4. NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Trustee or any Term
Certificateholder, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
SECTION VIII.5. AMENDMENTS. (a) This Supplement may be amended,
supplemented or otherwise modified in writing from time to time only if such
amendment, supplement or modification is effected in accordance with the
provisions of Section 10.1 of the Agreement.
SECTION VIII.6. SEVERABILITY. If any provision hereof is void or
unenforceable in any jurisdiction, such voidness or unenforceability shall not
affect the validity or enforceability of (i) such provision in any other
jurisdiction or (ii) any other provision hereof in such or any other
jurisdiction.
SECTION VIII.7. NOTICES. All notices, requests and demands to or
upon any party hereto to be effective shall be given (i) in the case of the
Company, the Servicer and the Trustee, in the manner set forth in Section 10.5
of the Agreement and (ii) in the case of
39
any other party, in writing (including a confirmed transmission by telecopy),
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made when delivered by hand or three days after being deposited
in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Rating Agencies or to such
other address as may be hereafter notified by the respective parties hereto:
DCR: Duff & Xxxxxx Credit Rating Co.
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Asset-Backed Research and
Monitoring Group
Telecopier: (000) 000-0000
S&P: Standard & Poor's Ratings Services
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset-Backed Surveillance
Group
Telecopier: (000) 000-0000
Any notice required or permitted to be mailed to a Term Certificateholder shall
be given as provided in Section 4A.3.
SECTION VIII.8. COUNTERPARTS. This Supplement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same agreement.
SECTION VIII.9. LIMITATION ON ADDITION AND TERMINATION OF SELLERS.
(a) Notwithstanding anything to the contrary contained in the Receivables Sale
Agreement, no Seller or Seller Division shall be added thereunder unless
(subject to the proviso contained in clause (iv) below) each of the following
conditions shall have been satisfied:
(i) (x) in the case of a proposed addition of a Seller, each of the
conditions set forth in Section 3.02 of the Receivables Sale Agreement, and
(y) in the case of a proposed addition of a Seller Division, the conditions
set forth in subsections 3.02(a)(ii), (e), (f), (g), (h), (j) and (k) (in
each case, applied to the applicable New Division as if it were a proposed
additional Seller) of the Receivables Sale Agreement, shall have been
satisfied.
(ii) The Company shall have received copies of the Policies of such
additional Seller (or such Seller Division, as the case may be, if
different from the
40
Policies of the Seller of which it is a New Division), which Policies shall
be in form and substance satisfactory to the Company.
(iii) The Company shall have received confirmation (A) that there
is no pending or, to its knowledge after due inquiry, threatened action or
proceeding affecting such additional Seller (or such Seller Division, as
the case may be) before any Governmental Authority (I) that could
reasonably be expected to have a Material Adverse Effect or (II) that
purports to affect the legality, validity or enforceability of this
Supplement, the Agreement or any other Transaction Document or any of the
transactions contemplated hereby or thereby.
(iv) The Company and the Trustee shall have received evidence that the
Rating Agency Condition shall have been satisfied with respect to the
addition of such Seller (or addition of such Seller Division, as the case
may be); PROVIDED that such satisfaction of the Rating Agency Condition
(and such receipt of evidence thereof) shall not be required with respect
to the addition of up to two Subsidiaries of Core-Xxxx (and/or New
Divisions) as Sellers (or Seller Divisions) during any calendar year, each
of which Subsidiaries (or New Divisions) meets the following criteria: (x)
such Subsidiary (or New Division) is in the same line of business as the
existing Sellers as of the related Seller Addition Date (as defined in the
Receivables Sale Agreement) and (y) as of such date, immediately prior to
giving effect to such addition (the "MEASUREMENT DATE"), the ratio
(expressed as a percentage) of (A) the aggregate Principal Amount of what
would constitute all Eligible Receivables of such Subsidiary (or New
Division) at the end of the Business Day immediately preceding the
Measurement Date if it were a Seller (or Seller Division) MINUS the amount
which would constitute the Overconcentration Amount applicable to such
Receivables on the Measurement Date if such Subsidiary (or New Division)
were a Seller (or Seller Division) to (B) the sum of the Aggregate
Receivables Amount as of the end of such day plus the amount described
pursuant to clause (A) is less than 10 percent, provided further, that if
such ratio is greater than 5%, the Rating Agencies shall receive
notification of such addition and delivery of a pro forma Monthly
Settlement Statement.
(v) The Trustee shall have received Opinions of Counsel of outside
counsel addressed to the Trustee covering matters with respect to such
Seller as were covered in the opinions delivered on the Issuance Date with
respect to the original Sellers, including "true-sale" and non-substantive
consolidation opinions.
(vi) The Company and the Trustee shall have received a certificate
prepared by a Responsible Officer of the Servicer certifying that after
giving effect to the addition of such Seller (or such Seller Division, as
the case may be), the Aggregate Target Receivables Amount shall equal the
Aggregate Allocated Receivables Amount on the related Seller Addition Date.
41
(b) Notwithstanding anything to the contrary contained in the
Receivables Sale Agreement, no Seller shall be terminated under Section 9.13 of
the Receivables Sale Agreement, in each case unless (i) no Early Amortization
Event, Potential Early Amortization Event or Potential Purchase Termination
Event (as defined in the Receivables Sale Agreement) (other than with respect to
the Seller to be so terminated) will have occurred and be continuing after
giving effect to such termination and (ii) the Trustee shall have received prior
notice of such termination (which notice shall be accompanied by a PRO FORMA
Daily Report confirming that the Aggregate Target Receivables Amount equals the
Aggregate Allocated Receivables Amount, each calculated after giving effect to
such termination and excluding all Receivables originated by the Seller to be
terminated); PROVIDED, that in no event shall Core-Xxxx be terminated as a
Seller under Section 9.13 of the Receivables Sale Agreement.
(c) Upon the termination of a Seller pursuant to Section 9.13 of the
Receivables Sale Agreement and the foregoing paragraph (b), the calculation
(including, without limitation, for purposes of the PRO FORMA calculations
pursuant to paragraph (b) above) of the Aggregate Target Receivables Amount, the
Aggregate Allocated Receivables Amount, the Series 1998-1 Required Reserves and
all other amounts from which each such amount is directly or indirectly derived
shall exclude in each case the Receivables originated by such terminated Seller.
ARTICLE IX
FINAL DISTRIBUTIONS
SECTION IX.1. CERTAIN DISTRIBUTIONS. (a) Not later than 2:00 p.m.,
New York City time, on the Distribution Date following the date on which the
proceeds from the disposition of the Receivables pursuant to subsection 7.2(b)
of the Agreement are deposited into the Series 1998-1 Non-Principal Collection
Sub-subaccount and the Series 1998-1 Principal Collection Sub-subaccount, the
Trustee shall distribute such amounts pursuant to Article III of this
Supplement.
(b) Notwithstanding anything to the contrary in this Supplement or the
Agreement, any distribution made pursuant to this Section 9.1 shall be deemed to
be a final distribution pursuant to Section 9.3 of the Agreement with respect to
the Term Certificates.
42
IN WITNESS WHEREOF, the Company, the Servicer and the Trustee have
caused this Series 1998-1 Supplement to be duly executed by their respective
officers as of the day and year first above written.
CM CAPITAL CORPORATION
By: /s/ XXXXXX X. XXXXX
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and CEO
CORE-XXXX INTERNATIONAL, INC., in its
individual capacity and as Servicer
By: /s/ XXX X. XXXXXX
-------------------------------
Name: Xxx X. Xxxxxx
Title: Senior Vice President & CFO
THE CHASE MANHATTAN BANK, not in its
individual capacity but solely as
Trustee
By: /s/ XXXXXXXX X. XXXXX
-------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Second Vice President
